More than two decades ago, Young & Rubicam instituted its whole egg theory. At the time, the notion commonly inspired outsider comments ranging from "No kidding" to "They've got to be kidding."
They weren't, but the idea was ahead of its time and eventually fell out of favor. Agencies turned their attention to the more popular idea of cross-selling clients on a variety of services or products. However, Y&R never really abandoned the concept. About six years ago, Y&R revisited the whole egg principle -- this time creating a plan to become their clients' best partner at building brands.
"Our business is changing from selling clients' products to helping our clients achieve in the marketplace," says Peter Georgescu, chairman-CEO of Y&R Inc. "Don't talk to them about creative brilliance, but tell them -- even better, show them -- that it works in the marketplace."
Y&R's commitment had to be more than just a mission statement. So the agency spent money on creating new client tools such as the BrandAsset Valuator research model -- a $50 million investment.
Y&R also reorganized into Key Corporate Accounts to handle its more than 40 major worldwide clients. That KCA idea is now being expanded into a Team Space concept. At each Y&R office around the world, the agency is establishing a team space for its major accounts.
The concept will allow any Y&R employee in the world to work up-to-the-minute with others anywhere on key accounts. So far the Citibank Team Space is up and running, but others, including Colgate-Palmolive Co., Ericsson and AT&T Corp., will be set up by the end of the year.
Ed Vick, chief operating officer of Y&R Inc., says the more recent shift "forced us to say it's not about sales or accounts or advertising. It's about having premium service that is better in every way."
In 1998, Y&R's perseverance was rewarded by clients. The agency picked up consolidated and new business globally from Cadbury Schweppes, Campbell Soup Co., Danone International Brands, Ericcson, Ford Motor Co. and Sony Corp. Just as clients recognized Y&R's integrated business and creative formula, so has Advertising Age in naming the company Global Agency Network of the Year.
The network won more than $660 million worth of regional/global new business in 1998, comparable with 1997. Y&R also ranked No. 1 in regional and global account wins for 1998, according to Advertising Age International rankings.
Marketers may have jumped on the consolidation bandwagon last year, but Y&R still had to convince each client that it was the right agency for the move. Y&R competed with several other agencies for its two biggest wins, both from existing clients -- $300 million worldwide from Danone and $335 million from Ford in Europe.
In the case of Ford, the shootout began early in the year. Ford asked both Y&R and Ogilvy & Mather Worldwide, then Ford's biggest European agency, for ideas about the Ford brand and Focus, the car company's big launch for 1998.
The two rivals worked feverishly for six months and presented to Ford's European managers in July. Ford was so impressed by Y&R's strategic thinking on the Ford brand -- and earlier creative work on the smaller-budget Puma and Cougar models -- that Ford went way beyond awarding Y&R the $100 million Focus launch and $90 million corporate account. Ford also moved four other models -- Ka, Fiesta, Explorer and Windstar -- to Y&R from O&M.
"A genuine and progressive spirit is the brand essence of Ford," Kevin King, Y&R's London-based account managing director, described Y&R's winning strategy.
Mr. King joined Y&R almost four years ago to focus on Ford, after handling the Peugeot account as managing director of Euro RSCG, London.
"We told Ford they should talk about how they've adapted those values," he said. "We talked to people in an intelligent way, about what quality of life do you expect. Ford is about improving people's quality of life."
Although Y&R's strategy sounds heavily weighted on the business side of the equation, creative has also undergone a transformation. Creatives at Y&R say they have grown to love the underlying business propositions, especially the brand analysis tools.
While it's obvious Y&R's philosophy pays off in new business wins, it also has been the starting point for a lot of solid creative, says Ted Bell, vice chairman-worldwide creative director for Y&R Advertising.
"We're pushing the creative philosophy of `inspired simplicity,' " he says. "It's about human values, not cultural values. We said, `Let's talk about ideas that everyone gets.' And if your creative philosophy is simple, there's a much better shot at ideas that travel well [around the world]."
That simple creative is winning accounts too. Y&R's London office led the pitch that won the $30 million worldwide Schweppes account, based on the creative work Y&R presented. Commercials, already airing in the U.S. and Australia and breaking soon in the U.K., star a live leopard. The leopard, who speaks with the voice of actor Kelsey Grammer, socializes at home and the beach with a gazelle, an alligator and other animals. The spots end with the tagline "Schweppes. Just a little more bite."
Like the other Y&R executives, Mr. Bell eschews creative for creative's sake. "We're not a movie studio. We're not a bunch of art directors sitting around figuring out how to amuse people. We have one goal, and that's to make it work for the client. If it doesn't work, I don't care if it's hysterical."
In one of the most talked-about moves by Y&R last year, the company went public, raising almost $800 million in two offerings. The IPO created several millionaires, some of whom retired.
However, Y&R weathered major management changes and in fact, ended more diverse. A year ago, the major regions in the world were run by Americans. Now the leaders are Canadian, Cuban, Dutch, French and Swedish.
"When you have the (offices around the) world run by Americans, you get only one slant on things. But this gives our teams a different perspective and a more international understanding of things," Mr. Vick says.
IPO SPURS RETIREMENTS
In Europe, Chairman Fernan Montero retired at the age of 50 in September after making about $30 million from the IPO. He was replaced by Bruno Widmer, who ran one of Y&R's most creative agencies, Advico Y&R in Zurich, Switzerland, and Bert Meerstadt as president of Y&R Europe. Mr. Meerstadt, a 37-year-old former consultant at McKinsey & Co., ran Y&R's Dutch agency, where he set up a Y&R management consulting unit.
In Latin America, Joe De Deo retired after nearly 40 years at Y&R and was replaced by Jorge Rodriguez as president, Latin American region.
In the U.S., retiring president of Y&R Inc. John McGarry Jr. was not replaced, but instead his duties were divided by Mr. Georgescu, Mr. Vick and Linda Srere, vice-chairman and chief client officer of Y&R Inc.
For all its strengths, Y&R does have some weak spots in its network. The company still needs to grow its U.K. business. London is a key office for any international network, and Y&R doesn't even rank in the U.K. top 10. Y&R has grappled with this thorny problem for years by looking for agencies to acquire but has never been able to build a top London agency.
In Asia, where everyone has had a tough year, Dentsu, Young & Rubicam also had problems. Etienne Boisrand, Y&R Asia Pacific chairman, pointed out nearly every agency network saw a drop in revenue in `98 due to the Asia crisis. This year, he says, DY&R is forecasting zero revenue growth for the network. Yet, even with these challenges, in 1998 the agency reaped the rewards of seeds it planted long ago.
"What I consider to be a success is the transition of the old Y&R from strictly running a campaign or program to the new Y&R where we improve our clients' performance in the marketplace," Mr. Georgescu says.
Contributing: Laurel Wentz, Normandy Madden
Copyright January 1999, Crain Communications Inc.