Ad agencies traditionally have known what marketers need, and talent outfits have had leads on new TV and movie projects in development. These skills are important in devising content-based marketing efforts, and the questions for these agencies now become: Go it alone by developing in-house expertise in other applicable areas? Or join forces?
It may not be so easy for advertising and talent agencies to join forces. A culture clash is possible in this pursuit of brand entertainment, says Rob Donnell, managing director-brand entertainment group at WPP Group's J. Walter Thompson USA, Detroit. The two industries answer to different clients and could find it difficult to serve a newly acquired client base, he warns.
"There's definitely a cultural difference between ad agencies and talent agencies," says Mr. Donnell, who was involved with Ford Motor Co.'s sponsorship of TV's "No Boundaries" and "24."
The solution often is to stay separate. This allows an ad agency to work with any talent agency that can best serve the client marketers' needs, rather than just being tied to one agency's talent. "The key is to find the people [at ad and talent agencies] who share the vision in this," Mr. Donnell says.
Most executives on both sides say they expect advertising and talent purveyors to remain entrenched in their areas of expertise. Still, some joint ventures have occurred.
"We're at the intersection of where brands occur-both celebrities and products," says Mark Dowley, chairman-CEO of Interpublic Sports & Entertainment Group, New York, an entertainment marketing company that was formed last April by Interpublic Group of Cos. "They're now converging. Where does brand content end and advertising content begin?"
"There's a blurring of the lines," says Peter Gardiner, partner-chief media officer for the New York and Los Angeles offices of Interpublic's Deutsch. "These are highly integrated deals. People have come from talent agencies and from studios with projects. It's as regular to get a call about an entertainment deal that can be in television, movies or the Web as it is to get one from a magazine publisher these days."
Interpublic decided in 1998 to take an ownership role in the brand entertainment sector by acquiring PMK, a leading entertainment talent publicity and marketing company. In subsequent years, Interpublic has acquired other such operations, including Bragman Nyman Cafarelli, Rogers & Cowan and Huvane, Baum, Halls.
On the other side are talent shops like William Morris Agency. It has worked directly with marketers to create content and deliver opportunities, says Lewis Henderson, senior VP with William Morris' entertainment marketing division.
Mr. Henderson's division focuses on corporate and organizational representation in content, as opposed to representing talent. Clients include Anheuser-Busch Cos., General Motors Corp. and Saks Fifth Avenue.
For the department store chain, William Morris partnered with David Kelley Productions to create the fall 2002 TV show "Girls Club." While the show didn't survive the season, it got exposure in Saks locations and tie-ins to the retailer's Web site. An associated sweepstakes built for Saks a database of 70,000 names in one week, says Paul Bricault, a senior VP at William Morris. "This was about leveraging the retail promotional network that Saks can deliver," he says.
Ad agencies know "how they want [brand image] to be portrayed using intelligence and target demographics," Mr. Henderson says. "We can take that information and create or acquire a show that hits that market. We pull that intelligence to create a win-win situation." Collaboration between talent agency and marketer/ad agency "is really the sweet spot."
A more practical reason to stay focused is the price in time and money to build teams and divisions to learn and oversee new focus areas, whether they're a new talent departments at an ad agency or a new creative or media division at a talent agency, Mr. Henderson says.
"The idea that we or the agencies are going to start building the teams for media planning and all the creative, that's an expertise that the ad agencies and media buyers do very well," he says. "Our group is not taking on those resources."
United Talent Agency also seems to have no plans to become an ad agency. United Talent brings its client actors and producers to marketers' ad agencies to propose deals, says Ferris Thompson, head of entertainment marketing. United Talent looks at its talent and studio projects as solutions for ad agencies and brands.
For example, this past holiday season, it sold "Hollywood Christmas Spectacular" to NBC and then brought it to Omnicom Group entertainment marketing company Davie-Brown, which delivered Blockbuster Video as title sponsor.
"We decided to leverage the business that we're already in, which is all about content creation for networks, movie studios and music, and taking those ideas early in the time line and presenting them as integrated marketing solutions," Mr. Thompson says. "This model seems to be working. Everyone has their roles and responsibilities, and they go well together."
Not that a talent agency has never expanded its reach to advertising. Creative Artists Agency became an early force in the blurring of advertising and talent when it won some Coca-Cola Co. ad work in the early 1990s.
sag rule hovers
A roadblock to any large-scale advertising and talent agency convergence remains the Screen Actors Guild's rule barring ad shops from owning any more than 10% of talent agencies. The rule was created to protect SAG clients from conflicts of interest arising from talent agencies working too closely with ad shops in TV commercial deals.
Calling that restriction a "flawed business model," Interpublic's Mr. Dowley believes it's likely to be relaxed over time.
Buying into talent or entertainment agencies can help an ad agency spot upcoming movie and TV deals, identify synergies for clients, and provide a middleman to package projects, says Jim Davie, president of Davie-Brown. The Los Angeles-based company was acquired in 2001 by Omnicom, and brought in tow such entertainment-oriented clients as PepsiCo's Pepsi, Frito-Lay and Tropicana; Miller Brewing Co.; BMW of North America; and Reebok International.
Others aren't sold on the idea of ad shops buying Hollywood agencies.
Alliances and partnerships work better than acquisitions, leaving loosely aligned partners to rely on each other's expertise to find deals, negotiate with a variety of parties, and deliver the best opportunities for the client or marketer involved, says Alyse M. Kobin, president-managing partner at entertainment marketing company Kobin Enterprises.
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