Interpublic Expands Start-Up Incubator

By EMILY STEEL
Interpublic Group, hoping to heat up ad spending on new types of media, is trying to create a greenhouse effect.
The big advertising holding company has been experimenting with an incubator program designed to help young companies with promising technology and ideas develop viable business models. It is opening the program to more start-ups this week.
The six-month program, called Greenhaus, aims to give new-media and tech companies an insider's look at how Madison Avenue works and what advertisers want.

Microsoft promoted its Halo Wars videogame on Justin.tv's games channel.
Interpublic isn't charging for the program. Nor is it investing in the start-ups that participate. Instead, it hopes to build relationships with fledgling ventures that could turn into the next Facebook or YouTube.
"We get barraged -- as most media agencies do -- with phone calls from start-ups whose products are starting to gain traction, but they haven't sold advertising," says Quentin George, chief digital officer at Mediabrands, the Interpublic media-buying unit that runs Greenhaus.
"Most of the calls either go unanswered, or if we do interact, the companies don't understand how media is bought or how to monetize their product," Mr. George adds. "We want to make the connection."
The effort comes as a crunch in ad spending makes dollars for experimental advertising options increasingly scarce. Marketers typically plan their ad budgets by first allocating money to established media like TV. Only then are the remaining funds allocated to testing newer technologies from mobile and interactive TV to social media and digital in-store ads.
The result has been a series of small projects that have yet to produce a consensus on how best to use many new technologies. "That's the reason why experimental budgets are the first thing to go," Mr. George says.
Media and ad companies are finding they have to take the lead to attract more money to fledgling ad formats. Earlier this year, Publicis Groupe agencies joined forces with media companies to try to create standards for advertising around online video.
Most of the early Greenhaus participants have been tech start-ups that have raised venture-capital funding and generated some buzz, but their founders mostly have engineering backgrounds and little experience in the media and ad worlds.
"We didn't totally understand some of the agency-speak and their motivations for what they do," says Brett Wilson, chief executive at TubeMogul, an online-video-technology company. "We definitely didn't understand how to sell to them."
After completing the Greenhaus program last year, TubeMogul, which tracks online-video audiences, revamped the range of data it offers to advertisers.
Justin.tv, a live-streaming-video venture added advertising to its chat section, offered customized marketing campaigns instead of one-size-fits-all banner and video ads, and added more predictable content to the site to assuage marketers' concerns about advertising next to riskier user-generated material.
The partnership has paid off for some of the start-ups. Because of Greenhaus, Interpublic ad agency Universal McCann turned to Justin.tv on behalf of its client Microsoft, which ended up promoting the release of its Halo Wars videogame via Justin.tv's games channel.
About three years ago, Publicis launched a unit with Denuo, a Publicis agency that focuses on emerging media and technologies, to help start-ups develop new ad models. Through the relationship, Publicis got paid with equity, and took small stakes in several companies.
"If we help them, and they make money, we want to participate in the upside," Denuo Chief Executive Rishad Tobaccowala says
Write to Emily Steel at emily.steel@wsj.com