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The Legacy Of Frank Lowe
A tale of egos, politics and IPG merger mania gone bad
Sept 18, 2006
In October 1999, Interpublic Group merged Lowe & Partners and Ammirati Puris Lintas, giving Lowe the lead role in a combined $11 billion entity that ranked then as the world's fourth-largest ad-agency network. At the time, IPG CEO Phil Geier confidently predicted that the new operation, spanning 80 countries and boasting the pedigree of one of London's best-regarded shops, "will combine the professionalism of APL and its global clients with the creative strength of Lowe." Five years earlier, Geier had predicted a similar outcome for the merger of single-office IPG creative shop Ammirati & Puris with its global IPG sister Lintas, a network itself created in part by the 1987 combination of the holding company's U.S. arm of SSCB Lintas with Campbell-Ewald.
For Lowe, founded in London in 1981 as a creative boutique very much in the style of its flamboyant namesake, Frank Lowe, the APL transaction arguably had the greatest impact of any merger in its history. But it was only one of many permutations of the company after Lowe hooked up with IPG in 1983. As IPG bankrolled Frank Lowe's shopping spree for agencies around the globe, the holding company shored up Lowe's U.S. operations with other companies.
Early on, agencies like Marschalk; Scali, McCabe, Sloves; and Goldsmith/Jeffrey were absorbed by Lowe to help build its profile in the U.S. Later, APL and Bozell were folded in to prop up Lowe's faltering operations. Lowe took a stake in San Francisco's Goldberg Moser O'Neill, and IPG acquired other West Coast agencies, such as Suissa Miller and Miller/Huber Relationship Marketing, as part of Lowe's participation in the consortium known as The Partnership, in an effort to align Lowe with other IPG marketing resources. Amazingly, even after the infusion of Bozell clients and talent failed, IPG executives still looked at other partners for Lowe, and as recently as last year considered merging it with Draft, the CRM company with which Lowe collaborated in The Partnership.
Despite all the mergers, IPG never managed to fix Lowe's problems. With about $450 million in worldwide revenue this year, Lowe has been unprofitable for the past five years.
After seven years of corporate rollups, mergers and acquisitions since the APL deal, Lowe now measures its ambitions in diminished increments of the past. Its viability relies on a current plan to refocus on its creative roots and downsize to eight key markets—from the 84 it claimed—to resemble an agency much more like that of its early days. While the APL merger marked a major turning point, Lowe's predicament is rooted in factors far more complex than a single event. Among them: bad mergers; bad personnel decisions; poor relations between the mercurial Frank Lowe and IPG; and big client losses, as an internally focused culture got distracted by politics.
The 1999 grand plan for Lowe to annex the world through APL failed, leaving the combined agency a global network in name only. In the U.S., Lowe is a one-office company, with that New York operation completely removed from the ancestral creative soul of Lowe London. In many places around the world, particularly in Europe, Lowe has had weak franchise control of its affiliates, many of which Frank Lowe brought in through licensing deals or non-equity arrangements. In some countries, such as France, Lowe's entities acted like a small holding company within the larger agency. (Confusing things further, Lowe later inherited Lintas outposts in the same markets or started up agencies from scratch, causing duplication of offices.) Ironically, Lintas, which Frank Lowe regarded as inferior to his agency, actually contributed strong operations in emerging markets like India and Brazil, which is proving a boost to the company today. Ultimately, the connecting element in this hodgepodge of operations were key Lowe marketers such as Unilever and Johnson & Johnson—a kind of client reliance no agency wants.
Lowe, perhaps the industry's most wounded animal in search of survival, has become the poster child for everything gone wrong in industry acquisitions and mergers. While the legacy issues surrounding Lowe are unique to its development, the ego battles and merger politics are not, particularly in an industry where consolidation is a time-honored tradition. Lowe serves as a cautionary tale for any agency needing to forge a common strategic vision and culture.
'No collaboration or coordination'
In the realm of public relations, Lowe has fought a losing battle in recent years, as IPG repeatedly blamed it for financial woes and internal agency vitriol leaked to the press. There is no shortage of disgruntled ex-employees badmouthing Lowe New York, the office culture most impacted by past mergers. (Lowe London seems to have more goodwill from its agency peers. The office earned best-agency honors for 2005 from The Creative Circle despite that office's own troubles, which judges said made the work for Stella Artois, Sure and Tesco "doubly impressive.") Nor is it solely an issue of poor perception. Lowe New York has had a revolving door of employees at all levels, many of whom left angry. Much of that ill will was still festering this summer, when, during months of Adweek reporting, many of those interviewed were unwilling to comment on the record, even when voicing some defense of the company.
If Lowe's future looked precarious at the beginning of 2006, when worldwide CEO Tony Wright was removed from that role after just 17 months, his successor, Stephen Gatfield, is sounding optimistic these days. The former IPG evp, who spent most of his 20-year career at Leo Burnett in the U.S., U.K. and Asia, is reducing the size of Lowe's network even as he bolsters resources in key markets. Last spring, IPG CEO Michael Roth suggested to investors that Lowe would continue as an ongoing entity only if it meets the strategic standards IPG requires. Gatfield insists it will and points to recent investment in high-level talent as evidence. Most critically, Gatfield says Lowe's agency operations will be in the black by the beginning of next year.
"If you look at the history of Lowe, things like [the] Lintas [merger] and The Partnership had little to do with what Lowe does best. Largely, that's a legacy that has nothing to do with who we are now," Gatfield argues. During Lowe's formative years, he says, "IPG was a company that was growing very rapidly on the back of the best of American corporate-ism: Lowe was a plaything. It was megalomania. The imperative that comes with big overwhelms the value that comes with brilliance. It didn't serve Lowe well. I look at this [transformation of Lowe] as going back to the future."
More precisely, adds a competitor well versed in industry mergers and acquisitions: "Lowe, as an idea, is something that has only existed in press releases. It's an amalgam of mergers that don't stand for anything. Ammirati and Lintas, then Ammirati Puris Lintas and Lowe: Interpublic kept putting out press releases about how it would work, but it was like oil and water. It never became integrated. Even in key markets, there's no collaboration or coordination."
Lowe's situation is symptomatic of the problems plaguing IPG after its acquisition frenzy of the past 20 years. The holding company, after all, is still subject to an SEC investigation as it struggles with financial controls stemming in part from poor integration of past acquisitions. Nevertheless, the history of Lowe raises larger questions about the past corporate vision and priorities at IPG, concerns that extend far beyond accounting details.
Under Geier and longtime CFO Gene Beard, IPG's acquisition-fueled growth kept investors happy—IPG's stock jumped at a compound annual growth rate of 22 percent during their tenure. But at what strategic price? Even as IPG bought hundreds of entities, which added the revenue that kept it No. 1 among industry holding companies during that time, it trailed competitors in building below-the-line and media planning and buying resources—lapses whose effects have become painfully apparent in recent years.
