M&C Saatchi: WPP needs ‘radical surgery’ for post-Sorrell future
M&C Saatchi's boss has warned his firm is ready to swoop on rival ad agency WPP’s territory as Sir Martin Sorrell’s successor is busy performing “radical surgery” on the business.
David Kershaw hailed surging earnings at M&C Saatchi, seeing revenue almost double to £215.4m after new accounting rules changed the way revenue from customer contracts is recorded.
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Meanwhile, pre-tax profits grew 12 per cent year-on-year to £10.9m for the six months ending June.
“We’re really pleased with the first half,” Kershaw told Morning Wire, contrasting Saatchi’s performance with other ad agencies, citing WPP’s recent two per cent revenue drop in its interim results.
Crediting his firm’s focus on organic growth over WPP's acquisition-driven expansion, he added that Saatchi’s big rival will be vulnerable as new boss Mark Read seeks to change tack following the departure of Sir Martin.
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“He will have to do some radical surgery to make it fit for purpose,” he told Morning Wire “I’m sure he will be doing the right things but it will take time, and for a nimble independent like us that will give us future opportunities so we are very well placed for that.”
He pointed to new deals signed in the UK with AXA, Expedia, the Football Association, Foxtons, Gamble Aware, Heineken, Legal & General, Powerade and Twinings as pushing growth.
Saatchi is working with two entrepreneurs on a venture called Send Me a Sample, which allows people to order sample products at the end of adverts via Amazon Alexa and Google Home speakers.
It also bought 51 per cent stakes in social influencer agencies Red Hare and Grey Whippet, who have joined M&C Saatchi Merlin’s social and talent divisions to form M&C Saatchi Talent Group.
Kershaw said its focus on these new ways of advertising, rather than traditional print and media, should pay off in the future.
“We are not over-dependent on media buying, which is an area coming under pressure,” he said.
On the new business ventures, he said: “We find entrepreneurs in those areas and give them a significant share of the business. That model is coming to the fore. What’s critical is this startup philosophy.”