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Grey Group is the smallest of the "Big Four" advertising networks within WPP. Its reputation for careful account management has earned the loyalty of several long-standing advertisers, not least Procter & Gamble and GlaxoSmithKline, both clients for the past 60 years, and Canon for almost 40. Despite the strength of such client relationships, Grey was traditionally better known for careful and methodical account management than for outstanding creativity. However, the agency has taken giant steps since the mid-2000s to improve the overall quality of its output, with its New York and London offices leading that charge. That has led to a string of significant account gains. Prior to its acquisition by WPP, the group had long been the subject of merger speculation. Although a small number of shares were traded publicly, Grey was to all intents and purposes a private company, controlled by patriarch Ed Meyer. Those years of speculation finally came to an end in 2004 when it was revealed that Meyer was prepared to consider a sale. The deal with WPP finally completed in March 2005.
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Grey is highly regarded for its global coverage and especially for account handling, where it has maintained a close bond with several major clients lasting not just years but decades. Those strengths were traditionally countered by one weakness: creativity. For years, the famously conservative network suffered the tag of "Grey by name, grey by nature", renowned for turning out efficient but lacklustre, low-innovation ads for fast moving packaged goods clients. Gradually, however, Grey has changed. Creative output improved noticeably in Europe in the last few years of the 2000s, and that change spread to the US as well towards the end of the decade following the appointment of Tod Myrhen as CCO in 2007. Several different campaigns, especially those for E*Trade and DirecTV, demonstrated the agency's rapidly evolving creative skills. The agency delivered an especially strong new business performance in 2013. Its US office won 20 of the 22 pitches it undertook, including the prized Gillette account, prompting Grey's selection as Agency of the Year by both AdAge and Adweek. Grey was Adweek's Agency of the Year again in 2015, for the second time in three years.
Grey Group continues to operate as a distinct operating unit within WPP, alongside what are now Wunderman Thompson, Ogilvy and VMLY&R. The group controls a small portfolio of marketing services shops, but is dominated by the main Grey Worldwide network, which operates 121 offices in 96 countries. Advertising Age estimated revenues of $733m in 2015. Including marketing services subsidiaries, Ad Age put the total figure at $894m.
In the US, Advertising Age estimated advertising revenues of $336m (or 46% of global revenues) for 2015. There are just two main offices, in New York and San Francisco. For almost a decade from the late 1990s, Grey New York was divided up into eight more or less self-contained "villages", smaller operating units targeting particular segments or specialising in a particular style of advertising. They included darkGrey (technology and telecoms), buzzGrey (the "pleasure principle" embodied in food, games and sports brands), freshGrey (new approaches for more traditional brands) and others. Incoming CEO Jim Heekin announced plans to "evolve away from" the village structure in early 2006, and that process was completed by year-end. Ericsson Fina is a small creative boutique in New York specialising in fashion and beauty advertising. Still run by founders Mark Fina and Alice Ericsson, it remains an independently branded unit under the Grey New York umbrella. Gradient Group is a specialised unit in the New York agency handling youth-oriented projects. Grey Canada also operates two locations on opposite sides of the country in Toronto and Vancouver.
Grey is also a major force in Europe, and the network won the European Effie award for advertising effectiveness seven times in 10 years between 2005 and 2015. It has a presence across the region, although there has been some consolidation in recent years. Key offices include Grey Gruppe Deutschland, Grey London, Grey Espana and Grey France. In 2012, the office of Grey in Sweden merged with that of Ogilvy and adopted the new name of Ingo. Elsewhere in Scandinavia, the network operates as UncleGrey, and regional management works out of a centralised Grey Nordic office in Denmark. In Italy, the local office in Mialn merged in early 2014 with another WPP agency 1861 United to form GreyUnited. South Africa has proved a difficult market in recent years. Grey's position weakened considerably after 2008 when local leader Ann Nurock transferred to the Canadian office. In a surprise development, Grey pulled out of South Africa altogether in summer 2013 following the steady decline in performance. It returned to the country almost a year later with the acquisition of Jo'burg's Volcano Group, which rebranded as Grey South Africa.
