PR bigs Richard Edelman and Gail Heimann square off in CEO smackdown
In one corner, we have Richard Edelman, president and CEO of the independent public relations company founded by his father in 1952. In the other corner sits Gail Heimann, two months into her tenure as president and CEO of Weber Shandwick, a firm forged in 2001 by merging the Weber Group, Shandwick International and BSMG under parent holding company Interpublic Group of Cos.
Edelman and Weber Shandwick are the No. 1 and 2 PR shops by revenue in the U.S., according to Ad Age’s Datacenter (Edelman is No. 1 globally, Weber Shandwick No. 3, behind BCW). So what would happen, we wondered, if we invited Edelman and Heimann to the Ad Age offices, sat them across from each other and told them to take the gloves off? Would sparks fly between the indie scion and the holding company lion? Would Heimann, who began her career as an Edelman intern, take jabs at her former mentor? Would they even agree to show up?
Turns out they would—and they did.
In the first of what we’re hoping will become a series of executive-on-executive interviews, we tasked each with bringing five questions for the other for an on-the-record, two-way tête-à-tête. Ad Age did not review the questions in advance, but editors were present in the room to moderate the discussion. What ensued was an often-gracious conversation about the firms’ differences and goals. Almost too gracious. The two executives shared their views of the public relations landscape as both are evolving their business models in real time. They debated the relative merits of independence versus the holding company model. And the digs that they did get in were almost too subtle to register. Just as you would imagine from a couple of messaging pros.
This conversation has been lightly edited for space and flow.
Richard Edelman: This is an obvious question: You’re part of a big holding company. Are you one way or another having to jockey around [fellow IPG agencies] R/GA, McCann, et cetera. Or because Weber Shandwick is so successful do they just leave you be?
Gail Heimann: We’re a part of an extraordinary holding company, and what it helps us deliver is two things: One is truly, profoundly, integrated solutions for our clients. Our clients, for the most part, are coming to us, Weber Shandwick, and the holding company with issues, problems, which require the best of the best of a multidisciplinary, integrated organism to work. So the philosophy within the IPG holding company is that it takes top talent to be in those integrated ensembles, and that you only get top talent when you bring together multiple brands. So you retain that culture and the ethos of each brand, and the discipline from which those individuals come. And you bring them together in a non-competitive, non-territorial organism in the center.
RE: Our philosophy, naturally, is different, which is that we now believe we compete directly with ad agencies and digital firms, [and] to a small extent, media companies, that earned creative is the future, that it’s trustworthy content, fast as the news cycle, social by design, has purpose at the core and starts movements. We’re happy to be on a team, but we’re certainly not happy to be junior partners. And I’m sure in your case, because Weber Shandwick’s that strong and successful, you’re not. But in most holding companies, you can see the destruction of the PR sector; Ogilvy and MSL are a cautionary tale about how not to do this integration.
GH: You’re exactly right. I think we have seen this subsuming of PR in the interest of quasi-integration versus the respect of the power of a discipline coming to a table as equals. You and I’ve been championing the power of earned ideas. Look at the marketing services world, and look at what wins at Cannes, the Clios, or name-your-other-award shows in that pure-play advertising world. It’s those ideas that inhabit culture and create conversation.
Ad Age: With so many marketers looking for holding company “solutions,” Richard, do you find yourself at a disadvantage at all because you don’t have other agencies within your structure?
RE: We’re creating these agencies. We bought United Entertainment Group, so we have experiential and sports. We have Edelman Digital, which we’ve created, which is our solution to R/GA.
And we can do paid [media] because we have 600 creatives at Edelman, most of whom came from paid context. We have media buyers, et cetera, mostly for social. So, we would prefer to have a vertical approach as opposed to horizontal, which is what the classical holding companies are.
GH: So what’s the Edelman 2030 agenda going to be?
RE: We’ll still be independent. Hopefully one of my kids will be ready to take over by then, let’s see. Or maybe all of them. I watched “Succession” ...
GH: I was going to ask!
RE: I’m not turning my kids against each other. That is sure. That is not happening. Jesus, what a snake pit.
