Saachi brothers come to the party

Melbourne Herald Sun, Friday 15 October 2010.

A week ago famous British ad agency Saatchi and Saatchi celebrated its 40th birthday and the biggest surprise was the guests - brothers Charles and Maurice Saatchi, who stormed out of the agency after a boardroom coup in 1995, to found M&C Saatchi.

They joined 1500 past and present staff and clients to celebrate the early days when they conquered the world, creating some of the most memorable ads and commercials - ever.

In 1970 they generated a storm from the start with the then shocking photo, even for Swinging London, of a "pregnant man" holding his distended tummy. The headline read: "Would you be more careful if it was you that got pregnant?"

Anyone who visited the UK in the years that followed will remember the beautiful, subtle ads for Silk Cut cigarettes, the magic of their British Airways commercials. And one campaign that travelled the world was "Australians wouldn't give a XXXX for anything else", for a certain Aussie beer that became popular in the London pubs.

The creativity came from Charles Saatchi, who built advertising's sharpest creative departments around the world, especially Australia.

These days Charles is probably even more famous to the general public as the lucky husband of Nigella Lawson. He gets the soulful eyes, the heaving bosom - and she can cook. What more could a man want?

Back in 94 the Saatchis’ departure dealt the agency some near-mortal blows. Mars walked out, while Dixons electrics stores, Mirror Group Newspapers, British Airways and Gallaher tobacco accounts followed the brothers to their new start-up, M&C Saatchi.

However, to everyone’s surprise both agencies recovered and flourished, to the point where they are not only talking but sharing parties. Not political parties though. In the recent UK election Saatchi and Saatchi did the Labour campaign while M&C did the Conservatives.

Here in Australia the agencies mirrored their parents. M&C Saatchi opened in Sydney with a coup - the Qantas account. The two have been fierce rivals ever since.

Today M&C have over 400 staff and are one of the biggest agencies in the country with clients like ANZ, Optus and Freedom.

Currently they are taking some satisfaction from their recent win of David Jones from their brother agency - the new campaign starts next week.

Of course in advertising the agencies may change but you’ll always come across the same old faces. In this case, 30 staff have moved from the old agency to the new. The more things change...

DJs is not the only pain Saatchi and Saatchi have been suffering down under. This week they have lost their important Toohey’s New and Hahn accounts, though they will be grateful that these did not move to their fraternal rivals.

The pressure is mounting though. Just a week ago their keystone $50 million Toyota account also came under threat, with a slice of it going to Droga5. An agency born in London from ex Saatchi staff and also repeating the success pattern in Oz.

So did Australian M&C fly up to London to join in the party? “No,” said Chairman Tom Dery. “I did receive an invitation but things were too busy down here. That party was not just for Saatchi and Saatchi but for all of us who came from the brand. We’re more interested in celebrating our own 15th birthday, in three weeks.”


If he had attended he could have recollected old times over a beer in their local pub next to the office in Charlotte Street. Appropriately named, “The Pregnant Man”.

Pills and potions beat Holdens and Fords

Melbourne Herald Sun, Friday 8th October 2010

Automotive is no longer king of Australia’s high-tech exports. You could say their leadership has been nobbled - today’s big winner is pharmaceuticals.

Yes, we export more pills and potions than Fords and Holdens. In fact IBISWorld researchers believe that in the coming year our sales will be $4.3 billion. That’s nearly half of all exports that haven’t been dug up or grown.

It’s interesting that although major markets, as you’d expect, are New Zealand, South Korea and the US, we also have a burgeoning trade with China and India - who are no pygmies in their own abilities to make and export medicines.

The secret is that we have a good grasp at the leading edge of medicines. Drugs like the influenza cure Relenza, invented by the cooperation between scientists at CSIRO, Monash University and ANU. Earlier this year the world had a scare over swine flu and all of a sudden governments around the globe were stocking tonnes of the only reliable remedy - Relenza.

Dr Fiona Wood made history with her ReCell spray-on skin. The dividends have been coming in, like last month’s announcement of a $2 million contract with the US Army.

But let me ask you a question. Where is the biggest producer of opium poppies in the world? Burma? Afghanistan? Nope. Tasmania.

Yes, Tasmania is the world's real Golden Triangle. It produces 51 per cent of the world's morphine concentrate, grown by 1000 licensed farmers. And then it is manufactured in the world's biggest opium factories - in Port Fairy, Victoria.

Of course, this information is not shocking news because it's all strictly legal - the opiates are used for medicines like codeine, thebaine and morphine. The only unauthorised junkies were a mob of wallabies who jumped a fence, got stoned, and made crop circles. (Cross my heart, it's the truth!)

Big pharma, however, is facing problems for the future. Some of the most lucrative patents in history have recently expired or will soon do so. Asthma drug Advair, antibiotic Levaquin, cholesterol drug Lipitor, and the invention that made Britain great, Viagra, are all expected to go off patent this year. This then makes them open game for the smaller generic manufacturers.

A blockbuster drug can also explode. Like Vioxx, which cost Merck & Co over $5 billion in legal damages, or the newly emerging case from users of Glaxo’s diabetic drug Avandia which is also being accused of causing heart problems.

Added to this, the government's Pharmaceutical Benefits Scheme has locked down the prices of many drugs and ensured that Australia has some of the lowest prices in the developed world. Good news for consumers but not for profits.

But as always it's swings and roundabouts. With a greying population about to be hit by a flood of baby boomers, the pharmacists' tills will ring ever louder for some time to come.

The companies and universities are not standing still, either. Last month the Australian Bureau of Statistics reported that this country’s research investment has just topped $1 billion. The hunt for new cures is relentless.

So the 40,000 employees in this $18 billion industry can regard their jobs as being pretty secure for some time to come.