Grey is less dominant in Asia and Latin America, although it has a large presence in both regions. In 2009, WPP sought to bolster Grey's position in Asia by transferring to it reporting control for Batey, a well-established Singapore-based shop which had previously formed part of the JWT network. Grey was among the first US agencies to establish an outpost in Japan, initially in a partnership with local shop Daiko but that partnership was terminated in 2000. In Latin America, the group shifted its regional HQ for that area from Florida to Brazil in 2009. The latter office, originally known as MatosGrey, has expanded significantly in recent years, most recently with the absorption of the local arm of integrated network 141, previously part of Ogilvy. It is part of Grupo Newcomm, the local umbrella which also houses Y&R Brazil. In 2014, the network bolstered its position in Peru with the acquisition of that country's biggest independent, Circus, now Circus Grey.
Grey is closely associated with global media network MediaCom. The group also operates a number of marketing services satellites including multicultural agency Wing, medical marketing specialist Grey Healthcare Group and consumer-oriented health & wellness specialist Grey Healthy People. Until 2006, a number of other units were loosely grouped under the umbrella of Grey Synchronized Partners. These included Grey Direct, Grey Interactive, J Brown and branding and design agency G2. In 2006, all four were merged under the G2 brand, with a single reporting structure. However the ties between Grey and G2, already gradually loosening in the early 2010s, were finally broken in early 2013 when it was announced that the integrated network would merge into Ogilvy's activation network Ogilvy Action under the new name Geometry Global. Most larger Grey offices now have their own inhouse activation, PR and shopper marketing teams. Townhouse was established in 2016 as a dedicated production facility for Grey clients (and especially P&G), working under the overall umbrella of WPP's Hogarth Worldwide network.
Grey also has relationships with other digital and promotional marketing units within the wider WPP group. In Europe, for example, it works closely with digital network Possible. Grey Directory Marketing is a US-based Yellow Pages agency. Alliance is a US-based sports & entertainment agency, which arranges sponsorships and special promotions. The group has strategic affiliations with a number of non-branded agencies in international markets. APCO Worldwide was sold to management in 2004; PR agency GCI Group was merged into another WPP subsidiary, Cohn & Wolfe, to create a new global network.
Jim Heekin passed over the role of CEO in August 2017 to Michael Houston. Long-serving global chief creative officer Tim Mellors retired in 2013 and was succeeded by Tor Myhren, also president & chief creative officer of Grey New York. Myrhen eventually announced his resignation at the beginning of 2016 to join Apple. Michael Houston was appointed as CEO, Grey North America in summer 2013 (from COO, Grey New York), and then elevated to global president in Feb 2016. Long time regional CEO for Asia Pacific Nirvik Singh was promoted to global COO in 2019. (He also remains regional chairman for Asia Pacific, Middle East & Africa).
Andreas Dahlqvist was poached from McCann/Commonwealth in 2014 to take over Myhren's role as chief creative officer at Grey New York. However he left the agency in 2017 to return to Sweden. His successor was John Patroulis, named as worldwide chief creative officer as well as CCO New York. The latter role was transferred at the end of 2019 to Justine Armour. Per Pedersen was named global creative chairman. Debby Reiner was elevated to CEO, Grey New York at the end of 2016. Suresh Nair is global director of strategic planning, with Jane Reiss and Christopher Ross as joint managing directors & key account directors.
Alina Kessel, previously president of Grey's GlaxoSmithKline account, was appointed as global CEO of Team P&G, based in London. She was replaced on GSK by Jason Kahner, based at Grey New York.
