Agencies are agog over startups.
Starcom MediaVest Group U.K. (SMG) is the latest to cast its lot with bright young things in London’s Tech City, opening a nine-person unit to establish partnerships between London startups and its clients. The group, called awkwardly enough Nexttechnow, draws from departments across the media agency network.
NTN, which began its pilot phase late last year, boasts it has already introduced more than 70 startups to clients. For instance, Twitter analytics tool SocialBro teamed up with SMG client McCormick, the spices and herbs manufacturer, to boost its influencer marketing program.
SMG has plenty of company on that front. Just last month Omnicom’s media agency Manning Gottlieb OMD set up a U.K.-based programmatic consulting team positioned as an “independent” adviser. And Publicis Drugstore is a £1 million ($1.6 million) project that opened in mid-October to offer co-working space, organize hackathons and start a full-blown accelerator program for startups.
“Small organizations can’t go on too many fishing trips, so startups like talking to us because we have a network of clients we can introduce them to,” said Jim Kite, SMG’s strategic development director. “As well as that, we’re bringing forward new ideas as to how their products can be applied in the marketplace because we have 80 clients in lots of different sectors.”
It’s not just agencies that are in the startup matchmaking game. At the Consumer Electronics Show in Las Vegas this week, there will be organized tech tours put on by consulting groups like Medialink, which links many clients with emerging technologies. There’s also the idea that sussing out the best marketing and advertising technology options for clients is simply part of what the agency should be doing anyway.
Also, this new line of business for agency comes with a certain level of risk. Agencies need to be transparent about the kinds of relationships they’re striking up with startups and keep their impartiality intact. For now, the SMG unit is simply a value-add, rather than a revenue generator for the agency.
“At the moment, no, [taking fees from startups] hasn’t come up,” Kite said. “The most important thing is impartiality. As soon as we start looking at fees and things like that, we may favor one startup over others who may be better for the job. We’d lose everything if that came into play.”