Paul Keye Takes On a New Challenge

After 40 years in the advertising business, Paul Keye is starting over.

Last month, Paul Keye left behind the rubble of the once-dynamic agency he co-founded, Keye/Donna/Pearlstein, to become chairman of the newly opened Los Angeles ad firm Livingston & Keye.

Keye, 61, created the state’s anti-smoking campaign that portrays tobacco executives as evil scoundrels. One ad he wrote warns: “The tobacco industry is not your friend.” Keye was also the creative director behind the familiar TV spot that likens the effects of drugs on the brain to eggs sizzling in a hot skillet. And it was Keye who, a dozen years ago, concocted the wildly popular “International Imitation Hemingway Contest” for a local restaurant that dared writers to compose bad Hemingway-like yarns.

Now, Keye has to put his creative talents to work with a new partner--one of Seattle’s wealthiest and most successful ad executives.

Few ad industry peers question whether Keye still has the creative fire. “The very fact that at 61 years old he is starting an agency should tell you how he feels about the ad business,” said Cliff Einstein, creative director at Dailey & Associates. “Instead of a young, hip place, clients will get a couple of experienced guys with flair.”

“This agency will have a very feisty character,” said Ron Elgin, president of the Seattle agency Elgin-Syferd. “My impression is Los Angeles doesn’t have many agencies like that.”

So enamored was Roger Livingston, 54, with Keye’s reputation that he spent a year chasing after him. Livingston, who yearned to open a Los Angeles ad shop, figured that having the name “Keye” on the door would make it a lot easier to get business.

“Paul is a unique presence in the Los Angeles ad community,” said Livingston, whose agency creates ads for Alaska Airlines and In-N-Out Burger. The 4-month-old Los Angeles office employs 16 and posts annual billings of about $35 million.

But not everyone thinks Keye’s new venture will succeed. “Paul is back in the trenches,” said one of the top ad executives in Los Angeles, who asked not to be named. “This is a business for the resilient. I don’t know how much more hammering he can take.”

What’s more, Keye has picked an especially tough time to launch a new agency. The Los Angeles ad market is in shambles. And the agency he left behind lost so much business in such a short time that many ad executives wonder how it managed to stay open as long as it did.

“It was a hell of a run,” said Keye, who is hardly eager to discuss the failure of the agency he co-founded 21 years ago. “It was the collateral damage that did in Keye/Donna/Pearlstein. What happened to the agency has nothing to do with the creative work.” Indeed, the agency’s ads have won numerous awards. Its light-hearted ads for the Suzuki Samurai won high marks. But the roof fell in two years ago when Consumer Reports claimed that the Samurai was unsafe to drive. It didn’t take long before sales nose-dived and a panicky Suzuki put its ad business up for review.

That decision came at a time Keye/Donna was expanding. It had invested heavily to open a New York office. Then, after losing Suzuki, the decision was made to initially maintain the staff size in order to attract another car account. “It didn’t work,” Keye said. The agency lost another important client about the same time the economy slowed.

By late last year, the agency that had once been among the hottest creative shops on the West Coast was a shell of its former self. What had been a staff of 120 employees had dwindled to 20. And its annual billings eventually slipped from $80 million to less than $20 million.

The agency’s parts were disassembled and mostly sold to Livingston last month. Now, Keye said, he will finally be able to spend all of his time doing what he likes to do best: creating ads. “This is an agency where the creative work is what the agency is all about,” Keye said. “We’re looking for clients who say the work is first--and nothing is second.”