Through Thick and Thin

From the beginning, 19 years ago, it seemed to be an improbable association. David Abbott, known around London for his urbane demeanor and elegant writing, was going into business with Ed McCabe-Madison Avenue’s brilliant, bantam ad man, as scrappy in person as he is with a pen.
Abbott and McCabe decided to come together while sharing a ride following a mutual speaking engagement outside of London. “It was the ’70s, and I bought a stake in AMV [while sitting] in a Porsche,” says McCabe.
At the time, McCabe’s Scali, McCabe, Sloves was a bright light on New York’s advertising scene, and Abbott Mead Vickers was a fledgling agency open only a year and little known outside London. The intervening years have seen AMV grow into the largest agency in the U.K., while McCabe has moved on from the glory years of SMS to start his own small shop in New York. But if their fortunes have reversed, Abbott and McCabe have remained business partners and friends, with AMV reciprocating in the kind of support once extended to them by McCabe.
The relationship started with Scali, McCabe, Sloves giving AMV an early boost in life by purchasing a 23.9 percent stake in the young agency. Eight years later, McCabe, who was then the president and worldwide director at SMS, left his agency and moved to England for a one-year stint at AMV. The British agency and McCabe together tried to buy SMS from then-owner Ogilvy & Mather, but their efforts failed after WPP Group PLC bought O&M in 1989. Not surprisingly, in 1990, when McCabe started planning his own business, he knew who his partners should be.

“We’ve always stayed in touch and they’re wonderfully loyal people,” McCabe says. “So when it came time to open my own company, Peter [Mead] was the only person I would ever think of approaching. He totally understands creative people, fights for good work and knows it takes time to build a business.”
Just how loyal and patient is the source of speculation among many ad industry observers on this side of the Atlantic. Six years after opening, McCabe & Co. has yet to fully establish itself in the manner trumpeted in the full-page newspaper ad McCabe wrote to announce his new venture. “If you build it, they will come,” was the headline. Today, McCabe & Co. says it has $60 million in billings. Clients include perfume marketer Renaissance Cosmetics and insurance concern Reliance Holdings Group. Within the past year, McCabe & Co.’s two founding partners, president and chief operating officer Patrick Hillman and art director Simon Bowden, have left the agency.
AMV owns 49.9 percent of the convertible preferred shares in McCabe and manages the agency as an autonomous company within the AMV group. According to AMV’s 1996 annual report, at year-end McCabe & Co. owed AMV $774,000 in loans, accumulated interest and management charges-twice the amount of the previous year. The London agency has guaranteed a $3 million loan facility, which McCabe had drawn down completely by the end of the year, the report states.

Some insiders at Omnicom, the global holding company that owns AMV partner BBDO, raise questions about the strategic importance of AMV’s McCabe & Partners investment.
“That’s absolutely untrue about any pressure from Omnicom,” says Mead, AMV’s chairman. “And I’m 100 percent behind McCabe. I plan to spend even more time in the States with Ed. I think there’s a real sense of momentum there.” In June, McCabe landed the Reliance account and Petrie Retail’s Marianne and Stuart’s stores, both of which declined to disclose billings.

Mead acknowledges that high startup costs in the toughly competitive New York market have clouded McCabe & Co.’s financial picture, but he vigorously defends the investment. “It’s true there were quite high costs to start up the agency,” he argues. “If you take away interest costs, Ed’s business has been profitable. He’s never been a trading loss.”
Abbott is also unwavering in his support. “Ed has shown his commitment to his business, and he’s carrying on with his work in a tough business climate. I admire his sticking to it,” he says. “Why then would we withdraw support?”
Indeed, the 59-year-old McCabe is considered by many in the U.K. as one of the few remaining larger-than-life personalities who helped create modern American advertising. That sentiment may be largely behind AMV’s allegiance to McCabe, who, at 36, was the youngest person ever elected to the Copywriter’s Hall of Fame. But some people close to Mead and Abbott say there may be an even more potent reason. “You have to understand the loyalty of these guys,” says one associate. “Scali, McCabe helped them out when they had money problems. So they’re hanging in there with Ed now.” Adds another close observer, “Abbott Mead’s investment in McCabe is entirely emotional and entirely uncommercial.”
-Noreen O’Leary