Droga5 has confirmed Eastwind that William Morris Endeavor (WME), not only will take a significant 49% stake in the capital equity of the creative agency founded and headed by David Droga, but also informed on the partnership this purchase brings with it.
Leaving aside that the price to be paid by WME ($225 following the information provided by the NY Times) seems suculent enough, the truth is that the alliance brings other synergies and benefits to both companies given the clients and sectors in which the agency and the purchaser are present. Specially in the field of entertainment, branded content, events, digital and retail sectors.
Droga5 informed that the current operations of the agency will not change by the purchase.
“Droga5 has always endeavored to be the most influential creative agency in the business, with ideas that move our clients and our industry forward,” said David Droga. “This partnership will exponentially accelerate our ability to realize that ambition,” The founder and Creative Chairman, Droga5 added.
“WME continually seeks partners who will provide our clients with unparalleled access and resources,” said WME co-CEOs Patrick Whitesell and Ariel Emanuel.
“Droga5 is best-in-class across the board, from its management to its creative output. Through this investment, we will be able to join the best artists and storytellers from all verticals, and we look forward to creating new opportunities for our collective clients.”
WME history in the world of advertising is not new. In 2010 they partnered with RED Interactive, giving clients access to an award-winning digital advertising agency. The company itself has developed Commercial & Endorsements department, as well as a Branded & Lifestyle department.
This partnership and purchase of Droga5 by WME is one, perhaps the most “glamourous”, among many other alliances, which have been baked in the same or similar way by other companies and agencies. All these partnerships may they walk along the “red carpet” or not, are reshaping as well an industry that is moving from “traditional” advertising to the digital communications and entertainment era.
Blending content, digital, mobile, social and retail
Shortly after the merger between WMA and Endeavor, which was carried out in 2009 the new agency WME helped to launch the investment group Raine, which aligned the company with properties like Vice Media and Zumba Fitness.
In 2010 WME partnered with RED Interactive, giving clients access to an award-winning digital advertising agency. Two years later, the company formed an alliance with the social media management firm The Audience, partnering with digital entrepreneur Sean Parker. The alliance executed social campaigns for properties like Ted and the Coachella Music Festival.
March 2013 brought a strategic partnership between WME and the Austin-based design studio Chaotic Moon. This provided WME clients with the opportunity to build apps and create custom content for the mobile space.
WME is also an investor in the e-commerce platform OpenSky.
On 2nd May 2012, WME and Silver Lake, a technology-focused private equity firm based in Silicon Valley, announced a strategic partnership and signed an agreement under which Silver Lake acquired a 31% minority stake in WME.
Silver Lake Partners, has made strategic investments in companies across the digital media landscape, including the interactive advertising, social media, social gaming and online retail sectors in Silicon Valey.
In 2012, Droga5 launched DE-DE, a standalone product development studio that blends the best of software (engineering, design, data) and the best of storytelling (narrative, branding, distribution) to build expertly crafted platforms and businesses. DE-DE’s first product, Thunderclap, won an inaugural Innovation Lion at the Cannes Lions International Festival of Creativity and was deemed “the future of social empowerment” by Forbes.
Synergies in the branded content and entertainment fields
Born in 2009 from the merger between the historic artist representative agency called William Morris (established in 1898) and the Endeavor Talent Agency (founded in 1995).
The global client base of WME represents many of the world’s most prominent artists, performers and content creators in the Motion Pictures, Music, Television, Theatre and Lectures sectors. Carlos Bardem, Robert Redford, Charlize Theron, Adele, Alicia Keys, Rihanna, or Lady Gaga to name some few names, are clients of WME.
Established in New York in 2006, Droga5’s roster of clients includes The Coca-Cola Company, American Express,Mondelez International, Motorola, Prudential, PUMA, Spotify and UNICEF.
Other deals reshaping the ad industry, though not baked in Beverly Hills
Just yesterday WPP’s Young & Rubicam and Shazam, the world’s leading media engagement company with more than 350 million users worldwide (100 million in the US), announced a non-exclusive partnership to help advance the mobile activation of advertising. The partnership also includes UP, a branded content and TV production company that is part of Y&R’s innovation incubator, Spark Plug.
UP has been a partner to Shazam over the past year, working together to build custom TV-activated experiences for brands during the Olympics, MTV VMAs and Grammys, among others.
WPP has shown specially active this year in the field of adding branded content skill to the group though strategical alliances, investments or purchases in companies like Muzy or SFX Entertainment.
Other example this time coming from Publicis Groupe and also very recent. On 10th July 2013 Publicis announced the purchase of Net@lk, a leading agency devoted to social media and social content for brands in China.
Leaving aside the purchases and strategical agreements of other companies, the branded content and digital drivers have triggered the brand change and restructuration in Havas group.
All those moves, and we include here just some few, show how innovations, digital and social are pushing contents and entertainment to the front row as the best way to engage consumers, reshaping this way the ad business itself.
Image over the headline.- Left WME logo, © WME. Right Droga5 logo, © Droga5.
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