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Ad agencies buy into Vancouver’s tech startup scene

Ad agencies buy into Vancouver’s tech startup scene

Posted by PanamericanWorld on September 25, 2016

Patty Jones recalls being at a crossroads three years ago as digital products were becoming further entrenched in the world of advertising. 

“We were trying to figure out how our team could best be involved in the startup community,” said Jones, an executive vice-president at DDB Canada’s Vancouver office. “We thought we would be really great ourselves if we created our own products, if we understood the technology enough to say, ‘Let’s take this technology and do something with it for this client.’”

Ultimately, she said, the ad agency’s West Coast office decided to leave it to tech entrepreneurs to innovate, while planning for DDB to work its way into the Vancouver tech sector by sticking to its own specialties – advertising, marketing, brand building, user experiences and creating logos.

The DDB Ignite pilot program launched in Vancouver a year ago, offering local startups like myBestHelper branding services in exchange for equity in the companies. The program would give the agency stakes in early-stage companies that would otherwise be unable to afford DDB’s branding services.

Modelled after tech accelerators and incubators, the program began rolling out across the rest of Canada in late August.

“It is important to note that, from my perspective, they are not trying to be an accelerator in the classical sense, nor are they trying to provide services on funding or sales management or other topics you might normally see,” Clayton Weir, head of BCTech’s HyperGrowth program, said in an email.

“This a unique model to provide access to the world-class marketing and branding expertise for startup companies who traditionally would not be able to afford it.”

Weir’s industry association is partnering with DDB to match startups with DDB Ignite. He said the company isn’t just paying lip service to this initiative as workshops he’s attended have featured executives, managing directors and top-tier experts providing advice to startups. 

“It would have been easy for them to send interns instead,” Weir said.

Rival ad agency Cossette, meanwhile, initiated its accelerator programs in Toronto and Montreal in 2014 before launching one in Vancouver in April. It’s offering office space and resources to cash-strapped startups and – like DDB – is providing branding and marketing services to small tech companies.

The Toronto and Montreal offices take equity in startups in exchange for the services.

But Michael Milardo, executive creative director at Cossette’s Vancouver office, said he wants the program to run in Vancouver for at least a year until his agency would consider taking equity. 

Reach, which specializes in improving Internet communications at universities, and health tech company iHeart were the first startups to go through the Cossette Lab in Vancouver. 

Cossette has the space and resources to support three startups at any given time, according to Milardo.

“I like the idea of building the clients of tomorrow,” he said, adding that the goal is to broker relationships between his clients and the startups accepted into the accelerator.

“If I can connect my client with the next generation of technology, then I feel like I’m doing a service.”

Ray Walia, CEO of Vancouver’s Launch Academy incubator, said he expects to see a lot more corporate accelerators popping up over the next few years, especially ones with specialized focuses such as DDB Ignite or Cossette Labs.

“It’s a business strategy from the corporate perspective,” Walia said. “They’re consistently trying to find ways to inject entrepreneurism into their corporate culture. That was a big thing for the last five years and a lot of them realized it was harder to do than just throwing some people in and expecting magic to happen.

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