• by Joe Mandese  @mp_joemandese, June 14, 2012

VivaKi Chief Strategy & Innovation Officer Rishad Tobaccowala channeled his inner Kafka Wednesday, explaining to a gathering of clients, agency executives, entrepreneurs, VCs, and a couple of journalists why ad agencies have managed to survive, and maybe even thrive, despite incessant proclamations that agencies were dying during his 30 years in the business: “The truth is, agencies are cockroaches.”

Tobaccowala, who is known to strike striking metaphors to make a point, likened agencies to roaches, because like the insect, they have proven themselves to adapt and persevere regardless of what is thrown at them.

“The reason is, we are cockroaches,” he concluded during the presentation, which opened a special VivaKi Ventures meeting at Digitas’ New York offices, which also included a “speed-dating” session with more than a dozen promising digital media startups that have been vetted and given a seal of approval by the agency ventures group, as well as a panel discussion of agency, client and venture capital executives that revealed some interesting perspectives on the role startups play in Madison Avenue’s digital ecosystem.

Tobaccowala said his point about agencies’ ability to survive was that they “cannot do it alone,” and must rely on outside “third parties” to help them adapt and develop new business models and services to help their clients evolve their businesses.

That’s the reason, he said, that VivaKi Ventures was founded 7.5 years ago, and why it continues to thrive. Acknowledging its founder -- former VivaKi exec Tim Hanlon, now CEO of The Vetere Group -- Tobaccowala said the ventures group has been instrumental in connecting VivaKi agencies and their clients to new and emerging businesses that have helped them adapt in a rapidly evolving media and marketing environment.

“We don’t think we can do it alone. Without other partners on the outside, we are pretty pathetic,” he said. “We are pretty useless. Because we get a lot of help, we are less pathetic than everyone else. And that’s the goal -- to be less pathetic than everyone else in agency services.”

The ventures unit, in fact, does not operate alone, but is actually part of a much larger “spoke-and-wheel” structure tapping into the 16,000 people working at various VivaKi agencies, as well their media partners. It’s this distributed approach, Tobaccowala said, that has enabled VivaKi to stay ahead of the curve and identify vital new enterprises, which are vetted and approved for use by Publicis agencies and their clients.

The dozen startups represented at the ventures meeting ranged from analytics firms like C3 Metrics to Amazon’s ad-supported Kindle e-reader platform to an artificial intelligence storytelling platform called Narrative Science.

While much of the conversation -- including the panel discussion that wrapped the event up -- focused on data, social, mobile, and the complexity associated with vetting so many new technologies, Tobaccowala said the area he was most personally interested in was the kind typified by Narrative Science.

“How do you tell stories in new ways,” he said. “Brands are not built by data alone.”

That, in essence, is what Narrative Science does, taking data from companies -- including publishers and brands -- and using machine learning created by expert “storytellers” to automatically generate content that can be used by publishers or brands to engage consumers.

How successful any of the ventures represented at the event will ultimately be will depends on a variety of market forces that continue to change, evolve and reshape the industry -- which is exactly why an organization like VivaKi Ventures is necessary, Tobaccowala said.

He also took a shot at other agency holding company venture models that are based on generating direct returns on their ventures efforts. While he did not cite any names, Interpublic’s Mediabrands unit has made no secret of the fact that it is looking to monetize its work with media startups, and has even brought its own products to market, including its “EML Magic Window” technology. MDC Partners’ two-year-old KBS Ventures unit is so sophisticated, it produces annual reports including details on the “return on equity” of the ventures it backs.

“A lot of agencies think this is a way to make money,” Tobaccowala scoffed.

“It’s a strange way to make money,” he continued. However, he added that it is in fact something parent Publicis is doing too, citing the massive $400 million venture fund it recently launched with Orange.

“There are two ways to do it. One is this way,” he said gesturing around the room of the VivaKi Ventures event. “The other is with heavy air power. We are doing both.”