• by Steve McClellan  @mp_mcclellan, October 6, 2011

Unemployment levels are high and gross domestic product growth is a tepid 1% or so. But despite those indicators, which tend to frighten both consumers and businesses, the advertising business is still pretty good.

That's the assessment of Miles Nadal, CEO of agency holding company MDC Partners. Nadal was interviewed at an Advertising Week session on Thursday by CNBC's Nicole Lapin.

"Clients know they have to spend money on marketing" to maintain and grow their brands, Nadal said. They have the money, he added, citing a figure of $2 trillion in cash that's currently on the balance sheets of U.S. corporations.

Nadal took a swipe at the press, saying that the media plays up the fear factor because it makes for great headlines that draw readers and viewers.

The advertising industry, he said, "is not in a bad time." And MDC specifically "is in a good place," having posted 24% organic growth in the first half of the year -- about double what the company expected.

While the stock market appears to be discounting for a double-dip recession, Nadal said he doesn't think it will happen. Near-term GDP growth will be "modest" but not negative, he predicted.

Despite high unemployment levels, the dwindling value of a 401(k) and depressed housing values, "people are still spending," he said. "They don't feel good, but they're spending," which drives the economy and spurs marketers to spend on advertising in a bid for market share.

Still, the consensus view is that economy isn't so good, Nadal acknowledged. This is why he's investing now in new companies, he said. It's the Warren Buffett theory of investment, he explained: "When people are fearful, be greedy and when people are greedy, be fearful."

MDC recently purchased two smaller specialist shops: the fashion-focused Laird + Partners and healthcare-focused Concentric. In both cases, the agencies have the potential to grow annually by double-digit percentages for the foreseeable future, said Nadal.

His bet is that the two shops will grab share by adding clients who want nimble, out-of-the-box thinking that they can't get from bigger, slower-moving shops. "Clients don't want to pay for infrastructure," he said.

Nadal also said his mergers and acquisitions team was looking at potential deals in the high-growth BRIC countries (Brazil, Russia, India and China). Brazil in particular is attractive for its macroeconomics alone, he said, noting the nation's current 9% GDP growth and the fact that it's generating 20 million jobs a year.

That said, the key issue driving acquisitions, Nadal said, is to what extent a deal helps the company drive growth with Fortune 100 clients.