WME Buys Stake in Ad Agency – Lady Gaga, Meet American Express

'Significant' minority stake in Adweek's 2012 agency of the year connects clients to brands

William Morris Endeavor has bought a minority stake in Droga5, an advertising agency that counts Coca-Cola, American Express and Motorola as clients, the agency announced Thursday. Terms of the deal were not disclosed, but individuals with knowledge of the deal described it as a significant minority investment.

The deal will connect Droga5’s client of top brands with WME’s client base of filmmakers, actors, musicians and athletes like Lady Gaga and Dwayne Johnson. The idea is that stars could get involved with brands at an early stage in an advertising campaign to find out how the two could work together.

Brands often know what they want in their campaign by the time WME can pitch its clients, so this gives WME an earlier look at what's coming through the pipeline.

Also read: WME, Kleiner Perkins Lead $8M Investment Round in Social Video Start-up Chill 

One example of what WME would be intersted in is Droga5’s campaign for Jay-Z’s memoir “Decoded.” The agency launched a marketing campaign mixing traditional advertising with mobile apps, an interactive game and corporate partners like Bing.

“Droga5 is best-in-class across the board — from its management to its creative output," WME co-CEOs Patrick Whitesell and Ariel Emanuel said in a statement. "Through this investment, we will be able to join the best artists and storytellers from all verticals, and we look forward to creating new opportunities for our collective clients.”

WME has previously made a series of strategic investments in companies such as the Raine investment group and the new production company of “South Park” creators Trey Parker and Matt Stone. Droga5, which was named Adweek’s U.S. Agency of the Year in 2012, will continue to operate as an independent company with the same management structure in place.

“Droga5 has always endeavored to be the most influential creative agency in the business, with ideas that move our clients and our industry forward,” David Droga, Founder and Creative Chairman of Droga5, said in a statement. “This partnership will exponentially accelerate our ability to realize that ambition.”