THE QUEEN OF MADISON AVENUE: Shelly Lazarus - After 28 years, O&M’s leader is steeped in its culture. Caroline Marshall meets Shelly Lazarus

By CAROLINE MARSHALL, campaignlive.co.uk, Friday, 29 January 1999 12:00AM

The chief executive of Ogilvy & Mather Worldwide runs her global empire of 377 agencies in 97 countries from a splendid tenth-floor corner office in New York. It is decorated with hundreds of toy frogs. By any reasonable standard of advertising decorum, this is not the way for the sharp-suited and neatly coiffed 51-year-old leader of the world’s tenth-largest advertising brand to behave. An office like that of Interpublic’s Phil Geier, with its acres of modern art, yes. Or one full of antique furniture and Ralph Lauren, like that of Young & Rubicam’s Peter Georgescu, perhaps. But frogs - china ones, checked ones, knitted ones, no.

The chief executive of Ogilvy & Mather Worldwide runs her global

empire of 377 agencies in 97 countries from a splendid tenth-floor

corner office in New York. It is decorated with hundreds of toy frogs.

By any reasonable standard of advertising decorum, this is not the way

for the sharp-suited and neatly coiffed 51-year-old leader of the

world’s tenth-largest advertising brand to behave. An office like that

of Interpublic’s Phil Geier, with its acres of modern art, yes. Or one

full of antique furniture and Ralph Lauren, like that of Young &

Rubicam’s Peter Georgescu, perhaps. But frogs - china ones, checked

ones, knitted ones, no.



I know I will have difficulty framing any sort of polite remark until I

get it over with. Hey Shelly, what’s with the frogs?



Before answering, she strides across the office to pick up a specimen

that a client recently sent her from the Midwest. Press the right button

and it croaks. She does so and laughs ebulliently: ’For my first wedding

anniversary, I bought my husband a frog that said ’I’m mad about

you’.



A week later, George bought me one back, then we kept buying frogs for

each other. Now I can’t stop them coming in, three or four a week, from

all over the place.’



Anyway, Shelly Lazarus, Campaign’s first Queen of Madison Avenue. The

mother of three children, aged 11, 19 and 24, she is married to Dr

George Lazarus, a pediatrician. She succeeded Charlotte Beers as chief

executive of O&M in 1996 after a 25-year career at the 50-year-old

agency. She has a BA from Smith College and an MBA from Columbia

University. After Columbia she joined Clairol as an assistant product

manager. Two years later, in 1971, she was approached by O&M. ’Two years

at Clairol had made me a hair expert,’ she says with a grin. ’O&M needed

someone on their hair account. I figured I’d stay two years.’



I ask about her feelings on the O&M brand when she joined, and now.

’They are not all that different,’ she replies. ’When I came, David

(Ogilvy) was still here a lot of the time. I found an organisation

staffed by decent people with strong beliefs and an extraordinary

commitment to clients.



’A few years ago there were people here who suggested that the David

stuff had become irrelevant,’ she recalls. ’Someone even tried to

rewrite his thoughts in more relevant English! But that made others say

’that’s hogwash’, we should reaffirm David’s principles.’



Given that New York is where the power lies - it employs 1,200 staff and

commands half of the US network’s dollars 2.6 million billings - most

people would expect the agency there to represent the epicentre of

Ogilvy’s famous culture. Is this true?



’Yes, in the sense that David started the agency here, you have a lot of

the senior people here and traditions like the bagpiper at Christmas.

But I think that some of the smaller agencies are more ’true Ogilvy’

than New York - in the intensity of the culture and the shared point of

view.’



All this talk of institutionalised principles, continuity and shared

values belies the rough times that Lazarus has seen in her long career

at O&M. WPP’s purchase of the network in 1989 marked the end of a

dramatic bidding war that had led to an inflated purchase price of

dollars 864 million.



From his 12th century French chateau, the retired Ogilvy famously

opined: ’God, the idea of being taken over by that odious little jerk

really gives me the creeps. He’s never written an advertisement in his

life.’