Divisional heads in the US include Claudia Strauss (CEO, activation & PR), Joe Lampertius (CEO, global shopper), Eric Shapiro (CEO, mobile & connected experiences). Milan Martin is president of Grey West in San Francisco. Alain Groenendaal suceeded David Patton as CEO, Grey Europe in 2016, but was himself replaced two years later by Eduardo Maruri. TH Peng is chairman & CEO, Grey Greater China.
Grey's former owner and CEO Ed Meyer, who turned 90 in 2018, runs investment and consultancy firms Meyer & Co and Ocean Road Advisors, in partnership with his son Anthony Meyer.
The Grey advertising business was originally founded in August 1917 by 18 year-old college graduate Larry Valenstein. During his vacations, Valenstein had worked as an errand boy for a small-time advertising agency, and now felt like trying his hand at the business himself. Funded by a $100 loan from his mother, he rented a tiny office at 309 Fifth Avenue in New York. Stuck for a name, he named the company after the colour of the walls in the office - he thought his own name too hard to pronounce and remember - and began touting his services to the shops and suppliers in the neighbourhood as Grey Art Studios.
Initially, Grey specialised in the production of a twice-yearly direct mail brochure containing ads sold to local businesses, mostly in the garment trade. Gradually he began to expand the business, moving to new offices on East 29th Street in around 1921, and taking on two staff: an art director and an office boy. Ironically it was the latter, 17 year-old Arthur Fatt, who was to make the most significant contribution to the company. Fatt quickly began suggesting ideas to his boss. In particular, he proposed increasing the frequency of the mailer and turning it into a slick magazine under a new name, Furs & Fashions. The content was expanded to offer a merchandising guide to local department stores. This proved extremely successful, and Fatt was quickly promoted to head salesman. The company name was altered to Grey advertising in 1925, and a year later it booked its first national advertisement for an existing client, Mendoza Beaver Furs, in the August 1926 issue of Ladies Home Journal. Mendoza soon gave Valenstein a new lesson in business – the ad was never paid for.
The company developed steadily through the 1930s, picking up other garment trade and retail clients including Van Heusen and Dan River. Valenstein promoted office boy Arthur Fatt to full partner in the 1930s, and the two men oversaw the running of the company for the next 40 years. Billings topped $28m by the 1950s, but despite attracting its first packaged goods client, Mennen, in the mid-1940s, Grey was still largely regarded as a soft goods specialist with a particular niche in the retail trade. One major factor was that Grey was one of comparatively few advertising agencies owned and run by Jews at a time when, even in New York, the mainstream business world was still largely gentile. (Gradually, however, those old prejudices began to change after World War II and other supposedly "Jewish" agencies began to spring up in the 1950s. In fact, one of these was to establish itself as arguably the most influential advertising agency of the decade, Doyle Dane Bernbach, founded by former Grey employee Bill Bernbach.)
In the early 1950s Valenstein and Fatt appointed former newspaper salesman Herbert Strauss as general manager, with a brief to move the agency into the packaged goods sector. His first success was to capture the business of the Block Drug Company in 1955. A year later he was able to pull in Grey's first piece of Procter & Gamble business, for Lilt home permanents. More importantly he recruited a team of eager young turks from another P&G agency, The Biow Company, after its founder retired. (In 1953, Biow testified that he had paid a California lobbyist $90,000 to help him win the Schenley account. In just three years, Biow’s billings dropped by 50%). Among these recruits was young account manager Ed Meyer, who led the P&G account. Meyer had impressed the detergent giant by suggesting it retarget its struggling Ivory Flakes soap brand for baby clothes and diapers. The refocus was a big success, and P&G began feeding Grey ever larger pieces of business. Another coup for the agency was to build Kool-Aid from a minor powdered drink into America's #3 soft drink by the 1970s.
