Agency A-List 2014

Grey Is Ad Age's 2014 Agency of the Year

Shop's Client-Retention Rate Was 95%; Revenue Up 18.4%; Won 20 out of 22 Pitches

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When a headhunter approached Michael Houston in 2007 about coming to Grey, he had no interest. The WPP agency was widely regarded as an old-school shop that had lost its cachet with both clients and talent. But when Mr. Houston demurred, the recruiter told him: "You just passed the first test, because they don't want anyone who wants to work at Grey," Mr. Houston said.

He took the job as chief marketing officer, rising to North American CEO this past summer. Ever since, he, and others like Chief Creative and New York President Tor Myhren, have been part of an effort led by global CEO Jim Heekin to change the agency's culture and reputation.

In 2010 Ad Age called it an Agency to Watch ("things might not be looking so gray anymore," we noted). Two years later it made the A-List at No. 7 ("Grey may have earned the right to be a little arrogant. … [having retained] important accounts and crafted work with mass recognition"). In 2012 it rose to No. 3 ("Heekin has permitted the agency to ... do things the agency can really be proud of"). And last year marked its best to date, or as Mr. Heekin puts it, Grey's "watershed year" -- earning it the top spot on our list.

The proof's in the numbers. Grey won 20 out of 22 pitches. Its client-retention rate was 95%. And revenue was up 18.4% in 2013, after 15.3% growth the year prior. That a big, holding company-owned, beast of an agency can churn out double-digit growth and buzzy, mass-recognized creative is rare. To outdo itself year after year is rarer.

It demonstrates that Grey hasn't just had a few good years, but pulled off what venerable shops and startups alike struggle to do: continually reinvent itself.

From left: Michael Houston, CEO of Grey North America; Tor Myhren, president-worldwide chief creative officer; Jim Heekin, Grey Group chairman and CEO Credit: Photo provided by Grey

WPP-owned Grey added 175 people in 2013, bringing the workforce above 1,000, after winning the hotly contested pitch for Procter & Gamble Co.'s

$250 million-plus global Gillette business from Omnicom's BBDO. It also added Symantec's Norton, Pfizer's Advil, GE Healthcare, and the $150 million Hasbro global business. And creatively, it shone, hauling home 36 Lions at Cannes and winning its first Emmy for Canon's "Project Imagination" film.

Evidence that 96-year-old Grey has left its rep for traditional TV work in the dust? It was behind the rapping Manning family (Peyton, Eli and Archie) in a mobile and digital "Football on Your Phone" effort for DirectTV. It helped P&G's Pantene hijack the Oscars in social media despite not being an official sponsor, which meant it couldn't say "Academy Awards" or "Oscars" or show any celebrities.

That kind of work is the result of shaking up the creative team to include producers, PR folks and technologists. Remarkably, 200 of Grey's employees now work in digital, though Mr. Houston sees lines blurring to the point that the distinction is getting meaningless.

Grey's revenue soared 18.4%, led by its top 20 clients (up 25%), digital (up 50%) and promotion (up 60%). The agency achieved that growth even though it parted ways with two accounts, Energizer and E-Trade -- for which it created the popular ads starring the talking baby. Both went to sibling shops under the WPP umbrella.

Clients appreciate that Grey can be nimble but also has the heft of a larger network behind it. Initially P&G invited Grey to pitch the brand's North American men's-grooming business, which had been held by BBDO for more than 80 years. It became a lot more than that when Grey solicited input from London and other parts of the network to inform an effort led out of New York, said Grey CEO Jim Heekin. Only after P&G saw Grey's essentially global idea did it shift toward a global review. The TV and digital campaign that kicked off during this NFL season sprang from that pitch.

"Grey knows consumers," said P&G Global Brand Building Officer Marc Pritchard. "They know brands and they know how to create winning campaigns. Grey is a long-term, trusted partner to P&G and they constantly challenge our brands to be the best."

Mr. Heekin sees it the other way around. Big clients broadly and P&G specifically have been the driving force of creative change at the agency, he said.

Shortly after he took over Grey from Ed Meyer in 2006, Mr. Heekin said a P&G executive, whom he declined to name, took him to breakfast, both to pledge full support for more ambitious creative work and say "the change cannot possibly come fast enough," Mr. Heekin said. "Our largest client provided us with all the air cover necessary to make this change."

"The thing I'm most proud of is that we tend to do our best work on our biggest clients," said Mr. Myhren. "There are a lot of agencies that do great work on things you never see unless you're at one of the award shows. All of our best work, whether it's Febreze or DirectTV or Canon or the NFL, these are on our biggest clients. And that's not easy."

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