How hard will the loss of BA hit M&C Saatchi?

The curtain has fallen on British Airways’ 23-year relationship with the Saatchi brothers, as Bartle Bogle Hegarty finally gets its hands on the airline’s &£60m creative account.

The appointment, a decade after the nascent M&C Saatchi snatched the spoils from under its nose, is cause for celebration at BBH, as is BA commercial director Martin George’s praise for the agency’s “outstanding insight, creative ability and proven track record”.

Speculation about the destination of the BA business has been furious. The account has acquired the status of one of advertising’s crown jewels, perhaps because of the Herculean efforts needed to win it.

The latest battle was as fierce as any, and there is no doubt M&C Saatchi will be reeling, despite chief executive David Kershaw’s suggestion that the business is only responsible for seven per cent of the agency’s income.

What gives the account such cachet is BA’s status as a front-rank British company and brand; the creative freedom awarded to previous agencies; and the fact that so many of the airline’s ads have entered advertising folklore, according to observers.

Chris Avery, an airline analyst at JP Morgan, says: “There is still something about the aviation industry that captures the popular imagination. BA gets a phenomenal amount of media coverage for a company of its size.”

Branding specialist Piers Schmidt, who worked with BA in the 1990s, says: “Being BA’s agency will get you onto other pitch-lists. BA is not like some big brands, shifting agencies every couple of years. If you get into bed with BA, you can build your business: within five years, M&C Saatchi was as big in terms of billings as Saatchi & Saatchi.”

But BA seems to be in a state of flux. Since chief executive Willie Walsh (pictured) took over from Rod Eddington at the start of the month, there has been speculation about a collaboration and eventual merger with American Airlines. BA is also preparing to move to a new home.

“The days of the special relationship that the Saatchis had, which went all the way to the boardroom, are over. The agency must fight for budgets and will be more of a service-provider for the airline,” observes Schmidt.

Yet BA is adamant marketing remains key, and that it has plenty of innovations planned before its move to Heathrow’s Terminal Five.

One advertising insider points out that the airline marketed itself out of trouble at the start of the century, and says it will continue to rely on marketing to maintain its position.

M&C Saatchi may have suffered from an inability to deliver on different levels, something BBH was keen to show it could do during the pitch. The airline is keen to push its website – as Walsh did at Aer Lingus – and develop different marketing channels, possibly leading to a shift in advertising emphasis, away from traditional television spots.

“M&C’s work was fine,” says one source. “But the effort that it took to get it produced was the problem.”

Although M&C Saatchi claims the account is not crucial to its overall business, the loss is bound to be painful, say observers, and could lead to the departure of key personnel.

“The damage to M&C Saatchi’s reputation will be harder for it to overcome than the economic effect,” says Schmidt. “It won’t be going into pitches with the same confidence.”

But M&C Saatchi is bullish. “The agency is confident and energised, perhaps in part by recent events,” says the agency’s UK chairman, Moray MacLennan. He adds that the quality of the work was not the reason for the review, and claims that the relationship is ending with BA as the most profitable airline in the world.

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