In the meantime, Grey also set about building a network. The first office outside the US was established in Canada in 1959. This was followed by London in 1962, followed by Grey Daiko in Japan the following year, a joint venture with local agency Daiko advertising. As such, Grey was one of the first US agencies to make inroads in Japan, even before it had established a national presence within its home market. In the US, an office was opened in Los Angeles in the mid-1950s, followed by San Francisco and Detroit in 1966, a year after the company went public. A Chicago office was established in 1970 as a result of the acquisition of local agency North advertising. That same year, Ed Meyer became CEO of Grey advertising, acquiring a controlling stake in the business. Larry Valenstein left the firm the same year and died in 1982; Fatt left in 1976, and passed away in 1999. Meyer controlled the development of the company almost single-handedly for the next 35 years.
Over that period, Grey continued to evolve and expand its offering. It launched below-the-line division Grey Direct in 1979, followed by PR arm GCI four years later. In 1986, the group acquired Gross Townsend Frank Hoffman healthcare agency, which became the core of Grey Healthcare. Acquisitions in 1999 included Innovative Customer Solutions, a healthcare contract sales and consulting organization, which joined the Grey Healthcare Group; and a clutch of US PR agencies including Boxenbaum Grates, Kamer-Singer, and Dragonette, all of which joined the GCI Group. In early 2002 the group snapped up Atlanta-based US integrated agency 360, a partner on the BellSouth account.
Yet in all other respects, the generally conservative group took almost no part in the rush to consolidate that characterized the industry from the mid-1980s onwards. The group's financial performance dipped dramatically in 2001 as a result of a reduction in client spending as well as write-offs of several internet investments, but improved the following year as the agency won a strong portfolio of new business. In 2002 the group was reluctantly involved in an embarrassing lawsuit when it transpired that a supplier, New York print services company Color Wheel, had bribed Grey employees to win contracts and potentially defraud both Grey and several clients.
In June 2004, with the group showing clear signs of emerging from the advertising recession, news broke that Ed Meyer, still chairman & CEO, but by now aged in his 70s, was considering a sale of the business. Industry commentators initially considered Publicis to be the most likely buyer as a result of a personal friendship between Meyer and Publicis boss Maurice Levy, as well as the fact that the two groups shared a major client in Procter & Gamble. Ironically, the shared P&G account proved to be more of an obstacle than an asset to such a deal. Changing years of habit, P&G was said to have voiced concerns about pooling all its brands within a single marketing organisation.
This apparently left the way open for WPP, despite the British group's association with P&G's traditional rival, Unilever. Later Havas confirmed that it too had entered a bid, despite opposition from several of its own shareholders. Buyout firm Hellman & Friedman, previously a backer to both Y&R and Digitas, was also reported to have submitted an offer. However WPP was named as the winning bidder for Grey in September 2004. By the time the deal completed in March 2005, the WPP offer was worth around $1.7bn in cash and WPP shares. As Grey's largest shareholder, Ed Meyer received $473m in cash, shares and bonuses. Ed Meyer finally retired as chairman & CEO of Grey Global Group on January 1st 2007, just days short of his 80th birthday. Jim Heekin, who had been CEO of the Grey Worldwide network since August 2005, became group chairman & CEO.
For 2003, its last full year as an independent company, Grey Group reported revenues up 9% at $1.3bn, and said business continued to be difficult in Europe, and especially in Scandinavia. However the tough trading environment in North America appeared to have improved. That region accounted for almost 45% of revenues. This was only slightly ahead of the contribution from the EMEA region, although the latter was affected by very poor performance in Scandinavia, where the group reported substantial operating losses. Asia and Latin America between them contribute almost 11% of revenues. After a $24.4m loss in 2001, net income was back in the black in 2002, but jumped almost 60% in 2003 to $29.1m. The group's last reported accounts were for the first half of 2004, in which revenues rose more than 14% to $708m, and net income jumped by three-quarters to $17m. Procter & Gamble is by far the group's biggest client, accounting for 10.6% of revenues, or around $14m, in 2003. No other client contributed more than 5%. No audited financials are available for Grey since it became a WPP subsidiary.
Last full revision 20th September 2018
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