OGILVY & MATHER AT 50 -- THE `HOUSE THAT DAVID BUILT' STILL LIVES BY HIS PRECEPTS: 3 OF 4

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SKIRMISHES WITH REEVES

He was in demand for interviews and speeches, and his remarks provoked talk. In 1952, he warned of bigness and accused older agencies of "creative burn out," bait to which his brother-in-law, Rosser Reeves, could not resist rising.

The result was a battle of press releases that was briefly the talk of Madison Avenue. The two found much to argue about in a constant competition for attention. "At parties each liked to dominate the room," Stephen Fox wrote in "The Mirror Makers." "If Reeves came in a loud dinner jacket, Ogilvy appeared in a kilt."

Mr. Ogilvy barraged new-business prospects with his new and improved 12-point "creative credo." Late in 1952 the agency picked up $6 million in Rinso business from Lever Bros., its first big package-goods account.

Meanwhile, some observers noticed that Anderson Hewitt, despite his titular role as CEO and Mr. Ogilvy's boss, was hardly getting noticed at all. Mr. Hewitt took a dim view of the agency's carriage-trade image and the British upper-class tone of some of his partner's pet accounts. But he was no match for the high-profile swath Mr. Ogilvy was cutting in the press.

EXIT ANDERSON HEWITT

"Andy was a prototype ad man," says Shelby Page, Mr. Hewitt's cousin by marriage and treasurer of the agency from 1949 to 1984. "He did things by influence and politics and spent time drinking martinis with the clients. David hated that sort of thing, was hell bent to do the right thing and had opinions on everything. They just never got along."

Their relationship grew so bitter that in February 1953 Mr. Ogilvy resigned. Francis Ogilvy and Bob Bevan, representing the London stockholders of Mather & Crowther and S.H. Benson, flew to New York to patch up the rift. They came to arbitrate but quickly recognized that time had passed; they would have to choose.

Their choice was David Ogilvy. In September 1954, the agency moved to 589 Fifth Ave. and dropped Mr. Hewitt's name from its title. The agency was now Ogilvy, Benson & Mather.

A CHANGE OF MIND

In October 1955, Mr. Ogilvy spoke to the American Association of Advertising Agencies and confessed a change of mind: The quick-sale, hard-sell style was out; advertising was a long-term investment in brand building. But for all his apparent dogmatism, such basic strategy questions posed a constant dilemma for him. He was more comfortable on the tactical level where he could boil everything down to a list.

In 1957, he startled the British Advertising Association by propounding a catechism of 39 directives for ad writing that, among other things, warned copywriters to get to the point and avoid sentences of more than 12 words. Dogmatic, to be sure. But the speech was the hit of the convention, and Mr. Ogilvy followed most of his own guidelines.

For all the speeches, though, the agency faced serious problems without the professional marketing savvy of Mr. Hewitt, who left with several key account people plus Sun Oil and Chase Bank. The agency lost Franco American and Rinso soon after, though Lever Bros. offered Dove soap as a consolation prize.

Knowing where his weaknesses were and realizing that brilliant ads were not enough, in 1956 Mr. Ogilvy sought the strength he needed to start growing again. He found it in a retired Benton & Bowles VP named Esty Stowell.

ENTER ESTY STOWELL

Mr. Stowell told David Ogilvy, according to Fortune, that his media and research departments were in poor shape, "and our account executives are the most extraordinary collection of bums you ever saw." The deal was, Mr. Ogilvy would handle the creative and Mr. Stowell would run everything else.

While Mr. Ogilvy delighted in controversy, he knew his clients did not, especially in their advertising. Yet the flap caused by the first Ban deodorant campaign for client Bristol-Myers surprised him. Because no network wished to show real people using a deodorant, Reva Korda, a young copywriter who would later become head of all OBM creative, represented the anatomy with a flowing montage of naked statues, accompanied by a discreet voiceover with a British accent: "In the mature male and the mature female . . ." It was too classy to be erotic, but too detailed to put viewers at ease. It was withdrawn after several months.

While OBM handled the routine maintenance of its bread-and-butter clients, including Maxwell House coffee, Dove soap, Good Luck margarine and Pepperidge Farm, another quintessential high-prestige, low-profit, David Ogilvy-style brand came knocking.

SEDUCTIVE APPEAL

Despite a meager $50,000 budget, Rolls-Royce had a seductive appeal to Mr. Ogilvy, who ignored Esty Stowell's warning that it would further typecast the agency as an elitist boutique.

The third of his defining moments was at hand, though the cleverness that would forever attach to him was not totally his work.

The ingenious clock headline ("At 60 miles an hours, the loudest noise in this new Rolls-Royce comes from the electric clock") was in fact lifted from an article in The Motor, a British auto magazine, proving another pair of Ogilvy truisms: that journalists are the best advertising writers, and that the best ads imitate journalism. Mr. Ogilvy fully credited his source in the ad, and the headline was in quotes. The copy that followed was pure Ogilvy, enumerating 11 engineering advantages as if he were handing down his own tips on what constituted good advertising. Rolls-Royce would be the third of the ads to seal Mr. Ogilvy's reputation and style.

