After Hearst Acquisition, iCrossing Moves Into Branded Content

Digital Shop That Grew Up in Search Marketing Launches Unit to Produce Blogs, Videos for Marketers

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One year after Hearst bought iCrossing, we are now seeing evidence of the publishing giant's influence on the digital agency. ICrossing is launching a content unit, Live Media Studio, dedicated to producing blogs, interviews, tips, videos and infographics for brands.

While iCrossing grew up in search marketing, the agency since its $325 million deal last June with Hearst has undergone a transformation, repositioning itself to help brands become publishers.

ICrossing is hardly the first agency looking to create content for brands -- many shops are starting to hire execs exclusively for content roles -- but the shop is betting its parent's 120-plus years in publishing, as well as its extensive archives, will give it a leg up.

"If you think about the approach [Huffington Post] takes to producing content, they aggregate content and they engage audiences," said Adam Lavelle, iCrossing's chief strategy officer. "We're doing that on behalf of brands."

The new unit marks a distinct evolution for an agency that was founded in the late 1990s and up until a couple of years ago saw about 70% of its revenue from the search-marketing space. Today, the agency makes less than 50% of its revenue from search, CEO Don Scales said. ICrossing's total U.S. revenue in 2010 was $136 million, according to Ad Age DataCenter estimates.

The agency in recent months has been able to wrangle accounts for all manner of digital marketing. One of ICrossing's biggest assignments is for LG Electronics. In partnership with the Korean manufacturer's in-house agency, HS Ad, iCrossing was named digital agency of record for LG's global marketing office. (Digital agency Publicis Modem still retains duties for LG's mobile communications in 10 markets, including the U.S.) ICrossing was also named digital agency of record for AAA and Equinox since the acquisition.

The agency's new content studio will be producing work for the Bermuda tourism board and a major financial institution, which declined to be named for this story, Mr. Lavelle said. The studio will tap into Hearst's vast network for freelancers for projects and, while it's not using its staff writers just yet, that option is on the map.

"We are starting to work with Hearst properties to create co-branded properties, where an editor of a Hearst magazine may do a guest piece for a particular brand," said Mr. Lavelle.

ICrossing will also be moving its headquarters from Scottsdale, Ariz., to Hearst's plush Manhattan tower, as the publishers' production studios are so integral to producing content for brands.

As for Hearst, it remains to be seen whether iCrossing will remain the lone agency in its marketing-services arm. Last June, Hearst signaled it was up for more dealmaking -- Mr. Scales called iCrossing the "hub" Hearst would built its marketing practice around. One year later, though, Hearst has not inked any further agency acquisitions. However, it has likely been preoccupied with a nearly $900 million bid for a Lagardere magazine portfolio.

"While they're very intrigued by our space, they're surely not giving up on their traditional business," Mr. Scales said.

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