Grey’s MediaCom Reins in Beyond Interactive

In a move that consolidates its interactive units during a troubled market for online advertising, Grey Global Group is rolling its interactive agency, Beyond Interactive, under its media agency, MediaCom.

According to spokespeople for Ann Arbor, Mich.-based Beyond Interactive, the move formalizes a longstanding relationship between MediaCom’s Web units — MediaCom Digital and media.com — and Beyond Interactive.

“Beyond Interactive and MediaCom have been working together on various client accounts since Beyond joined Grey Global Group in 1999,” said Beyond’s Jonn Behrman, who will remain president and chief operating officer of the firm. “This move puts structure on a natural convergence of interests.”

However, the move actually is wider in scope: while retaining its name, Beyond Interactive has become “MediaCom’s online media arm,” said a company spokesperson. It will absorb MediaCom Digital and media.com, and its billings — which come from interactive creative work as well as media planning and buying — would add some $266 million in billings to MediaCom’s bottom line.

MediaCom executives positioned the move as an effort to offer their company’s clients a more unified media planning solution.

“We have seen a growing demand for truly integrated media approaches that combine these new digital services with today’s increasingly complex offline media solutions,” said MediaCom chief executive officer Alec Gerster. “The convergence of these skill sets is inevitable and the formation of this new division will enhance our ability to plan, execute, and optimize media across all digital and non-digital platforms as well as across borders. This is exactly what the marketplace is looking for today.”

Beyond’s executives likewise put a good face on the news, citing MediaCom’s worldwide presence (it handles some $10 billion in media placement around the globe) as a factor that would contribute to its client offerings.

“The new Beyond Interactive has a global footprint unprecedented in the digital advertising industry,” said Beyond Interactive chairman and chief executive Harvey Goldhersz. “As many digital services such as ad serving, marketing optimization, and media modeling, as well as the Internet itself, know no geographic boundaries, Beyond gives clients an ability to reach consumers anywhere at any time around the globe.”

Nevertheless, the move does come at a time when demand for online agency work is likely to be waning, as industry leaders agree that advertisers are reducing their online marketing budgets. Yahoo, along with several other Web publishers, has said that macroeconomic conditions are causing dot-com advertisers to collapse at an increasing pace, while traditional advertisers are cutting their discretionary spending — which includes marketing.

Similarly, online media like banner advertising — one of Beyond’s core competencies — continues to suffering from questions of usefulness for branding and direct response.

But MediaCom denied that the move was in reaction to the trouble online ad market.

“It’s not because of the economy, but it’s the evolution of Internet advertising,” said a MediaCom spokesperson. “It’s not bringing Beyond in, as it is giving an online and offline offering under one house to our clients. It’s client-driven, like everything we do.”

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