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The merger is not entirely surprising. There have been whispers in the industry of a Gray-AKQA mashup since Read took over as WPP in 2018 and began merging larger and struggling legacy creative brands with smaller digital players. Yet few people would have expected WPP to abandon the Gray brand altogether, perhaps thinking it would go in the direction of VMLY & R (born from the merger of VML and Y&R) and Wunderman Thompson (created from de Wunderman and J. Walter Thompson), with a new brand formed by shuffling names (AKQGrey, perhaps?).
Read said, on the branding aspect, the company didn’t want to create a “language twister” by naming the new network something like AKQGrey.
Gray and AKQA have worked more closely together in recent years. In some countries and cities including Denmark, the two agencies already share offices.
“Gray has evolved a number of times over his 103 years and this is the next step in his evolution,” says Houston. “As someone who works in the brand business, while names are obviously important, brands are more than their names.”
It is not known if any of the Gray Group brands, in particular its multicultural agency Wing, will also be famous. Read says these are details that are still being chopped up.
“This is another defining moment in the attempt to resuscitate the creative talent inherited from WPP,” said Greg Paull, co-founder and director of R3. “AKQA has built a strong, data-centric business that, in a post-COVID world, is more relevant than it already is.”
Grey’s legacy
Gray was founded as a Gray advertising agency in 1917, from an art studio, by Lawrence Valenstein, who was only 18 at the time. Originally, the agency specialized in direct mail. In 1921, Valenstein hired 17-year-old Arthur Fatt, who later became president of the agency. Fatt helped develop Grey’s reputation as an agency using a team approach to advertising.
By 1964 Grey’s billing reached $ 100 million, and over the next several decades he would gain several major accounts, expand globally, and produce highly successful campaigns, especially for “Star Wars” toys in stores. 1970s. Gray was on a tear until 1998, winning accounts such as the Los Angeles / Orange County Mitsubishi Dealers Advertisers Association, Dannon yogurt, Sprint and Dairy Queen. Then, in 1998, Gray ran into legal issues with his Mitsubishi Motors of America leasing advertisement, and he began to see a series of customer losses.
While there was a time when Gray seemed to bounce back, he never quite returned to his pre-1998 heyday.
Ad Age named Gray an agency to watch in 2010. She moved up to third on the A list in 2012, and in 2014 was named Ad Age Agency of the Year. By 2013, Gray had won 20 out of 22 locations, its customer retention rate was 95%, and its revenue was up 18.4%. Ad Age wrote in their 2014 A-List profile, “It goes to show that Gray has not only had a good few years, but has achieved what venerable shops and startups struggle to do – continually reinvent themselves.”
Ad Age Datacenter reports that Gray estimated global revenue for 2019 to be around $ 702 million, down 1% from 2018. Meanwhile, AKQA estimated revenue of $ 304 million in 2019, which was relatively stable from the previous year, according to Ad Age Datacenter.
Procter & Gamble is one of Gray’s oldest clients, having worked with the consumer goods giant for seven decades. Over the past few years, Gray has been the source of some of his most defining work, tackling toxic masculinity in “The Best a Man Can Be” for Gillette; and recently worked with Cartwright to urge the Silent Majority to be anti-racist in “The Choice” for P&G.
In 2020, Gray scored several victories, including Discover and the Carlsberg Global Account.
AKQA, founded in San Francisco in 2001 ((but with roots linked to two agencies founded in the 1990s), was cited in WPP’s second quarter results as one of its “better performing” specialist agencies than others in its class, although in May it lost the Clorox digital account to Omnicom’s OMD.
Despite the pandemic, Ahmed and Houston say none of the agencies have had to lay off employees and are currently hiring. In April, Gray put about 3.5% of his staff in New York on leave for three months.
WPP acquired Gray in 2005 for $ 1.8 billion in cash and stock. WPP bought AKQA in 2012 in a deal with an enterprise value of $ 540 million.
Contributor: Bradley Johnson
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