Jun 2012 Agencies and Start-ups
Today is Demo Day at TechStars in New York and David Tisch (@davetisch) is tweeting away about the companies he has pitching this year for VC money.
At JWT NY we have a partnership with TechStars and the companies do a practice run for us and our clients. We also choose a couple of the start-ups to engage more actively as consultants and looking for real opportunities to do projects together.
Across the ad industry start-up fever continues to build. As Rishad Tobaccowala said in a speech that will be more remembered for cockroaches and living in the land of the pathetic, every holding company and agency is trying to find links to engage with the start-ups in their region. And most have multiple approaches.
The challenge from the agency operating company is getting the projects to come to life. Agency teams like to work with a blank sheet of paper rather than building on other people’s ideas and commercially it is hard to engage external teams outside the production process.
At JWT we are pushing as many levers as we can find to break this and that is why we’ve created dotJWT. It isn’t easy but once you figure out how to make collaboration not equal compromise, then you have are ready to work in the digital economy.
How successful any of the ventures represented at the event will ultimately be will depends on a variety of market forces that continue to change, evolve and reshape the industry — which is exactly why an organization like VivaKi Ventures is necessary, Tobaccowala said.
He also took a shot at other agency holding company venture models that are based on generating direct returns on their ventures efforts. While he did not cite any names, Interpublic’s Mediabrands unit has made no secret of the fact that it is looking to monetize its work with media startups, and has even brought its own products to market, including its “EML Magic Window” technology. MDC Partners’ two-year-old KBS Ventures unit is so sophisticated, it produces annual reports including details on the “return on equity” of the ventures it backs.
“A lot of agencies think this is a way to make money,” Tobaccowala scoffed.
“It’s a strange way to make money,” he continued. However, he added that it is in fact something parent Publicis is doing too, citing the massive $400 million venture fund it recently launched with Orange.
“There are two ways to do it. One is this way,” he said gesturing around the room of the VivaKi Ventures event. “The other is with heavy air power. We are doing both.”