Saatchi and Saatchi, PR at It’s Best and Worst
Goldman, advertising columnist for the Wall Street Journal, knows advertising; he describes some of the changes taking place in the business over the last 30 years. A good writer, he has an excellent eye for detail and tells many interesting stories. As any good reporter would do, he spoke to everyone connected to the Saatchi story – including Maurice Saatchi and his reclusive brother Charles. Perhaps the most interesting is that Goldman witnessed Maurice Saatchi’s winning pitch to British Airways.
In a time where the “self made billionaire” is a trend, Conflicting Accounts: The Creation and Crash of the Saatchi and Saatchi Advertising Empire is “how not to” book in business. The book, which gives a piece by piece account of how Charles and Maurice Saatchi expanded a small advertising agency to a company of mammoth proportions is really a cautionary Aesop’s Fable. They decided to make their company larger only to feed their already obese egos and wallets.
Once board members caught on, they were ousted and wrecked the company they created. Their financially questionable consolidations and mergers, as well as a general slowdown in the advertising business created a crisis that resulted in their being forced out of their agency in 1994 by outside directors.
The 1980’s were the prime time in their advertising empire. They accomplished this though the art of acquisitions. By issuing new shares of stock to buy startups and small agencies, they owned almost 40 different advertising agencies by 1986. Their egos began to explode, leaving the company two steps away from bankruptcy. Excessive personal spending (the “Saatchi Collection of art just released a new photo book) and a failed attempt to buy the second biggest bank lead to their demise.
The board of directors for Saatchi had endless arguments with the selfish brothers both in and out of the boardroom. This lead to their leaving and forming a new ad agency “M & C Saatchi” which lead to more confusion than benefits. They Saatchi brothers went captured many former clients and eventually surpassed the old firm.
This book is a cautionary tale for anyone who has an eye for business. What better way to learn that from a couple of selfish brothers, who in less than 25 years, managed to build and then nearly destroy the Western world’s largest advertising agency. Charles, the older brother was the creative one, throwing out pitch after pitch.
Maurice was the business savvy younger brother. When the firm just started out it grabbed headlines after an ad for Britain’s Health Education Council with the headline “Would you be more careful if it was you that got pregnant?” and showed a pregnant man. Another ad helped Margaret Thatcher take office-it showed a huge unemployment line and the headline read “Labor Isn’t Working.”
The previously mentioned acquisitions helped the agency grow through the 1980s. The brothers then took on New York City, and garnered the number one ad agency in the world. However, both their invasion of Madison Avenue along with their ads themselves was made out of greed. The commission for ad agencies during their time period was 15%. Saatchi took 22%. It didn’t end there; next they wanted to control banks and management, all to feed their egos. Soon after, there was a slump in the need for advertising. Like the volatile stock market today, investors did a double take with Saatchi securities.
This was primarily due to their flamboyant spending. After a series of unseemly battles fought in the press and boardroom, Maurice was fired at the beginning of the1994 fiscal year. Not one to leave his brother, Charles did the same, forming the aforementioned M& C Saatchi Company. The former original “Saatchi” is now named Cordiant, and is still tops in the advertising world.
Goldman gives an amazing account of the rise and fall of the Saatchi brothers. Between the lies, dirtiness and overspending, you need to wash your face after each story-if just for the entertainment value of these two characters alone.
