It’s A New Era For Grey As Meyer Passes Torch

NEW YORK Last week’s hiring of Jim Heekin as chairman and CEO makes clear the succession of Grey Worldwide, bringing to an end the autocratic reign of Ed Meyer, who has led the 88-year-old agency for 35 years.

It will now fall on Heekin to reshape the culture and industry perception of the WPP-owned network, whose longtime ties to cornerstone client Procter & Gamble are more of a defining characteristic than the agency’s creative work.

Seventy-eight-year-old Meyer, who hands over his worldwide CEO title to Heekin, enjoys an instant recognition and close association with Grey that is usually reserved for agency founders whose names grace the door. In that respect, the hiring of Heekin “marks the end of an era,” as one executive put it.

Heekin, who last week described Grey’s culture as “formal, businesslike,” added “I’m not out to change the culture, but I can tell you what I stand for: teamwork, talent and new business. … I hope to bring a new energy, a new vitality to the agency.”

Upon his arrival on Sept. 6, Heekin will report directly to Meyer, who said he will remain CEO of Grey Global Group through the remainder of his contract, which ends in December 2006. The holding company’s operating units, including G2, Grey Interactive, Grey Direct and Grey Healthcare, will continue to report to Meyer.

But Heekin will also be accountable to Martin Sorrell, the exacting CEO of Grey parent WPP Group, which bought Grey Global Group for $1.5 billion in March.

Sources said that Sorrell, on Meyer’s recommendation, reached out to Heekin in late April. They had their first informal “chat” at the Carlyle Hotel in Manhattan sometime in June. Contract negotiations have been taking place for weeks.

Meyer last week said he is confident that Heekin’s major agency and account experience and capabilities made him the best candidate to lead Grey.

In fact, he pointed out that he almost hired Heekin in the past. “I’ve wanted to hire Jim for a couple of years and came very close two years back,” he said, noting that in the summer of 2003, when then-Grey New York president Steve Blamer came close to leaving for IPG’s Foote Cone & Belding, he was in talks with Heekin. (Blamer stayed on, but ultimately joined FCB earlier this year.) “This is one of those chances in life that you get to revisit,” Meyer said.

Heekin will face several challenges right off the bat: to improve Grey’s margins, which historically lag behind industry standards; upgrade the creative product; provide a smooth transition for mega client P&G; and recruit a leader for Grey North America, a position that oversees Atlanta, San Francisco, Los Angeles and New York, and which last week he called his first priority.

“Grey needs to lift operating margins, which are way below the pack,” said Michael Nathanson, an analyst at Sanford Bernstein in New York. The shop’s margins, which have hovered around 5 to 6 percent in the past, were 8 percent in 2004, well below the big-agency network average of about 12 percent. “At the same time, the creative output at Grey needs to be improved. So I would assume [there will be] a lot of back-office cost cuts and new creative hires too,” he said.

North America president, chief creative Tim Mellors, whom Heekin has not yet met, has been credited with improving the reel during his 14-month tenure. He was on vacation last week and could not be reached.

P&G—a key attraction for WPP—will need plenty of attention. The Cincinnati client has been expanding its roster in recent months, adding the likes of independent Wieden + Kennedy and Publicis Groupe’s Fallon. And, as the client nears completion of a merger with Gillette, Grey could be facing more agency competition—likely from Omnicom shops.

In a statement, P&G said of Heekin, “We welcome him to the team and we look forward to working with him in building great brands that meet the needs of our consumers.”

Grey is the third agency CEO job in two years for the 56-year-old Heekin, who left Havas’ Euro RSCG on Aug. 1 after 18 months in the top job. Before that, he was CEO of McCann WorldGroup, which he left in February 2003 amid an SEC investigation of accounting irregularities. At each, Heekin moved swiftly—within the first three months—to install new top strategic, gain new business and hire creative leaders.

“As long as Ed is here, I want to take advantage of all he knows,” said Heekin last week. Although Meyer said he will stay on through ’06, it is believed the operating companies know that Heekin, whose contract runs through 2007, is their sooner-rather-than-later chief executive. As for Meyer, having Heekin will relieve him from “wearing two hats all these months,” running the agency and the other companies. “I’ve been overworked,” he said.

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