Ad agencies have been trying to develop non client sources of revenue since the Stone Age, nearly always unsuccessfully.
The latest fashion in this is ‘incubators,’ using agency marketing skills to give a leg up to new businesses in which they have a stake. BBH in the UK has gone down this route numerous times and BBH founder Sir John Hegarty is now having a go independently with The Garage Soho. Newbie london agency Lucky Generals has also entered the lists, somewhat early in its development.
Havas-owned BETC in Paris is a rather larger operation, also with some extra-advertising investments in its recent history including a music business, and it’s now become a founding partner of Paris & Co – Le Cargo (below) which it says will be Europe’s largest business incubator, focussing on “cultural and creative digital industries.”
This is no small claim: French rival Publicis Groupe also announced last year that it was to fund €300m of start-ups. BETC, wisely no doubt, is not going it alone. Other founding partners include Boulanger, EM Lyon, Médiamétrie and Vivendi.
Vivendi, it should be noted, is chaired by one Vincent Bolloré, whose family own most of BETC owner Havas. Son Yannick now runs Havas. Ever since Bolloré senior took control of Havas and moved into Vivendo there has been speculation that the two might combine. Bolloré has done Havas the odd good turn including securing the O2 European media business in 2014. But a formal deal has yet to emerge.
It may not but the presence of Vivendi in Le Cargo may mean that this incubator notion is more than pie in the sky. Bolloré invests in all sorts of things but he’s an accomplished and, when required, ruthless dealmaker.
Why are agencies so keen on non-client sources of revenue? Because there isn’t a client around to fire them. That’s one reason why the big media agencies are so keen so trade media on their own account – rather than a client’s – and the lure is the same for creative agencies. Havas, Vivendi and friends might just be able to create a new model.