ADVERTISING, journalism and technology continue to converge. The latest example: Vice Media’s acquisition of Carrot Creative, a digital agency that creates apps, websites and games for media companies and brands. In its new home, Carrot will experiment with ways to distribute Vice’s editorial content. The agency will also focus on building digital initiatives for brands that work with Vice. “We take our learnings as a media company and offer them to brands which are now trying to work like media companies,” said Andrew Creighton, the president of Vice Media. “It gives us an extra resource.” A person familiar with Tuesday’s acquisition, who was not authorized to speak publicly, said the deal was valued at $15 million to $20 million in stock and cash. Vice has long looked for ways to reinvent its business. Vice, which began as a magazine in 1994, has since moved into video, television, advertising, music and events, among other fields. A spin through
Vice’s Brooklyn offices reveals as many studios, editing suites and lushly appointed meeting rooms as there are writers hunched over computers. The company has grown through technology, Mr. Creighton said. “We started with desktop publishing,” he said, then “when we got into video we took advantage of the democratization of broadband and video production tools.” Two years ago, Mr. Creighton said, less than 10 percent of those who watched Vice videos were on phones. Now the number is escalating fast, and will most likely hit more than 50 percent in coming years. “We’re growing into multiple new verticals,” said Mr. Creighton, pointing to news, fashion and sports efforts that will start next year. “We have a solid website, but we were focusing on content rather than tech, and now both go hand in hand.” The acquisition of Carrot, said Mr. Creighton, will add to Vice’s technological capacity. For example, Carrot has found that viewers take in and share material from either media companies or brands differently on different devices. “The smaller the screen gets, the smaller the audience gets,” said Mike Germano, the chief executive of Carrot Creative. A smartphone has an audience of one, a tablet perhaps two and the TV many more. He added that technology and content, brands and media companies, were no longer separate. Mr. Germano, who has worked with brands such as Ford, Jaguar and Red Bull, compares what he does to “Mutual of Omaha’s Wild Kingdom,” the animal-themed TV show that began in the 1960s. “That was how people saw giraffes and lions for the first time, and that’s what we’re getting back to now,” he said. “When you don’t feel like you’re watching an ad, when they’re providing a service, that’s when you build a relationship with people.” The changing nature of the industry, though, is also raising concerns. The Federal Trade Commission recently expressed concern that so-called native advertising or sponsored advertising could mislead consumers. “By presenting ads that resemble editorial content,” said Edith Ramirez, the chairwoman of the F.T.C., at a conference last week, “an advertiser risks implying, deceptively, that the information comes from a nonbiased source.” Vice says it clearly delineates between editorial and branded content. Such digital advertising has been on the rise as media companies look to bolster ad numbers. Trade commission officials, citing recent surveys of online publishers, said that 73 percent offered native advertising and an additional 17 percent were considering it this year. About 41 percent of brands and one-third of advertising agencies use such methods, the officials said. (The New York Times is among the publications that will begin the practice in 2014.) Mr. Germano noted that the proliferation of digital devices would change how people consume information, just as the Internet has changed how people buy things. And consumers, he said, can enjoy those just the same. He cited a recent experiment in which a basketball player, Victor Oladipo, wore Google Glass to the N.B.A. draft, giving users of the website the Verge a player’s-eye view of proceedings. “That’s not something that might make ESPN happy,” Mr. Germano said, “but it’s an example of how media is really changing.”
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