Guide to Digital Subsidiaries

Download Franeo’s new e-book: The Agency Executive’s Guide to Digital Subsidiaries to learn more about whether a digital subsidiary might be a good idea for your PR, marketing, or advertising agency — and how to do it effectively.

The big PR, marketing and advertising agencies and holding companies like to make acquisitions, investments, and strategic partnerships in the digital space to extend their capabilities and create new revenue streams.

This is not something new. In 2006, Interpublic invested in a little startup called Facebook. They ended up making a reported $200 million on that deal.

Last year, Publicis announced it would team with one of its European telecommunications clients to invest a combined $200 million in digital startups around the world.

As Omnicom and Publicis prepare to merge, digital may be at the root of the deal, according to AdWeek:

“… today’s ad agencies need to use Google and other digital-media platforms — including, increasingly, digital video platforms as soon all advertising is delivered digitally — to show the right message to the right person at the right time … Much of that infrastructure can be licensed — Publicis and Omnicom companies already partner with Adobe, Oracle and Salesforce.com — but big holding companies see revenue and strategic advantages in building out much of their own platforms.”

The holding companies have long been picking up digital firms whenever possible to add to their portfolios. But it’s not limited to just the behemoths. APCO Worldwide acquired StrawberryFrog in 2012 to tap in to its creative and advertising expertise, especially in the digital space.

Even the children of holding companies have gotten into the game. For instance, WPP-owned Hill + Knowlton Strategies picked up Group SJR, a digital content firm over the summer.

In recent years, Edelman has purchased firms like Grassroots Enterprise (a DC-based digital advocacy firm) and Design Royale (an Australian digital shop).

In 2012, W2O Group acquired Austin’s VM Foundry and used it to create W2O Digital.

Get the picture? Major firms and holding companies want to have digital subsidiaries.

What about you?

Continue reading by downloading Franeo’s new e-book: The Agency Executive’s Guide to Digital Subsidiaries to learn more about whether a digital subsidiary might be a good idea for your PR, marketing, or advertising agency — and how to do it effectively.