Omnicom has finalised the acquisition of the interactive TV agency Weapon7, in a cash deal thought to be worth more than £10 million.
Omnicom plans to bring Weapon7 into the Zulu network of specialist agencies, where it will sit alongside the digital advertising and media shop Agency Republic, the direct marketing agency Claydon Heeley, the software specialist Code and the mobile marketing agency IPSH!.
It will also look at developing Weapon7 globally. At the moment, the UK leads the world in terms of digital TV penetration and, therefore, in expertise when it comes to interactive TV campaigns. But with the medium beginning to take off in the US, Omnicom sees huge opportunities to grow the business there, as well as in China.
Founded in 2001, Weapon7 has made its interactive TV mark with campaigns for clients including Chrysler, Nissan, Coca-Cola, Adidas, Nokia and Smirnoff. Although much of its work is on a project basis, it is one of the agencies on COI's digital roster, and is in talks about having a retained role for some clients.
Two of Weapon7's founders - the managing partner, Steven Hess, and the planning partner, Mark Brown, - are staying on to run the agency. They each have four-year earn-out clauses and will both become partners on the Zulu management board.
A third founder of Weapon7, the creative partner, Simon Smith, left the agency two weeks ago, ahead of the Omnicom deal, saying it was "time for a new adventure".
Advertising via interactive TV involves strategy, creative ideas, the technical expertise to carry out campaigns and broadcast media planning understanding. It combines traditional advertising with new digital thinking. As a result, there is no real ownership of the industry, and interactive TV ads can come from sources as diverse as traditional ad agencies, in-house production teams at media owners such as Sky, and standalone production companies.
Jon Claydon, the chairman of Zulu, defended the decision to invest in a specialist agency, when it seems that a DIY-approach can work for some campaigns.
He said: "Yes, some clients will choose to make their own interactive ads, just as some choose to make their own television ads. But interactive advertising is technically more complex, and the vast majority will be more comfortable entrusting the work to specialists who understand the medium."
He added that the acquisition is part of Zulu's strategy to have market leadership in what it sees as key digital assets. Weapon7 fits in with this because of its track record of working on big-name brands.
"The big attraction of Weapon7 is that it has blue-chip international clients. It's not one of those agencies that gets talked about without doing much work," he explained.
Weapon7 has a history of collaborating with Omnicom ad agencies in the past, working alongside Abbott Mead Vickers BBDO on its successful pitch for BBC2 and with TBWA\ on campaigns for Adidas and Nissan.
Hess also has inside knowledge of the company, having held the role of global planning director on the McDonald's account for the Omnicom-owned media agency OMD before founding Weapon7.
Nonetheless, it has taken Claydon 12 months to see off other suitors and persuade Weapon7 to become part of the Zulu fold.
Hess is confident Weapon7 can maintain its identity and individuality now that it is part of Omnicom. He says it is a brilliant opportunity to expand the brand globally.
Interactive TV advertising has come a long way since UK viewers first started pressing their red buttons back in 2001, when JWT created the first such ad for Chicken Tonight.
Since then, hundreds of campaigns have run on Sky Digital and with Freeview now carrying interactive TV ads and BT Vision carrying them when it launches, more advertisers are likely to embrace it.
Many broadcasters are actively promoting the medium, including Sky Digital, and ITV Sales and BBC Broadcast, which teamed up last year to sell the advantages of interactive TV ads. One such advantage is its accountability, with advertisers able to tell how many people are interacting, and how long they are spending on the campaign.
Hess said interactive TV is not a technology, but a way of using broadcast advertising - still the most powerful medium around - to its best effect. "It is about finding ways of tempting viewers to spend more time engaged with a brand," he said.
"In today's overloaded media environment, consumers who have expressed an interest in a brand and its story can be very valuable assets. What brand would not like a little one-on-one with their customer?"
THE RISE OF WEAPON7
- Founded in 2001 by Steven Hess, Mark Brown and Simon Smith
- 18 staff
Campaigns of note
- The iTV element of Honda "cog" and Adidas' Jonny Wilkinson and David Beckham advertising
- Smirnoff's debut iTV "triple distilled" campaign
- Included in the D&AD Annual for its "egg" campaign for Xbox, which had 1.9 million interactions, the largest number for an iTV campaign to date
Weapon7's iTV firsts
- Orange "3G peasy" - first iTV ad to go to full-screen TV
- Sprite 3G - first iTV ad to offer mobile downloads of iconic Sprite character
- HSBC - first iTV ad to use an interactive game.