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WELLS RICH GREENE BDDP

 


Address:
9 West 57th Street
New York, New York 10019
U.S.A.

Telephone: (212) 303-5000
Fax: (212) 303-6216


Statistics:
Private Company
Incorporated: 1966 as Wells Rich Greene
Employees: 850
Sales: $923.7 million


Company History:

Wells Rich Greene BDDP is the world's eighth-largest advertising agency. Founded in the 1960s by Mary Wells and two partners, the agency made its reputation with innovative creative work. The company experienced phenomenal growth in its first few years of business. It remained an American agency based in New York and closely associated with its founder for nearly 25 years before teaming with a French agency to adopt a more international character.

Wells Rich Greene opened for business on April 4, 1966. Its founders were Mary Wells, Dick Rich, and Stewart Greene, all of whom had previously worked together at another advertising agency, Jack Tinker & Partners. The three set up shop in a four-room suite of the Gotham Hotel in Manhattan with only a couple of employees, including Mary Wells's mother, who acted as the fledgling firm's receptionist. The agency's first client was Braniff International Airways, a $6 million account that Wells brought with her from Tinker.

From the start, Wells Rich Greene (abbreviated as WRG) was dominated by Mary Wells. Dick Rich would leave the company in 1969, and Stewart Greene would also depart before the firm's first decade had elapsed. Renowned in the advertising world as a savvy, energetic, and aggressive executive, Wells developed a reputation for groundbreaking creative work, which became a mainstay of advertising's golden age.

The first demonstration of the flair that would come to distinguish WRG was the agency's campaign for Braniff. Wells convinced the company to give its flight attendants new designer wardrobes, paint its aircraft in a rainbow of unorthodox colors, and adopt as its slogan 'The End of the Plain Plane.' The object of the campaign was to make flying fun.

With Braniff as its anchor the agency billed $9.8 million in its first nine months. By the end of its first year WRG had 100 employees installed in offices at 575 Madison Avenue, and the agency's billings had reached $39 million.

WRG won its second big client in June of 1967 when it notched the $12 million American Motors account. With this high-profile automotive assignment, the agency established itself as the hot shop of the moment. By the end of the company's second year billings had skyrocketed to $85 million, and WRG had added the consumer products giant Procter & Gamble to its client list. The company's dramatic increase in revenues came despite the agency's relinquishing of the Braniff account following Mary Wells's marriage to the company's president. Braniff was replaced in August of 1968, however, by Trans World Airlines, a $14.6 million client.

In December of 1968 WRG sold stock to the public, a move Wells would later call 'a big waste of time' in an interview in Advertising Age. At its first stockholders meeting, held in May of 1969, the company reported six-month billings of $39 million, which had yielded earnings of $801,000, and announced that it would soon begin work on the Royal Crown Cola account as well as a campaign for Samsonite luggage. Although WRG lost the Samsonite account the following year, the company added Miles Laboratories' lucrative Alka-Seltzer brand in a coup that brought the agency an additional $20 million in billings. WRG went on to create the memorable 'Try it, you'll like it' and 'I can't believe I ate the whole thing' tag lines for the product.

In 1971 WRG lost the Royal Crown Cola account, which forced the company to close its Chicago and Atlanta offices. Despite this setback, the agency had billings of more than $100 million at its five-year anniversary. The company had opened five offices, including two overseas, and employed more than 300 people.

The following year WRG suffered a greater setback when it unexpectedly lost its $20 million American Motors Corporation (AMC) account, reportedly because the agency had failed to cultivate AMC dealers with enough enthusiasm. In the wake of this defeat WRG made its first acquisition, purchasing Gardner Advertising, a St. Louis advertising agency with a long history. The two firms were linked by their work for the Ralston Purina Company, and the move gave WRG a broader geographical base for its operations.

At the end of July, 1973, WRG was once again reporting record earnings as billings increased by 60 percent over a nine-month period. By the next fall, however, Wells had grown weary of the constraints placed upon her agency by its status as a publicly-owned company, and WRG moved to buy back its stock and return to privately held status. The company's plan was designed to put 43 percent of WRG in Wells's name. By the beginning of 1975 the agency had bought back a large percentage of its stock but not enough to eliminate minority stockholders. The effort to go private dragged on until 1977 when control of the company was firmly placed again in the hands of Wells and other top executives.

During the mid-1970s WRG increased its involvement with Procter & Gamble, successfully launching its Sure antiperspirant. Overall, agency billings reached $190 million in 1974, with net income of $3.2 million.

By the following year, however, net income had plummeted nearly 70 percent to $l million. Although billings had not dropped nearly as far, rising costs, including higher salaries and more expensive office space, put the squeeze on profits. In addition, advertising agencies across the board confronted an unwillingness on the part of many clients to take risks like those on which WRG had built its reputation. These customers preferred instead to make less expensive, less creative, but more hard-hitting ads.

