AKQA and Grey merge operations in five markets in efficiency drive

Two of WPP’s creative agencies, AKQA and Grey, are to merge operations in five markets as part of an efficiency drive.

AKQA will become the sole or lead brand in four of the five markets – Australia, Belgium, Italy and the United Arab Emirates.

AKQA “assumes management” of these offices, “with Grey’s senior management becoming part of the local leadership teams”, the two companies said. Grey will be the lead brand in the fifth market, China.

Laura Maness, the chief executive of Grey, and Ajaz Ahmed, the founder and chief executive of AKQA, said in a joint interview with Campaign that the simplification would help to drive faster growth and appeal to their “burgeoning roster of global clients”.

The two agencies employ around 5,500 staff globally and share clients such as The Coca-Cola Company and Volvo.

About 225 people work in the five affected markets and it is understood fewer than 5% – or around 11 employees – will be “impacted” in “duplicative, non-billable or low-billable roles”.

Grey has been part of AKQA for financial reporting purposes since the end of 2020, but the two agencies have continued to go to market as separate brands.

The “strategic realignment” in five markets “enhances AKQA’s capabilities and focuses Grey’s footprint on growth markets”, the companies said.

This is what the changes mean in each market:

• In Australia, AKQA will become the sole brand and the Grey brand, which has operated as WhiteGrey, will be dropped.
• Similarly, in the UAE, AKQA will be the sole brand and Grey Dubai will be dropped.
• In Belgium, Famous Grey will rebrand to AKQA Brussels, where AKQA has not previously had an office.
• In Italy, AKQA and Grey will merge under AKQA’s leadership, but both brands will continue to operate for clients, which include Unicredit – a recent joint win.
• In China, AKQA and Grey will merge in Shanghai under Grey’s leadership, but both brands will continue to operate and serve clients, which include L’Oreal and Nike.

Maness said: “AKQA and Grey have already been working together in these regions and our areas of expertise complement each other perfectly.

“By bringing our teams together, we’re combining the best of both worlds – Grey's renowned creativity and AKQA's world-class design and innovation.

“I’m confident that this move will benefit not only our employees but also our clients, who will have access to a truly unparalleled pool of diverse talent and expertise.”

Following the restructure, AKQA and Grey will operate 50 offices – which they call studios – globally. AKQA will have 30 offices in 18 countries and Grey will have 20 offices in 18 countries.

The two agencies said: “There are no plans to integrate any other Grey studio into AKQA.”

A year of efficiency

Ahmed said: “We are proud to partner with Laura’s team and believe the Grey brand has lasting value. Driving operational excellence is core to our mission of delivering sustainable growth and in service of building a leaner, more agile agency to improve our performance and better enable our long-term vision.”

WPP has been making efficiencies across the holding company, most notably with the merger of VMLY&R and Wunderman Thompson to create VML in October 2023, and it told investors at its capital markets day in January that it plans to save £125m through restructuring as well as investing £250m in artificial intelligence and technology.

Revenues from its creative agencies declined 1.6% last year.

Ahmed conceded that creative agencies have been facing “increasing competition” and “different competition” from new and existing players in the marketing eco-system and the rise of AI has brought new issues.

“The way that an agency stays relevant is by increasing the level of innovation and its value-add for its clients, and that’s really what we’re focused on,” he said.

Ahmed described the merger of offices in five markets as part of “a year of efficiency” for AKQA and Grey – a nod to how Meta positioned its global overhaul in 2023 that led to a big leap in profitability.

Asked why AKQA and Grey have not followed VML in going for a full-blown merger, he said: “The easy thing to do is to make one brand but it’s not the right thing to do and there’s immense value in the Grey brand and the Grey leadership team.

“And that’s reflected in the in-bound [interest] we're getting, the opportunities we're getting and the incredible team that's been built under Laura's leadership.”

Grey wants to focus more on global clients

Ahmed founded AKQA in 1994 and he has remained in charge after selling to WPP in 2012. Grey was founded in the US in 1917 and WPP bought it in 2004.

Maness, who joined as CEO in 2022, was upbeat about the changes, saying “I have never been more excited or optimistic about Grey’s future” and claiming its pipeline of client opportunities is “the strongest it's been in a decade”.

But she said Grey needs to focus more on global clients: “I think there had been an over-emphasis on local clients and local markets, and this really re-positions Grey to super-charge its growth engine and to deliver on behalf of the current base of local clients and to continue to add global clients.”

She went on: “We're transforming ourselves to grow faster and we have an incredible opportunity to make the most of our collective scale. And this intentional [smaller] footprint [for Grey] is going to create new opportunities for our people, and it will deliver even better results for our clients. The goal for Grey has never been to be WPP's biggest agency. It’s to be the fittest.”

Maness said Grey has already made progress in a number of areas that go beyond headline staff numbers including improving the gender balance and diverstiy of leadership.

“We believe we're in the business of value creation and we're also in the continuous improvement business and if you're not changing, you're not growing,” she said.