Unlike many publicly traded companies, Toronto-based MDC Partners doesn’t plan on a quarterly basis, said company CEO Miles Nadal. Instead, MDC runs its operations based on five-year planning cycles. And over the next five to seven years, Nadal said, the plan calls for MDC to double in size, both in revenue and profits.
If those goals are reached, that would make MDC a roughly $2 billion business by revenue with pre-tax earnings of close to $200 million.
Speaking at the UBS Media & Communications conference in New York on Wednesday, Nadal said the company would get there through a combination of organic growth and acquisitions, with roughly equal contributions from both.
The company’s organic revenue growth this year averaged around 21% through the first three quarters -- impressive growth that Nadal acknowledged was not sustainable. But the company is making a big bet that clients will increasingly embrace an agency model that is focused on agility and technology, coupled with an ability to drive sales and traffic for clients with measurable ROI.
Nadal added that while the majority of the company’s business is in the U.S. now (about 90%) the firm would continue to expand overseas, based solely on the “broadening geographic needs of clients.” While there will be some physical expansion -- next year the company will establish offices in Brazil for several of its agencies -- technology enables it to service client needs in many countries from just a few locations.
Nadal cited Crispin Porter + Bogusky, as an example. The shop’s eight offices, he said, “are sufficient to service any client anywhere. ... You don’t need to have offices all over the place,” as agency networks did 20 or 30 years ago, he said.
Plus, he feels more confident about 2012 than he did just six weeks ago, when the Euro Zone crisis was peaking, unemployment figures hadn’t yet shown a slight uptick, investors were somewhat panicky and there was a “pause” by some marketers on project spending as they re-assessed consumer demand.
“The business is doing well, but TV tells us otherwise.” He described current business activity as “solvent,” if not showing signs of huge growth. Consumer spending “is not growing rapidly,” he said, although projections for GDP growth next year are “reasonable” if not extraordinary. Domestic growth estimates, he said, range from 2.5% to 3.5% while global growth estimates are in the 3.5% to 4.5% range.