• by Joe Mandese  @mp_joemandese, February 7, 2007

Publicis Media Groupe is one of the backers being lined up to join a coalition of advertisers and media companies funding the next stage of TV ratings firm erinMedia's growth, according to a report filed late Tuesday on BusinessWeek.com). The report quotes a partner of Boston-based venture capital firm Spark Capital that Publicis, the parent of Starcom MediaVest Group, ZenithOptimedia Group and Denuo, along with an unnamed "large television network and a "major automotive advertiser," as being part of the coalition.

Publicis could not be reached for official comment, and a Publicis executive contacted by MediaDailyNews late last night declined to elaborate, saying only: "There's no real story yet to tell from our side."

Last week, erinMedia founder Frank Maggio confirmed for MediaDailyNews Jan. 30.) that a $260 million VC firm was close to funding an expansion of erinMedia with $25 million in capital, but said the companies had yet to finalize their terms. He said the discussion has been six months in development, and began shortly after Maggio made an impassioned speech to the industry in New York during last year's Advertising Research Foundation conference in New York, at which he called for a coalition of advertisers, agencies and media companies to help develop erinMedia into what would ultimately become and industry-owned ratings firm that would compete with Nielsen.

Shortly after that speech, Maggio began reaching out to cable operators with a plan for them to acquire stakes in erinMedia in exchange for sharing data from their digital set-top boxes, a fundamental component of erinMedia's method of generating TV ratings. Ultimately, Maggio said he expected to "give" erinMedia back to the industry once it was up and running.

Maggio has explored an acquisition of Nielsen prior to the buyout of its parent company by a group of private equity firms, and he has two lawsuits pending against the TV ratings giant include a federal antitrust suit that some believe could be a real game-changer for the industry if Maggio wins.

But Maggio told MDN that the suite was not a material part of the new round of venture funding. Instead, he said it is the formidable array of patents and intellectual properties that erinMedia has amassed as part of its plan to innovate the TV ratings process beyond the clunky, 20th and 19th-century technologies utilized by Nielsen to produce estimates that are the basis for roughly $70 billion in TV ad spending in the U.S.

The $25 million, he said, would be used to hire new employees to expand erinMedia's operations, and to upgrade its hardware and systems. But an even more important part of the deal would be the involvement of important strategic partners, such as advertising agencies, advertisers and media companies.

Like other big agency holding companies, Publicis has recently become a player in backing strategic ventures that it believes may offer innovations and advantages for its clients. Most of those investments to date have been managed through its Denuo unit, an elite team of media futurists and emerging media strategists who have struck non-cash strategic relationships with several--mainly Internet--start-ups. Other big Madison Avenue players including WPP and Interpublic have made high profile cash investments in firms such as Spot Runner and Facebook.com.

The Publicis backing of erinMedia, however, makes real strategic sense for the agency because its operating units, especially Starcom MediaVest Group, historically have been innovators in television audience measurement and have invested their own working capital to help fuel its development. In fact, Starcom recently won MEDIA magazine's Media Agency of the Year award largely on the basis of helping to develop a minute-by-minute commercial ratings system from Nielsen well ahead of the rest of the industry. It also recently struck a deal with TiVo to begin utilizing its digital set-top clickstream data in its TV planning and evaluation process. Starcom is also famous for having jump-started the wave of TV audience reach optimization in the U.S. during the late 1990s.

Meanwhile, it will be interesting to find out who the other major strategic partners are that Spark Capital is lining up for erinMedia.

According to information on its Web site, Spark describes its team as "Natives of the media, entertainment and technology industries. We have been instrumental in the development of new markets and market leaders. We are former film and television executives with experience in the development, production and distribution of entertainment. Akamai Technologies, Qtera, Aether System and Novatel Wireless are just a few of the companies backed by the Spark team. We are inventors of EMMY-award winning technology. We hail from entertainment and media companies including Blockbuster, Lions Gate Entertainment, Sony Pictures Entertainment and Turner Network Television. We leverage the collective know-how and resources we gained every day for the companies we back."

Recent ventures backed by Spark include Next New Networks, an early stage, Web-based video programming service founded by Herb Scannell, a former Viacom executive who helped develop and later ran Nickelodeon.