Funding Tech Startups — Good for Agencies, But What About Clients?
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Young digital-media and -marketing firms that have captured millions in venture-capital dollars are turning to more-conservative but no less interested investors: ad-agency holding companies.
After decades of buying and merging on Madison Avenue, the likes of Interpublic Group of Cos., WPP, Publicis Groupe and MDC Partners are investing in technology and software companies.
As with any VC investment, financial ROI is a priority — and, to that end, two standout examples are Interpublic’s stake in Facebook and WPP’s stake in Buddy Media. But these arrangements also offer competitive advantages, such as education about emerging sectors that influence marketing, as well as the ability to customize a company’s product for the agency’s clients.
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