Geier does not believe that Lowe's problems reflect a larger loss of direction at IPG during his tenure. "To manage a company, you have to make sure management executes the plan in place: three worldwide [IPG] agencies, each to have a total communications strategy," he says. "There's a responsibility and an accountability to do that. That was always there until 1999 at Lowe—the strategy was there, but afterward it did not get executed."
Beard did not return calls.
Well regarded in their day, Geier, who retired in December of 2000, and Beard, who left the year before, have received much of the blame for the troubles at IPG. And yet six years have passed, and many of IPG's longtime board members and auditors PricewaterhouseCoopers—who approved or examined those earlier deals—are still in place at a company that has continued to falter. Roth himself has sat on IPG's board since 2002 and chaired its audit committee until July 2004.
It is not yet clear if recent management—the holding company has had three CEOs since Geier's departure—have learned from past experience. In June, Roth confirmed that IPG would combine Draft, one of IPG's most dynamic below-the-line holdings, run by entrepreneur Howard Draft, with Foote Cone & Belding, one of the industry's oldest agencies, founded in 1942, which has had lackluster growth. Combining Draft with FCB is Roth's most audacious move in his 21 months as CEO. He's betting his Wall Street credibility that he can restructure two of IPG's three networks—Draft FCB and Lowe—at the same time he has promised investors peer-level growth by 2008.
Roth offers up a sound rationale about the strategic underpinnings for Draft FCB. He sees it as a modern integrated communications offering that provides measurable results to client needs. By contrast, he says, "the Lowe merger was a defensive move."
Nevertheless, longtime IPG observers say he would do well to remember the lesson of Lowe and APL. "So many of the mergers IPG has made make sense strategically but not culturally," argues one. "Ammirati & Puris was an agency that said no to clients; Lintas, an agency that said yes to clients. Culturally, how can it work? Strategically, will it work?"
A culture clash from the beginning
There was never any cultural connection between Frank Lowe and IPG. You couldn't find more different personalities than Lowe—who used to ask agency execs to make small talk with a stuffed animal he would travel with—and the kind of feisty Irish street-fighting IPG execs best characterized by McCann Erickson. While the IPG flagship was well regarded, it had a dull image in the early '80s, when big marketers were discovering a new generation of creatively driven agencies in the U.S. and U.K. In London creative hot shop Lowe Howard-Spink, Geier found an exotic orchid to transplant to his corporate steak house of beefy, cigar-chomping execs. Not surprisingly, then, in the most American of industry holding companies, Lowe, by its very origin and British leadership at the top, has always been a kind of organizational outsider—one that may never have been understood by its corporate parent.
The roots of the agency's detachment from its parent (some would later describe it as "hostility") go back to the beginning of Frank Lowe's association with IPG and his initial reluctance to do a deal. When he did strike the alliance in 1983, Lowe, then 42 years old, celebrated by detailing for The New York Times his contempt for Madison Avenue and much of America, criticizing everything from the country's gargantuan salads to its tedious TV commercials, all of which he said "appalled," "shocked" and "frightened" him.
"Most good London agencies didn't want to sell to an American agency at the time, let alone IPG, and Frank was no exception," says a source. But the ambitious Lowe couldn't resist the overtures of Les Delano, a self-styled Paul Newman character who raced cars at Le Mans well into his 60s. Delano, an American, had earlier sold his New York agency, Tinker, Dodge & Delano, to IPG and moved to London in the late '70s. A former president of Marschalk Campbell-Ewald Worldwide, Delano was the intermediary between IPG and Lowe, with both sides never sure where his allegiances lay. Delano preferred to keep a low profile, working behind the scenes as he guided Lowe's European expansion. (At one point within IPG, he was known as the ampersand in Lowe & Partners.)
Delano thought there was good reason for IPG to consider Lowe. In the early '80s, the holding company had two traditional global networks, McCann and Lintas. Delano suggested IPG do something different and establish a creative presence in Europe. London was abuzz with great creative shops, and Delano was interested in one of the most famous of them, Collett Dickenson Pearce. Frank Lowe had run CDP but had left to start his own shop, and Delano felt CDP's work hadn't been as good since. Lowe, an account man with a discerning eye and ability to sell clients on breakthrough work, set up Lowe Howard-Spink in May 1981, taking CDP's Fiat, Birds Eye and Whitbread brewery accounts with him. Delano tracked him down, and after Lowe said he didn't want to sell, Delano devised a more inventive plan. He suggested a reverse takeover of IPG's troubled Wasey Campbell-Ewald, the British subsidiary of Marschalk Campbell-Ewald, which worked for General Motors' Vauxhall. After the 1983 transaction, IPG was Lowe Howard-Spink's largest shareholder, with 35 percent. The IPG association would eventually give Frank Lowe a minority stake in New York's Marschalk, which worked for marketers such as Coca-Cola and RJR Nabisco. The transaction also allowed IPG to raise money through rights issues to finance Lowe's push into Europe.
"Lowe was a rollup, pure and simple," says a source. "IPG bought a number of agencies around the world that worshiped at the altar of Cannes. There were no shared clients, and because it was a rollup, they lost control of offices because they didn't own them. So they had huge organizational and operational issues, as well as logistical issues."
Frank Lowe declined repeated interview requests for this story. Delano also declined to comment.
As Frank Lowe moved into the U.S. in 1985, it quickly became clear that Marschalk, with its traditional packaged-goods advertising, was hardly the creative canvas on which he could demonstrate the kind of work that had made him a star in London. Lowe tried to woo David Metcalf, then a creative director at Scali, McCabe, Sloves in New York, to jump-start Marschalk's tepid campaigns, but the Yorkshireman, who began his career as a junior copywriter at CDP, refused to work for IPG. So, in 1987, Lowe Howard-Spink & Bell, as the London agency was then known, bankrolled Lowe Tucker Metcalf, which paired Metcalf with a Scali colleague, Bill Tucker. With clients like Parker Pen and Hanson Trust, the agency won a gold Pencil at The One Show within two years of opening. For Frank Lowe, LTM was an attempt to replicate the creative success he enjoyed in the U.K., sources say. "The only reason Frank started Lowe Tucker Metcalf was to say, 'I'll show the fuckers.' He wanted to show IPG he could do it," says one executive.
The agency proved to be Frank Lowe's only independent effort in the U.S. (Fast-forward 20 years to December 2005, and Frank Lowe, his non-compete now expired, would once again show IPG what he was capable of—opening another independent, The Red Brick Road, and taking Lowe London's largest piece of business, the $80 million Tesco account.)
Lowe Tucker Metcalf offered other signs of things to come: One source recalls Frank Lowe spending some $60 a square foot in 1988—double market rates—for offices on East 55th Street. He had Lord Linley, son of the late Princess Margaret, design a desk worth at least £200,000 that couldn't even fit into the building's service elevator. Lowe's extravagant spending at IPG would become the stuff of industry legend.
(David Kiley, who was Lowe's svp of marketing communications from 1994 through late 1996, and is now a BusinessWeek senior correspondent, recalls the expensive refurbishing of the agency's offices in Manhattan's Grace Building, in which Lowe was based for just five years. Kiley, also a former Adweek reporter, says Frank Lowe had restroom doors installed that cost more than $10,000 and an internal wooden staircase costing "well into the six figures.")
