Meyer's Many Shades of Grey.
In the 1960s, for example, Meyer built Grey's package goods business; in the '70s, he took the agency global. (Today it has 408 offices in 158 cities in 90 countries.) In the '80s, he led the industry in developing the subsidiary businesses (health care, direct response, public relations, etc.), and in the '90s, he diversified significantly into the technology area and developed partner companies that today represent nearly half of his company's total revenues.
Then, in January 2000, the so-called richest man in advertising bowed to the pressure and the inevitable, and appointed a new generation of management. At the same time, he restructured Grey, set up a holding company, renamed it Grey Global Group, dropped the limiting word "advertising" (Grey Advertising is now Grey Worldwide), and installed himself as the reigning royalty. He is now chairman, president, and CEO of Grey Global, continuing his trifecta in a new nurturing role.
But the 73-year-old chief dismisses the notion that he might be winding down. "I'll be helping all our companies strategize their growth," he says. "When will I retire? To paraphrase Warren Buffet, five years after I die."
And so strong is the stamp of this brilliant autocrat--Grey and Meyer have become virtually synonymous--no one in the kingdom is complaining. When patriarch Meyer started in 1970 as CEO, Grey stock was $5 a share. Recently it closed on the NASDAQ at over $450, (Meyer owns around 70 percent of it.)
Under his reign, Grey's billings soared by a factor of 30 from $250 million a year to more than $8 billion, making Grey the sixth largest global communications network in the world and the biggest ad agency in the U.S. With Young & Rubicam's betrothal to WPP, it's the last remaining major independent. But Meyer sniffs at the term. "We're not independent; we're beholden to our shareholders," he says.
Ed Meyer was born just eight blocks from where he now lives in the 70s on Park Avenue in Manhattan. As a student at the private Horace Mann and public Stuyvestant high school, he haunted the theaters of New York dreaming of becoming a comedic playwright like Moss Hart and George S. Kaufman. During his service in the Coast Guard, through college and his first few lobs and even for a time at Grey through the 1970s, he wrote plays in the evening. "I've got the first act of a dozen comedies sitting in my drawer," he admits.
At Cornell during World War II, Alfred Kahn, Meyer's economics professor, told him he thought Meyer had a real feeling for the subject. At Kahn's urging, he considered economics, but instead, after graduating with honors, returned to Manhattan and enrolled in the Bloomingdale's executive training program. "I learned to be a merchant prince in women's lingerie," he says.
Three years later--determined now to get paid for his writing--he joined the Biow Co. as a copywriter on Lava Soap a small Procter & Gamble brand. But he "hated the account guy for his verbal ignorance and that he earned more than I did," he recalls.
That antipathy propelled Meyer to switch horses. After three years at Biow, he joined Grey in 1956 in account services. "But I remained the creatives' champion from then on," he says. At that time, Grey was a one-office agency that billed less than $30 million. Five years later he was appointed executive VP for account services. He was elected president in 1968 and elevated to CEO and chairman in 1970. And 30 years later, he still still writes his own speeches.
In fact, Meyer has always written his own agenda--and he's not shy about taking credit for it. Even as a pup in the 1960s, demonstrating the force of character for which he is widely known, he persuaded the company founders to go global and buy agencies around the world. "For years, Grey was New York-centric. I convinced Arthur Fatt and Lawrence Valenstein, who were then in their 60s, to risk taking the agency international on their own dollar," says Meyer.
It turned out to be a good call, though it didn't seem so right away. "It was a real leap of faith, very proactive and very uphill," he says. "We didn't have many global clients for a few years-all expense and no income--and were fighting an entrenched but very inefficient system where brand managers all had their own agencies. Ultimately, we offered accountability...and prevailed."
Today, Grey serves more multinational clients than any other global network and more than half of its worldwide volume comes from outside the U.S. "In the '60s, buying agencies around the world was doable," says Meyer. "By the '80s, it wasn't affordable. Now there's nothing left to buy."
Still, buy he does. Last year, aided by a handful of lieutenants, Meyer authorized the purchase of almost one new agency per week in Malaysia, Japan, India, Brazil, New Zealand, Peru, Argentina, South Africa, and elsewhere. Well-versed in perhaps a dozen industries, (as well as his own e-mail), Meyer says he makes decisions based on "focused intuition."
This energetic taskmaster has pushed Grey's boundaries in more than a physical sense. Fifteen years ago, Meyer began engineering the transformation of Grey from an ad agency into a marketing services company, with 10 specialties including direct response (Grey Direct); interactive marketing and e-business consulting (Grey Interactive and Beyond Interactive); public relations (GCI/APCO); global media (MediaCom); sales promotion (J. Brown/LMC); health care advertising (Grey Healthcare Group); entertainment advertising (GWhiz! Entertainment); Hispanic advertising; and package design, with three more incubating. Grey now has 72 new media companies worldwide and is pioneering research in untested markets like China.
