Ending weeks of speculation, Grey Worldwide on Thursday announced that Euro RSCG Chairman-CEO Jim Heekin would become Chairman-CEO of the WPP Group-owned network effective September 6.
Heekin, 56, for months was the subject of rumours involving discussions with WPP; those talks intensified following his resignation from Euro RSCG, part of Havas, on August 1.
“We decided to keep this the world’s biggest secret,” Ed Meyer, Grey Global Group’s chairman-CEO, said in an interview on Thusday.
A first for Grey Global
Heekin’s arrival marks a first for Grey Global Group, which is run by the 78-year-old Meyer, who sold the company to WPP. The company, for the first time, is handing oversight of the entire global advertising network to one person.
Grey Worldwide, which had 2004 revenues of $603 million, according to Advertising Age estimates, was run by several geographic region heads, who all reported to Meyer.
In addition to Grey Worldwide, Grey Global’s holdings include Grey Healthcare Group, MediaCom, and Grey Synchronized Partners, which houses G2, Grey Direct and Grey Interactive. Joe Celia will continue to run Grey Synchronized Partners and report to Meyer.
Heekin has been at the helm of global agency networks before. From 2000-03, he was CEO of Interpublic Group of Companies’ McCann Erickson WorldGroup. He joined Euro RSCG in September 2003 as president and chief operating officer and ascended to the top job in January 2004.
“For my background, what I’ve done and the kinds of places I’ve worked in and the problems I’ve tackled, in almost every respect, this is an ideal match,” Heekin said. Grey Worldwide’s major accounts include packaged-goods giant Procter & Gamble Co (which has used Grey as a roster agency for 44 years), tobacco marketer BAT and telecommunications company BellSouth.
“He is a very good agency man,” said one executive, who has known Heekin for decades. “He is an operations guy with good values and who is very loyal to those who work for him.” He is known more as corporate manager than as a glad-handing client relations executive or even a swashbuckling rainmaker.
When WPP acquired Grey Global in March 2005, WPP management set as a goal to improve Grey’s operating margins, which at 5.7 per cent in 2003 were less than half that of Omnicom, WPP and Publicis Groupe. Labour is the company’s largest expense; another area of costs has been real estate.
“Margins have been improving since the sale,” Meyer said, adding “Jim’s not coming in to fix the margins. I want him to build the business… Expect a lot of new business. It has been a hallmark of Grey.”
Heekin nearly joined Grey after being ousted as CEO of McCann WorldGroup in 2003 following the disclosure of a raft of accounting problems at the network that resulted in Interpublic restating earnings downward by $181.3 million. Meyer approached Heekin when former Grey executive Steve Blamer was close to leaving the agency for rival Foote Cone & Belding Worldwide, also owned by Interpublic. Those discussions ended after Blamer opted to remain with Grey.
Heekin left Havas following a boardroom battle that led to the eventual ouster of his boss, former chairman-CEO Alain de Pouzilhac, and, weeks later, the decision by Havas’ management to promote several of Heekin’s underlings to managerial roles above him.
As for his new boss, Martin Sorrell, WPP Group's group Chief Executive, the two met years ago after Sorrell successfully took control of JWT in a hostile takeover. Heekin at that time ran the agency’s flagship New York office.
“I’ve had contact with both [Ed and Martin] for years,” Heekin said.
Meyer’s contract with Grey runs through December 31, 2006. There is no contractual arrangement under the terms of Heekin's agreement with Grey that he will succeed Meyer, although Heekin said “I’m in a position to learn the company while he is here,” and to be in a position to be considered for the job when Meyer does leave.
According to a Grey Securities and Exchange Commission filing, WPP agreed that after a successor to Meyer as CEO of Grey Worldwide is named, “WPP will, subject to applicable law and if requested by Meyer, appoint Meyer to WPP’s board of directors.”