M&C Saatchi is tapping into what it calls a "utopian space" for brands, broadcast and ad agencies with its recent acquisition of film and television production studio The Human Indomitable Spirit (THIS).
Speaking to AdNews, M&C Saatchi CEO Jaimes Leggett said broadcasters have less budget to play with and brands are increasingly trying to connect with consumers in different ways, which has driven the demand for brand-funded films and TV.
“The world of marketing communications is changing. Our clients’ needs are evolving and our capabilities need to change to reflect that,” Leggett said, adding founders Michael Lawrence, Nicholas Cook and Taylor Steele also hold the same belief of where the industry is heading.
“Advertising is still a critical part of our business and will continue to be. I don’t see that ever changing but I see us doing more than just making posters. We are constantly adding to our arsenal as needs evolve and change so partnering with THIS is just a reflection of that.”
Leggett said gone are the days where the big broadcasters used to pay for the production of a series or film with their margins being slashed.
"On the other side, consumers are drawn to content that is interesting and brands are having to find ways to engage with consumers and entertain them while delivering a message,” he said.
“As a result, we are seeing brands evolve out of the world of just simply producing linear advertising and start to explore producing content in order to engage and entertain consumers.
“We found broadcasters needed support, clients needed support and we needed the capability to meet that demand.”
THIS founders Michael Lawrence, Taylor Steele and Nicholas Cook
The acquisition allows M&C Saatchi to explore new opportunities outside of traditional advertising formats, but Leggett doesn’t see the new unit taking away work from the agency’s in-house production company, Make, or its main communications business.
“It’s not about cannibalising. It’s about providing a more holistic set of services to our clients. As their needs change, so should our capabilities of a business,” Leggett said.
“The shift away from linear advertising is not a new insight for us. If you look at the best businesses around the world, they have been producing content for some time. Previously, a lot of that content has been outsourced to external partners but now we are doing enough of this type of work to invest in the internal capability.”
THIS is currently working on a project out of Los Angeles that is funded by three brands in the US that aren’t M&C Saatchi clients.
Another example of a project executed by THIS uses a handful of Australian celebrities and airs in India, Australia and South Africa with brands in each market funding the film, with the idea starting with a current M&C Saatchi client.
“Some of the work is for existing clients that has become bigger. Some of the work is a creative idea that has been sold to other clients and some of that work has been brought to us by Australian broadcasters,” Leggett said, adding the agency won’t use THIS as a “Trojan horse” to strongarm new clients.
The way brands are integrated into THIS' content varies on a case by case basis. He gave the examples of Channel Seven's X Games integration with Subway which has “overt” branding within the programming, whereas Ripcurl’s four-part TV surf series subtly reinforces the brand’s connection with the sport.
“You’re not going to go to a cinema and watch an hour and a half long ad, but you may go to the cinema and watch really interesting content and walk away with a particular understanding of what a brand stands for,” he said.
As for more acquisitions, Leggett said he’s always inquisitive, but it's not the core focus for the business.
“Our growth isn’t predicated by acquisitions. We have largely grown by seeing great opportunities in the marketplace, hiring brilliant people and empowering them to run at those opportunities. I don’t think you’ll see a lot of acquisitions as it’s not our core strategy,” he said.
“But will we continue to grow our group offering? Absolutely. Will you see more work around the content space? Absolutely. It’s by no means the only thing we are doing.”
Leggett is speaking at AdNews Lessons in Leadership event in October. Read more about the event and get your tickets here.
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