Last week was hell for Michael Greenlees, chairman of the GGT
News that the mighty Procter & Gamble had fired its New York office -
Wells BDDP - sent shock waves around the world. Analysts drastically
marked down profit forecasts, its share price plummeted by a third, and
predators - smelling a cheap and vulnerable buy - began audibly to lick
their lips (Campaign, 23 January).
So what went wrong at Wells BDDP? Greenlees is no stranger to the wiles
involved in keeping top clients happy. And yet he let P&G - one of the
world’s most loyal, lucrative and conservative clients - slip through
Insiders say the crisis blew up from nowhere, and ran out of control
before top BDDP management, who all live outside the US, could get a
grip on it. They add, moreover, that to understand fully why things went
so wrong, we have to go back to 1995.
The story of what was then Wells Rich Greene reads like the most lurid
of television soaps - power, money, intrigue and the whiff of financial
scandal. In its heyday, Wells was one of New York’s hottest agencies but
decline - or, to be more exact, stodge - began to settle in. It was an
ailing Wells that the French network, BDDP, led by its charismatic
chairman, Jean-Marie Dru, purchased in a wave of expansionism in
Dru gave his new possession time and space to improve, but by 1995 he
had lost patience with Wells’ energetic but unfocused chairman, Ken
Olshan was particularly close to Wells’ flagship client, P&G. And it is
said that P&G never forgave the French for the way Olshan and his
president, David Sklaver, were ousted. Olshan was given his marching
orders over a Jewish holiday, and Wells was tardy in settling with him.
Even worse, the agency publicly accused Sklaver of financial
irregularities and was forced a few months later to admit that he did
not ’knowingly engage in wrongful conduct’.
Nevertheless, the new chairman, Frank Assumma, got off to a hopeful
start, hiring the P&G veteran, Paula Forman, as his president and
Britain’s Doug Atkin as his planning guru. The trio put a moratorium on
new business, a policy that reaped rich rewards as the agency put on
some dollars 120 million in billings from existing clients.
Then came bad times for BDDP. The debt-laden network was put up for
sale, and it became difficult to hang on to good clients and people.
Still, the Assumma-Forman-Atkin triumvirate carried on, until, to the
relief of all, Greenlees - an adman not a banker - came to the
He managed to persuade the bankers and shareholders to support a daring
bid to buy BDDP lock, stock and barrel for more than pounds 100 million.
It was a deal that would catapult the newly merged empires of GGT and
BDDP into 15th ranking in the world (Campaign, 20 September 1996).
Ironically, it was from that time that things began to go badly wrong
for Wells. Assumma - always a patrician - became more proprietorial
about Wells’ clients after GGT’s arrival, insiders say. And he started
to cross swords with Forman.
Three months later, and quite separately, Wells’ executive creative
director, Linda Kaplan Thaler, left to do her own thing. More ominously,
she was followed at the beginning of December last year by Forman
herself and, a few weeks afterwards, by Atkin.
P&G was not pleased. The Cincinnati-based conglomerate, it is said,
began to feel jerked around by first the French and then the Brits. In
December, it summoned Greenlees to an urgent meeting and, despite
buoyant sales on two of the three P&G brands in Wells’ stable, gave him
an ultimatum: sort out your personnel problems or go. Six weeks later,
Wells was fired.
As one ad executive put it: ’P&G has an image of being very rational,
very based on numbers. But sometimes it acts very irrationally. Like a
baby, it wants to stamp its little feet.’
Whatever caused the final break, the loss of P&G is more than just the
departure of a client. Although representing only 6 per cent of GGT’s
worldwide income, P&G makes up 26 per cent of Wells’ revenues. It was
the rationale for being in overpriced Manhattan, the nice little earner
that allowed Wells space to breathe, and its departure is hardly a vote
of confidence for other potential clients.
Gone, too, is Greenlees’s chance to woo P&G to other parts of his
But perhaps the most chilling aspect of this fiasco is what it means for
the GGT group as a whole.
Despite a very solid set of half-year results, the P&G news wiped a
devastating 39 per cent off shares, leaving it a potential bargain for
predators. ’It is very vulnerable,’ Lorna Tilbian, a media analyst for
Panmure Gordon, admits. ’Given time and space it will recover. But at
this stage in the cycle I don’t know if people will give it that.’
Omnicom, Publicis and WPP are all reported to have made contact with GGT
since P&G’s withdrawal, and news of these talks has been enough to lift
the share price back to pounds 1.80 this week from its low of pounds
1.23. But a sellout would mean the end of dreams of a global network for
Greenlees, at least on this occasion. And for Dru, who has gone to hell
and back trying to keep the BDDP network intact, it would be the end of
the road as a self-made man.