With last week's unveiling of its new-media consulting unit, Denuo, Publicis Groupe is hoping to branch out from agency services to help clients solve business problems arising from emerging digital media.
Rishad Tobaccowala, formerly chief innovation officer at Publicis Groupe Media, will lead the unit as its CEO. The 46-year-old has established himself as a strong new-media booster, often stressing the need for agencies to embrace tech changes and adjust their business models to fit new realities.
"[Agency] organizational structures were set up for an analog world," he said. "We are living with classical structures in a jazz age."
Tobaccowala has assembled a team of 14 diverse media and technology experts, plucking top stars from Publicis agencies, including Courtney Acuff, head of mobile marketing unit SMG Digits; Dan Buczaczer, head of word-of-mouth arm Reverb; and Tom Tercek, who led SMG Access, an emerging messaging unit. He recruited Nick Pahade, founder and managing director of WPP Group's Beyond Interactive, as president.
Denuo departs from the role of an agency in that it will execute short projects for clients, from point-of-view papers on a company's wireless strategy to setting brand strategy in new channels.
Tobaccowala said Denuo would not limit itself to working with Publicis clients. Instead, it will look to work with the entire digital ecosystem, including publishers, tech providers and venture capital firms.
"In order for this to work, we have to build a business around constant evolution," said Pahade.
Denuo executives do not anticipate competing directly with established consulting firms like Bain and Accenture, or agencies that create and execute campaigns. Rather, Tobaccowala envisions Denuo partnering with media and creative agencies in coalitions formed by clients to solve particular business problems. "It's going to get harder and harder for any one group of companies to do it all," he said.
Yet many of Denuo's services—figuring out how to reach consumers effectively—are cornerstone aspects of what agencies offer clients. "A true integrated agency is doing this already," said Eric Wheeler, managing director of Omnicom's Ogilvy Interactive North America.
A key aspect of Denuo, according to its executives, is the close relationships Publicis has already formed with emerging technology players that will reshape the ad industry through "advice capital." Publicis has taken stakes in half a dozen ad-fueled tech startups, including Web video company Brightcove and online video ad network Lightningcast. In return, executives have advised the companies on the development of their ad strategies.
For Washington-based Lightningcast, Publicis executives have advised it on a spin-off company, InStream, that has taken Lightningcast's Web video technology and built it into an ad network, said company CEO Tom MacIsaac. "We have an interest in knowing what they see, and what's important to their agencies," he said. "That's where the dollars flow into the system."
Along with this new approach, Denuo will depart from agency compensation structures, instead trying to share in the value its ideas create, whether it's a stake in a new venture or a cut of business generated from a Denuo- created idea. "This is about getting back to the basics of getting paid for idea-generation," said Pahade.