"Next year, half of our billings should come from non-advertising ventures," says Meyer. "Advertising is a growth business, but marketing services is growing even faster." One of Grey's Internet services companies is up 400 percent; overall marketing services is up over 20 percent compared to 8 to 9 percent growth for advertising. "Here's a smart, tough guy who's right more often than he's wrong," observes analyst Alan Gottesman, managing director of West End Communications.
Meyer concedes he's made mistakes--and he's candid about why. "I'm very slow to dismiss people who don't produce, because of arrogance on my part-- believing I can make you better, I can fix it. It took me 15 years to get rid of the head of an office who did poorly and not because I'm kind-hearted," he says.
Grey has never attracted attention as a creative cauldron, although some of its campaigns have lasted in the minds of consumers: "Choosy mothers choose Jif," "The seafood lover in you" for Red Lobster, and Mennen's "For skin almost as soft as a baby's behind." Rather, strategic repositioning has been its trump card. When Grey first worked with Slim Fast, it was strictly a "diet" product that did less than $60 million a year. The agency repositioned it as a nutrition product representing a "healthy way of living and healthy eating, which incidentally took off weight as well," says Meyer. The brand exploded and Uni-lever recently bought it for $2.3 billion.
Similarly, Pantene was an insignificant brand created by a P&G chairman in response to his wife's desire for a specialized product, he says. "It had a .03 share before Grey repositioned it to focus on healthier vitamin-enriched hair and blew it out as a mass-market product." Pantene became the world's largest shampoo. "In a way, it was the world's first cosmeceutical," says Meyer.
Grey was also at the forefront of using TV to sell movies. "Before, Hollywood studios perceived TV as the enemy, and way too costly. We convinced Warner Brothers to advertise on prime time. Now TV is the principal medium studios use to launch a movie--and Warner Brothers the biggest advertiser on it," he says.
Not every year has been a stellar one during Meyer's reign, however. In 1998, net income dipped 15 percent as clients like Barilla, Dannon, Kraft Foods, Lexmark International, and Mitsubishi Motor Sales of America jumped ship. "That was a rough patch, but we've more than made up for it, adding $690 million in new media billings last year," Meyer says quickly.
The jury is still out on whether Grey will get completely back on track, but already, 2000 is shaping up to be a record year. Last year and this, several current clients heaped more on Grey's plate, including American Home Products, Cannon, Hasbro, Kiwi, Mars, Playtex, P&G, 3M, Brown & Williamson, Seagram, and Sprint. The agency recently also won Oracle's $100 million global account as well as $140 million worth of billings from Glaxo-Wellcome for Imitrex, Zyban, and Wellbutrin.
The firm has also benefited from dot-com infusion with such accounts as Americangreetings.com, kforce.com, GiftCertificates.com, and E*Trade Canada. Meyer anticipates dot-com spending to "become more rational," but he isn't worried. Those accounts never represented more than 4 percent of Grey billings, he explains, and the company extrapolates prepayment for media buys from any client whose finances it deems shaky.
Meyer thinks the consolidation that has shaken up the ad agency world in the last few years is nearly played out. He scoffs at rumors that Grey might merge with fellow P&G agency Saatchi & Saatchi. "We're comfortable in our own very ample skin. With $8 billion in billings and offices around the world we can handle any multinational and there's no need for any merger," he says.
Besides, Meyer adds, Grey simply has a different culture. "Instead of multiple agencies offering a bazaar of options that don't add to a client's benefit, we only want best-of-breed agencies," he says. "This is a service business; clients are our first consideration."
Meyer says he learned that lesson from mentor Arthur Fatt, "a compact, dapper man of monumental energy," who was a wonderful family man, a self-effacing humanitarian, and philanthropist, as well. While he never craved the limelight--believing it belonged to his clients--he became a statesman and spokesman for the advertising profession and helped to destroy the huckster myth. He was a shirt-sleeves proprietor who treated clients' businesses as his own. It led to better strategic problem-solving, real satisfaction, and great work."
Edward H. MEYER
Chairman and Chief Executive Grey Global Group
"When will I retire? To paraphrase Warren Buffet, five years after I die."
Family: Wife, Sandy; daughter, Meg, 40; son, Anthony, 38. Of his mother, Meyer says: "Mom would have been supportive if I were a transvestite."
Education: B.A., economics, Cornell University, 1949.
Drives: Lexus and SUV. "When we had Mitsubishi, I drove one. Now we don't have it. I'm free and over 21 and I can drive anything I want."
Passions: Tennis, trying to learn golf. "I read incessantly with eight to 10 books on my nightstand at any given time."
Pet Peeves: "As a type-A personality, being caught without something to do."
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|Title Annotation:||Edward H. Meyer of Grey Global Group Inc.|
|Publication:||Chief Executive (U.S.)|
|Date:||Oct 1, 2000|
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