Update: another thing: wouldn’t a joint venture with Madison restrict OnMobile’s options of getting advertiser deals from other advertising agencies?

Earlier (Dec 8th 2010): Mobile VAS company OnMobile Global has formed a 50:50 mobile marketing joint venture with agency Madison, reports afaqs. Kabuza will look to leverage the mobile reach of OnMobile, while Madison will look to offer marketing and advertising services to its existing client base. This is a rather interesting partnership, particularly since it is a joint venture between the two entities, and not just a partnership. OnMobile had previously partnered with GroupM to push its AdRBT services to clients, but the AdRBT initiative has had fairly limited success. Earlier this year, One97 Communications* also partnered with online ad sales house NetworkPlay to offer mobile marketing services. Now, a few differences between the OnMobile-Madison and One97-NetworkPlay deals:

– OnMobile-Madison is a joint venture with both entities owning 50% stake, while One97-NetworkPlay is a partnership, and the revenue-share details are not known. The entities would obviously be more vested in the deal in case of OnMobile-Madison.
– OnMobile has experimented with Mobile Marketing before, running
– Madison is a media buying house, and deals directly with advertisers. NetworkPlay is a sales house and sells to media buyers like Madison. So does this mean that Madison will Kabuza (and hence OnMobile) preference over opportunities from NetworkPlay-One97? Also keep in mind, that from a digital marketing perspective, stake in NeworkPlay is also owned digital marketing firm WebChutney.

As we’ve said before, we’re not in favor of agencies entering into partnerships with publishers (or their representatives). Agencies represent advertisers and sales houses represent publishers; the two should operate at arms length. Practically, that’s not how things work: today, agencies own Ad Networks. In this case, a publisher (OnMobile) is partnering with an agency (Madison).

Disclosure: One97 Communications is an advertiser with MediaNama