Over the last few years, advertising agency R/GA has taken its leadership and innovative approach to digital technology into the startup world by partnering with companies such as German retailer Metro, Westfield Labs, and the Los Angeles Dodgers on accelerator programs with a particular focus, such as sports technology, connected commerce, and hospitality innovation.
Now the agency and its parent Interpublic (IPG) are launching a new program called the Marketing Tech Venture Studio, targeting startups in messaging, AI, bots, and machine learning. R/GA and IPG get early access to companies that may give them a head start on the competition, while the startups get the agency's creative and business strategy expertise, as well as the opportunity to work with agencies and clients from across IPG's global portfolio of companies, as well as its broad network of Fortune 500 clients and global brand marketers.
"In this world today, with all the new technologies and innovations, we want to be in front of all of it to enhance what we're doing for our clients, and performing in a very competitive environment," says IPG chairman and CEO Michael Roth. "Our goal, when you have an organization that has so many different agencies, 50,000 employees in 100 countries, we want to make sure all of our resources are being used to enhance the operations of all of our member companies. We need to be ahead of the curve in these innovations because that's what our clients are looking for."
Startups from around the world are invited to apply here from August 18 through October 24. The program will start on January 10, 2017, and run until early April, culminating in a demo event where each company presents their work to a select audience of investors, industry leaders, and press.
"We see it as a critical part of the future of marketing and digital product creation, and in our core business we're already doing a fair amount of work in this space with our clients, so we felt it made sense to explore a program in this area," says R/GA's global chief operating officer Stephen Plumlee. "Messaging, bot, machine learning, emerging platforms like Snapchat, live streaming, and voice activation are all huge opportunities for brands to connect directly with consumers, and to do that on a mass scale opens up a world of possibilities to make those connections."
For both R/GA and Interpublic, this kind of program helps them in their efforts to stay ahead of the marketing tech curve, while getting in early on potential partners or acquisitions. As R/GA helps the startups with business transformation, marketing, and business strategy, the agency and IPG get to know these firms and their products at the early stages, and have an inside view of the utilization of their technologies. Roth says they look to use that in furthering existing client relationships as well as attracting new clients.
"Let's face it, clients are looking to us to bring cutting edge innovation to the marketing platforms and what better way to do that than get involved with these companies early on, than when their either competing companies trying to use those resources or paying high multiples to do it," says Roth. "This is a win-win."
Plumlee says they see these programs as a kind of extended due diligence. "We work with these companies closely ourselves, we bring our staff into the mix, but we also bring in client partners and other industry partners, so there's a very detailed sense of these companies by the end of the program," he says.
Participating startups may give the agency a technological advantage, but R/GA and IPG aim to more than reciprocate with their own expertise. Roth says that many times a startup has an interesting product but they don't know what to do with it, or the commercial application. That's where R/GA and IPG bring in practical and business aspects of bringing a product to market. He reminisces about IPG's early Facebook investment, as an example.
"I remember when we invested in Facebook, they didn't know the potential of what they had," says Roth, on IPG's less than 0.05% stake bought for less than $5 million, which the company sold in 2012. "They knew they had a tremendous opportunity, but they didn't know how tremendous, and brought it to a client to monetize it. That's where strategic rationale comes in. That's what differentiates our program, so you'll notice we're calling it a venture studio instead of an accelerator, and the idea there is to communicate that difference between what we're doing and what a typical program does."
Based on their past experience in accelerator-type programs, Plumlee says they're targeting more mature companies and that this program will take some cues from a traditional accelerator—a fixed duration, a class of companies, a demo event—but the timeline of the program's format will be a bit more advanced, focusing more on pilots and mentor meetings, over how to do a seed fundraiser.
"Whether it's new business opportunities or our existing clients, they're all looking at this new space and how they can use it in furthering their business objectives," says Roth. "So when you're in a position to bring some of these products to a client that they haven't seen, it obviously enhances our relationship, and is a win-win for the (startup) company, client, and agency. That's the perfect scenario, where you can help these companies grow, then bring in a client that will utilize it in a way that it was intended. That's what we're there for."