After three years, LTM was shut down, and Lowe convinced Metcalf to come over to Marschalk. Marschalk's creative director, Andy Langer, moved aside to begin working on the agency's European acquisitions, becoming known as one of Frank Lowe's shoppers. Metcalf served as cd for two years before Lee Garfinkel was hired for the job in 1992, relegating Metcalf to copy chief. Metcalf then left.
Metcalf and Langer declined to comment.
Getting noticed in spite of it all
After years as a drowsy, midsize agency, Marschalk, now known as Lowe, began to take off in 1993. In October of that year, the shop, then with $300 million in billings, grabbed attention when, in the space of two weeks, it won Smirnoff vodka and Diet Coke and announced the finalization of a deal to buy Scali, McCabe, Sloves from WPP Group. That iconic shop brought Lowe marketers such as Mercedes-Benz of North America and Perdue Farms. At least initially, SMS founder Marvin Sloves and Frank Lowe appeared to be of like minds. Sloves had attempted, on a smaller scale, what Lowe was achieving worldwide, collecting a unique string of creatively driven agencies. At the time, Frank Lowe was quoted as saying that "bringing two agencies together is delicate," a telling note of caution for the years ahead.
It took Garfinkel a couple of years to hit his stride at Lowe, but the agency began to produce work that got noticed. Ads like the 1994 Diet Coke spot with Lucky Vanous, in which female office workers ogle a bare-chested construction worker, generated buzz in industry circles. Lowe's reputation would grow through the years with much-heralded Mercedes campaigns, featuring commercials like the 1998 Marlene Dietrich-inspired "Falling in Love Again."
In eight years, Lowe had swallowed Marschalk and then SMS. But even as Lowe New York seemed to be absorbing SMS without difficulty, the office had no coherence with Lowe London—or any other offices, for that matter.
"Lowe New York was a very good place," recalls a source. "The Mercedes work was especially good, and they were doing things like [the] Lucky [campaign for Diet Coke]. You had Marvin and his strong sense of culture from Scali, [and] at least there was some connectivity there between Marvin and Lee, being New York advertising and Jewish. Nevertheless, as a company it was a totally schizophrenic organization, even back then. Lowe London was totally different from Lowe New York."
Frank Lowe, meanwhile, was putting his own English stamp on a New York agency culture in search of itself.
"He tried to impose his Britishness on an American workforce," recalls a senior staffer from that time. "He imported Irish boys to keep coffee urns full and china coffee mugs washed—that's all these guys were paid to do. Even then, the money spent on stuff like that was unconscionable."
If there was a split personality forming at the top of the agency, it would become apparent that things weren't much better among the rank and file.
"You can't understand how damaging it is when you change so quickly with these mergers," recalls one senior executive. "Lowe never had a chance. IPG kept merging it, moving it uptown, downtown. Once you merge these things, people spend 50 percent of their time managing their careers. There are so many power plays in advertising anyway, and with these mergers you kept getting new groups of management supervisors, vps and evps, and each time they kept upsetting the ladder. Lowe just kept doing that over and over again."
In October 1996, IPG closed the deal to acquire Goldsmith/Jeffrey, a New York creative boutique known for its award-winning work for Everlast, ESPN News, J.P. Morgan and Barney's. While the agency's clients didn't move to Lowe, the acquisition brought G/J's two founders and a handpicked group of talent. Garfinkel gained a creative partner in Gary Goldsmith, and IPG saw Bob Jeffrey as a possible successor to Sloves. The small deal—G/J was primarily a print shop—didn't cause the kind of cultural disruption that larger ones in Lowe's history did, but it would introduce a new layer of politics that would later play out between Garfinkel and Goldsmith.
In 1996, Lowe broadened its geographic scope in the U.S., taking a minority stake in San Francisco's Goldberg Moser O'Neill. Still, when Lowe landed Gillette's Oral-B Laboratories the following year, it chose to open its own San Francisco office to handle it, led by Jeffrey. Early on, he added Sun Microsystems, Eddie Bauer and more business from Oral-B. But in the spring of 1998, Jeffrey left for J. Walter Thompson. (By April 2000, IPG merged a foundering GMO into Hill, Holliday, Connors, Cosmopulos. Account losses caused Lowe San Francisco to close in May 2001.)
Jeffrey declined comment.
Little noticed at the time, this doubling up in markets underscored a pattern under way around the globe where Frank Lowe had bought minority stakes in affiliates. Lacking any real influence over them, though, Lowe sometimes opened or acquired other offices in the same markets. Still, Lowe and his agency shoppers continued their spree.
At the same time as Lowe looked for Jeffrey's replacement, the agency was seeking a U.S. president who would ultimately replace Sloves when he retired. In August 1998, Publicis New York CEO Bob Kantor was tapped for the job, vacant since John Hayes left for American Express four years earlier. Unable to muster internal support, Kantor was out of the job by December. Lowe insiders from that era say that Lowe Group CEO Frank Lowe and Lowe/SMS co-chairman Marvin Sloves were at loggerheads, with the dispute becoming deeply personal. They portray Sloves' co-chairman, Lee Garfinkel, whose ambitions soared with his increasing celebrity, as a pawn in the power struggle. Dating back to SMS' legendary relationship with Volvo, Sloves knew how to bond with his automotive clients. IPG wanted Sloves, then in his mid-60s, to retire, sources say, underestimating his tie to Mercedes while miscalculating Garfinkel's own sense of influence at the client.
Geier denies IPG ever put pressure on Sloves. "Sloves said he wanted to retire and then he changed his mind," Geier says.
Mercedes: a turn for the worse
In December 1998, Sloves announced his retirement. Garfinkel was named chairman, and just months later, in April, the $100 million Mercedes account followed Sloves out the door, eventually landing at Omnicom Group's Merkley Newman Harty. IPG subsequently charged Sloves with "tortuous interference." After a drawn-out battle, an arbitration panel found in favor of Sloves. The business stayed at Merkley, and the two sides settled out of court.
Sloves could not be reached for comment.
The loss of Mercedes dealt a crushing blow to Lowe and marked the beginning of hard times at the New York agency. Mercedes was not just a financial cornerstone but a creative marquee that helped define the office. (Diet Coke had left in 1998.) What's more, the protracted arbitration with Sloves distracted senior management and took a divisive toll on morale. Since the loss of Mercedes, and Heineken in January 2002, Lowe New York has never been able to attract the kind of sexy showcase accounts it needs to live up to the promise behind its creatively positioned brand.
Most significant for Lowe, the loss of Mercedes opened the door for IPG to merge it with APL.
Sources say Frank Lowe pushed for the deal, wanting the kind of scale corporate siblings like McCann boasted. (In the IPG press release at the time, Lowe is quoted as saying that from the time he started Lowe Howard-Spink, "it was my objective to build a top-10 worldwide agency, with high creative standards.") Associates now claim that as an IPG board member, Lowe felt he had to voice support of the transaction but actually harbored reservations.
