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After spending much of the past decade financing movies, Ryan Kavanaugh is expanding heavily into the advertising arena, launching Madvine as an in-house agency that will manage the entire marketing campaigns of brands like Evian while also integrating corporate clients into Relativity Media’s film, TV, digital, music, sports and fashion businesses.

Madvine (a combo of Madison Avenue and Hollywood’s Vine Street) already has signed French bottled water brand Evian, gene testing firm Pathway Genomics, and Mondelēz International, which owns Oreo, Trident and Stride, as its first clients. Other brands in Mondelez’s portfolio include Cadbury and Milka chocolate, Nabisco biscuits and Tang.

Madvine will be run by former Coca-Cola marketing executive Danny Stepper and producer of Disney’s “Goal” soccer film series, which were funded by Adidas. Relativity and Stepper also have helped Coke launch new energy drink Arriba through a separate partnership, which could expand to have more of the company’s brands work with Madvine in the future.

Evian and Mondelez have inked multi-year deals — spanning three to five years — with each spending considerable coin worth millions to pair up with Madvine and Relativity’s projects. Kavanaugh said the deals could generate $10 million a year for Relativity, creating a new revenue stream for the company.

Taking it one step further, Relativity is now actually Evian’s advertising agency of record, with Madvine handling the company’s entire marketing budget as it looks to entertainment as a way to reach out to younger consumers for its water.

Relativity said Madvine’s mission is to disrupt the traditional advertising and product placement model and bypass third-party agencies to connect brands directly with entertainment produced by Relativity.

“The traditional model for brand-content integration is poised for disruption,” said Stepper. “Through our multi-platform approach, Relativity has the unique ability to offer ubiquitous opportunities for leading brands to reach global audiences through our content and distribution platforms.”

Relativity is essentially selling brands deals to become the exclusive category partner that includes automotive, banking, liquor, clothing and shoes, for example. Once they sign on, they’re involved at the development stage of projects. If a new drink is being launched, the beverage could be teased in a movie, seen on the red carpet of its première, then gain more exposure in a TV show, digital series and while in the hands of athletes who can promote it across social media platforms and be seen using it on the bench at a sporting event. It’s transmedia on steroids.

At the same time, Madvine has a team that gets new products like Arriba prime exposure in stores like Walmart, Target, Walgreens, Kroger and 7-Eleven.

Working with a newcomer like Madvine is a potentially risky move for companies. But for many marketers, it may be a risk worth taking, considering that traditional product placement deals, promotional partnerships or even advertising on TV isn’t giving brands the kind of exposure they often believe it can.

At the same time, Kavanaugh has smartly admitted he doesn’t know all there is about advertising, turning to the Dentsu Aegis Network, one of the largest advertising conglomerates in the world, to provide the kind of advertising services brands may still need. Dentsu’s Story Lab will work with Relativity to find ways to work brands into projects early on in their development.

“We want to recreate the wheel, but some of this still involves traditional advertising,” Kavanaugh told Variety. With Dentsu Aegis, “we’re giving (clients) a familiar home where they should still get the same services from an agency as they had before.”

Brand reps like Angela Courtin, president of Aegis Media U.S., said marketers have no choice but to work with new ventures like Madvine. “They need great content because consumers are tuning out of traditional advertising,” she said. “Relativity is providing them with a great opportunity to bridge branded content because they’re going directly to the storyteller.”

And that will be key in keeping Madvine’s current and future clients happy.

Brands who pay to help promote a film or TV show can sometimes find their appearances cut short inside the final project, leaving them with little connection to the entertainment they want to associate their products with. They rarely get to work with the creative team behind the content, if at all.

Yet Madvine is pushing to get brands involved as scripts are being written.

For example, Evian will be integrated into Relativity’s TV series based on the film “Limitless,” and will be part of an original digital workplace comedy series called “Interns.”

Kavanaugh wanted to launch Madvine after declaring that “old television advertising is a dying model,” and that production companies like Relativity have the capability of becoming content engines that give brands unique ways to reach consumers.

Kavanagh called Madvine a concept he has been developing over the past three years, especially “as brands were wasting a lot of money.” Through his new division, “it’s about getting everyone comfortable that we’re truly bringing brands on as content partners,” he said.

Mondelez views the deal with Relativity as a way to “look beyond traditional advertising channels and toward even deeper brand integration,” according to B. Bonin Bough, VP of global media and consumer engagement, Mondelēz Intl. “Our partnership will help broaden our reach by connecting our brands with Relativity’s built-in audience for its compelling content.”

Evian already has been innovating with digital videos. The bottled water brand this week released the latest installment of its highly successful dancing “Baby & Me” campaign this time starring a younger version of Spider-Man. The digital video is part of a promotional partnership around Sony’s “The Amazing Spider-Man 2,” out May 2. The series of shorts were produced by its French agency, however.

“Relativity’s aggressive, entrepreneurial spirit is a perfect match for Evian, and so both partners are committed to building each others’ brands,” said Eric O’Toole, president of Danone Waters of America. “Through its array of assets and media products, Relativity will help us craft new ways of bringing the brand and its story into our consumers’ lives.”

In addition to the Kevin Costner actioner “3 Days to Kill,” Relativity’s releases this year also include “Earth to Echo,” “Oculus” and author Nicholas Sparks’ “The Best of Me.”

It recently launched Relativity Digital Studios, run by former Myspace and Fox exec Roger Mincheff; and operates Relativity Television, with more than 35 series on the air or in stages of development; Relativity Sports, which represents more than 300 athletes (including the Houston Rockets’ Dwight Howard and the Knicks’ Amar’e Stoudemire); M3/Relativity for fashion, beauty, style and creative design; and recently acquired a stake in Downtown Records.

Making Madvine successful will come down to “relationships and trust,” Stepper said. “There have been a lot of promises that Hollywood hasn’t delivered. But the commitment from the very top, from Ryan, is the key differentiator (for Madvine). This is a big priority.”

Kavanaugh will have more to say Madvine in an appearance Thursday at Variety’s Massive: Marketing & Advertising Summit.

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