Grey Advertising Restructures Under Holding CompanyGrey Advertising Inc., New York, yesterday announced it will establish a new holding company to serve as the corporate parent for all of its subsidiary properties pending stockholder approval.
The company said the change would be accomplished by transforming the nearly century-old identity of Grey Advertising Inc. into Grey Global Group Inc. with the core advertising agency becoming Grey Worldwide and falling under newly promoted management.
The announcements were made by Edward H. Meyer, chairman, president/CEO of Grey Global Group, who said the move simply made "good business sense" following a period of extraordinary growth in recent years for each of the company's divisions.
Since Grey Art Studio's founding in 1917 and changing its name to Grey Advertising in 1925, the company has grown into a global, multiservice communications empire with established core competencies in online and offline advertising, public relations, direct, interactive and healthcare marketing.
"What we've done," said Meyer, "is establish a corporate structure that recognizes we were once an advertising agency that had a lot of companies associated with it. But now, what we are saying is that we are not an advertising company anymore. We are a communications company."
Meyer noted the company is more of a truly global group with at least 10 lines of business. "We want everybody to know that," he said. He also pointed out that the company's Grey Direct unit "is now morphing into much more of an e-marketing business. It's where our strongest direct business now is," he said. "But overall, this organization recognizes each of our communications companies as major business units along with the advertising agency.
"Additionally, it will ensure that all clients have primary access to the wide range of marketing communications capabilities -- in whatever integrated combination that is appropriate -- all under one corporate umbrella."
Like some of its competitors, the world-class organization associated with the Grey name has, in recent years, changed into a more full-service communications company offering traditional advertising and branding services as well as public relations/public affairs, direct marketing, Internet communications, healthcare marketing and online and offline media services. And Grey's own press materials acknowledge that "over the past 10 years these communications services, all pre-eminent in their respective markets, have grown from representing 5 percent of revenues to where they now represent over 40 percent of the company's worldwide revenues."
However, a company spokeswoman said the entire institution remains a public company, that there was no new infusion of capital associated with the restructuring. And her remarks were reaffirmed by Meyer who noted that "each of the communications companies will have their individual management structures while being able to tap the counsel and resources of the holding company."
He said top senior management would remain available for critical corporate client opportunities but "with respect to the advertising agency [itself], it's time for the next generation to move into place to build the agency of the future."
In disclosing the reorganization, Grey also announced new leadership at many of the company's key units, including the promotion of Steve Blamer, 43, to president of Grey Worldwide/New York from CEO of Grey Advertising/London.
Principal officers of Grey Global Group are now Edward H. Meyer, 73, chairman/president and CEO; Robert L. Berenson, 60, vice chairman and general manager; Steven G. Felsher, 50, vice chairman and chief financial officer; and Stephen A. Novick, 59, vice chairman and chief creative officer. All four officers have an average tenure with Grey of more than 20 years.
Grey Global Group's nonadvertising partner companies include global firms such as Grey Direct; GCI, public relations; APCO, public affairs; Grey Interactive, Internet communications; G2, integrated marketing, corporate identity and promotion; Grey Healthcare; and MediaCom. U.S. firms include J. Brown/LMC, co-marketing through retail partnerships, and Beyond Interactive, Internet media buying and advertising, among others.
The new Grey Global Group, with $8 billion in billings, will remain with Nsadaq under the ticker symbol GREY. Grey Worldwide, with 408 offices in 90 countries also remains one of the top 10 advertising agency networks in the world and one of the largest advertising agencies in the U.S. market.