IPG put its own man into the new Lowe Lintas & Partners, an agency that now had packaged-goods accounts and global marketers: Longtime McCann executive Michael Sennott, with his more traditional big-network background, became Lowe's No. 2 executive, taking the post of vice chairman.
For Lowe London, the first three years after the APL merger were good. In 2000, it won the plum Orange telco account as well as a new joint-venture assignment from HSBC and Merrill Lynch. It also earned U.K. Agency of the Year honors in 2000 from Campaign. The agency inherited a strong network in Asia and Latin America, which made Unilever happy.
Lowe New York was a different story. The cultural cracks already apparent at Lowe widened after the addition of APL, itself an agency that had never gelled after a merger.
"We got there and we discovered there were Lee people and Gary people," says one former APL creative staffer. "Gary had his accounts, Lee had his accounts. Ammirati and Lintas were already two very different creatures—the Ammirati people didn't want anything to do with the Lintas people. It was a very fractionalized place."
If staffers felt adrift, it could be partly attributed to the fact Garfinkel and Goldsmith, unaware of the problems plaguing their new agency partner, were thrown into performing triage on APL clients while holding on to their own. Over the next two years, Lowe New York would lose nearly $1 billion in billings from the exit of marketers like Burger King, Sun Microsystems, Ameritech, KPMG, Eddie Bauer, Hoffmann-La Roche's Xenical drug, Denny's, Goldman Sachs, Mentadent, Robitussin, UPS, Dell, Sprite, Marriott and Purina One. By then, Sennott was less than enthusiastic about his new mission, sources say.
Sennott declined comment.
It was none other than Frank Lowe who drove a wedge even further into the divide. At the end of 2000, after the tough year, Lowe executives threw a holiday party to celebrate the first year of the merged entity—and hopefully improve morale. Gathering at Manhattan's Chelsea Piers, Garfinkel and Goldsmith played a reel of 10 spots to celebrate the quality of the agency's work. The 700-800 employees responded enthusiastically. But the evening took a surreal turn when the worldwide CEO took the stage. With a drink in one hand and a cigar in the other, his driver standing next to him with an ashtray, Lowe embarked on a 35-minute monologue that soon became an all-out rant about how lousy Lintas' work was. He complained about Geier and called Garfinkel a "little mouse," according to sources in attendance. Some described it as Lowe's style of British humor; others blamed alcohol or exhaustion. Knowing Lowe never wore a watch, Jerry Judge, then his top manager, finally got his boss off the stage by conning him into thinking the buses had arrived to take the partygoers home.
The year had taken its toll on the relationship between Garfinkel and Goldsmith. Garfinkel, then CEO, was becoming more detached from day-to-day management, even as he became more aggressive in his requests for more power and money, while Goldsmith felt he was shouldering more of Garfinkel's responsibilities, sources say.
Garfinkel responds: "The exact opposite was true. While I was managing the agency, other people were managing their careers. The only night I left before 8 p.m. was on Friday, Nov. 17, 2000. I told my partner [Goldsmith] that I was leaving at 6 to take my wife out for her birthday. I heard from Frank's former assistant that at 6:15 Frank called to ask me something. When he couldn't reach me, he was put through to my partner, who told Frank that he had no idea where I was."
Of the money issue, he adds: "I had a new compensation package in June 2000, and I was happy with it. That wasn't the issue. I had asked for new compensation packages for other senior executives and additional stock grants for the people who helped me get through the merger. ... I would not sign my agreement until [IPG] offered some kind of compensation to the other employees."
It became clear that Garfinkel was being phased out as Goldsmith's clout increased. In January 2001, Garfinkel left Lowe Lintas. (In August 2001, he would join D'Arcy Masius Benton & Bowles as president and worldwide chief creative officer.)
Frank Lowe's growing estrangement
Removing Lowe from the scrutiny of IPG's corporate stage would not be so easy. Geier and Frank Lowe enjoyed a love/hate relationship over the years, with the two bonding over late-day glasses of red wine in Geier's office. The IPG CEO was at the holiday party, and Lowe's performance reinforced holding-company concerns that he had become too divisive a force and would have to go. (In the coming year, Geier would quietly try to get Lowe to retire, to no avail. Some say Geier offered to remove Lowe from his post before the IPG CEO left.)
Part of Lowe's growing estrangement may reflect the fact that his corporate nemesis, McCann chief John Dooner became IPG's COO in 1999. Over the years, Lowe has denied ever having any interest in succeeding Geier as IPG CEO. Nonetheless, many at IPG believe he wanted a shot at the top job and pushed for more acquisitions to show he could run a corporate empire the size of Dooner's McCann Worldgroup. The two men's dislike for one another transcended boardroom rivalries. Dooner is said to have resented what he viewed as Frank Lowe's profligate spending. Starting in the mid-'90s, Lowe's T&E filings amounted to around $1.5 million annually. He was also filing for reimbursement of personal costs—restocking his wine cellar, buying art—in amounts of $1-2 million a year, sources say.
Lowe, raised above a Manchester pub and knighted in 2001, enjoyed his rich lifestyle. Lowe's charter of private planes was a sore point with Geier, who flew business class. (Citing corporate policy, the IPG CEO curtailed that practice of Lowe's.) But Lowe grew increasingly resentful of the company that afforded him his lavish personal and professional lifestyle, former associates say.
By 2000, Lowe, then 59, appeared to be increasingly bored with advertising and the integrated direction it was taking. He lamented the passing of an era of big personalities like Ogilvy, Bernbach and Wells Lawrence, and disliked the industry's new financial taskmasters. (Describing his mood, one longtime colleague likens him to Norma Desmond in Sunset Boulevard, when, at the end of the film, the fading star recalls her glorious past in silent films. "I am big," Desmond says. "It's the pictures that got small.")
Passionate about English football and tennis, Lowe turned his focus toward sports marketing. Creating a new corporate entity, Octagon, IPG bought into dozens of companies for Lowe, including U.K. race-circuits operator Brands Hatch, for which IPG paid $195 million in late 1999. (During this time, Lowe even tried to get IPG to buy his favorite football club, Manchester United. That didn't happen, but in 2000, IPG said it took a "substantial equity position" in Eintracht Frankfurt, a team playing in Germany's Bundesliga. The team was relegated out of the top German league shortly after the deal.) By 2000, Octagon was crowing in its press releases that "after only two years from launch," it had more than 1,000 employees in 20 countries. Two years later, IPG said Octagon's motor-sports division would reduce the holding company's third-quarter earnings per share by nearly half, and that its chairman, Lowe, would leave at year's end. In 2003, IPG announced a $286.9 million asset impairment charge, which the company said "primarily reflected" a non-cash write down of assets in Octagon's motor-sports and sports-marketing business.
"Geier tried to buy peace with Frank Lowe, buying him things like Octagon," says a source. "But there was never any central supervision under Phil when it came to Frank Lowe's acquisitions. So with Geier, you had the guy who could have managed Frank Lowe and never did, and with Dooner, the guy who was never going to manage Frank Lowe and tried to—creating outright hostility."
