Mark Penn, CEO of MDC Partners, told attendees at the UBS media conference in New York today that his plan for success boils down to this: “Turn it into a true holding company.”
That would be a company where everyone is working together toward common goals, as opposed to dozens of individual fiefdoms each working autonomously and where top leaders take off after their earn-outs are completed.
Work is well underway.
The new MDC will consist of a series of networks with support from a central corporate entity that can facilitate scalability. Penn cited the company’s announcement last week about its new network, led by creative agency Doner. It’s now united with sibling specialty agencies, such as digital influencer marketing and PR offering Veritas, shopper marketing agency 6Degrees Integrated Communications, brand strategy and digital PR agency KWT Global and several others.
Other new networks will be announced in the future, led by a well-regarded creative agency — Penn cited Anomaly and 72andSunny as examples — and joined with digital specialists.
Another key part of the strategy, Penn said, is “reintegrating media” into the offerings of the firm’s big creative agencies by way of those networks. Earlier this year, it restructured its media operation, combining CRM company Gale and media agency Assembly, which Penn described as the final step to fully integrating media with data.
The firm is also paying strict attention to costs. So far, it cut about $30 million (on a run-rate basis) out of expenses by restructuring compensation packages, travel and entertainment policies and its real-estate portfolio. Another $30 to $40 million in costs is being targeted for elimination.
The company cut its corporate budget by $8 million and expects to save $10 million to $12 million in real-estate costs. In New York, for example, operations will be consolidated from 14 locations to three or four. That includes relocating corporate operations now housed at a tony 5th Avenue address in midtown Manhattan.
Most of the holding companies are consolidating real-estate holdings. Like those firms, MDC is expecting to foster greater collaboration among its operating units, in addition to the cost savings.
“The assets are already there,” said Penn. They were just under-managed.
The company also has plans to broaden its international footprint, once the domestic restructuring is fully in place. Currently, about 80% of the business is in the U.S.