Saatchi& Saatchi Advertising
O. Milton Gossett, left, and Maurice Saatchi and right, his brother Charles.
Image taken from The New York Times, 3/16/2002, as seen on the day that Saatchi & Saatchi acquired Compton Communications.
Milton Gossett’s relationship with the world
renowned Saatchi & Saatchi Advertising came about in 1982 through the
engineering of a major merger with Saatchi & Saatchi Advertising, Europe’s
largest agency. This merger propelled Saatchi & Saatchi Advertising to the
then-stratospheric heights of 147 offices in 87 countries and a worldwide
billing of more than $4 billion. In 1981, Saatchi & Saatchi Advertising was
worth $350 million and was a subsidiary of Compton Communications USA, which was worth $650 million.
Saatchi & Saatchi’s acquiring of Compton Communications was major news
within the advertising industry. Saatchi & Saatchi was attempting and
negotiating to buy a major advertising firm worth almost twice as much. This
merger would give London based Saatchi & Saatchi Advertising major presence
in the US.
The Saatchi brothers desperately wanted to become international and to hold a strong position within the US. The problem facing Saatchi & Saatchi was that they handled some of Procter & Gamble’s advertising in Europe. Procter & Gamble favors distributing it’s advertising amongst several advertising agencies. Several top agencies in the US had accounts with Procter & Gamble, and Saatchi & Saatchi were approaching these agencies with takeover bids. In 1979, The New York Times reported, “Saatchi & Saatchi, one of Britain’s largest ad agencies, is negotiating to buy Cunningham & Walsh, according to two well-informed advertising executives.” In the same article, Gossett was quoted as saying, “I am aware of their [Saatchi & Saatchi] urge to be a presence in the United Sates and they are doing nothing without our knowledge” (The New York Times, 1979). With this news, Procter & Gamble announced that if these takeovers actually did happen, they would remove accounts from Saatchi & Saatchi London. This removal of accounts made Compton USA very nervous and something had to be done to protect their relationship with Procter & Gamble in London. At this time Gossett decided to increase Compton USA’s share in Saatchi & Saatchi Advertising to 40 percent in order to secure accounts and the control of the Saatchi brothers.
After many discussions, the Saatchi brothers finally agreed to allow Compton USA to increase its stake in the London subsidiary. When both brothers went up to sign the papers, Charles Saatchi said “no,” and walked out of the office; the deal never went through. Some time went by and rumors spread throughout the industry of Saatchi & Saatchi’s next move. Finally, negotiations were reopened and Maurice Saatchi suggested to Gossett that Compton buy 100 percent of Saatchi & Saatchi Advertising. Gossett feared he could not get the Board of Directors to agree because the Saatchi brothers were a “wild” agency and his board was quite conservative. This deal, if approved, would secure all of Compton’s standing and fully acquire the top advertising agency in British advertising (Fallon, 1989).
The board negotiated with Saatchi & Saatchi Advertising and Compton was actually considering the acquisition of the British advertising agency. During these negotiations, Maurice Saatchi shocked the board by suggesting, “Why don’t we buy all of YOU instead” (Fallon, 1989). The Saatchi brothers actually convinced Compton USA to agree to this suggestion. On March 16, 1982, The New York Times printed “Saatchi Acquires Compton.” This article astounded the advertising industry with the first line reading, “It was the case of a lion gobbling up an elephant” (The New York Times, 1982). The Saatchi brothers finally had their presence in the United States. The excitement did not stop there. After the negotiation was over, Gossett was named the chairman and chief executive. His first job would consist of renaming the newly formed ninth largest advertising agency in the world. Gossett decided the company’s name would be “Saatchi Compton.” In a final meeting after the news of the merger hit the press, and before signing the final papers, Charles Saatchi said, “I hate to do this to you, but we need both Saatchis in the name” (Fallon, 1989). That being the last straw, Gossett stated that negotiations were off. On July 2, 1982, an article brief was printed in The New York Times, stating that “…the deal, by which Saatchi & Saatchi, Britain’s largest agency, would acquire Compton Communications, was signed, sealed, and delivered.” Four months after the initial negotiations and announcement of Saatchi & Saatchi’s merger with Compton USA in March of 1982, the deal was over and Gossett decided to name the industry giant Saatchi & Saatchi Compton.