The agency's later campaign for Mercedes-Benz took the emphasis on engineering detail even further. The car was in a tiny niche defined by elegance and luxury, words used endlessly in its advertising. At OBM the words were never used. Writer Bruce McCall wrote long essays on engineering and performance that in the opinion of many influenced American awareness of what made good cars.

A TINE FOR GROWTH

The normal mission of advertising is to bring an image to substance. The Mercedes campaign did something even more remarkable: It brought substance to an image.

By 1960, it was time for serious growth. In that year the agency hired away one of the most promising young executives at Batton, Barton, Durstine & Osborn, John (Jock) Elliott, a tough-minded former marine who had a remarkable ability to convert his most powerful bosses into dedicated mentors. His job was to manage the largest single account OBM had ever won, Shell Oil.

"There's been a lot of misinformation about how Shell doubled the billings of O&M," Mr. Elliott

said recently. "I might as well set the record straight. It was $13 million, not $25 million. At the time O&M was billing $32 million. Soon after we got Shell Oil, Shell Chemical followed, which was about $2 million. The total was $15 million, or about 50% [of the agency's pre-Shell billings]."

ADVOCATING FEES

The Shell business made big news, less for its size than its conditions. The company wanted to substitute a negotiated annual fee based on a cost-plus formula for the traditional 15% commission system. The details were announced Nov. 13, 1960, before the Association of National Advertisers meeting and was the talk of the trade, and Mr. Ogilvy became a high visibility advocate of fee arrangements.

"It made sense to him," says Mr. Elliott. "The client paid for what it got. I don't recall David being a great fee advocate before Shell. But after we got the account, we both made endless speeches about why we thought it was so good."

Even more remarkable was the autonomy Shell seemed willing to grant. Cyril Martineau, Shell ad manager, said: "We don't intend to make any advertising decisions for them. I don't want to see an alternate campaign. We make the product. They advertise it. We respect their expertise. . . . Why keep a dog and bark yourself?"

DAVID'S PROFILE RISES

Mr. Ogilvy went to work turning out a classic OBM long-copy print campaign. "The ads went into great detail and ran around 1,500 words," Mr. Elliott recalls. "Yet they had an average `read most' score of around 21% and a Starch noting of 40%. Beat that!"

David Ogilvy's public profile hit its peak with the publication in October 1963 of "Confessions of an Advertising Man," which sold 1 million copies and was translated into 14 languages.

Inside the agency, growth was bringing in mass merchandisers such as Sears, Roebuck & Co. to balance Mr. Ogilvy's rarefied New Yorker clients. Billings were approaching $80 million. And more and more he and his and management "partners" began to see advertising's future on a global basis.

In 1961, OBM bought back the remaining 10% of its stock still owned by S. H. Benson.

In November 1964, OBM and its venerable London partner, Mather & Crowther, announced an "equal partnership" merger to form a single operating company, known simply as Ogilvy & Mather, a parent company joining OBM and M&C. The merger created a combined billings strength of $130 million and made the agency a power throughout Europe. With the stroke of a pen, Mr. Ogilvy's agency shot from 21st to 8th in the annual Advertising Age rankings.

Ogilvy & Mather was no longer a boutique in which Mr. Ogilvy turned out most of the award-winning gems. "David was aware of the need to institutionalize the company," says Mr. Elliott, "and took steps to do so. He wanted to build a cadre. We used to have a list of `crown princes.' `Keep a close eye on the crown princes,' David would say, `and make sure they are being brought along.' "

In December 1965, Mr. Ogilvy dropped his title as chairman of O&M's U.S. operations (he remained chairman of O&M International) to become creative director, and Mr. Stowell gave up the presidency. "David asked if I would like to be chairman [U.S.]," says Jock Elliott. "Needless to say, I thought it was a splendid idea."

Mr. Elliott became first among equals in an uneasy and ill-fated management triumvirate in which his principal rival was James Heekin, the agency's president. In November 1969, the arrangement blew up when the board replaced Mr. Heekin with Andrew Kershaw from the Canadian office, and Mr. Heekin left the agency.

A COMMON NAME

In January 1966, all the offices officially took the common name Ogilvy & Mather, and Ogilvy & Mather International (OMI) was formed as the parent with Mr. Ogilvy as titular chairman.

There were now 41 stockholders in Ogilvy & Mather who had to decide whether to become rich. Mr. Ogilvy owned 17% of the shares, valued at around $3.65 or about three times earnings. But he had seen a handful of agencies, such as Doyle Dane Bernbach, Foote, Cone & Belding, Grey Advertising, and Papert, Koenig, Lois sell publicly at four times that P-I ratio. He felt the time was right.Not all his colleagues saw it that way, though. Esty Stowell was violently opposed. "He was of the old school," says Shelby Page, then O&M treasurer. "He felt agencies were service businesses and should not be public. They were not considered good investment vehicles."

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