Blamer Stays at Grey, FCB Left Searching

Meyer makes concessions, hangs on to New York president

NEW YORK What did Ed Meyer do to convince Steve Blamer to stay at Grey Worldwide?

Neither man is talking, but sources said Blamer, president of Grey in New York, had been expressing concerns over the course of about eight months on topics ranging from his title to the resources afforded the New York office to the financial incentives given to senior executives. At least some of those concerns were likely resolved, sources said, to convince Blamer last week not to decamp for Foote, Cone & Belding.

As a result, several blocks down Third Avenue, FCB saw Blamer, whom sources described as the only serious candidate for the new position of North America CEO, decline that job. In that role, Blamer would have been the heir apparent to Brendan Ryan, 60, who has been CEO of FCB Worldwide for eight years.

Whether Blamer, 47, got that level of commitment from Meyer last week—in the form of Grey’s own North America CEO position—is unclear. Meyer, 76, CEO of Grey since 1970, is notorious for playing the succession card close to the vest. Unsurprisingly, all Grey observers received last week was a statement from Meyer and Blamer emphasizing that the two “are fully committed together to building Grey Worldwide.” That and a directive for everyone to get back to work.

Blamer’s talks with Interpublic Group’s FCB began in earnest several weeks ago, one source said, after what was described as a “major falling-out” between him and Meyer. Blamer was not on the team that brought in the $270 million Kmart account [Adweek, July 28]. Meyer excluded Blamer from that process and led the pitch himself, along with executives from other Grey Global Group companies, sources said.

Meyer is said to have originally balked at Blamer’s hope of earning a North America title. Sources said Meyer had also been quietly interviewing outsiders for that job, including former McCann-Erickson WorldGroup CEO Jim Heekin. Heekin could not be reached for comment.

In addition, Blamer has long wanted more resources allocated to New York. The office accounts for a huge proportion of domestic billings and has grown by some $700 million on Blamer’s watch through added business from clients such as BellSouth, Botox and Smuckers. Yet for a time in the past year, the agency’s search for a New York creative director was put on hold for lack of resources (that position is still open). Meanwhile, New York has shouldered the burden of having to bolster the fortunes of the entire network as other regions foundered.

Another issue has been the prospect of giving senior executives more of a financial stake in Grey as a means of retaining top talent. Meyer is famous for holding the reins tightly and rationing power to colleagues. Blamer, for example, is not an executive of Grey Global Group, the holding-company unit, nor is he (indeed, nor is any Grey executive besides Meyer) a major shareholder. At other agencies, including FCB, executives at Blamer’s level tend to have a bigger role in the business.

But Meyer’s approach also is potentially useful when it comes to retaining talent, as it gives him plenty of leeway to sweeten the pot without having to promise anyone the top job. According to one former Grey executive, the agency’s reputation for low compensation is unfounded, and highly valued employees tend to be rewarded handsomely if the agency truly wants to keep them.

However he pulled it off, insiders and observers with an interest in the agency expressed relief that Meyer managed to keep Blamer. “In the end it would have been a loss [if he had left]. There’s no question about that,” said John Miller of Ariel Capi- tal Management, Grey’s largest outside shareholder, with 33.4 percent of the common stock.

The missed opportunity will be felt keenly at FCB. The agency is considered to be on the rebound following a 7 percent drop in billings and revenue in 2002, to $3.7 billion and $350 million, respectively, according to industry estimates. It was also praised during IPG’s earnings call last month for keeping costs in line. This year, FCB’s U.S. network has won Diet Coke ($40 million in billings); Dannon waters ($10-15 million); GlaxoSmithKline’s Augmentin antibiotic ($3 million); and additional business from Qwest and Samsung.

Ryan and FCB Worldwide COO Gene Bartley declined to comment on the Blamer talks. FCB rep Bill Haney said, “We think Steve Blamer is a great guy. We think highly of him, but we couldn’t reach an agreement.” He declined further comment.

The fact that the talks leaked also may have been a factor in Blamer’s decision to stay at Grey. One source said Blamer, by all accounts a straight arrow, was “mortified” that the negotiations with FCB played out so publicly.