Ad Congloms’ Digital Media Forays: What Gives?

AdWeek has a good story about Publicis, WPP, and Interpublic are taking equity stakes in all sorts of emerging digital platforms–games, enhanced and interactive TV, and broadband video. The holding company giants want a toe-hold in new and social media companies so they can influence the startups’ ad models and platforms. They also, no doubt, want access to their ad and marketing services accounts, and to have early looks at experimental ad and media delivery platforms.
The equity stakes are small: WPP took a $3 million investment in online game site WildTangent, a minor interest in Visible Technologies, a provider of consumer-generated content tracker, and a stake in LiveWorld, a social network provider. Earlier this summer, IPG inked a $10 million deal for a sliver (.5 percent) stake in Facebook, while Publicis, through its Denuo unit, has taken equity stakes in several startups that look more like barter arrangements in the sense that Denuo offers consulting services to the fledgling firms. Omnicom sitting on sidelines till now.
During the first boom, these agencies raked in money by spending startup’s venture money…this time, however, the difference appears to be that MadAve is putting actual dollars, albeit small ones, into the equation and taking more of a strategic/long-term interest.
But conflicts of interest are also there: IPG’s stake in Facebook will create new ad models for all kinds of clients but will IPG also have a quid pro quo vis-a-vis Facebook’s ad account? Isn’t it a wee bit strange too, that IPG-owned agencies count Microsoft as a client and Microsoft recently inked a deal with Facebook to be the exclusive provider of advertising to Facebook?
Will such arrangements mean some clients will steer clear of certain agencies due to competitive conflicts? While ad execs tell Adweek that the equity deals don’t involve preferential treatment, I don’t buy it. On MadAve, there’s always some sort of quid pro quo originating with the actual deal or spawned from handshake arrangements. It’s just another form of the two-martini lunch.
It’s not clear, however, which side has the upper hand in these emerging arrangements–the holding companies or the startups. Frankly, I think the startups have a lot more to teach the agency world than vice-versa.
Related:
WPP Takes Stake in Social Networking Firm Live World
Interpublic Picks Up Small Stake in Facebook; $10 Million Ad Spend Promised
Game Publisher/Ad Network WildTangent New $13 Million Round Includes $3 Million Firm From Sorrell’s WPP
Publicis Launches Digital Media Consultancy; Takes Stakes in Six Startups
UK’s Digital Agency Launches New Media Incubator

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