Dive Brief:
- WPP's Grey announced an exclusive partnership with Betaworks, a startup incubator that invests in tech companies and helps them bring their products to market, Adweek reported. Terms of the deal were not disclosed, but it is understood that WPP will compensate Betaworks.
- Under the deal, Grey will be the lone marketing partner for Betaworks while the incubator, which acts as both a startup accelerator and venture-capital firm, will share its innovations with the agency. Grey can, in turn, potentially share those insights with its own clients. Betaworks' investments include Twitter, Venmo, Medium, Kickstarter and Everlane. The company also played a major role in creating businesses such as Giphy, Chartbeat, Bitly and Digg.
- Kellogg's, GSK and HSBC are already working on Betaworks projects involving an "education platform" and an unspecified new product, per Adweek. Grey could offer creative campaign services to promote the products when they are ready to go to market. Grey and Betaworks also launched a co-curated weekly podcast series called Builders. The deal is in line with Grey's plans to invest 75% of its capital in creative talent and resources, Adweek said.
Dive Insight:
As agencies have caught flack in recent years for being sluggish to adapt to evolving technology and consumer needs, Grey's move to link up Betaworks could keep the agency on the bleeding edge of digital innovation while deepening insights and bolstering appeal with brands. Grey employees are expected to spend time at Betaworks to learn about new startups and tools that could benefit their clients as part of the partnership, according to Adweek.
The news builds on a series of strategic plays coming from the agency sector as these companies look to restore growth and fend off newer competitive threats to client business like consultancies. IPG earlier this year purchased the data-marketing division of Acxiom for $2.3 billion in one of the most dramatic moves made in the space. Alliance Data Systems is also considering a sale of its Epsilon Marketing Services business, which could be an appealing buy for one of the major ad holding groups.
WPP has internally realigned several of its major shops to attempt to better meld its traditional creative specialties with technology. Grey launched Grey Consulting in August, a global enterprise practice that focuses on business and brand design, innovation and digital transformation. In September, under new CEO Mark Read, WPP brought together Young & Rubicam and VML to form a VMLY&R. The development was quickly followed up by the announcement Wunderman Thompson last week, which merges the legacy J. Walter Thompson agency with the more digitally-minded Wunderman.
