• by Joe Mandese  @mp_joemandese, July 27, 2007

In what appears to be the first move of its kind on Madison Avenue, one of the ad industry's top media shops has merged its traditional and digital media units into one integrated media services agency that insiders claim "reinvents the agency model." In this case, it also happens to be a model that will be headed by the digital management team, as a former traditional media head steps down. Aegis Group today will announce it is merging Carat with Carat Fusion into a single, integrated shop known simply as "Carat," MediaDailyNews has learned.

The new, integrated agency will be headed by Aegis digital media stars Sarah Fay and Scott Sorokin, who will serve as CEO and president, respectively. Ray Warren, who joined Aegis two years ago as president of Carat USA and president of Carat Media Group Americas from managing director of Omnicom's OMD unit, is out.

The reorganization is noteworthy for several reasons. First and most obviously, it is the first example of complete integration between a major traditional and digital media services organization. Secondly, it aligns Carat's North American operations with Aegis' burgeoning Isobar network, now the largest interactive marketing and digital media organization in the world, according to recent estimates from Paris-based RECMA. Lastly, it is a recognition that Carat USA needed to make a substantial change to its management team, following two years of mediocre new business, some major account losses, the defection of some key talent, and declining staff morale.

Carat insiders say Warren never really filled the shoes of former Carat chief Charlie Rutman when he left to run Havas' MPG unit, and that they've been expecting a change for months.

If Aegis wanted to truly reinvent Carat, it couldn't have picked a better team than Fay and Sorokin to do it. Fay, who most recently was CEO of Isobar's U.S. operations, including Carat Fusion, Molecular, and iProspect, was one of the agency's first digital media hires. She joined in 1998 as managing director of Carat Business and Technology, and also has a long history in direct marketing and business to business media.

Sorokin, who most recently served as president of Carat Fusion, is newer to the Aegis organization, joining last year from McCann Worldgroup's MRM Worldwide unit, where he was global account leader on the Intel business. But Sorokin is one of Madison Avenue's true digital media pioneers, and has nearly a quarter century of experience working on some of the earliest digital developments, both pre- and post-Internet. Prior to that, he had a career as an advertising creative.

The new team will report to David Verklin, CEO of Carat Americas.