In June of 1975 WRG bought Doherty, Mann & Olshan, a small marketing company. As it celebrated its tenth anniversary the following year, the agency undertook a reappraisal of its direction and operations. Incorporating the recommendations of a management consulting firm, WRG announced a plan for aggressive growth through the acquisition of other American advertising agencies. Although WRG had formed affiliations with 19 foreign firms, which mainly assisted the agency with coordination of airline advertising, the company did not plan to seek the bulk of its growth overseas, since high costs and fervent national feeling comprised expensive barriers to profitable operation. The purchase of domestic firms was deemed less risky.

Despite these intentions, however, WRG ultimately did not embark on a string of agency acquisitions. Instead, the company became 'a big, simple shop' in the words of Advertising Age, with a large portion of its revenues derived from its New York office, which handled only American clients. 'We were never interested in accumulating a lot of agencies,' Wells told Advertising Age 12 years later. 'We were much more interested in trying to build a very simple operation that could honestly care most of the time about clients ... because we felt that would be a successful way to go. And so we have kept ourselves simple.... Our focus is on clients and on doing advertising.'

Under this philosophy WRG's growth came through the implementation of measures such as the establishment of a new business department, which was assigned to research markets and actively recruit new clients. In addition, the company sought to add new products from the clients it already had to provide the necessary growth to keep profits high and hold on to talented employees.

Those creative people became essential to the project WRG began work on in 1976, when the agency accepted a commission from the New York State Board of Tourism to make the state attractive to travelers. In what would become one of its best-known campaigns, WRG developed the 'I Love New York' theme song and logo, with its heart-shaped emblem signifying love. When the campaign was introduced in 1977 it virtually resurrected New York City's fortunes as a tourist destination, which had been devastated after the city's fiscal and racial woes of the mid-1970s. The logo itself went on to become a cultural icon, instantly understood across the country and adopted for a multitude of purposes.

WRG followed up its inauguration of the 'I Love New York' campaign by notching two new clients, Citibank and the cosmetic titan Max Factor. In 1979 the agency added some Ford Motor Company products and opened a new branch called WRG/West.

In the wake of WRG's successful Sure antiperspirant campaign, Procter & Gamble assigned the agency its Prell shampoo account. With its Gleem toothpaste and Safeguard soap business, WRG's Procter & Gamble billings were increased to more than $20 million.

In 1980 WRG reorganized itself, placing its agency operations in different cities under the control of a new parent holding company called Wells Rich Greene, Inc. One year later, Wells appointed Kenneth S. Olshan, who had joined the company when WRG bought his small marketing firm in 1975, chairman of the agency.

The following year WRG added a $35 million account from Pan American World Airways. At this time the company closed its Texas office, WRG/Southwest. In 1983 agency founder Mary Wells began a gradual withdrawal from day-to-day involvement in running the company, entrusting more and more decisions to her deputies.

In late 1984 WRG reorganized its management structure in its New York office, which was responsible for more than half of the company's total billings. In order to decentralize power, the company created a new executive vice president level of administration. The agency was now largely run by Olshan and another WRG executive, Charles Moss. Wells spent much of her time away from the business at her home in the south of France. With its leader out of the fray, WRG refrained from taking part in the merger frenzy that gripped much of the advertising industry during the mid-1980s. While others were forging alliances and forming super agencies, WRG continued to go its way alone.

By 1987 WRG revenues had reached $765 million, on work done exclusively for American companies. Many of the agency's client companies were run by people with long-standing personal ties to Mary Wells. By the late 1980s her sustained absences from active involvement with the agency engendered rumors that she was sick and caused doubts about the company's future without her.

Although Wells had stepped in to head up the agency's successful effort to hold on to its $40 million Benson & Hedges account in late 1986, questions about her indispensability gained greater currency when Wells resigned from the corporate board of longtime agency client Ralston Purina in 1987. Following her departure from the board, Ralston Purina began to move its business away from WRG, handling some campaigns in-house and farming the rest out to other agencies. That year the agency also lost two longtime accounts from Procter & Gamble, Prell shampoo and its Citrus Hill orange juice line. On the plus side, WRG won $40 million worth of business from MCI Communications and a $60 million account representing Cadbury Schweppes, a candy and soft-drink maker. By the end of 1987 WRG billings had reached $765 million.

By 1988 Wells's agency had lost its last piece of Ralston's business as the company's dog chow work was moved in-house and its Chex cereal account was switched to another shop. WRG amply compensated for the loss, however, when it won part of the prestigious IBM account in September of 1988. The agency's success in getting this $70 million assignment was particularly significant as it was the first new-client campaign in which Wells had not participated. Assigned to develop IBM's overall market image, corporate image, software, and mid-range computers, WRG introduced print advertisements featuring the slogan 'This isn't the IBM I thought I knew'; a trouble-plagued television campaign was eventually scrapped.

In 1989 WRG ended its long association with St. Louis-based Gardner Advertising when it closed the business. The agency's work for Ralston Purina had been a mainstay of its operations, and that client's defection left Gardner fatally weakened. The company also lost its Sure deodorant account with Procter & Gamble and saw the last of its Cadbury Schweppes work after that company was purchased by Hershey's. These clients were replaced by two travel business companies, Sheraton hotels and Hertz rental cars. In March of 1990 the agency also added Continental Airlines. Before it was able to implement its campaign for the financially feeble carrier, however, lack of money forced its postponement.

