NEW YORK In a bid to spur innovation and turn big ideas into new revenue streams, Interpublic Group's Mediabrands has created a venture fund to finance start-ups proposed by its worldwide staff of 6,500 employees.
Executives from Mediabrands, run by CEO Nick Brien, the former global chief of IPG media agency Universal McCann, are scheduled to discuss the details of the new fund publicly for the first time today at an AdForum presentation in New York.
The Mediabrands Venture Fund was disclosed internally about two weeks ago. In a memo to the staff, Brien said the fund was "designed to encourage all our 'entrepreneurs inside' to step forward and lead our business into the future."
Mediabrands was formed a little more than two months ago to manage IPG's media agencies including UM, Initiative and J3; research and marketplace intelligence gathering specialist Magna and related diversified services companies such as NSA, OSI and Wahlstrom; marketing accountability expert MAP; and IPG's Emerging Media Lab. Staffers at all of those shops are now eligible to submit ideas for possible funding.
Tara Comonte, global CFO at Mediabrands, and the executive who will administer the venture fund, said the idea for the fund stemmed from a series of discussions among the division's leadership team. "Brilliant ideas are one thing. Making them real is another," she said. "This is a way to make them real." The expectation is that three to five proposals will receive backing each year.
Comonte, who previously was global CFO at UM, said that first-round proposals would be vetted by regional CEOs and CFOs. In order to advance, proposals need to be scaleable across multiple regions, with perceived value to many clients and ultimately moneymakers for the company, she said. Ideas can focus on (but aren't limited to) new business models, new types of media and marketing services, research initiatives or new technology.
The first wave of proposals is due Oct. 31. Submissions must include an executive summary, proposal description and five-year projections for costs and revenues. A small group of senior executives, including Comonte, Michael Hudes, diversified services and strategic development head at the company, and several others will assess the proposals, narrowing the list to between three and five that would receive funding. Others on the assessment teams could include account, region and discipline leaders, said Comonte. Brien would give the final sign-off.
Once chosen for backing, the finance department would develop a detailed six-month business plan and the winning staffers would have the opportunity to run their proposed ventures. At the end of the initial six-month run, the venture would be reassessed for its long-term potential and further funding, said Comonte. "This is not a one-off," she said, indicating that the company expects to find some permanent new ventures. "It's a way to foster a culture of innovation."