A surprise it may have been, but it certainly wasn’t the nicest of birthday presents. Shortly after celebrating its tenth anniversary, M&C Saatchi faces a review of its flagship (and foundation) client, British Airways.
Actually, what’s really surprising is that the &£60m account has not been reviewed before. That’s not a criticism, it’s a compliment. Few creative accounts survive five years at an agency, let alone ten. Indeed, it could be argued that the uninterrupted tenure is even longer – the relationship with the Saatchi brothers goes back to 1982.
So why pick now to launch a full-scale creative review? The immediately cited reasons are that BA is in strategic review mode: it’s taking a long, hard look at its short-haul operation; it’s about to launch a range of critically important long-haul club-class products; and, oh, it’s getting a new chief executive, ex-Aer Lingus supremo Willie Walsh. But reviews, product launches and even chief executives have come and gone countless times before without shaking M&C’s hold on the account.
Of course, it may be that Walsh is even keener on economies than his meticulously cost-conscious predecessors, lending credence to the idea that the review is no more than a sting designed to reduce M&C’s no-doubt handsome fees, after the theatre of a full-blown pitch. Certainly this is what the pride of London ad agencies will fear if they are picked for the shortlist (not that it will stop them putting themselves forward with, or without, a client conflict).
They are right to be fearful. M&C Saatchi is as formidable in defence as it is predatory in its attack. And on this occasion, it cannot afford to lose. True, over ten years it has done much to broaden a business which initially consisted of little more than BA and Dixons. But BA still represents, even in its present shrunken form, a large percentage of M&C revenues. More, it remains a massively prestigious trophy and probably M&C’s only true claim to global, or at least international, pretensions. Think about this: what would happen to the cement of M&C’s international network if BA did do the unspeakable and depart?
This brings us on to a second milestone that M&C is in the throes of celebrating: its first year on the London Stock Exchange. The flotation on AIM could not be called an unmitigated success, though it has been far from a disaster. The share price today is almost exactly the same as it was on launch day. This is not on account of the market, nor indeed the media sector within it, both of which have performed quite well recently. Nor can it be attributed to M&C’s profits being lacklustre: they weren’t. If not as good, pound for pound, as say WPP Group’s, they certainly showed strong organic growth. Some persist in the sceptical belief that the flotation was really about bankrolling the original five partners, though we have no reason to doubt chief executive David Kershaw’s explanation that the money raised is, in fact, to fund European expansion. Most likely, investors are awaiting the tangible fruits of that investment before they pile in. France has only just opened. We await office openings in Germany, Italy and Spain.
It need hardly be said that the loss of BA would not advance those expectations.