Omnicom's Radiate in midst of buying spree

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Omnicom Group's Diversified Agency Services unit has quietly built up its events and experiential-marketing war chest. And under its umbrella network, Radiate, the holding company plans to acquire more.

Radiate, Boca Raton, Fla., owns 13 agencies, which have total billings of $450 million, and is affiliated with 11 others. By next year, Radiate's CEO Gary Reynolds and President Steve Groth, project that figure will be in the region of $1 billion.

"We seek to acquire most of the agencies we align with," Mr. Groth said. "We stay out of the traditional advertising and PR agencies and focus on events and experiential-marketing firms." Radiate is due to close on another unnamed acquisition in the next two months.

Omnicom's move into the events space is largely in response to marketers' shift toward non-traditional marketing disciplines. Radiate, which sits in on sibling ad agency pitches, feeds leads to its own mini-network while offering marketers a single bill for a range of specialized event disciplines.

Microsoft Corp.'s Cindy Spodek Dickey, group marketing manager, worked with Radiate to promote its video-game console Xbox: "What I like about the concept is that it keeps it whole. They recognize what their core competencies are and what they're not. They find you the best resources for the account."

downside

The downside with the model is the chance that a third-party agency could under-deliver and thus ruin a good relationship. "They know that each recommendation is a reflection on themselves and that there are certain obligations that have to be met," said Ms. Spodek Dickey said.

Radiate came into being shortly after Omnicom acquired GMR Marketing in 1998. Mr. Reynolds and Mr. Groth wanted to create a mini-holding company in the events space. While they seek out leads for entertainment and sports-event boutiques within the holding company, each agency retains its independence and pursues its own clients. "We don't consolidate them or rebrand them or dilute them," Mr. Groth said.

Among Radiate's network of owned agencies are AMCI, Marina del Rey, Calif.; C2 Creative, New York, a business-to-business marketing firm; U.K.-based event marketer Thompson Marketing; and German TV production company MPS. Affiliates include the Washington Speakers Bureau, which represents athletes and media personalities .

According to Mr. Reynolds and Mr. Groth, Radiate hasn't actively marketed itself until now, because it was still developing its selling proposition. One of Radiate's first big projects is DaimlerChrysler's Camp Jeep, an event for Jeep owners that includes a range of activities such as extreme sports. "The client wanted [fewer] agencies, not more," Mr. Groth said, "Radiate is about taking a diverse package and consolidating it with logical teams. It is a completely different strategy."

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