Despite its acquisition by MDC this year, TargetCast is maintaining its scrappy devotion to challenger brands.
New York–based TargetCast is MEDIA Magazine’s somewhat ironic selection for 2012 Independent Media Agency of the Year. While no longer technically independent, the agency has remained so in spirit and direction. Over the past year it continued to foster industry influencing innovations including building new go-to-market tools and platforms and creating a brand-extending subsidiary that broadened the shop’s reach.
Even the decision in March by its partners Steve Farella, Audrey Siegel and Steve Minichini to sell a majority of the agency to Toronto-based marketing services holding company MDC Partners was driven by what they believed would be the best way to serve advertisers in a constantly changing media landscape.
In fact, part of the decision to select TargetCast was based on who the partners decided to link up with — MDC is probably the most entrepreneurial of the holding companies in Adland, with a different approach than most of its competitors. In 2012 it made a huge bet on media, buying several firms and reorganizing most of its media assets under a new management arm, Maxxcom, which is led by Farella. The unit is already driving synergistic new business techniques that benefit all of the shops under its purview while Farella is developing a new go-to market approach that will be unveiled in early 2013.
Founding CEO Miles Nadal (who is, not coincidentally, our choice for Media Executive of the Year) and his management team at MDC insist that the managers of the shops the company acquires retain their entrepreneurial approach while collaborating with sister agencies in ways that benefit clients.
And TargetCast wouldn’t have it any other way. To hear the agency’s leaders tell it, they intend to retain the mix of independence and, entrepreneurial spirit that enticed MDC to make an offer in the first place.
The deal was years in the making. “We dated for two years,” quips Farella, who founded TargetCast in 2002 with Siegel. Minichini joined as the third partner in late 2009 when TargetCast acquired the digital agency he founded, Triumph360.
Siegel says that during the lengthy courtship with MDC, the three TargetCast partners thought long and hard about agency’s future direction. Ultimately, says Farella, three factors made the tie-up with MDC viable: the MDC business model, the holding company’s commitment to media and “the opportunity to find other assets that we didn’t have internally.” He describes the fit as “natural … They have over fifty separate agencies that all collaborate together and that’s a fabulous model for TargetCast.”
Siegel concurs, adding, “Clients didn’t tell us that something was missing. But we don’t just solve media problems. We solve business problems with media and communications solutions.” Siegel noted work the shop is doing for spirits client Illva. “We’re conducting attitudinal studies in seven countries, which is not usually the purview of a media agency,” she says. “But it is the purview of a business partner. All agencies think about the consumer. We take it to the next level.”
The agency also turned consumer insights into more precise and client-relevant audience measurement in 2012. The agency’s research department developed a proprietary fusion model that married client-customer data with Nielsen respondent level ratings, creating specific program target audiences based on client planning and not just the age/sex demographics offered by TV networks. Long-time client Expedia applied the approach in 2012. Other clients will use it in 2013.
Inevitably, Siegel says, client business problems will become more complex over time. And each of the agencies at MDC present a potential solution.
Will the link to MDC change the profile of the typical TargetCast client? Siegel says no. The agency’s mission has always been and will continue to be serving what she calls “strong independent brands,” with a “high touch” offering that includes a mix of top-notch strategy and implementation, senior level talent, deep-dive data analytics.
And while TargetCast has an in-house digital operation led by Minichini, synergies with MDC shops such as Varick Media Management, the digital media trading platform, help differentiate TargetCast.
Pre-MDC, TargetCast used many different demand side platforms to help it implement its philosophy and approach to the digital marketplace, says Minichini. “We were going from DSP to DSP to cherry pick the technical overlay” in pursuit of precise target audiences, he says. Now TargetCast links to Varick’s system. With the Varick connection, along with a few select DSP links and its own proprietary optimization tools, TargetCast has a digital media trading program that is unmatched in the marketplace.
Minichini’s operation within TargetCast had a busy year in 2012 winning accounts — such as the digital AOR for client Pfizer Consumer Care — and innovating on its own. His team developed tools to help clients acquire both online and off-line media more efficiently. Other platforms were developed for dynamic ad insertion and social media monitoring.
One new tool lets sellers put inventory offers into a computerized system. After a series of negotiations the agency pares down the competitors to a couple of finalists-based on both the quality of the media offered and the price. Then finalists are brought to the client for selection.
Another platform called HotSpot, invites media sellers to offer premium but unsold inventory packages that have to move quickly at reduced rates. The HotSpot platform, Siegel insists, is not meant for remnant inventory, which implies low quality. “We bought Olympic spots in the top 10 markets for half the normal rate,” she says. “We hold back dollars with client approval and wait for those opportunities to get the right consumer in the right place and time and at the right cost.”
The agency also launched a new business called TargetCast Inside, which is designed to provide regional creative shops with media capabilities to help them reel in or retain full-service accounts.
And Inside has been a significant revenue generator for TargetCast. Farella says that all of the new business from the Inside division combined would rank as the fifth-largest revenue-generating client within the broader agency. “It’s really worked out well for us,” he says. “It’s our existing product repositioned for the creative agency marketplace and it provides us with incremental reach.”
Meanwhile, the agency posted over 15 percent revenue growth in 2012, a mark that it has achieved consistently since its founding a decade ago. “Each year has been better than the last,” Farella says. In addition to Pfizer, as well as Land’s End and Lockheed Martin via its TargetCast Inside subsidiary, it’s also gotten new assignments from Deutsche Bank and DWS Investments.
And while the new accounts help to drive positive financial performance, “more importantly we’ve kept all our existing clients happy,” says Farella, noting that the agency hasn’t lost an AOR account in the 10 years TargetCast has been in business. “The secret sauce to growing the business is to not have a leaky bucket,” he says.
“The strongest measure of client happiness,” adds Siegel, is additional work, Pfizer’s digital assignment being a prime example. “We started with them in 2004,” she notes.
And 2013 is expected to be another record year.
Not bad for an agency that started with two people, a computer and an idea about how to serve the media needs of challenger brands more effectively and efficiently. In 10 years the agency made one acquisition, Minichini’s Trimuph360, when it became clear clients were going to need a lot of help navigating and innovating amid the digital marketing shoals, and that Minichini & Company had the talent to deliver.
“We started from scratch,” says Farella. “And we did it on our nickel. There were no backers, no investors, no stock market. No nothing except our money and a lot of guts.”
And, adds Siegel, dedicated employees and sticky clients who believe in the TargetCast vision, past, present and future.