Geier responds: "When Frank was managed properly, the business did well. When he decided not to be managed, the business did not do well."
Dooner declined comment for this story.
In January 2001, Dooner became IPG CEO. In May, he moved Lowe out of day-to-day operations, installing Jerry Judge as Lowe's new chief. At the same time, Dooner trumpeted a "fourth global network" called The Partnership, which aligned Lowe Lintas with holding-company resources in the same way that McCann Worldgroup is organized. It continued a now-familiar pattern: Lowe was effectively being submerged into a bigger entity, thereby cutting short the agency's efforts to create its own diversified global network. Frank Lowe, who at IPG was openly disdainful of below-the-line marketing services, was named chairman of The Partnership. The role was ambiguous, as no one reported directly to him, and he held it for just two months. The news was delivered to him by his longtime lieutenant, Judge. He was out. (Lowe resigned from the IPG board in 2002, became a consultant to IPG in 2003 and cut ties with the company in September of that year.)
The Jerry Judge era
While the agency lost its larger-than-life founder, few clients seemed bothered by the absence. Lowe, after all, was strongly associated with an era that had passed. "Frank Lowe was very U.K.-focused," says Simon Clift, global chief marketing officer at Unilever. "We have people and processes in place to ensure a strategy or campaign will work as well in Japan or America as it would in the U.K. I think Frank thought of this as indecisiveness. [He] was a relic of a previous 'Soho-centric,' exclusively U.K.-focused era. As far as we were concerned, his departure from IPG was well handled; it was a non-issue."
Dooner, at the time of Frank Lowe's departure from a day-to-day agency role, made no effort to mask his impatience that the Lowe agency move beyond the excuses of the past. He told Adweek in 2001: "We're in the world of 'it is.' We have to get away from the excuses of yesterday, 'what was.' In the past, this industry had occasions when it was held hostage by crazy creative personalities. What's needed today is to put together strong business propositions for our clients."
The deposed founder had quite deliberately evolved his organization in defiance of systemic networks like McCann, creating a far-flung, idiosyncratic group of agencies where the only glue was Frank Lowe. Like an Iron Curtain country freed from the clutches of a longtime autocrat, once Frank Lowe left, the agency lost any remaining sense of a common mission. Always a political place, it broke down into an atmosphere of "every man for himself," a kind of professional anarchy, rife with finger-pointing and blame.
"There's been no center of gravity at Lowe; everyone's a mercenary," says one longtime executive. "You're in a situation so dysfunctional, everyone is acting on their own behalf. When everyone's out for themselves, that's what the people around them do in kind. It's either 'How am I going to make the most of this for me?' or 'How the hell am I going to get out?' "
By 2001, top IPG execs, in an investor conference call, blamed an unexpected "hangover" from the APL/Lowe transaction for IPG's less-than-stellar first quarter. Dooner felt the agency had lost its client emphasis, and has said it was settling for an "account saved is an account won" complacency.
This was the agency that Judge, previously Lowe's worldwide president, inherited. Under pressure to meet IPG margins, Judge cut costs and laid off some 1,000 employees from 2001 to 2003.
A veteran of London creative shop Bartle Bogle Hegarty, Judge went on to help turn around Young & Rubicam's London office in the mid-'90s. Judge was an Irish raconteur, a "hail-fellow-well-met" figure around the agency who was well liked but may have been too lenient at a place spinning out of control.
"He's, at heart, a creative guy, not systematic, not a methodical, crack-the-whip kind of guy," says one former Lowe exec. "He's a good salesman who gets people excited, but he may not have been tough enough for Lowe."
Some insiders say Judge, mindful of Frank Lowe's abysmal relationship in the end with IPG, may have spent too much time politicking at the holding company.
Says Judge: "I dealt with so many things IPG wanted me to do. Looking back, that may have been wrong for [the] Lowe [agency]."
Yet another merger
In 2002, Lowe took a $200 million billings hit from the loss of Verizon Communications, Heineken and Diet Coke (which the agency had won back the previous year). In February 2003, for the second time in four years, IPG tried to jump-start Lowe, this time by merging it with Bozell. David Bell, who had become IPG CEO after Dooner's brief term, thought his former agency would finally stabilize Lowe. In addition, Bozell CEO Tom Bernardin, a Bell ally and loyalist who was close to Verizon Wireless, could keep watch for the holding company.
Says one former top Bozell executive: "After Lowe lost Verizon and Diet Coke—we had Verizon Wireless and the Milk Board—Lowe did what it always does: It looked for another merger. Lowe had only existed because it's been swallowing other agencies for the past five years."
As a result of the merger, Lowe U.S. CEO Paul Hammersley and New York president Rob Quish were out. The $300 million Verizon Wireless account went into review in January 2004, and Bernardin was gone soon after, taking a job as CEO at Leo Burnett.
Just five months later, Lowe was dealt another major body blow, as HSBC consolidated its global business at WPP. The agency wasn't entirely to blame: The global bank was looking for an integrated holding-company strategy, and IPG couldn't deliver Draft, which was already committed to Bank of America. Still, it was a devastating turn for Judge.
Rumors about Judge's imminent demise began to circulate. As the agency's CEO became an increasingly weak monarch and uncertainty weighed on already sagging morale, a group of top agency execs wrote a letter to IPG CEO Bell, protesting any removal of Judge, sources say. (For his part, Judge went to Bell and asked about the rumors, only to be told they were not true, sources say.)
Bell declined comment as did Judge.
Finally, it became official. In August 2004, after three years in the top job at Lowe, Judge ran out of time. IPG announced that he would be replaced by Tony Wright, worldwide chief strategy officer at Ogilvy & Mather. While Judge was liked by marketers at key clients such as Unilever, that wasn't enough to save him. It was Michael Roth, IPG's new CEO, who had taken over from Bell just eight months earlier, who broke the news to Judge, saying, "Your ship had sailed before I even arrived," according to sources.
In the end, even Judge's closest client contacts didn't help him. "Jerry Judge is a very good friend of mine," says Unilever's Clift. "He is a wonderful person, is very able and has many sound qualities. Apparently the people who run IPG didn't think he was the right person for the job. Of course, that is entirely their prerogative." He adds: "I respect and like Tony Wright. He's a good thinker; he has a very good planning background. I guess the view of IPG was that the agency needed a stronger enforcer."
Judge retained his post as CEO of The Partnership, but with his departure at the end of 2004, that consortium quietly disappeared as well, another unsuccessful press-release rationalization of IPG assets. (Sources say a major reason it was dissolved is that Howard Draft was not interested in working with a new partner. "Tony is a great strategist, but we probably didn't see eye to eye on how to go forward with these two different businesses," Draft says.)
The Tony Wright era
Wright, then 43, a well-regarded planner by training, had no experience running an agency. Bell's plan was to team his strategic strengths and multinational experience with a strong operations person. He tapped another of his former colleagues from Bozell and True North, Ed Powers, the COO of Constituency Management Group, an IPG company handling PR and corporate and brand identity.
