King of the agencies finds plenty of rivals want crown

By IRENE CHAPPLE

Legend has it Saatchi & Saatchi's former managing director, David Walden, once took the stage and, glass of champagne in hand, burst forth with the song Lord It's Hard to be Humble as he collected more Axis advertising awards.

Is it true? "Probably," says Walden, who now heads Whybin TBWA. "It was at a time when Saatchi was truly the most dynamic agency in town ... we really believed in ourselves ... the song became a sort of anthem."

The 1980 country hit was even used in a self-promoting advertisement, albeit briefly and with self-deprecating humour.

But the glory that prompted Walden's outburst is now a fading memory for the agency that was once - in terms of creative accolades, brand power and account wealth - untouchable.

Since then, the marketing world has shifted. So too have many of the key staff behind Saatchi's extraordinary success.

The agency is still a powerhouse both creatively and financially but it is no longer playing by itself.

Over the last couple of years a new advertising tier has shaken out. Where once Saatchi stood alone, it now shares the top shelf with other players.

A makeover at the Wellington office, long the creative hub of the New Zealand industry, is intended to refresh the thinking of an agency that still makes some of the country's best-loved ads.

Saatchi has expanded beyond the big-budget brand advertising that made its name - it is big on interactive advertising, for example - but has not diversified as much as its key rivals.

The agency was, through the 90s, New Zealand's shining star. It was one the top 10 agencies in the world, according to industry magazine Advertising Age.

Creatives from all over the world desperately wanted to work at the Wellington office.

Its worldwide head, New Zealander Kevin Roberts, has his own website in which he promotes "lovemarks", described as "super-evolved brands".

Today an advertising veteran has this to say about Saatchi: "It was a meteorite. Something that shines twice as bright ... but they last half as long."

He doesn't want to go on record, because he admires its success, and is uncomfortable bagging the agency publicly.

The last two years at Saatchi have been rough. It has lost clients and several long-time and well respected staffers. Billings are well down from its financial high just eight years ago, when, according to rankings in industry magazine Admedia, it was $70 million ahead of its closest rival, Colenso BBDO.

It now sits around the $104 million mark and, in terms of billings, is one of a handful of leading agencies such as Auckland's Colenso BBDO and DDB.

Staffing levels at Saatchi's have dropped from a high of 177 in 1995 to just over 100 now, while Colenso and Wellington-based sister firm Clemenger have just under 90 in each office.

Saatchi's parent, France-based Publicis Groupe, is understood to be squeezing Saatchi Worldwide for more revenue.

Over the last decade or so the advertising industry has undergone significant change.

Perhaps the most painful, one which has affected the entire New Zealand scene, has been the departure of large accounts overseas as clients find the most economical way of advertising global brands.

Clients are also insisting, louder than before, on proof of results. Marketing budgets have been tightened and advertising has to prove itself. It has to sell product.

Expensive branding campaigns are no longer the default: wider marketing tactics such as public relations and direct marketing are called for. The long lunches have been curtailed.

The New Zealand industry is now driven by retail advertising - big spenders such as McDonald's, The Warehouse, Briscoe, Farmers, New World - whose messages are more about imparting information than building a brand.

Over the years Saatchi has lost brand accounts such as Lion Red, Visa and the New Zealand Tourism Board while it dumped big-spending government accounts from the LTSA and the ACC.

They left for varying reasons including global realignment, dissatisfaction and, in the case of the Tourism Board, a political kerfuffle after Roberts and then-Prime Minister Jenny Shipley shared a dinner date.

Saatchi has long been recognised for its big-budget brand-building, particularly in television.

As general manager Peter Moore says: "Brand advertising is what we really enjoy. It's like cricket. [Brand-building] is our test match."

Think of Saatchi's Telecom ad, with the Cat Stevens soundtrack and young boys playing around the couch, which gave the telco a heart.

The Toyota ads, which turned "bugger" into a respectable word and the brand into a New Zealand icon.

Graeme Wills is Australasia chairman of Publicis, the global advertising giant that bought the Saatchi network some 18 months ago. He says Saatchi's strength in brand-building has also contributed to an Achilles heel.

Marketers are looking for smart solutions that adopt various disciplines, he says. "They don't just want the 50-second television commercial."

Saatchi still holds the wealthy Telecom and Toyota accounts along with other big clients such as TVNZ and Westpac - which it won in a hotly contested pitch this year and which is now being run from Sydney.

But the last few years have seen a proliferation of new agencies and a resurgence in the creative and financial successes of Saatchi's competitors.