The goal for me would be 55/45, non-U.S. versus U.S. That means our non-U.S. has to grow quite a bit, because our U.S. is 60 percent of our revenue. I wantB to have many more non-Brit, non-American clients in our top 20 clients. I want there to be a significant AOR [agency of record] kind of status for us. Mostly with sort of mid-sized companies of the world, not the Unilevers necessarily, but the little ones. And I want earned creative to have actually become something that is 25 percent of the business, instead of 10.
GH: That’s a lot to accomplish.
RE: Well, I’ve got to move. Given the status of age, I got to move my ass. I feel the hot breath.
GH: I don’t disagree in terms of the balance of ex-U.S. and U.S. That’s going to shift a little bit. I see growth in places like Africa, which is the fastest-growing middle-class economy, that kind of thing. So I think some dimensional change in geography. For us, it’s a little bit sort of the muscle of what we now think of as consultancies, with a heart of a creative shop. We started out as more of an art. We’re morphing into more of a science.
RE: Speaking of geographies, how would you cope with what happened in China and the NBA, and to advise clients of which items to let pass, which situations to get involved in?
GH: It’s hard to answer specifically to any issue because obviously we work in a lot of issues across a lot of fronts. The best I can say to you is a huge amount of listening and a huge amount of sensitivity on both sides. Our decisions, as it relates to these issues, impact obviously the client in question, other clients around that particular issue, and our employees. So it takes a huge amount of thought, intelligence, knowledge sets and sensitivity.
RE: Speech is a fundamental of the American system, free speech, and in some other systems it’s not. And where there’s a cross-cultural kind of experience, one has to respect the national part, and have something that is generally acceptable across, but doesn’t say much, because it’s hard to come on one side or the other. You’re going to get whacked by both.
Ad Age: How do you advise clients with political issues that upset their employees? Ogilvy CEO John Seifert took a beating for its work on behalf of the U.S. Customs and Border Protection. Do you walk away?
GH: We walk away when there’s big dollars on the table, and we walk away because of reasons of values and principle. We have an ethics committee and we talk to the ethics committee at times because we believe our employees will be intolerant of our taking on a particular client with a particular issue. People would be surprised how many calls we get about things that we really cannot take on and perhaps in years past would have done so under the rubric of “Hey, we exist to solve the world’s toughest problems for our clients.” But in a society and world that is transparent and in a society where our employees matter and what they care about matters deeply, we can no longer risk taking on certain assignments in that sense.
RE: Three-quarters of people in the U.S. say they trust [their] employer more than any other institution and that they want the CEO to stand up and speak up on issues of the day and not wait for government. So, that’s a very clear sign of a new standard of what you should and shouldn’t take. Now, Seifert has got issues on business model, and I’m sure he has other U.S. government business, and it was impossible to reframe that situation, and he did it as well as he could.
GH: Do you have bright lines around specific areas?
RE: No guns. We take no coal. We take no tobacco. And we don’t take sovereign nations that are problematic, because it’s not worth it. It’s going to be harder for PR companies to make the case that we’re like lawyers. And I think the Bell Pottinger example is a perfect one, where they took on an assignment from a sleazy client, and they paid for it with the life of the firm. Because they also cooperated and actually did terrible stuff about race relations in South Africa. [The British multinational’s racially charged activities in South Africa caused a scandal that would ultimately lead to Bell Pottinger’s bankruptcy in 2017.] You can’t do that. So it’s who you work for, then what you do, both.
GH: I would expect there may be more bright lines in our future.
RE: [To Ad Age] Are you happy with this so far?
Ad Age: So far, yes. It will take some editing down.
GH: But you want us to argue a lot. We’re civil people.
RE: You could have had us with a different agency. We’d be happy to be very uncivil with them. [To Heimann]: So, you’ve had the new job for ...
GH: Two-and-a-half months and a day or two.
RE: What are you finding? I’m happy to give you advice after 22 years. I’ve now been through this. You’re my third Weber Shandwick competitor. Fourth, because it was Larry Weber and then Harris [Diamond] and then ...
GH: Andy [Polansky]. But admit it, I’m the first one who had her first PR job at Edelman.
RE: One hundred percent.