At Lowe, reaction to Wright's hire ranged from ambivalence—many within the agency thought him unqualified for the job—to contempt, sources say.
"Lowe's problems were operating problems," says one source. "Yes, the agency needed to figure itself out, but it had creative positioning, even if it hadn't done great creative in years. So what does IPG do? They put a guy into the top job who has never run an office, let alone a network."
In Wright, Bell saw an agent of change from outside of Lowe, an industry professional whose stock in trade was thinking out of the box, a person Bell bet could shake the company out of its troubled past, sources say.
"Tony brought a sense of urgency, and you could forgive his mistakes because he was doing shit, and it's easier to clean up after those mistakes—at least someone is taking action," says a source. "If you looked at Lowe under Jerry Judge, Lowe's performance was not so strong. There were huge losses of clients and a real need in change of leadership. They had slid down too far into the culture Frank [Lowe] created."
Even after moving Wright aside as Lowe CEO in March 2006 after only 17 months, Roth defends the choice. "I interviewed Tony Wright when I was an IPG board member, and he gets it: integrated offerings, planning, how Lowe needs to change. For Tony, the CEO job was overwhelming—it covers such a large geographical area," Roth argues.
In February 2005, Wright unveiled his "Lighthouse" strategy for Lowe, which called for the elimination of regional management and a focus on 12 key markets. (Interestingly, in the statement he issued, he made a point of stressing that there would be no office closures.) In essence, the plan wasn't much different from an earlier one proposed by Judge, who had a similar idea called L15, or one proposed by IPG consultants McKinsey, which advised downsizing Lowe and closing its New York agency to give the network a European focus.
During Wright's first year, he felt tripped up by some unpleasant surprises, sources say. He had been given no idea that Lowe was entering a pitch to save its lead role on Unilever's Omo brand. Unbeknownst to Wright, Frank Lowe's non-compete was expiring in early 2005, and the agency founder was beginning to talk to Lowe London's biggest client, Tesco. What was quickly becoming clear was that Ed Powers wasn't the right partner for the novice CEO, who felt Powers was more of a financial executive than an operations person. As events unfolded, Wright began to feel like a bit player in a drama already written, sources say.
Powers did not return calls for comment.
Wright, having observed the value Ogilvy & Mather earned from embracing David Ogilvy's identity, wondered if Frank Lowe could serve as a figurehead for the agency, sources say. He had Lowe's picture hung in Lowe London's reception area, an image Roth ordered removed after noticing it during a visit. Wright met with Lowe to consider whether the latter could act as a non-executive director. He quickly abandoned the idea. Months later, stunned IPG execs learned of the meeting—yet another example of Wright's increasingly secretive decision making, in their view. When he later recruited Mark Wnek and then Garry Lace, a friend of Wnek's, Wright similarly kept his own counsel, sources say.
If executives at the holding company sometimes felt in the dark about Wright's thinking, many agency staffers weren't faring much better. Wright became increasingly withdrawn with employees, sources claim. Staffers complained about a communications void with the new CEO, about a lack of response to e-mail and voicemail.
Wright, who is now chairman, says he feels he made himself more than available as CEO, given the demands of the job. "Putting Lowe back on track is a complex task that involves a lot of hard work and focus, not spin and saviors," he says.
Wright soon made his intentions known, turning his attention to Lowe's flagship offices. In New York, some staffers felt Goldsmith was becoming too lofty and detached, acting more as a chairman than a creative leader. Wright worried that Goldsmith's No. 2, executive creative director Dean Hacohen, an ally dating to their days together at G/J, wasn't up for the much-needed turnaround of the New York creative department, sources say. In April 2005, Wright blindsided Goldsmith when he fired him, replacing him with Wnek, the former chief creative officer of Euro RSCG Wnek Partners. (Wnek, who was also co-chair at Euro RSCG London, also got Goldsmith's chairman title.)
Lowe London, under CEO Matthew Bull—the former chairman of Lowe Bull Calvert Pace in Johannesburg, South Africa, installed by Judge in 2001—had become an agency in need of change. A Frank Lowe loyalist, Bull had become a difficult personality within Lowe's management team, sources say. During his tenure, the office lost major pieces of Unilever business, HSBC, Diet Coke and Braun and he was unable to recover that revenue.
In replacing Bull with Garry Lace, however, Wright gambled on an executive infamous in London industry circles. In March 2004, Lace left his job as CEO of Grey London under a cloud, when it was discovered that he was quietly trying to set up a rival company. Ominously, Lace's arrival angered Paul Weinberger, the son of a former CDP associate of Frank Lowe's and a key man on Tesco. Wright was intent on changing Frank Lowe's old guard, who he felt had lost their momentum: He told Lowe's worldwide creative chief, Adrian Holmes, who had been at the London agency since its early days as Lowe Howard-Spink, that he was no longer needed in the creative department. While some concurred with his view of Holmes, many staffers were still shocked at the way Wright handed the situation. Wright gave Holmes the embarrassing news while the latter was chairing a Lowe creative conference in Rio, as the two men waited in a taxi line, sources say.
Lace and Weinberger did not return calls; Holmes declined comment.
If the London-based Wright felt estranged from the rank and file of his worldwide agency, he didn't relate to his holding-company parent either, sources say. The disconnect between IPG and top execs at Lowe continued. As an openly gay, British planner, Wright's associates said he wasn't interested in the boardroom politics among people he considered to be Republican golfers.
"It's totally wrong to say Tony didn't get our support," Roth says. "I said to him: 'All you need to do is raise your hand and ask.' "
Mark Wnek tackles New York
Back in the U.S., Wnek, who started at Lowe in June 2005, was facing his own mixed reception. The first-generation Brit had always wanted to work in New York—"America is the promised land if you're Polish," he says—and has an immigrant's zeal in wanting to prove himself during his second tour of duty at Lowe. (He joined the London office for a brief stint in 1989.) Wnek says he wanted the job so he could return to his creative roots. In contrast to the revolving door of management at Lowe, Wnek proudly declares he is the product of one of the most stable recent management teams in the U.K. industry, having run Euro RSCG's operations there with Brett Gosper and Chris Pinnington for 10 years. (Wnek is also known for having founded one of London's most short-lived agencies. Ben Mark Orlando collapsed in 2003 after just 116 days when Ben Langdon, the former McCann Europe CEO, left to take Wnek's old job at Euro.)
For Goldsmith loyalists, already shellshocked, Wnek's take-no-prisoners personality immediately rubbed them the wrong way. His brashness was in sharp contrast to the quieter refinement of Goldsmith, the Texan who had guided his troops through so much of the turbulence rocking Lowe in recent years. Wnek makes no apologies. "My catch phrase is, 'It's not compulsory to work here,' " he says.
That became clear in his first meeting with the New York creative department. Some of those in attendance recall a staffer asking Wnek—known in the U.K. for his 'Pure Genius' campaign for Guinness—to see some of his work. They say Wnek viewed it as a kind of unwelcome challenge, and the individual was soon history.
"I think he had no respect for what was in place [at Lowe]," recalls one executive who was in the room that day. "It wasn't like he was out to get anyone. I just think he wasn't anxious to share his work or who he was."
