Mediabrands' Ventures Unit Evolves in China and U.S.

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Hong Kong-- Mediabrands has rebranded its strategic partnership and investment arm from Greenhaus to Velociter and hired Tim Hanlon as CEO and managing director. His duties are to collaborate with innovative “game changers” in media and marketing to provide proprietary agency insights and solutions to clients.

In January, IPG-owned Mediabrands launched its Mediabrands Ventures unit in the U.S. and rolled it out in China six months later, with ambitions to rapidly expand in the country.

“China is behind and advanced at the same time," said Jimmy Poon, CEO of Mediabrands Ventures in China.

Based in Shanghai, Poon oversees the China divisions of Velociter and the Emerging Media Lab. His job at Emerging Media Lab is to identify, evaluate and approach new content owners and publishers. In some cases, Mediabrands will propose investing time and money to help them develop and pitch ad products.

At Velociter, he will do the same for homegrown tech startups, in which IPG will co-invest alongside venture capitals, incubators and angels.

Among Mediabrands Ventures' investment targets are Chinese companies that produce tools to drive word of mouth on social networking portals and micro-blogging sites. It will also court niche ad networks and firms that specialize in data-driven ad targeting. Poon says China's digital media landscape lacks the audience transparency that U.S. marketers enjoy, and advertisers often assemble media plans based on a site's visibility and reputation rather than data from audited measurement firms. This leads them to exclude smaller quality media properties.

The holding group also wants to tap into the social gaming scene and is in talks with startups to integrate brands in the form of advertising subsidized games or in-game placements. An example of a likely partner is Beijing-based Happy Latte. The firm has created an app call High Noon, a multi-player game that turns an iPhone into a gun to shoot opponents. The app has been downloaded more than a million times and is a top-100 game in more than 50 countries including the U.S., Canada, France and Japan.

The key challenge for Mediabrands Ventures in China, according to Poon, is to convince brand marketers to test new and emerging platforms. With the media landscape constantly changing, he said brands may end up standing still if they wait for opportunities to be clearly laid out before taking any action.

Poon believes innovation in the region has been driven by very demanding advertisers, particularly in parts of the ecosystem that do not deliver clear value. He noted media agencies in China are often paid commissions under 10 percent and in some cases 5 percent.

He also observed regional media and technology companies tend to adopt innovations and platforms from the U.S. He cites social networking sites Renren and Kaixin001, which are similar to Facebook, and YouTube clones Youku and Tudou. But he says these companies don’t copy blindly from the West as they reinvent and adapt from the implementation to engagement process for the local audience.