Will Saatchi & Saatchi UK’s restructure put it back on track?

Less than two years after Saatchi & Saatchi UK put together a girl band to help promote brands to young people, the agency is disbanding the division that came up with the idea. Branded content unit Gum was launched to great fanfare at the end of 2005 by then UK chairman and chief executive Lee Daley. But fast-forward two years, Daley is gone and Gum is being scrapped by the agency’s new chief Robert Senior (MW last week).

The move comes as no great surprise because the division had already been scaled back after founding partners Andreas Neumann and Amos left to set up their own company. More significantly, its axing will be seen as one of the many initiatives that Senior has up his sleeve to overhaul the ailing agency after he was appointed in the summer to run Saatchi & Saatchi-Fallon (SSF), a newly aligned group set up to help halt the decline at the once-mighty Saatchi.

Smoke and mirrors
The agency launched a raft of units, including Gum, youth division Friends of Johnny and R&D lab Industry@Saatchi, under Daley’s stewardship. But one source says: “It was all smoke and mirrors for an agency that was underperforming.” No longer a top-ten agency in London, Saatchi’s total billings were a dismal £174m last year, down 17% from £212m in 2005.

It is understood that Senior, in addition to his search for a UK managing director, is reviewing the agency structure and plans to make it leaner. Last August, Saatchi restructured into four client groups, with each division run by a different group head, and also created a new group structure designed to incorporate brand extensions including Gum.

But the agency has since been stemming account losses. Last year, it lost the global Carlsberg brief and this year the bulk of its UK Toyota business to CHI & Partners (MW July 21). John Wright, the agency’s former managing director, who was moved by Daley to lead the Toyota/Lexus business across Europe, has also left since.

Holding on
For Senior, the task will not only be to win domestic business, says one advertising executive, but also to help retain the business it already has. Speculation is mounting about the £80m Sony Ericsson account it won a year ago, with rival agencies circling ahead of a possible advertising pitch, however the client denies this.

For his part, Senior has already brought in the much-coveted Labour Party advertising brief. He has also hired Paul Silburn, the former Fallon Minneapolis creative, as creative chief to partner Kate Stanners.

Details of the restructure have yet to emerge, though the changes will mean an increased focus on the agency’s conflict shop Team Saatchi, the one jewel in the crown for the UK group. Last year, Team Saatchi scooped Domino’s Pizza and the Cyprus Tourist Board, and more recently the brief to relaunch the Linda McCartney food range.The restructure is also likely to re-energise Saatchi & Saatchi X, launched in 2004, to deliver in-store, below-the-line solutions. The division counts the likes of Procter & Gamble and Microsoft as its clients.

One advertising executive says: “Senior has a very straight-talking approach to advertising. His new structure, whatever shape that might be, and his new hirings will all reflect that.” Others believe that simplifying Saatchi’s offering, rather than any sort of Midas touch, is what Senior needs to concentrate on. The AAR’s Martin Jones says: “Saatchi is an agency with a fantastic pedigree and Senior will need to de-clutter its offering and get down to basics.”