Wnek recalls it differently: "One senior creative person asked me, 'Can we see what you like?' I was appalled. I don't want a house style. She was a Macy's creative, Macy's left, and we departed on good terms."
London acquaintances say the brusque Wnek has never been concerned about alienating people. "He's more focused on being successful in the creative department and focusing determinately on changing the culture and improving the work," says one. "If people get booted along the way, it's an inevitable consequence."
That first meeting was a defining moment in establishing the Wnek mandate at Lowe New York. He shrugs off 2005 account losses like A&P, Macy's and Gorton's, saying that Lowe should not have been working with those sorts of marketers in the first place. "My agenda, my remit from Tony, is to get the place noticed, to kick some ass," Wnek says. "We want less of the gray flannel; I've been put in to completely revolutionize things. People were starving for this. Gary's guys were over 40, doing a certain kind of work. You need a modern place here where you have a mixture of people, ages. In a great agency, everyone should be getting on with it."
Responds Goldsmith: "We had a great mix of people at all levels and from a lot of different backgrounds and cultures: India, Brazil, Texas; men and women; 22 years old, 52 years old. I don't hire or fire people based on demographics or the need for a quick PR hit. I've always made decisions based on talent and character and treated people in such a way that they stayed more than eight months."
Goldsmith is alluding to the recent departure of John Hobbs and Peter Rosch, two of the three Lowe ecds that Wnek brought into the agency last September. (At BBH, the team gained notice for its work on Levi's, Rolling Stone and Unilever's Axe.) Another top Wnek hire, ex-JWT and BBH creative Brian Friedrich, who joined Lowe last August to work on Unilever's Degree, was fired this summer.
Wnek denies those departures hint at unhappiness with his management style. "Perhaps the fact that [Hobbs and Rosch] are going to a production company to try their hand at directing suggests their heads aren't entirely in helping build departments, coaching others to do great creative and interacting with marketers?," he says. Wnek goes on to gush about the work of remaining ecd Fernanda Romano, who has been shooting Nokia work with filmmaker Wim Wenders.
Rosch says he and Hobbs left because Wnek never delivered on certain promises. "We went to Lowe with one goal: to make it a great creative shop again," he says. "Unfortunately, other than hiring [Fallon art director] D.J. Pierce, nothing we asked for or recommended to achieve that goal was ever implemented. So, yes, we did struggle with the move. The opportunity to direct a couple of projects came along, and it couldn't have been better timing."
Romano, whom Wnek hired last summer from DM9DDB in São Paulo, says Lowe New York is beginning to feel like a new place. "The mood is so much better now," she says. "Mark's been so open to these [nontraditional advertising] things. He really is making this a media-agnostic place. I was worried about coming to Lowe—I had heard the whole spiel about the place, and it was Mark who became the selling point for me."
The return of Sir Frank
At Lowe London, meanwhile, Wright's installation of Lace in January 2005 triggered the exits of managing director Mark Cadman and planning director Russ Lidstone, who left in protest. In October, the agency lost its lead on Omo, with the bulk of the business coming out of Lowe and JWT, moving to BBH in a $250 million account shift. Then in December came the announcement from Frank Lowe that he was back in business with his own independent shop, taking Tesco, Lowe London's crown jewel. With $8 million in revenue, it was a 25 percent hit for the U.K. office. He also poached the disaffected Weinberger, and 25 of the new agency's 30 staffers came from Lowe as well.
But things would get worse. It seemed like déjà vu when it was discovered that Lace had earlier initiated a meeting with Frank Lowe to see if he would be interested in establishing a new agency with the Tesco account, sources say. Lowe, in turn, contacted his solicitors about the session to document the fact that he did not instigate the overture. Even within the cloak-and-dagger traditions of Lowe, Lace's audacity was breathtaking.
With its coup, Lowe's startup, without offices or even a name—it would be called The Red Brick Road—nearly topped new-business charts in the U.K. last year. (In January 2006, IPG filed a complaint with the American Arbitration Association, alleging that Frank Lowe used proprietary information to damage the company. There has still been no settlement, although sources say the two sides are getting closer to one.)
For Lowe London, the Tesco loss hurt more than revenue. Americans may not be able to appreciate the overwhelming stature of Tesco in the U.K. (The company is even starting to see consumer backlash because of its reach). The world's fourth-largest retailer, it counts a full one-third of Britain's consumers as shoppers: £1 of every £8 spent at U.K. retail outlets passes through Tesco's tills. It's also the world's largest online grocer. Within the next 12 months, the company will expand into the U.S. through convenience stores, initially in California. Tim Mason, the former Tesco marketing director who moved the business to The Red Brick Road, has been sent to the U.S. to personally handle the launch. (Red Brick Road is not handling the U.S. launch.)
Paul Hammersley, earlier mentored by Frank Lowe while working at his agency, left his job as CEO of DDB London to front Lowe's new venture. He is one of six equal partners in the agency.
Bringing in Garry Lace to Lowe London was "really a piece of clumsy management," Hammersley says. He describes it as a destabilizing event, as the retailer was upset by the way it was handled, particularly in regard to Weinberger, who felt unwanted by Lace. Hammersley voices surprise that Lowe could miss now-obvious signals about looming trouble. Using soccer parlance, he says: "I don't think IPG understood the position it was in, where your largest London client leaves after two meetings [with Frank Lowe]. They got a yellow card in March after Cadman and Lidstone left."
Hammersley insists: "It's not that Tesco loved Frank. They wanted their team [at Lowe] to be happy and motivated."
Pausing, he adds: "If a client like Tesco is willing to make this decision in days, move business in just weeks, it's an interesting statement of our times."
Through press representatives, Tesco marketing execs declined interview requests.
Sitting in The Red Brick Road's Carnaby Street offices—which ironically once belonged to BBH, a role model for the new agency—Hammersley believes the time is right for his new shop. This summer it reeled in a plum global Heineken assignment, thanks to Frank Lowe's close historical ties to the Heineken family, who still control the company. The agency did compete in a pitch for the business, though, going up against incumbent StrawberryFrog and Bates. (Hammersley says it's still hard to estimate exact spending, but says, with inclusion of the account, revenue at The Red Brick Road has almost doubled.) Hammersley insists the agency has ambitions beyond a handful of clients in Lowe's Rolodex and is looking at new compensation models. He says he foresees a time when The Red Brick Road may expand to having three or four offices around the world.
The road ahead
As The Red Brick Road hopes to expand to a creatively focused select-market enterprise, Frank Lowe's onetime agency moves toward that same goal, albeit on a larger scale.
Gatfield has spent the year untangling Lowe's web of business relationships overseas. The agency's affiliates have often been licensed, operating as Lowe in name only, while others have been set up in non-equity arrangements. Of the 84 markets in which Lowe has a presence, slightly more than half of them were viable affiliates. In the view of IPG insiders, cleaning up the Lowe network was long overdue. Gatfield has closed or merged 17 of those agencies to date—the bulk of offices to be shuttered—and will do the same to others until the early part of next year. (This is a major factor in the agency's expected return to profitability.) Lowe's agency in China is now wholly owned, and Gatfield has strengthened operations in emerging markets like Brazil through acquisitions.