One month later Mary Wells announced that she would step down as chief executive officer of the agency she had founded and turned over her title, as well as effective control of the company, to her successor, Kenneth Olshan, WRG's president. She retained the title of chairman and founder and insisted that she would remain involved in the business on an as-needed basis. At the same time Wells announced that Boulet Dru Dupuy Petit (BDDP), a French advertising giant known for its innovative creative work, would gain a much-desired toe-hold in the United States by buying 40 percent of WRG. The union was designed to give WRG an overseas presence while at the same time allowing it to compete more effectively with other international agencies while still maintaining a degree of independence. The deal, structured as a stock swap, also provided the necessary cash to buy out Wells's ownership stake in the company. WRG added its $885 million in annual billings to BDDP's $791 million, creating the world's eighth-largest advertising agency.

By the end of 1990 WRG had lost its $51 million MCI account, which resulted in the dismissal of 20 staff members, and gained in its stead a $35 million project from Chase Manhattan bank. With this venture, the agency tried out its new management structure, implemented in December of 1990; in order to fully exploit the possibilities of its new partnership, the agency set up two divisions, WRG Advertising and WRG Communications. Within the advertising agency, staffers were rearranged into brand teams. The company's communications arm was designed to expand WRG's operations beyond simple advertising to more far-flung marketing pursuits, such as direct mail and promotions, which Wells had resisted entering. BDDP had proven expertise in these highly profitable activities. With its new international affiliation, WRG also began an aggressive effort to win clients outside the United States. This direction became more critical in April of 1991 when the agency lost Philip Morris, one of its staple clients, which moved its Benson & Hedges account to another agency.

Two months later BDDP raised its ownership of WRG from 40 percent to 70 percent, buying out founder Mary Wells almost entirely. A few days later the company announced that its name would be amended to Wells Rich Greene BDDP, symbolizing the new relationship between the two firms and their commitment to a multi-cultural advertising network. Acknowledging that WRG had lost the creative flair for which it had first become famous, the company unveiled a new corporate philosophy entitled 'The Way We Work,' designed to make clients the center of the firm's operations.

In November of 1991 WRG/BDDP announced the formation of its first communications subsidiary to handle direct marketing. This was followed by an increase in Procter & Gamble billings after that company consolidated its advertising among a smaller number of agencies. Despite this good news WRG/BDDP faced a considerable challenge as it attempted to integrate operations and corporate cultures from opposite sides of the Atlantic. How well the company succeeded in this daunting endeavor would largely determine its fate in the increasingly global advertising market of the 1990s and beyond.





Further Reading:


Dougherty, Philip H., 'Advertising: Wells Rich Earnings Increase,' New York Times, May 27, 1969.
Grant, Don, 'Wells Rich Gained Alka-Seltzer Account With Message That Hard Times Call for Hard Sell,' Advertising Age, December 14, 1970.
'A New Era: 'Creativity' Plus Plain Talk,' Business Week, February 20, 1971.
'Wells Rich Greene,' Advertising Age, February 21, 1972.
Grant, Don, 'WRG to Exchange $1,800,000 in Agency Stock for Gardner,' Advertising Age, September 4, 1972.
'Wells Rich Says Profit in Quarter, 9 Months Rose to Record Levels,' Wall Street Journal, September 14, 1973.
Metz, Robert, 'Wells Rich's Initial Bid to 'Go Private' Proves Only Partly Successful,' Wall Street Journal, January 7, 1975.
Danzig, Fred, 'After 10 Years, Wells Rich Greene Says It's Time to Get Its Act Together,' Advertising Age, May 3, 1976.
Alter, Stewart, 'WRG Shifts Power, Adds VPs,' Advertising Age, November 19, 1984.
Lafayette, Jon, 'Mary Wells: On the Record,' Advertising Age, August 1, 1988.
Konrad, Walecia, 'Can Wells Rich Shine If Its Leading Lady Bows Out?,' Business Week, October 3, 1988.
Lafayette, Jon, 'Double-Edged Sword Handed to Lintas, WRG,' Advertising Age, August 28, 1989.
Wolfe, John, 'Guard Changes at Era's Hot Shop,' Advertising Age, April 23, 1990.
Lafayette, Jon, 'Stock Deal Unites WRG and BDDP,' Advertising Age, April 16, 1990.
Rothenberg, Randall, 'Wells Rich Greene Deal Shows Strength of French,' New York Times, April 16, 1990.
Lafayette, Jon, 'WRG, BDDP Work at Partnership,' Advertising Age, March 25, 1991.
Lipman, Joanne, 'BDDP Takes Minority Control of Wells,' Wall Street Journal, June 12, 1991.

Source: International Directory of Company Histories, Vol. 6. St. James Press, 1992.




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