OPINION: Grey beefs up operation to beat recession threat

If the ad industry is truly on the cusp of recession, then Grey’s decision to swallow its Mellors Reay subsidiary has an irresistible logic.

If the ad industry is truly on the cusp of recession, then Grey’s

decision to swallow its Mellors Reay subsidiary has an irresistible

logic.



Leave aside Grey’s determination to allay the creative reputation

synonymous with its name by installing Tim Mellors as its creative

figurehead. The fact is that size matters in the communications

business, and it will matter even more if economic dark days are

ahead.



Grey needs more critical mass if it is to consolidate and extend its

place among the handful of networks that will dominate the global scene

in the next millennium.



For Mellors Reay, gaining the necessary weight quickly enough has been a

problem almost since inception. Much was expected when it launched

almost four years ago as Grey’s creative counterbalance. But it has

often flattered to deceive and has lacked the momentum needed to propel

it out of the middle ground.



As a result, it has seemed to be neither fish nor fowl. Too big to be a

creative boutique, too small to successfully convert major pieces of

business.



Even with the resource of a wealthy parent behind it, Mellors Reay has

clearly reached the limit of its growth potential - and, had it

survived, it would have remained no more than a profitable adjunct of

the Grey empire.



From Grey’s point of view, the merger not only provides the agency with

a creative star but will give it a better balance between global and

domestic clients. More important, though, is how the marriage fits in

with a consolidation and acquisition process going on across the group’s

media, below-the-line and PR interests with the aim of powering them to

the top of their respective leagues.



Grey knows that, if recession bites, the diversity of its offering will

be its best protection.



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