More troubling, however, was the weak management, the departure of

senior executives (the chief executive, Ken Roman, resigned shortly

after the takeover) and the loss of clients: Shell, Unilever, Seagram’s

Coolers and Nutrasweet, Campbell’s Soup, Amex. With revenue off budget

by 40 per cent and operating margin at a measly 4 per cent, Charlotte

Beers, chief executive of the Chicago agency, Tatham-Laird & Kudner was

appointed to turn round O&M’s fortunes.



Lazarus recalls returning to the advertising agency in 1991, soon after

Beers was appointed, following her successful stint as president of O&M

Direct in the US. ’Direct was growing well,’ she says. ’Staff were

clamouring to join, clients were waking up to direct marketing. Then I

came back to O&M Advertising. We were losing people, morale was low, we

were in trouble on our big clients.’



Recalling this bleak time, she is characteristically honest: ’I’d have

nightmares about everyone leaving on the same day and me turning up for

work at the agency to find no-one there!’



Amex did take its dollars 60 million business to Chiat Day but O&M won

it back, which brings us to her most satisfying moment in the business:

’Turning everything round. Winning Amex was the validation.’ So how did

she pull it off?



’We just stayed with the brand when Amex went to Chiat Day. Chiat Day

wanted Amex to be young, hip, cool and trendy so they created

irreverent, cynical advertising. And the clients hated it because it

wasn’t them.’



’Staying with the brand’ is what Lazarus, who has managed some of O&M’s

flagship accounts - including Amex, Unilever and AT&T - is about. She

has a reputation as a patient business strategist who is prepared to

work hard to build relationships with senior clients. No-one felt the

loss of the Amex account harder than Lazarus, who spent six years as

group account director on the business and led the chase to regain it.

The key to the comeback was her links with the Amex boss, Lou Gerstner,

and his marketing chief, Abby Kohnstamm. In addition, Lazarus

commissioned new research, rehired Bill Gray from BBDO to run the

account and was rigorous with creative work. Not only was the business

back at O&M within 11 months but, when Gerstner and Kohnstamm moved to

IBM in 1994, O&M scooped its dollars 500 million global business too. It

was the biggest single account switch in advertising history.



IBM is now a blueprint for the network in the sense that, like Amex, it

has an individual client profit-and-loss line across the group companies

that work on the business. So what has this taught Lazarus in terms of

managing the in-fighting between ambitious managers, who are inclined to

put their own performance and their own client relationships before the

greater good of the network or WPP?



’It’s really very simple. IBM pays for a scope of work and, with a

single profit-and-loss line, how we split fees and allocate costs is not

an issue.



We are all encouraged to find the smartest solutions with no financial

incentive one way or the other.’



It is such incentives for co-operation across the network that WPP,

plotting from its mews headquarters in Farm Street, wishes to maximise,

thus making the parent company much more than a mere financial brand. On

the other hand, it’s no secret that WPP’s chairman, Martin Sorrell, is

never satisfied with the status quo and has a sometimes prickly

relationship with his agency managers.



In O&M’s case, there are two pieces of evidence to support this view:

the method of appointment of someone to the new post of group chairman

for O&M London, and the launch - or not - of MindShare in the US.



Even before the resignation last week of its chief executive and deputy

chairman, Tom Bury, who was not considered for the post, it was clear

that the job of group chairman for O&M London was earmarked for an

outsider.



A simple matter of poaching one of adland’s pounds 250K-a-year

heavyweight managers, you might think. But everyone knows that WPP - as

facilitator, catalyst or bully, call it what you will - is likely to

play a leading role in the appointment. In a business where all aspects

of people management are considered by agency chiefs to be central to

their role as manager of their own business, such intrusion from outside

- even when ’outside’ is the parent company - must seem a blow to

credibility.



And so to MindShare. WPP’s European media brand was formed in 1997 out

of O&M’s the Network and J. Walter Thompson’s media department. Although

WPP has already combined television buying negotiations for its O&M and

JWT agencies in the US, in a venture called the Alliance, one question

is going begging. When will MindShare launch in the US?



’The Alliance has been very successful for us, we were a little earlier

than you guys with pooling media, and we could change our name to

MindShare tomorrow ...’ Lazarus hedges. So will she?



