Publicis Forms Media Ventures Unit, Will Take Stakes In New Media, Technology

For more than a decade, some of Madison Avenue's biggest media shops have been seeking to reposition themselves from "media buying" agencies to media investment managers for advertisers. Now one of the biggest - French agency holding company Publicis Groupe - is poised to make that more than a positioning statement. In fact, it has created a new corporate-level unit that may begin taking financial positions in media companies as part of a new strategy to have an economic influence over new and emerging media outlets and technologies for its clients. The new unit, dubbed Publicis Groupe Media Ventures, is still under wraps and is not fully fleshed out, but word of it has begun leaking out as part of a gradual restructuring of Publicis' media operations -Starcom MediaVest Group and ZenithOptimedia Group - and the expanding role of Publicis Groupe Media.

In fact, insiders at Publicis aren't exactly sure how they will handle the new venture-based approach, including whether the agency takes equity positions directly, on behalf of its clients, or possibly both.



Even as these details are being worked out, the director of the new venture capital unit - former Starcom MediaVest Group new media czar Tim Hanlon - has begun brandishing his new title, and this week has been formally replaced in his old role with new media. SMG today will announce that Tracy Scheppach has joined Starcom as vice president-video innovation director, overseeing the agency's Video Investment Group (VIG). Scheppach, who was vice president-programming and research for Liberty Media's OpenTV interactive TV unit, will also take over the so-called "TV 2.0" practice created by Hanlon.

That practice was created to envision how new technologies and platforms are changing the way people use television and how advertisers can continue to reach them. And outgrowth was the creation of the VIG unit, which works with traditional TV buyers to negotiate TV buys on new platforms, such as broadband and video-on-demand.

But Hanlon's new role recognizes that much of the ability of advertising on new media platforms will depend on who owns or controls those new media players. Madison Avenue has been discovering this via the cable TV industry, whose digital set-tops and broadband pipes increasingly are becoming the digital gateway into most American homes, but which as been loath to give advertisers entry.

By taking equity positions in new media companies, the Publicis team believes it can have a greater influence in shaping the outcome for advertisers. In fact, that's exactly what the major studios and networks did when TiVo emerged as a significant potential threat to their advertising and copyright models. They took early investments in the company, gaining seats on the board and influence on the digital video recorder marketer's business plans.

What's still unclear is how Publicis would make these investments, whether it would align itself with any financial organizations, or whether the ventures would all take the form of cash.

"Some things are worth more than money," says a Publicis insider familiar with the plans. Rishad Tobaccowala, the chief innovation officer of Publicis Media Groupe, for example, has become a member of the board of directors of behavioral marketing developer Revenue Science. Other top media agency executives have taken influential board positions at other emerging media companies. Carat CEO David Verklin and former GM Mediaworks CEO Rick Servaitis have taken roles with Invidi, a company that is trying to develop a genuine addressable advertising marketplace in the U.S. cable TV industry.

While Tobaccowala has been criticized for taking what some see as an incestuous role within a company that is also a supplier to his agency and his clients, he has routinely countered that such relationships give Publicis greater insight into developing markets, and enable it to shape their outcome.

Meanwhile, it is unclear whether other big agency holding companies will adopt a similar strategy. Most of the majors have created corporate-level media units such as WPP's Group M, Omnicom's Omnicom Media Group, and in May, Interpublic hired former MTV executive Mark Rosenthal to oversee Interpublic's media operations.

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