M&C Saatchi hails integrated offering for revenue growth

Advertising agency M&C Saatchi has reported better than expected revenues for the first half of the year, as client demand for mobile and social media services grew.

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Global revenues for the independent advertising network were up 23% to £71.9m in the six months to 30 June, compared to £58.2m a year ago.

It reported like-for-like revenues up by 21% to £70.6m, while operating profit rose by more than a fifth to £7.6m.

M&C Saatchi attributed the year-on-year increase in earnings to the expansion of its integrated offering, particularly in its new mobile and social businesses in the UK, where pre-tax profits rose to 31.4m (4.9%). Other businesses in the group include Lida and Walker Media.

The agency will be focusing more on rolling out its integrated offering internationally, M&C chief executive David Kershaw told Pitch, adding the company’s strategy is to generate new business around mobile and its nascent social media analytics offerings.

“We’ve shifted our centre of gravity away from new business wins to developing our integrated offering,” says Kershaw. “If there are areas where don’t feel we have the expertise already, we’ll either launch start-ups or do similar micro-acquisitions to what we’ve done with Inside Mobile, Milk and Human Digital,” he adds.

New business wins during the second quarter, including Google, Siemens and Pernod Ricard, helped push billings to £242m.

Elsewhere, the agency’s international expansion is set to continue with the launch of it’s New York hub which will house brand consultancy, Clear, M&C Sport and Entertainment and M&C Mobile at the end of the year.

Kershaw added that the agency’s new office in South Africa had already broken even after it launched last year, and that along with its new office in Italy, which won business from Sky, were on course to be profitable over the next year.

Pricing pressure in Australia and China resulted in overall operating margin dipping to 10.6% from 10.7 in 2010, while revenues were up 76% in America, despite reporting an operating loss of £0.1m.

To see some of M&C Saatchi’s creative work from the last year, check out their Pitch profile here

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