’We might but that’s not particularly interesting to me. We have to keep

looking at it. The US media market is very different to the UK. Media

independents have not been terribly successful here. What we have to do

is figure out how we can retain the brand insight while moving beyond

buying. The Alliance is already working well for our clients, it’s also

driving costs down.’



Meanwhile, Sorrell is looking at groups such as Rupert Murdoch’s News

Corporation that are building increasingly powerful multimedia

empires.



He wants to offer advertising’s equivalent: clout, volume and power via

a single media brand.



With this in mind, I persist with the question: WPP wants her to launch

MindShare in the US - so does Lazarus have a timescale in mind? ’No,’

she replies. ’I know that WPP believes there is value in having a global

media company. I know they started thinking about it in London where all

the big media companies are independent. But I’m in the US, the

recipient of that thinking, where media independents haven’t been that

successful.’



Therefore, we move from WPP’s pet project to one of Lazarus’s own: Brand

Stewardship (which was introduced by Beers at the end of 1992) and its

newer expression, 360 Degree Branding (which is, as one O&M insider puts

it, ’Shelly’s thing’).



Based on an audit of a brand, both seek to uncover the emotional

subtleties and nuances by which brands exist. Both promise long-term

custodial care for brands that have been managed by a revolving group of

client company managers. Both express a belief that the value of an

agency to a client begins and ends with the brand - at its every point

of contact with the consumer, not just the execution.



Nice new-business tools, perhaps, but can they lead to better work?



’If you believe that the role of the agency is to build and magnify the

brand, then insight about the brand should give you a clearer route to

what you want to say in the advertising. It’s been liberating for us on

Dove and Maxwell House,’ she enthuses. ’And it frees creatives to do

very intuitive advertising.’



These are fighting words indicative of Lazarus’s approach to managing

people. ’When I arrived at O&M in New York all the decisions were made

at the top, which I changed immediately,’ she reports.



I ask her views on Ford and Guinness, the two account losses which cost

Tom Bury his job.



On Guinness, Lazarus is adamant: the client never liked the work:

’Although the advertising world valued the Guinness work, my impression

is that the client never liked it. I’ve seen instances where agencies

will present daring work and initially the clients are nervous, but you

convince them over time. Guinness never got more comfortable with the

work. And I don’t believe that we should ask clients to live with

advertising that they aren’t proud of because that is the visible face

of their brand.’



She is more familiar with Ford. ’I have less of an explanation for the

loss of Ford,’ she says. ’We did some wonderful work for them and they

didn’t like it. I think we missed the fact that they were changing as a

company but we weren’t changing.’



’In fact,’ she continues, ’I have a great respect for the way Ford did

it. They realigned things into Y&R but they still left us with an

enormous piece of business (O&M still handles Ford’s dealer and

commercial vehicle business, as well as the Mondeo and Escort). They

could have done it more brutally but they did it as if to say ’Let’s

start again, we have faith in you and we want it to work.’’



Who knows, I venture, Ford may return to O&M some day: ’Well,’ she

laughs. ’I’ve made a career out of it ... Amex, Ponds, Maxwell

House ... I’m just hanging in there!’



It is therefore no surprise to hear Lazarus argue the merits of organic

growth over the competitive pitch. ’That’s been the philosophy of this

agency from the very beginning,’ she asserts. ’I would like to see us

expend 99 per cent of our efforts on current clients. If I could stop

everyone from pitching for new business, I would. I can’t because I

don’t manage that way. But the emotional impact on an agency when it

loses a beauty contest pitch is long and deep.’



And yet it is international clients - big global ones like IBM and Amex

- which the O&M network needs if it is to continue to meet WPP’s targets

for growth.



Kodak was a good fillip in 1997 but last year brought two setbacks for

the network - dollars 30 million worth of Shell International business

left for JWT, and then there was Ford. The challenge of landing a couple

of big global clients looks set to be Lazarus’s toughest over the next

year.



Oh, and just in case you were wondering, she’s got quite enough frogs,

thanks.



This article was first published on campaignlive.co.uk

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