Saatchi now faces fierce competition for large accounts and creative accolades from powerful players including Colenso, which snaffled the Air New Zealand account from Saatchi, DDB, which holds McDonald's and Sky, and Clemenger, which scooped up the LTSA, an account that has since won the agency a multitude of awards.

Saatchi alumni have also left to build their own agencies including Whybin TBWA, M&C Saatchi, Generator and Meares Taine.

Last year Meares Taine snaffled the Lion Red brand and subsequently produced a campaign that harked back to work done by principal creatives Jeremy Taine and Roy Meares during their employment at Saatchi's.

Some of Saatchi's clients have moved to Auckland but the agency's creative centre remained steadfastly Wellington focused. This is despite repeated rumours the Wellington shop would close because it was impractical to serve Auckland-based clients and because of the cost of overheads for two offices.

But the Wellington staff don't want to shift. So Saatchi's Auckland office is now heavy with account directors - the so-called "suits" of the industry - while Wellington houses the bulk of the creatives and has recently been refurbished to feature offices on wheels.

The offices are referred to as pods and are expected to aid the generation of ideas through serendipity, according to Wellington creative Howard Greive: "To foster those moments when a thing of genuine originality can be created out of a random meeting."

The pods can be moved, giving creatives a new horizon to gaze upon.

The Wellington creatives flit between the cities to cater to the Auckland-based clients.

It appears an expensive way to run a business but Saatchi general manager Peter Moore is dismissive, comparing the agency to large law firms that have offices in each city.

Andrew Stone, who co-founded Generator and was a former managing director at Saatchi, is now rumoured to be taking the position of chief executive at the agency after this year's posting of former head Ian Christie to London.

Stone won't deny the rumours, and Saatchi staffers say they assume he is taking the job. There has been no official response to news articles on the alleged appointment.

Saatchi is frequently accused of harbouring a creative snobbery, leading to a cold-shouldering of the less glamorous accounts.

And so the billings drop: "The business has to follow the money," says the advertising veteran. "But the creative people think they are immune from that."

Saatchi did not reveal its revenue figures this year, but when asked if the agency's offices were making a profit Moore said "you can make more money running a dairy".

He later says the entire industry suffers from a flawed perception it is wealthy.

Moore is also dismissive of comments Saatchi has suffered from the move toward retail advertising. He points out Lotteries, TVNZ and Telecom have large retail components and specialist work in areas such as direct advertising - in which Saatchi once had an arm - is done through co-ordinating with outside freelancers or agencies.

The suggestion Saatchi has suffered from an attitude problem is "an easy accusation", says Moore. "But I reckon a lot of that is laced with green-eyed envy."

Anyway, says Moore, "we may not have the volume going through the place but no one has knocked us off our creative perch".

Such talk rankles competitors such as Colenso but Saatchi undoubtedly remains a powerful presence at awards nights.

At this year's Axis, Saatchi took Best in Show for an innovative online campaign for adidas. But the previous two years were dominated by Colenso. The years in which the Axis were compared to an in-house Saatchi party are long gone.

Recently dissatisfaction within Saatchi's Wellington office has been highlighted by staff departures.

Maggie Mouat, wife of former creative director Gavin Bradley and 14-year veteran of the creative department, is now with Clemenger. After the departure a spat between Mouat and Saatchi's Len Cheeseman went public through letters to Admedia.

Cheeseman had questioned Mouat's account of the awards she had won; Mouat replied by saying she was "very pleased to be on the outside of what I can only describe as an emotionally violent culture".

Mouat has previously said the leadership of Bradley and Kim Thorp, creative director for 14 years from the mid-80s, drove the strength of the agency.

Her new head, Clemenger creative director Philip Andrew, also credits personalities with the agency's success. He is unconvinced by arguments Saatchi has suffered through changes in the industry.

He says simply, "The band has left the building."

He is referring to the departures of such creative luminaries as James Hall, who has just returned from Saatchi London; Kim Wicksteed, now running his own consultancy; worldwide chief operating officer Peter Cullinane; and Bradley.

Thorp is also mentioned, although he retains a role as Saatchi New Zealand chairman until the end of this year. He also owns a vineyard in Hawkes Bay and runs a consultancy with Cullinane, called Assignment, which Hall is expected to join next year.

Thorp recalls Saatchi's success through the 90s as being due to "that absolute desire and passion and almost, I suppose, a desperation to stay being among the world's best."

That desire was driven by the enjoyment, he says, of being at the top.

But Thorp now sees an industry where "there are sparks of brilliance all over the place".