The brass at Publicis Groupe's VivaKi are logging an excessive number of miles in the first half of 2013, even for ad-agency execs. The reason: to prove to colleagues around the globe that their unit still has value even after achieving its original goal of pushing Publicis into the digital age.
Five years after the operating unit with the headscratcher name was formed, VivaKi faces an identity crisis. What is the role of a specialty unit created to inject digital into traditional agencies when digital savvy has trickled down into nearly every shop?
VivaKi CEO Frank Voris and Chief Strategy Officer Rishad Tobaccowala are in the midst of a road show to explain just that, hitting two Publicis agencies a week and making quarterly trips to India and China. Their pitch is that there's still a big knowledge gap in advertising that needs to be filled, and the new VivaKi can help solve client problems and boost business -- whether its media, creative, PR or research.
“A lot of people are talking about disrupting stuff; we have disrupted ourselves. We have changed our model,” Mr. Tobaccowala said.
VivaKi's journey started in January, shortly after Publicis announced that the media-firm heads reporting through VivaKi -- SMG CEO Laura Desmond, Razorfish CEO Bob Lord and ZenithOptimedia CEO Steve King -- would report directly to Publicis CEO Maurice Levy.
VivaKi was stripped of its operating role and refashioned into more of an internal consultancy, still managing global digital partnerships and automated ad buying, and offering its services to Publicis' creative shops like Saatchi & Saatchi, Leo Burnett and Bartle Bogle Hegarty.
VivaKi identified four areas of focus: data-driven marketing, next-generation commerce (“commerce plus,” according to VivaKi brass, who apparently love to name things), next-generation storytelling and a regional focus on China, India and the Americas.
For Publicis' creative agencies and PR firms, VivaKi might offer some media-buying capability, particularly through its Audience on Demand technology or data to power dynamic creative, where the message adapts to the viewer. VivaKi will also vet startups, consolidating the due-diligence agencies might do in that space, and manage startup investments, as well as Publicis-wide relationships with Google, Facebook, Yahoo, Microsoft and other platform players. The approach will be “here's tech that you can use and we will help facilitate the connection,” said Kurt Unkel, president of product and head of Audience on Demand.
That pitch is being well-received. “We don't need every creative agency to reinvent the wheel with some of these partners,” said Leo Burnett Chief Innovation Officer Mark Renshaw, who got the visit from Messrs Voris and Tobaccowala. “Anybody who turns away a source of competitive advantage or a way to lower your cost of doing business is kind of crazy.”
When VivaKi was formed in 2008, the global economy was on the verge of collapse, but new technologies that automated the buying and selling of digital ads were starting to emerge. That was the year Google acquired DoubleClick. Facebook and YouTube were ascendant powers.
Publicis wasn't keeping up with that rapidly transforming world. Prior to the acquisition of Digitas in 2007, digital made up just 8% of Publicis' revenue. VivaKi was formed to infuse the company's old-line media firms -- Starcom, MediaVest, Zenith, Optimedia and Denuo -- with digital know-how and allow its newly acquired “digital” agency, Digitas, to benefit from the media-buying power of those agencies.
Today, many of those digital-buying skills are now distributed throughout the agency, and digital accounts for nearly 33% of revenue at Publicis following the acquisition of Digitas and Razorfish. That's roughly equivalent to rival WPP, meaning VivaKi's original goal is largely met, leaving it to sing for its supper.
The criticism since day one of VivaKi and similar groups at rival holding companies is that they force one-size-fits-all tech solutions down the throats of the various agencies to save costs. Agencies have started to resist. “When push comes to shove, the battle is always going to be won by those that are closer to the budgets and closer to the clients,” said Tim Hanlon, former exec VP of VivaKi Ventures, who now runs his own consultancy, Vertere Group.
Even the old-line agencies are getting more adept at managing digital, making it harder for VivaKi to stay a step ahead. One example is Ms. Desmond's giant Starcom MediaVest, whose clients include Coca-Cola and Procter & Gamble, signing a multiyear agreement with Twitter in April that includes hundreds of millions of dollars in ads bought in advance, as well as the ability to provide input into the startup's products.
In years past, that might have been a VivaKi deal, much like the partnerships it struck with Google and Microsoft. That said, most individual agencies are focused more on specific client problems, not forging global platform deals or watching where the world is headed next.
“We are challenged to provide world-class solutions to the agency,” said Mr. Voris. “At the same time, we have a group focused on the future and looking at new technology so we don't lose sight of where the spaceship is traveling.”