INTERVIEW: M&C Saatchi worldwide CEO on China, chutzpah, cash acquisitions

The US is still the most competitive advertising market in the world with 42 per cent of the top 50 agencies' revenue, but to MacLennan, China will soon move from third-largest to second best.

"China, along with India, are two emerging markets we're looking at because they're very big, growing and strategically important for us. Here is our investment priority: China, India, then the US," he tells Campaign Asia-Pacific.

China's revenue contribution to M&C Saatchi's global revenue pie is relatively small, which is why the agency wants to increase its presence in the mainland aside from the two offices in Shanghai and Beijing run by China CEO Angela Hsu. "China is slightly under-represented for us, but that will change". So will false starts made in the past, namely M&C Saatchi-I, a digital arm established in 2009 that does not seem like a good idea now. "Having a separate digital agency is not the best business model, so we intend to merge it into the group," he reveals.

Turning back to 'Chindia', a two-pronged investment strategy is in the works for the two markets, starting with using the cash M&S Saatchi is sitting on to acquire modest-sized specialist agencies in non-traditional advertising disciplines such as mobile, events PR, brand activation, and shopper marketing. "We don't want agencies who want to sell themselves, but who want to join us," MacLennan says. "We will leave them with a large minority stake, like 40 per cent, so they remain incentivised to grow their shares to 400 per cent, maybe."

The second prong in his strategy is hiring talent in the above-mentioned disciplines. "It's a straightforward objective but a hard one," he admits. In China particularly, he is after adventurous and inquiring minds, which may be hard given the collective, less-than-individualistic mindsets of ad workers there.

Other bumps on the road: offices in Madrid, Cape Town, Singapore and Thailand were opened only to close again, due to "people issues", MacLennan reflects. "We hired people to manage what we had rather than to grow the business, so that was what we got. We hired out of sentiment or convenience. But one learns those lessons." The relaunch in Singapore took place in May.

Undiscouraged and moving on, MacLennan started up an Abu Dhabi office three months ago, and because the agency does not have much of a Southeast Asia presence, his hunting ground includes Indonesia. "We want to be have as few offices as necessary—that means in key geographies only." This year, MacLennan's plate is full with his focus on New York, Stockholm, Abu Dhabi, China and India; and next year Turkey, Warsaw, and Indonesia.

As for clients, "it's no big secret, but we will look for international clients who want an entrepreneurial culture instead of a status quo environment", he says. Garmin, Etihad, Siemens, Larsen & Toubro, Future Sharp Skills, SOTA Malaysia, Google, Vertu, Volkswagen are recent new wins, but that star in the sky MacLennan wants to reach is automotive clients on a regional level.

Many of these names are won on a domestic basis, and he attributes that to the bottom-up structure of the agency. "There is stronger localisation because we are not a jelly-mould agency. We have a saying: 'You eat what you kill, you do not get fed from the mother bird in New York.'" MacLennan's appetite as worldwide CEO is still to seek out internationally aligned business.

Reacting to the news of micronetwork BBH being bought by Publicis, he comments, "It's an easy way to grow, but they won't remain as independent as they're insisting at the moment." He is adamant about M&C Saatchi's independence, eschewing the idea of being bought. "There is an in-built logic and our 'brutal simplicity of thought' culture that makes it difficult to buy us unless it's a hostile takeover, because we, as shareholders and managers of the agency, also have equity in it."

"People join us because we pursue an independent spirit that makes us troublesome. We don't like to be told what to do, and we don't like rules. The rigid 4A groups feel like financial institutions that happen to do advertising. They may be bigger than we ever will be, but we stand for something different. I even encourage people to be rude to me, done with some sense of humour and style, of course," he adds.

MacLennan does not disclose growth targets for the agency, but articulates how his performance will be measured. "We are very honest with ourselves," he laughs. "I don't mind being talked about by our competitors in negative ways. The more chutzpah we have, the more notorious we get."