GH: When you get this job people come in and offer you advice, so one person walked in and said, “Take it slowly. Think about what you want to do.” Another person walks in and says, “Change. Change fast. Change now.” I’m like, “Oh my gosh, so much counsel.” So, I have made some changes in the management team. We’ll see a few more announcements. I’m finding that it is heart-palpitating at times, thrilling at other times. It’s an interesting world to preside in. Suddenly it lands on your desk and you have to make the decision. There are decisions that certainly impact a given client, multiple clients, many thousands of employees. That’s a responsibility. There’s opportunity too, which is fantastic and exciting, but the responsibility part is there. I mean, you had it. How do you handle it? You look fine. You look happy.
RE: I’m good. Remember I got this job and my dad was the predecessor, and he was used to being the owner, boss, and last word. So, look, I did still let him basically take care of Asia, because he liked that, and I did Europe and the U.S. He was in Chicago, and I sort of let him do that, so we worked it out over many years. So, I had to find a way.
GH: Edelman, an eponymously named family business, right? So, you refer to yourself in the third person a lot. Does that ever get awkward? [Laughs] When you’re recruiting top talent, what’s your appeal? Does the family business strike top talent as “Hey, take me into the family business?”
RE: Well, to a certain extent it’s, “You’re going to work for me, and I’m going to be around, and the ownership of this place isn’t going to change, and you know who you’re dealing with.” And besides, this is a little bit like the pirate ship. We’re the different ones, and you want to make a revolution? You want to do something different, you want to make earned creative the thing? Then join. That was what persuaded Judy John, and that’s what got Yannis [Kotziagkiaouridis, head of data and analytics] to come, and Tom Crampton from Ogilvy and you know, it’s a different proposition. There are some who don’t, because it’s too entrepreneurial or too “Richard’s a difficult kind of character because he’s demanding and wants to win.”
GH: Never heard that, Richard. If you look at the much ballyhooed millennial generation people seeking varied experiences, I think a part of an appeal of an organization like ours is the holding company. There’s great global opportunities. You’re at the epicenter of everything that’s happening in the world. We’re going to move you fast and furiously, and you’re going to have opportunities to look beyond these walls ... I mean, working with you, I get it.
RE: That’s for the senior [level]. But for the junior you’re going to get a lot of responsibility really quickly at our place. I think when you were with us you had a lot of responsibility at 26 or 27. We give real work, and move quickly and move up. I think we all have to recapture some aspect of growth, because otherwise, it’s flatlined and everybody just stays, and you’re stuck. Junior talent goes to Facebook or something. We want to keep them, and we all have a big job to do to keep making our places more diverse.
GH: What are you hearing from your clients today?
RE: They are looking to us to give them tangible results. I mean, prove that in fact it’s more than impressions, it’s a deeply data-driven and data-proven bit of work. They want us to have more senior people than junior people, not just executors of work that they order, and they want us to be agile across the lines of our skills.
Ad Age: What are their biggest pain points?
RE: They are deeply worried about trade and they’re worried about new multi-localism. And they’re worried about getting caught in the crossfire. There used to be a universal set of values and therefore a brand could be the same and you could have the same creative and more or less just execute locally. No, not now. You not only have to execute, you need a context for local and it means more care. Does this matter? Does this work? How? Why? So, we’re even rearranging budgets such that we keep our core at the center. If we have to put some money into local market A because local market A is not going to fund it, therefore we have to do better work.
Ad Age: Richard, is there any circumstance in which you would consider selling?
RE: With the exception of Weber Shandwick, I can’t say a single PR firm that has benefited from being part of a holding company. And here we are, one and two, and damn close to each other and we both regard each other with the highest estimation. And so I think the holding company model, vis-a-vis our industry, is broken with one exception, and we therefore do not see it.
Ad Age: What would you advise each other if you were in each other’s shoes?
GH: There’s a great story to tell in being who you are and being the Avenger superhero. I don’t know that I’d do much different except continue to exercise the spirit of independence that is so differentiating.
RE: My advice to you as an incoming CEO, take your time in making considered changes and make sure you have a good finance partner. I went out and hired a new CFO and she changed the financial system and that didn’t work and we couldn’t send bills out for awhile, and this was not a great auspicious start for me.