M&C Saatchi is set to close its Australian operations after three decades, a decision reportedly communicated to staff by its London headquarters. The agency's departure follows a sustained period of client departures, culminating in a situation where there is "not enough work to keep busy," according to industry insiders.
Cascading Client Losses
The agency, which began in Sydney in 1995 with foundational clients like Qantas and British Airways, has seen major clients such as Optus, Commonwealth Bank, and Tourism Australia sever ties over the past two years. Woolworths, the last significant remaining client, is scheduled to move its contract to Droga5, owned by Accenture Song, in November.
Internal Factors and Market Shifts
Industry sources suggest that the decline accelerated following the departure of key personnel approximately four years ago, initiating a domino effect that led to clients disengaging. The departure of essential staff can erode trust and create a perception of instability for clients concerned about continuity.
The agency's withdrawal from pitching for key accounts, including Woolworths and Australian Retirement Trust, signaled its diminishing capacity or confidence. Notably, the Australian Retirement Trust account, previously held by M&C Saatchi for three years, was eventually won by its historic rival, Saatchi & Saatchi.
Workplace reviews on sites like Glassdoor had also indicated a downturn, with comments citing a lack of sufficient work and the sentiment that the agency's peak was in the past.
Some industry observers point to a broader market trend favoring independent Australian agencies over global networks, which can face pressures to repatriate profits. The decline of M&C Saatchi Australia and New Zealand (AUNZ) is seen by some as reflecting this shift, with an increasing emphasis on agencies demonstrating consistent new business wins.
Failed Buyout and Restructuring
Adding to the agency's commercial setbacks, a proposed acquisition by investment firm Parc Capital collapsed just weeks after its announcement. While Parc Capital cited the outcome of a due diligence process for the deal's abandonment, an M&C Saatchi spokesperson stated that a transaction could not be concluded on terms acceptable to all stakeholders.
These events followed earlier restructuring, including the closure of its in-house media business, Bohemia, and a 20% reduction in staff in June after reporting a nearly 32% drop in revenue. The agency's executive leadership team in Australia was led by Chief Executive Dani Bassil.
In response to the failed buyout, M&C Saatchi's London headquarters indicated that M&C Saatchi AUNZ was in discussions with clients about ongoing work and the potential transition of business to other parts of the M&C Saatchi group. The statement clarified that this decision specifically affected the Australian and New Zealand advertising agency business and would not impact M+C Saatchi World Services, a government services and behavior change agency that continues to operate in Australia.