The unit will claim about $6 billion in total billings, more than half from multinational clients. The name is an extension of the New York-based agency's MediaCom moniker, used for the last several years in Europe and Asia.
The move follows J. Walter Thompson Co.'s announcement earlier this month of the creation of the JWT Global Media Group, with similar objectives. And the usage of a separate brand name parallels Saatchi & Saatchi Worldwide's decision to call its media buying division Zenith Media, although Zenith is a more structured and separate unit than MediaCom or JWT Global will be.
MediaCom's objectives are to improve "consistency in philosophy, best practices, quality of people and training systems" from country to country, said J. Alec Gerster, exec VP-media and programming services for Grey, New York, who adds the title of chairman, MediaCom Worldwide.
"Multinational clients are demanding a greater, more deliberate and more focused service," said Ron De Pear, chairman of JWT Global Media, London, whose multinational clients include Unilever, Kellogg Co. and Ford Motor Co. "The necessity to [create JWT Global] now instead of in the past is because the whole media area is in ferment, is changing."
Multinational agencies are continually pondering how to more effectively organize their media operations, said Ira Carlin, worldwide media director for McCann-Erickson Worldwide, New York. But most changes are fine-tuning, Mr. Carlin said. "The key is where are the reporting lines? A [significant change] would have to involve a radical restructuring of budgeting and profit and loss responsibilities."
That's not happening at Grey or JWT, although Mr. Gerster said MediaCom will have some spending power. "We'll be able to make significant additional investments to take existing offices to the next level," he said.
MediaCom will have the power to make investments bigger than a local office could afford when MediaCom sees that such investments could lead to new-business opportunities with multinational clients, said Jim Bell, managing director. Those could be with new clients or existing clients such as Procter & Gamble Co., B.A.T Industries and M&M/Mars, he said.
Messrs. Bell and Gerster declined to project how big MediaCom's investments will be, but Grey is prepared to spend up to $1 million on additional overhead in the next year.
China is the first market likely to see new investment in media systems or services from MediaCom. Messrs. Bell and Gerster will travel to Hong Kong this week to roll out MediaCom to Grey's Hong Kong, Shanghai, Bei-jing and Guangzhou offices.
Neither would specify MediaCom's Chinese plans, but both men said they are committed to investing in proprietary research, and program distribution and development around the world, particularly in developing countries.
Mr. Gerster said the benefits of having a global unit such as Media-Com probably will become apparent first in youth advertising. He calls the world's youth a "magically cohesive group" and a promising target for a global advertising campaign.
Grey's multinational youth advertisers include Hasbro, M&M/Mars, Kraft Foods and Warner Bros.
Another area that will see global advertising and media planning earlier, he said, is business-to-business marketing.