MDC CEO Upbeat About Ad Economy

Miles-Nadal

Despite the uncertainty surrounding the economy, and reports from research firms that year-to-year ad expenditure growth dropped in the second quarter versus the first three months of the year, Miles Nadal, CEO of ad holding company MDC Partners, says it's a "Wall Street fallacy that media spending is declining."

That said, Nadal acknowledged that "there is an element of apprehension" among clients as to how the current economic turmoil both in the U.S. and abroad will play out. But so far, Nadal insisted, "there has been no impact on overall spending."

That could change, of course, if the economy takes a dramatic fall --but for now, Nadal said, "I have no concern about 2011 and the early indications are that 2012 will be business as usual."

Nadal was the third CEO of an agency holding company (WPP's Sir Martin Sorrell and Aegis Groups' Jerry Buhlmann preceded him) to tell attendees at the Goldman Sachs Communacopia conference in New York this week that clients were sticking to their 2011 spending budgets amid the mixed economic signals.

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"Uncertainty creates opportunity," said Nadal. "We're telling clients now is your time," he said, noting that "people see an opportunity to drive market share," if competitors cut back on advertising and marketing expenditures.

Nadal said that MDC has achieved 24% organic growth in the first six months of the year, which he noted was well beyond the expected 10%. Over half of the company's revenues now come from digital and social media, he said.

MDC has also made a big push into analytics. "We are faced with a level of accountability [from clients] that's never been seen before."

The company's biggest highlight of the year was winning the $160 million BMW account via its New York-based agency Kirshenbaum Bond Senecal + Partners. The company won everything up for grabs, including lead agency for the overall brand, customer relationship marketing, reputation management, digital and traditional advertising, dealer advertising and multicultural.

The advantage of having all the business, Nadal said, is that the company will be better able to plan and execute an integrated strategy. "That sounds obvious, but it's not so simple. It's a better opportunity to drive tangible performance."

MDC also recently purchased 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.

"We're not trying to be the biggest company out there," Nadal said. The goal: combination of organic and acquisition growth that will yield 20% revenue increases annually.

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