Or this, from Mark Read, CEO of WPP Digital, on his definition of
success: "We'll be successful when we won't need to exist anymore.
Particularly in five years' time, the boundaries of what's digital
and what's not will be irrelevant." In a call with Wall Street
analysts last month, Omnicom Group Chief Financial Officer Randall
Weisenburger said: "We're not seeing any slowdown in the push
toward digital. We see digital in a broader perspective, not just
in online advertising. We see it as online marketing and
branding."
Varied approaches
But how best to tackle this fundamental shift to creating
communications to a digital world is a matter of debate, as the
differing strategies of Omnicom, WPP, Publicis and Interpublic
Group of Cos. attest. In the past 18 months,
each has
invested in digital companies to strengthen its offerings
in creative and media, but the amounts of money spent and deal
structures vary widely, as does each holding company's use of
acquired assets.
Publicis in January made the biggest financial commitment to the
area with its
$1.3 billion purchase of
digital-marketing-communications company Digitas.
WPP also has been active in the space. In the past year it has made
eight investments in companies specializing in mobile-marketing
search, online-advertising production and building online
communities. But unlike Publicis, WPP's move is not the
billion-dollar sort; the total amount it's spent is "meaningful,
but not significant in the scheme of WPP," said Mr. Read, who heads
the company's investments in the discipline.
His boss, WPP Chief Executive Martin Sorrell, is quite outspoken
about valuations of digital companies being rich -- too rich, for
the most part, for his liking. But the holding company understands
how a few dollars well spent with a startup can open up dialogue.
"The investments help to cement the relationships," Mr. Read said,
and generally are minority stakes.
Taking it slow
Omnicom, like WPP, has shied away from big-dollar commitments; its
focus, said Jonathan Nelson, the former co-founder and chairman of
digital agency Organic who now advises Omnicom chief John Wren on
digital strategies, is "on the assets we have." The holding company
invests according to its networks' needs.
"We've not focused on our venture-capital portfolio as the others
have," Mr. Nelson. "If a market is resurging, the question we ask
is: What do we have there? Do we need to make an acquisition?" In
the past year, Omnicom bought an interactive agency in the
Netherlands and merged it with Tribal
DDB's offices in Amsterdam; in the
U.K. it added Weapon 7, a digital-interactive-TV consultancy, to
bolster Zulu Group.
