Networking venture hopes to attract new members

The founders of a successful digital marketing firm launched a decade ago soon will unveil Magnet 360, a network of 18 local communications boutiques that they plan to expand to Milwaukee, Cleveland and Denver.

Magnet 360 is backed by an initial $3 million from Chairman Skip Gage, whose Gage Marketing is a member firm, as well as Scott Litman and Dan Mallin. Their Imaginet digital marketing firm was a 110-person, $14 million concern when they sold it to global-communications juggernaut WPP Group in 2001. The former Imaginet, now known as RMG Connect, was a $100 million concern when the two founders left RMG Connect in 2004.

"Big companies like WPP and Omnicom have amazing assets, but they limit themselves to geographically based teams, and it drove us crazy," Litman said. "We could never tap people in Toronto to work on a 3M product, for example. We like to build businesses. And the moment you sell your business to a big holding company, you lose your entrepreneurship and some energy and leanness."

That's also the price you pay for getting ka-chinged!

Gage, an Imaginet investor, said he's investing again with Litman and Mallin because they have developed "a business model with Magnet 360 that is very much in tune with the times as marketing dollars shift increasingly to digital formats. Dan and Scott know this space very well. ..."

"We are minority investors in about six of these agencies already," Litman said. "We are trying to help these partners grow their businesses like crazy. Our goal is to have 30 members of which we have equity in 10. There are already 450 professionals at these [18] firms. Our member agencies have incentives to work together, helping ensure clients receive the right services from the right agencies."

Magnet 360 expects to raise another $4 million in expansion equity and $2 million in debt next spring.

Litman said on balance the average billing rate of Magnet 360 partners will be around $150 per hour compared with $175 per hour, on average, for national firms.

The partner firms include Cadria, Reside, Slice, MarketingBridge, Insight Commerce, Capsule and other advertising, interactive media and digital communicators, most of which did not exist a decade ago.

Client companies include Ford, Cargill, Volvo, Wells Fargo Home Mortgage, U.S. Bank and Microsoft.

Storyworks Media launched

Health care industry veteran Jeff Fritz has launched Storyworks Media, which will provide Internet-based communications strategies for health care and financial firms centered on "highly personalized, unique videos to describe individual and employer-sponsored benefits resulting in increased consumer engagement in those products."

Fritz, who will chair the firm, will soon be joined by CEO Mike Bingham, another veteran of the health care business. Bingham spent five years through 2007 leading Twin Cities Rise, a training-and-employment agency targeted at underemployed males that has gotten national attention for its success and the work of founder Steve Rothschild.

Fritz and Bingham hope to raise a half-million bucks from investors in early 2009.