No One Noticed Omnicom's Mobile Ad Deal - Business Insider

Omnicom / LinkedIn

Cupples, Wren and Healy

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Omnicom, the giant ad holding company that owns agencies such as BBDO, DDB and TBWA, did a revenue sharing joint-venture with mobile ad company Amobee earlier this year, the company tells us.

The deal occurred before Singtel's $321 million cash acquisition of Amobee in March, we hear.

The pact is an interesting one, given Omnicom's historic aversion to digital ad agencies. CEO John Wren famously got his fingers burned when he acquired stock in Agency.com and Organic just in time for the late 1990s/early 2000s dot-com crash. The two agencies were moved into an off-balance sheet vehicle titled Seneca Investments. The deal was so controversial that Wren lost a board member over it, and the company was sued, albeit unsuccessfully.

Since then, Omnicom has been criticized by observers for being light on new media agency brands and heavy on traditional shops.

Now, all Omnicom's Asian clients who need mobile advertising will be working with Amobee's platform, Amobee CEO Trevor Healy tells us. Amobee offers soup-to-nuts mobile marketing services, from standard display ad buys to applications to 3D media and tablet campaigns. The company has 200 employees in Singapore and San Francisco. Healy says Amobee is one of the biggest buyers of mobile ad inventory in Europe. His clients include Google, EBay, and Barnes & Noble.

Omnicom Asia CEO Barry Cupples tells us that Amobee will work in conjunction with Omnicom's existing mobile agency, Airwave:

Airwave is an OMG business unit which operates independently in the mobile space. Their role is to bring strategic value to our clients through expert knowledge and understanding of the mobile offering. Airwave [has] great platform, ideation teams, and execution experts within their framework to ensure a stronger offering to take to our clients and an end to end solution in quick-fast time.

The structure is simple ? the Amobee platform is powering Airwave capabilities and the bench strength that they bring to the table in terms of resources and discipline, taken from a track record of success, is significant. With our own resources and talent, working with Amobee has given us a head start in a space we believe will dominate within platform media, content, and data provision. We will grow Airwave together as partners.

Because the venture is a revenue-share and not an ownership stake for Omnicom, Wren's historic fears are taken care of: All the owned-tech-asset risk is essentially outsourced to Amobee, yet Omnicom still gets a slice of the gross revenue.

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Source: http://www.businessinsider.com/omnicom-quietly-did-a-huge-mobile-ad-deal-and-no-one-noticed-2012-10

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