Buenos Aires-based Fernando Vega Olmos, appointed Lowe's worldwide creative director on Unilever two years ago, is expected to spend more time in Europe. Vega Olmos, whose Vega Olmos Ponce agency is 49 percent owned by Lowe, is very well liked at Unilever, Lowe's largest client going back to the days when Lintas was Unilever's in-house agency. In January, the packaged-goods giant consolidated global creative duties on its oral-care brands at Lowe. Unilever's Clift plays down press reports about Lowe falling out of favor during performance reviews this summer at Unilever. "It's been a source of bemusement to me," he says. "You'd be hard pressed to recognize the Lowe we work with from the agency the trade press writes about. Our reel with Lowe has never been better and is among the best of any of our agencies. At their best, the agency combines the globalism and intimate understanding of Unilever that Lintas had, along with the traditional creative standards of Lowe. There is little doubt that this injection of creativity into the old Lintas is one of the reasons why they have retained so much of our business."
Lowe, in re-creating itself now, faces the same requirements from Unilever as the company's other roster shops do.
"We want our agency to have strong creative hubs in five places, maybe seven, maybe 10," Clift explains. "In that respect, Lowe is facing the same challenge as other agencies like JWT and McCann. They must offer good work and be well connected, both between hubs and with countries within each hub's own region."
Unlike past Lowe attempts to manage integrated communications across IPG companies, like the agency's involvement in The Partnership (as well as other lackluster initiatives known as Plus and Activation), Gatfield envisions a more organic way of working across disciplines. "We believe the fortunes of Lowe rest on our ability to be a premier ideas company, to build excellence that drives our multinational business either by running it ourselves or through our partners, partners like R/GA, Momentum, Jack Morton," he says.
Gatfield, whom former Burnett colleagues describe as a kind of organizational psychologist as well as strategist, is particularly proud of the infusion of talent in Lowe, a considerable investment that suggests the agency's future may no longer be in doubt within IPG. Amanda Walsh, the former European CEO of WPP's Red Cell network, will tale over as chief of Lowe London in October. In London, she joins Kevin Allen, former McCann Worldgroup worldwide director of global accounts, who became Lowe vice chairman in July. (Allen was influential in Lowe's integrated win of Nokia last year.) In April, Lowe named BT head of marketing communications Rebecca Morgan, who also logged 11 years at BBH, as chief strategy officer. That injection of high-level talent has caused some to wonder about Wright's future. But this April, Wright, who appears to work well with Gatfield, signed another two-year contract with IPG.
In July, Lowe London was buoyed by the arrival of John Lewis $24 million account. Landing the British retailer, an iconic U.K. brand, was a notable win, as the agency's executives frequently remind this reporter. (Their repeated use of it as a sign of a turnaround is a telling detail about the state of affairs at a London agency, once one of the U.K.'s largest, which has become diminished in size and stature.) Ecd Ed Morris is expected to lead the resurgence, as one of London's most highly regarded creative executives. But few have forgotten how Morris seemed quite willing to jump ship last year as he considered joining Frank Lowe's startup, only to be wooed back to Lowe with a big pay raise.
Across the pond, Gatfield hired former BBDO New York managing director Nancy Hill as Lowe's North American CEO in June, becoming Wnek's partner. Lowe New York also got a boost last week, beating Wieden + Kennedy to win creative on XM Satellite Radio's $50 million ad account following a review. That followed the $50 million win of EarthLink in the spring.
Lowe's new management team not only must go on the offense in scoring new business, they must play defense in retaining existing business and talent. There's no shortage of competitors looking to cash in on the agency's vulnerabilities: After a holding-company tug-of-war between Omnicom and WPP, longtime Lowe exec Asit Mehra, a director in charge of Unilever, said in March he was leaving to work on the client's business at Omnicom's DDB. A month later, Andy Langer, the onetime Marschalk cd who went on to become Lowe's global creative director on Johnson & Johnson, announced he was leaving Lowe, after nearly 30 years, to become creative chief at another J&J agency, Roberts & Tarlow, also owned by Omnicom. (Lowe's grip on J&J appeared to be loosening after Ogilvy picked up creative duties on the company's sponsorship of the 2008 Olympic Games in Beijing. Lowe has since hired Barbara Boyle, former Saatchi & Saatchi global cd on Tide and Pampers, to succeed Langer in leading the charge on J&J.)
Walsh and Hill, who share reputations as personable, well-liked executives, represent a much-needed break from the cabals and intrigues of previous Lowe factions, sources say. Says one: "They're a welcome addition to a place that lost its way through the egos, testosterone and grandiosity of the past."
Even before arriving, Walsh—who had 35 offices reporting to her at Red Cell—is being rumored to be in the running as a possible successor to Gatfield, whose contract stipulates that his Lowe role is a three-year job. Walsh, who was influential in the restructuring of Red Cell's 55 offices, which became United, said she will focus on restoring Lowe's U.K. creative legacy.
"Steve's been very clear: London is the home of Lowe," Walsh says. "I'm very focused on making Lowe the best agency in the world. Lowe New York—what it lacks in profile, it makes up for in revenue." (That is likely to get a rise out of Wnek, who describes New York as the company's "flagship" office in his press releases.)
Speculation about Wnek's own commitment to Lowe has died down. "After my first six months, if I knew at the beginning what I knew then, I wouldn't have taken the job," he admits. "It's been a real trial by fire." But he vehemently denies any interest in other New York jobs.
Gatfield admits, "I think there may well have been a period where we risked losing Mark, but now that's past."
Lowe's new executives have a tough time understanding the skepticism of a weary media corps that doesn't doubt the enthusiasm of the latest group to tackle Lowe's problems but has heard it all before.
"The 25,000 mergers at Lowe, which accounts for the number of toxic former employees—I'm still taken aback by the joy and alacrity the press take in our losses," Wnek says. Hill adds: "When anything attached to Lowe is bad news, it becomes worse news. If it's good, it's not going to be as good."
Lowe insiders chafed when IPG CEO Roth went on the record about the agency. Addressing investors last spring, he said: "Most of you have already asked me the question, 'Why haven't you put a bullet in Lowe already? Why are you dealing with all these issues? Why not just break up Lowe and disperse it among your many strong networks and be done with it already?' " (Roth went on to explain why IPG is spending the amount of time and effort to invest in Lowe, saying he believes there is a way for IPG to "utilize the strengths of Lowe in this marketplace and really turn it into a competitive advantage.")
Given IPG's own turnaround efforts, whether Lowe ultimately has the time to realize those ambitions remains to be seen. Gatfield's rationalization of Lowe's assets may prove to be the easy part of the job. Now, the agency must live up to Roth's promises to Wall Street and deliver the numbers.
"It takes more than just reducing offices—that's just a structural issue," says one source long familiar with Lowe. "To survive, the agency needs forward momentum, new business."