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Grey Interactive finally shines in light of P&G deal

By Published on .

The cloak of secrecy is finally off Grey Interactive--or so the agency would have you think.

Ever since it became lead interactive agency for Procter & Gamble Co. nearly two years ago, the catty ad industry has whispered about Grey. Without much work to show, other execs started to wonder if Grey was capable of producing real work.

What little did come out of the shop were fluffy Web sites for clients like Captain Morgan rum, hardly the calling card of a serious interactive marketing company.

Now, things have changed. For the first time, Grey Interactive's three managing directors--Norman Lehoullier, Scott Sorokin and Orin Wechsberg--have significant business to tout.

DRIVING DEALS WITH P&G

Grey Interactive was the driving force behind last month's launch of Parent Time, a joint venture Web site from P&G and Time Warner that was more than a year in the making and costing well over $1 million. Today, Grey opens the first phase of a major transactional Web site from Dell Computer Corp., its first client outside the Grey Advertising roster. And by spring, expect news of another Grey-inspired venture, between P&G and Conde Nast Publications.

To further stress its independence, the company last month moved out of Grey's midtown Manhattan headquarters to offices several dozen blocks south, on lower Fifth Avenue near the Flatiron District.

But for all its desire for attention, the tough questions are still hard to answer at Grey Interactive.

MUM'S THE WORD

In an interview earlier this month at the company's new headquarters, none of the top executives were willing to comment publicly on their role in the development of Parent Time. Instead, they left it up to Bob DeSena, VP-interactive advertising for Time Warner Cable Programming ("They have done a tremendous amount of work for us on Parent Time--everything from graphic look and feel to the ad system") and a spokeswoman for P&G (`'They did an excellent job serving in a strategic role and as an adviser").

Same goes for Dell, another notoriously guarded client. And don't even think Grey will tell you much about the P&G-CondeNet venture, except to say not to expect anything until the first part of 1997, at the earliest.

LASER FOCUS ON BUSINESS

"In the early days of television, advertising played non-traditional roles," said Mr. Lehoullier. "In this new media, will agencies and advertisers play non-traditional roles? Yes."

He continued: "A year ago, most of the sites we did were multimedia print ads. . . . Now, [the Web] has become a real business model."

One gets the feeling that at Grey Interactive, there isn't much room for things that aren't laser-focused on business. Of the three co-directors, who share a combined 30 years of experience at Grey, only the goateed and funky-vested Mr. Sorokin, 35, is a reminder of the Web's more creative side. Messrs. Wechsberg and Lehoullier, who are 43 and 48, respectively, retain that buttoned-up management look--this is Grey, after all.

In the four years since its founding, Grey Interactive has grown to more than 40 employees, more than double its size last year. It represents seven U.S. clients, and its 19 affiliate offices outside the U.S. manage 11 more clients.

OPTIMISTIC ABOUT GLOBAL GROWTH

"This is a commitment from Grey to expand this business and not shift it off into buying other businesses" like rival Omnicom Group recently did, said Mr. Sorokin. Grey declined to comment on revenues at the unit, but executives are optimistic about its global growth possibilities.

The goal is to build an interactive agency network that takes advantage of the global Internet.

"Virtually all our clients are saying, `How do we develop a global marketing strategy?' " Mr. Lehoullier said, pointing to Dell and P&G as examples.

In the case of Dell, the world's largest direct PC marketer, the products it sells in the U.S. aren't always the same as those available in Europe. Its online store, launching Nov. 18, will use transaction and targeting technology to deliver content applicable to each market.

DELL TAPS GREY FOR MEGA SITE

The goal is to make it easier for business computer users to do business with Dell--to get product information, buy a computer or get order status, get tech support or get technology news, said Scott Eckert, director of Dell Online.

"I'm convinced that a year from now they'll be doing more business on the Web" than any other company, Mr. Lehoullier bullishly predicted.

In the case of Parent Time and the planned CondeNet venture, which will target women with beauty-related content, Grey is wearing the content developer hat. In each case it devised the concept and played the role of investment banker. It also designed much of the creative look of the Parent Time site, and developed an ad model called Relevant Advertising Delivery under which targeted ads will pop up as a user traverses the site.

The project has a three-year advertising commitment from P&G. About the only thing Grey won't do, it seems, is sell the ads. But it does want to dictate the way they look.

"In a site like Parent Time, you have the ability to send a very targeted message," Mr. Sorokin said. "The RADs act differently than banners or buttons. They take you to microsites within Parent Time."

For now, however, the site features banners for marketers like Bank of America that still rotate across the pages. Parent Time is related to Time Warner's Pathfinder, which uses an ad rotation system. The new ad model won't get its first showing until January.

PROVING RETURN ON INVESTMENT

For Grey Interactive, the challenge now is to show that all the thinking and strategizing over the past few years will generate a return on investment for clients.

"Compensation on a pure project basis is not good," Mr. Lehoullier said. "For most of our clients, we have a return on investment model" of payment, where the client sets certain measures of success, such as customer leads, brand awareness or traffic.

As for that Captain Morgan site, the pirate just got himself a redesign.

"There's still room for that," Mr. Lehoullier said. "But the Web's becoming a harder-working medium over time."

Contributing: Bradley Johnson.

Copyright November 1996, Crain Communications Inc.

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