Grey reinforces status as cutting edge of WPP agency line-up with global Gillette gain

WPP-owned Grey has been the coming force among the world’s big traditional agencies for some time now; in particular its New York operation headed by creative Tor Myrhen.

The agency has just won Procter & Gamble’s global Gillette account from BBDO (worth $300m in the US and two or three times that globally), beating Saatchi & Saatchi in the final round after seeing off Wieden+Kennedy earlier in the process. Put BBDO into the equation and you don’t get much stiffer competition than that.

Grey New York was chosen by that shrewd observer of the agency scene, Fearless Group’s Jerry Judge, as his agency of the year for 2012 and Jerry ascribed its success to the shrewd management of global CEO Jim Heekin (left), foolishly dispensed with by Interpublic’s McCann some years earlier.

Jerry also chose Dollar Shave Club founder Michael Dubin as his person of the year and that also reveals the pressure on both new agency Grey and Gillette owner P&G. Gillette is humongously profitable (enjoying twice the profit margin of other P&G brands); the extortionately-priced replacement blades for its top of the range Fusion ‘system’ being particularly cash-generative (which is why they’re locked up in the supermarket, just like bottles of vodka or gin).

Dollar Shave Club in the US and cheaper brands from other manufacturers everywhere are chipping away at Gillette’s market share and hence profits so the appointment of Grey is arguably the most important agency move P&G has made in recent years, even more than the encroachment of Old Spice agency W+K on other bits of its business.

So why is Grey so successful at the moment? In many ways its flagship account is US satellite TV provider DirecTV for which it produces hard-hitting advertising knocking rival cable operators, coated in humour.

Which may give a clue about what it might produce for Gillette, a brand whose advertising has never been notable for jokes.

Certainly BBDO’s ‘The Best A Man Can Get’ campaign was anything but funny; not intentionally anyway. W+K revived Old spice through humour – will P&G be brave enough to go the same way with the much bigger Gillette?

One man applying his shaving gel with extra zeal will be WPP boss Sir Martin Sorrell. WPP bought Grey, the last of its big traditional agency acquisitions, in 2005, in part to elbow its way into P&G. Grey, founded in 1917, had been a long-time P&G agency whereas WPP’s JWT and Ogilvy worked for Unilever.

Many people at the time saw this as a big risk: had P&G dumped Grey it was hard to see how the then-stolid agency would have replaced the business. It didn’t need to of course and now Grey has pushed WPP rival Omnicom, which owns BBDO, right to the margins of the P&G agency roster.

It’s turning out to be quite a good year for SMS. He may have been forced to take a £150,000 ‘pay cut’ by his shareholders (although he’s hardly on his uppers, having received a staggering £29m in pay and share awards from WPP in just the last two years) but his strategy of making WPP so big that even the biggest clients find it difficult not to use his advertising and media agencies seems to be paying off.

It’s not all plain sailing of course; Sorrell needs to keep Heekin and the rather younger Myrhen sweet if Grey is to continue as the blue-eyed boy among WPP’s agency line-up. But, as evidenced by his own £100m WPP fortune, he has a tidal wave of money available to help him do so.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.