The merger is not entirely surprising. There have been whispers in the industry of a Grey-AKQA mashup ever since Read took the helm of WPP in 2018 and began merging larger, struggling legacy creative brands with smaller digital players. Still, not many people would have expected WPP to dump the Grey brand outright, perhaps thinking it would go the way of VMLY&R (born from the merger of VML and Y&R) and Wunderman Thompson (created from Wunderman and J. Walter Thompson), with some new brand formed from the mashing of names (AKQGrey, perhaps?).
Read says, on the branding aspect, the company didn't want to create a "linguistic tongue twister" by naming the new network something like AKQGrey.
Grey and AKQA have been working closer together over the past few years. In some countries and cities including Denmark, the two agencies already share offices.
"Grey has evolved many times over its 103 years and this is the next step in its evolution," says Houston. "As someone who works in the business of brands, while names are obviously important, brands are much more than their names as well."
It's unclear whether any of the brands within Grey Group, specifically its multicultural agency Wing, will also be rebranded. Read says these are details that are still being hashed out.
“It’s another watershed moment in the attempt to resurrect WPP’s legacy creative talent," says R3 Co-Founder and Principal Greg Paull. "AKQA has built a strong, data-centric business that, in a post-COVID world, is more relevant than ever."
Grey was founded as Grey Advertising Agency in 1917, from an art studio, by Lawrence Valenstein, who was just 18 years old at the time. Originally, the agency specialized in direct mail. In 1921, Valenstein hired 17-year-old Arthur Fatt, who later became chairman of the agency. Fatt helped develop Grey's reputation as an agency that used a team approach to advertising.
In 1964, Grey's billings reached $100 million and over the next few decades it would go on to win several major accounts, expand globally and produce highly successful campaigns including for "Star Wars" toys in the 1970s. Grey was on a tear until 1998, winning accounts including the Los Angeles/Orange County Mitsubishi Dealers Advertisers Association, Dannon yogurt, Sprint and Dairy Queen. Then, in 1998, Grey faced legal problems related to its advertising of leasing for Mitsubishi Motors of America, and it began to see a string of client losses.
Though there was a time when Grey seemed to be bouncing back, it never quite returned to its pre-1998 heyday.
Ad Age named Grey an Agency to Watch in 2010. It rose to No. 3 on the A-List in 2012 and, in 2014, it was named Ad Age's Agency of the Year. In 2013, Grey had won 20 out of 22 pitches, its client-retention rate was 95% and revenue was up 18.4%. Ad Age wrote in its 2014 A-List profile, "It demonstrates that Grey hasn't just had a few good years, but pulled off what venerable shops and startups alike struggle to do: continually reinvent itself."
Ad Age Datacenter reports Grey had estimated 2019 worldwide revenue of about $702 million, down 1% from 2018. Meanwhile, AKQA had estimated revenue of $304 million in 2019, which was relatively flat from the previous year, according to Ad Age Datacenter.
Procter & Gamble is one of Grey’s longest clients, having worked with the consumer goods giant for seven decades. In the past few years, Grey has been behind some of its most defining work, tackling toxic masculinity in “The Best a Man Can Be” for Gillette; and recently working with Cartwright to urge the silent majority to be anti-racist in “The Choice” for P&G.
In 2020, Grey did pick up several wins, including Discover and Carlsberg's global account.
AKQA, founded in San Francisco in 2001 ((but with roots connected to two agencies founded in the 1990s), was called out in WPP's second-quarter earnings as one of its specialist agencies that "performed better" than others in its category. Though, in May, it did lose the Clorox digital account to Omnicom's OMD.
Despite the pandemic, Ahmed and Houston say neither agency has had to lay off employees and they are currently hiring. In April, Grey furloughed about 3.5 percent of its staff in New York for three months.
WPP acquired Grey 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.
Contributing: Bradley Johnson