Exactly six years after setting up M&C Saatchi Indonesia, president director Anish Daryani has acquired M&C Saatchi Holdings Asia Pte Ltd, the holding company of the Indonesia entity, buying out 55% of the group’s equity for an undisclosed sum. As a result, M&C Saatchi Indonesia will be rebranded as a new independent entity.
Daryani set up the Jakarta office on January 24, 2018, with co-founding partners chief creative officer Dami Sidharta and executive strategy and digital director Elki Hendria. At the time, he was the former CEO of Phibious Indonesia and had about 15 years of advertising experience. During his tenure, Phibious won Indonesia Independent Agency of the Year at Campaign's Agency of the Year Awards for three consecutive years.
Daryani’s announcement of going independent in Indonesia comes amidst the agency’s ongoing struggles with exits, restructuring, and consolidation efforts at the group level following Zillah Byng-Thorne’s appointment as executive chair and the departure of Moray MacLennan as chief executive in September.
Byng-Thorne is currently searching for a permanent replacement for Moray MacLennan. In the interim, she informed investors that the agency group needed to focus on simplification and collaboration. She reiterated this message following the move to a UK “super-group” with one P&L and the changes at Sport and Entertainment in Europe.
The Asia operations have been mired with changes as well.
Most recently, the London-based listed firm announced divesting interest in struggling subsidiaries in Hong Kong as well as Sweden to local founders. At the end of the calendar year in 2022, the Sweden unit generated a loss before tax to the tune of £360,000 (US$ 454,950) and is expected to be loss making in the year ending 31 December 2023. M&C Saatchi Spencer is not in the best shape either and expected to be loss-making in 2023.
The group sold 100% stake in M&C Saatchi Spencer Hong Kong to veteran creative leader Spencer Wong, who launched the Hong Kong operations in 2018, marking the ad agency’s ninth office in Asia.
The dual axe of the 2019 anti-Beijing protests in the SAR, coupled with extended Covid shutdowns, meant financial uncertainty and operational turbulence for Wong’s entity. The Hong Kong arm was envisioned to service local businesses and Chinese businesses seeking international expansion. M&C Saatchi Spencer was positioned to complement existing operations in Shanghai, Kuala Lumpur, Tokyo, Jakarta, Delhi, Mumbai and Singapore by offering advertising, digital and social media marketing, whilst building its own unique niche.
Since the divestment announcement on December 22, Wong decided to stick with the company name and rehaul operations entirely. In a statement issued to Campaign, he said: "We will keep the operation under the name M&C Saatchi Spencer, aiming to focus on the branding and marketing services in Hong Kong and the Greater Bay Area." He added that the agency has a new and exciting business model and strategic development in the pipeline that will be announced soon.
Another significant development was the retrenchment of the Singapore office run by managing director Madina Kalyayeva and chief creative officer Ali Shabaz and marked by several exits, including that of Asia CEO Richard Moorewood. Moorewood left the agency at the end of December, 2023 after a seven-year term. He passed the torch to Justin Graham, Australia group CEO, who took over as the new regional chief executive and manages Asia operations from a combined office in Sydney.
In Asia, profit-making entities are the Malaysian wing, run by CEO Lara Hussein and Daryani’s Indonesia office. In May 2023, then-chief executive Moorewood added additional duties of Southeast Asia growth and development to Daryani’s title. The agency has undergone a significant overhaul since 2019 when it uncovered accounting irregularities that led to profit warnings and board resignations.
It has since closed or sold several offices, cut costs and raised capital to strengthen its balance sheet. Globally, it’s not in the best shape either, reporting a 7% decline in global revenue and a $10.23 million drop in operating profit in H1.
The agency finished 16th in the October 2023 creative table, down from the third spot at the start of the year, in Campaign’s Advertising Intelligence tool’s ranking that tracks new business on a global level. Regionally, estimated year-to-date net billings remained at $127.3 million with 36 new client wins. Top among those for the agency: Resort World Sentosa, a finance and insurance client, and Australian Retirement Trust.
Even after these changes, Graham, the new regional chief executive, assured Campaign that Asia is still very much a priority for the agency. “Asia is an important region for growth and innovation. The goal is to work towards centralised collaboration, stabalise and grow the company to make it future-fit,” he said.
Q4 earnings are yet to be announced; the company anticipates a ‘small single-digit’ revenue dip for H2.
Indonesia: The road ahead
Daryani launched the Indonesia vertical on January 24, 2018; he is possibly looking at a re-launch date at the same time. He tells Campaign that business with all clients, talent, partners and vendors will remain unaffected and continue to stay with the new rebranded entity. The new agency will even operate from the same premises in Jakarta.
It must be noted that at this point, the creative, digital, PR, and activation businesses are going independent with Daryani, but the profit-making Performance business continues to operate in Indonesia under a separate legal entity.
In 2022, Performance was the fastest growing sector for the agency, it added 24% revenue to the earnings with key business wins such as Asana, Asics, Julo, Noice and Jobstreet. Top performers like Kabeer Chaudhary and Roshat Adnani earned promotions. Chaudhary is now the Singapore-based global CEO for the Performance vertical and Adnani is the managing director for APAC, overseeing the P&L for the region.
Commenting on the development, Daryani, said, “M&C Saatchi is one of the strongest brands in the business, and it has been my life’s honour to serve the group over the last six years. We started M&C Saatchi Indonesia with just the three of us (with Dami and Elki) and have grown to a team of a hundred.
“We’ve earned many Agency of the Year titles over the years, among other awards, including our first Cannes Lion, attracted the best talent, and built a formidable business. Here, I have learned immensely and forged strong bonds with friends I made the world over from across the network. However, as a creative entrepreneur, some of my ambitions can only be met as an independent entity, which regretfully involves my exit from the group.”
Daryani is grateful for the “good times” and Byng-Thorne’s keenness to agree to a deal that allows him to race towards entrepreneurial ambitions. He added: “For M&C Saatchi Group, I will continue to be a reliable friend. As we take our second first step, we wish to continue serving our clients with the same passion and integrity and setting higher benchmarks in the industry.”
Meanwhile, Bing-Thorne said, “We have enjoyed our relationship with Anish and wish him and (his) colleagues all the very best for their new venture.”
Daryani’s current clients include PermataBank, Bytedance, Sampoerna—Phillip Morris, Tempo Scan Group, Unilever, Kimia Pharma, Mandi Pharma, Mastercard, Grab, LG, Pertamina, Kemenperekraf (Wonderful Indonesia), Asian Paints, Adaro Energy, Ismaya Group and Astra Credit Company, among others.