Wall Street Journal—Questions for Jonah Disend

Toronto-based advertising concern MDC Partners  is expected to announce today that it has acquired a 60% stake in Redscout, a consulting firm that works with marketers such as Johnson & Johnson  and PepsiCo Inc. New York-based Redscout offers services such as trend watching, brand consulting and package design. It also tries to help marketers develop new products -- something Madison Avenue has long tried to add to their arsenal.

MDC, parent of ad agencies such as Crispin Porter & Bogusky and Kirshenbaum Bond & Partners, thinks the Redscout acquisition could give it an entree into product development. "We think there is an incredible opportunity to cross-fertilize them [Redscout] with our other firms and share their knowledge and expertise in developing brands," says Miles S. Nadal, MDC Partners' chairman and chief executive.

Jonah Disend, the 35-year-old founder and chief executive of Redscout, talks below about the issues that arise during product development and points out some of the biggest consumers trends in the marketplace.

The Wall Street Journal: Many ad agencies have flirted with trying to get into product or services development as a way to gain new revenue streams. But it's never really caught on. Why do you think they haven't been able to make that part of their business model?

Mr. Disend: The discipline of making ads is often about being as different as possible from the competitors. This is not necessarily the goal with product development, and certainly not the starting point. So often with advertising you think, 'How do I add brand value through communications so that I make them want my brand versus your brand?' We think, 'How do I add value to the thing itself in order to drive desire?' Also, there is a totally different mindset when it comes to innovation versus marketing. Almost every time I interview someone from advertising and I ask them to come up with an innovation solution for a category, they immediately go to marketing and promotions solutions. They may get to targeting and distribution, but they rarely get to the foundational elements of the thing itself. These foundational elements include: the Achilles' heel of a competitor that can be exploited in our new product; recognizing categories which are desperate for a new approach, such as JetBlue to the airline industry; identifying a new behavior that is begging for a new service offering; or spotting technologies or capabilities in a client's stable which are being underleveraged. These are all critical to innovation.

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