The NYTimes say the new agency will be part of Translation Consultation and Brand Imaging, the company Stoute founded and sold last October for an estimated $10 to $15 million to the Interpublic Group of Companies, the third-largest agency company (behind the Omnicom Group and the WPP Group).
"We saw a place in the market for a new agency. The current fashion and standing that African Americans hold in the world today â€“ especially in American culture â€“ isnâ€™t fully represented in the advertising community," commented Stoute. "We want to show this community in advertising thatâ€™s fresh, accurate and perfectly executed. And weâ€™re excited to be doing it with a great partner like Interpublic, which has such deep relationships with the worldâ€™s greatest marketers. Our plans for this new agency have been repeatedly speculated at in recent press reports. As a result, weâ€™re announcing Translation Advertising a little earlier than anticipated."
Stoute and Jay-Z will be the co-chairmen of the new company and own 51% of Translation Advertising. Interpublic will own 49 percent.
"As an artist, you make music," Jay-Z told the NYTimes. "And if you see people who donâ€™t know how to market your music, you get involved in it."
This venture, is indicative of the intensifying interest on Madison Avenue in minority consumers. The African-American, Hispanic and Asian-American populations in the United States, together account for an estimated $2 trillion in consumer buying power.
Jay-Z's role at Translation Advertising would be to offer his creative and entrepreneurial ideas.
"Translation Advertising is a new and exciting venture," said Jay-Z. "Interpublic shares a vision of representing and connecting with the African-American culture and community in an honest and responsible way. This partnership with Interpublic and Translation Advertising is a natural business pairing. I look forward to sharing ideas and breaking new ground once again in a new area. We are not looking to just have an agency, we are looking to perfect our relationship with the consumer."
As a stand-alone agency, Translation Advertising will be accessible to and partner with Interpublicâ€™s leading network of full-service agencies. The new company will focus on creating advertising programs for clients, including television, print and radio, which are aimed at African American and culturally-blended consumers. As the agency grows, it will seek to partner with sister IPG companies to deliver specialty marketing services, such as special events and activation.