MDC Partners is a mid-sized North American marketing group, housing a broad portfolio of creative and diversified marketing agencies, now mainly headquartered in the US, but with a growing international network. Operating primarily as a venture capital investor, it has accumulated stakes in a collection of separately branded, often single-office agencies, several of which have gradually developed a limited international profile. MDC has become best known for its shareholdings in two highly admired American shops, Crispin Porter & Bogusky and 72andSunny, each of whom also has outposts in Europe. Other subsidiaries include KBS, Anomaly and fashion specialist Laird & Partners. A key addition in 2012 was the purchase of a minority stake in Detroit-based Doner. The main benefit MDC offers its partner agencies is the upfront payout for their shares. Beyond that, businesses are left with operational independence, and that includes the freedom not to work with each other to grow faster or more efficiently. Gradually, though, the group has begun to encourage synergies between its various subsidiaries, not least through the creation of a pooled central media buying agency, now known as Assembly. However, after several years of rapid growth, MDC ran into a succession of problems in the 2010s. An SEC investigation into expenses claims filed by founder Miles Nadal led to his abrupt departure in 2015; soon afterwards, the rapid growth curve began to stall, and in 2018 MDC finally launched a strategic review that may lead to its sale or break-up.
Who are the clients of MDC Partners? See individual agency profiles below for more
Who are the competitors of MDC Partners? See ranking of Leading Global Marketing Groups
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Adbrands Daily Update 15th May 2019: With all results now in, Interpublic was clear champion of 1Q with 6.4% organic growth, followed by Omnicom at 2.5% and Havas at 0.1%. MDC was negative -0.9%, ahead of Dentsu at -1.6%, Publicis at -1.8% and WPP at -2.8%.
Adbrands Daily Update 8th May 2019: Investors were relieved to see signs of stability at hard-pressed MDC Partners, following the introduction of new CEO and effective controlling shareholder Mark Penn. There's no magic bullet just yet: organic decline was 0.9%, actually the second worst ever from MDC, and the group reported a net decline of almost $12m in new business in the quarter. However net losses were slashed from $31m in 1Q 2018 to just $2.5m. The group predicted organic growth for the full year at between zero and 2%. It was hardly the best set of numbers, but investors rewarded the company with a 10% hike in its share price.
Adbrands Daily Update 15th Mar 2019: As rumoured last week, marketing industry veteran Mark Penn was confirmed as the new CEO of MDC Partners. At the same time, his marketing services roll-up Stagwell has acquired a large minority stake in ordinary equity and preference shares for $100m. Assuming full conversion of the preference shares, the stake would be between 25% and 30% of MDC. Said Penn, "I have admired MDC for a long time and believe wholeheartedly in its mission. Its agencies share an impressive entrepreneurial culture and the network as a whole is steeped in untapped potential. I am eager to begin applying not only our investment and resources, but also a plan based on my expertise, towards growth and the creation of significant value for our shareholders." At the same time, MDC finally reported figures for 4Q and full year 2018. The final quarter was lacklustre, with an organic decrease of 0.3% (the same decline as Publicis reported). Full year revenues were $1.48bn with a net loss of $132.1m. The latter included an $80m charge for asset impairment.
Adbrands Daily Update 8th Mar 2019: Marketing industry veteran Mark Penn is in talks to become CEO of MDC Partners. The former advisor to Bill & Hillary Clinton, former CEO of Burson-Marsteller, and former strategic chief of Microsoft now runs his own much smaller marketing services group Stagwell. One suggested scenario might see an equity alliance between the two groups, with Stagwell acquiring a minority stake in MDC; Penn would serve as CEO of both companies. Stagwell's subsidiaries include digital agency Code & Theory, research company Harris Insights and public affairs agency SKDKnickerbocker.
Adbrands Weekly Update 1st Nov 2018: Another grim quarter for struggling MDC Partners, though with some glimmers of improvement. Revenues of $375.8m for 3Q represented organic growth of 1.5%. That was significantly better than last quarter's 1.7% decline but still far behind past performance. The group expects to report around 1.0% for the full year. Bottom line was impacted by a $21m impairment charge against goodwill and other assets, resulting in a net loss of $18.2m for the quarter. Excluding impairment and other most non-cash items, adjusted EBITDA would have come in at $59.8m, compared to $53.8m for the year-ago quarter. Dentsu and Havas/Vivendi are both due to report mid-next month.
Adbrands Weekly Update 27th Sep 2018: Just in case anyone in the industry hadn't already got the message by now, MDC Partners formally confirmed that it is "exploring potential strategic alternatives"; in other words, putting itself up for sale. That follows a grim set of results for 2Q, as well as what will presumably be an even weaker result for the quarter about to end. As announced last week, the group is also seeking a successor to chairman & CEO Scott Kauffman. The problem facing MDC in its search for a buyer is that its several parts are worth considerably more separately than the sum of the whole. Comparatively few acquirors will want to buy the entire group, but key assets like 72andSunny, Anomaly, Crispin Porter & Bogusky and what is now Forsman & Bodenfors would each individually appeal to other groups.
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