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INTERPUBLIC'S INTERACTIVE INVESTMENT AGENCY GROUP PLACES ITS BET DOWN ON A NEW MULTIMEDIA COMPANY

By Published on .

Interpublic Group of Cos. is looking to give its agencies a leg up in the interactive scramble with an investment in InterActive Partners, a new multimedia company.

New York-based Interpublic, parent to McCann-Erickson Worldwide, Lintas Worldwide and the Lowe Group, is participating in the new enterprise with Bell Atlantic Corp. and venture capital groups Technology Partners and Kleiner, Perkins, Caufield & Byers.

Interpublic's investment was estimated at $2 million to $3 million.

InterActive Partners, operating out of Los Angeles and Saratoga, Calif., is expected to provide home shopping, children's games, gambling, place-based entertainment and other programming outlets for Interpublic agency clients.

The new company will work with McCann, which recently established McCann Interactive, said John Dooner, president-chief operating officer of McCann-Erickson.

InterActive Partners will develop content for companies including game software developer Crystal Dynamics; Silicon Gaming, an interactive gambling company; and New Children's Studio, a children's entertainment company.

The principals of InterActive Partners, Robert Fell and David Morse, are both directors of Crystal Dynamics.

"On cable TV, programs are either advertiser-supported or subscriber-based. We felt the same thing would happen on the computer end," Mr. Fell said. Interpublic, he said, will provide assistance in four areas: financing, strategic alliances, advertising advice and client participation.

The first products from InterActive partners are expected out in 18 to 24 months.

Interpublic's decision to invest in InterActive is "very significant and a big decision on their part," said Dean Witter Reynolds analyst James Dougherty. "Interpublic gets a lot of credit, and they deserve it for well-controlled, predictable grind-it-out results. Interspersed in there, they have made big strategic calls on the industry and have been right about it."

Interpublic Chairman-CEO Philip H. Geier Jr., at an analysts' conference in New York late last year, hinted at the company's plans when he said it was exploring a multimedia information exchange consultancy to work with marketers within and outside its agency units.

At the same time, Interpublic Chief Financial Officer Eugene Beard said the group would provide advertisers with information and competitive pricing analysis of new-media technologies.

Interpublic has been one of the more aggressive agency groups in exploring new-media outlets.

Angling to bolster its infomercial capabilities, the company last fall formed a strategic alliance with Huntington, N.Y.-based Brockway Direct Response Television. That move followed two others: an investment in EC Television, a European program producer and syndicator; and the purchase of Crane Media Sales, a TV rep company.

"Without being able to tell you which of these interactive services are going to stick to the ceiling, they believe some of them are and they want to be at the table," Mr. Dougherty said.

Debra Aho contributed to this story.

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