MDC Upbeat About Ad Spend In 2013

by Steve McClellan, Jan 9, 2013, 12:21 PM

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MDC CFO David Doft told investors Tuesday that the company’s fourth-quarter organic revenue growth performance didn’t vary much from the first three quarters of the year, but the signs are positive for a “very good year” in 2013.

While some holding companies reported a dip in ad spending by clients as the second half of 2012 progressed, Doft said: “We didn’t see any change in the behavior of marketers. It was a strong year for investing in the growth of their businesses.”

MDC's organic revenue growth through the first three quarters of last year was 7.2%, significantly higher than other holding companies, albeit from a lower revenue base (approximately $780 million). For now, Doft said he was sticking by previous guidance that the company would achieve 5% to 7% organic growth for full-year 2012 and 2013. “We haven’t seen anything negative” that would change that estimate.

Doft made his remarks at the Citi media conference in Las Vegas. Other Adland executives speaking at the conference reported that the concerns marketers have about the uncertain economy had not been alleviated by recent Congressional legislation. But Doft noted some positives stemming from the fiscal cliff compromise between Republicans and Democrats. “Just the fact that they settled is good for consumer confidence,” he asserted. That, in turn, could boost consumer spending -- which would serve as an incentive for marketers to launch new products and increase budgets to promote them.

Like other holding companies, MDC is investing heavily in technology tools and platforms to help clients make sense of big data and develop more efficient go-to-market strategies.

As for international expansion, Doft said the company plans to take a “more organic” approach, in part because it’s more expensive to acquire agencies overseas than to domestically create longer periods to achieve desired ROI. However, he added that the company’s general strategy “doesn’t preclude a partnership or acquisition here or there” if it makes business sense. For MDC, international expansion is “more about bringing existing brands to overseas markets  [versus] getting new brands overseas.”

By way of illustration, Doft cited MDC PR shop Allison + Partners which just opened an office in Beijing after opening a London office last year. Those are the initial steps in a planned “global expansion” for the agency, he said.

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