MDC Partners appears to embody a new breed of holding company. Back in 1998, when it snapped up a chunk of Margeotes/Fertitta & Partners, the US ad industry's collective response was pretty much: "MD who?"
Six years later, no-one would dream of questioning MDC's credentials.
It acquired the current creative darling, Crispin Porter & Bogusky, and, more recently, a majority stake in Kirshenbaum Bond & Partners.
With its growing network of the US's top creative shops under its nurturing wing (Cliff Freeman & Partners is rumoured to be next), the Toronto-based, Nasdaq-traded company, which owns 19 small to mid-size marketing outfits, is joining the ranks of holding companies that govern US advertising.
According to the Kirshenbaum Bond partner Richard Kirshenbaum, the timing couldn't have been better. "What was lacking in the marketplace was a creative network," he says. "People are tired of large holding companies managed by numbers. We've heard every horror story in the book and realised that we didn't have to go with the big boys."
He may be right about the timing - to a US buffeted by terrorism, recession and boardroom corruption, Miles Nadal, MDC's chairman and chief executive, and his Canadian League of Extraordinary Gentlemen investors must seem like a blast of fresh air.
Nadal is said to relish the role of insurgent and allows agency chiefs to keep 20 to 49 per cent of their shops. "Success is created by being bold, early and right," he has said.
As one of the few remaining independents, Kirshenbaum Bond was a prime acquisition target. Set up 16 years ago by Kirshenbaum and Jonathan Bond, the agency immediately came to personify Manhattan's brashly confident personality, evidenced in a series of innovative, unpredictable and often brilliant creative works. For Kenneth Cole, the agency created print ads reading "Imelda Marcus bought 2,700 pairs of shoes. She could've at least had the courtesy to buy a pair of ours - Kenneth Cole"; for Bamboo Lingerie, it put stencilled ads on pavements; for Snapple, it dreamed up the hugely popular Snapple lady, Wendy, and put ads on fruit; for Target, it gave away bags of bagels with directions to the store. In the 90s, the agency explained its guerrilla advertising philosophy with a book called Under the Radar: Talking to Today's Cynical Consumer.
But by 2001, the agency's fortunes veered south when it lost its biggest client, Revlon, and revenue dropped to $30 million. Layoffs followed, necessitating a strategy rethink. "Jonathan and I made a conscious decision to re-invent ourselves," Kirshenbaum says. Business bounced back; it has just won the $25 million account for the brokerage company Edward Jones and, in 2003, the agency's wins included the $95 million Andrew Jergens account and the $50 million Brown & Williamson media account, joining the existing clients Citibank, Timex, Target, Meow Mix and Verizon SuperPages. Plus, the agency has opened an outpost in San Francisco, the strategy-led media buying and planning outfit Media Kitchen, the interactive shop Dot-Glu and the public relations and promotions unit Lime - all funded largely from the partners' own pockets.
By 2004, the company claimed billings of more than $525 million and revenue near $50 million. "We didn't need to do a deal; we had the best two years in our history," Kirshenbaum says.
So why MDC? And why now? "We had a vision of our own integrated mini-network in New York and San Francisco and this gives us a different level of confidence," Kirshenbaum says. Money aside, they also had to like the people and share a vision. As for the current economic climate, "we're the kind of agency that does well in bad times", he says.
Kirshenbaum Bond's immediate plan is to lock in staff via incentives and invest in the agency brand, rolling it out further on the west coast.
Specifics include acquiring a Hispanic or multicultural agency, opening offices outside the US or opening Media Kitchen, Lime and Dot-Glu offices outside New York.
Kirshenbaum says that reaction to the deal has been uniformly positive and the agency's phones have been red hot with new-business possibilities: "So many people have said: 'It's nice to see the good guys win.'"
Might UK expansion plans be on the horizon? "We've always been intellectually interested in what's going on over there and we have always been a mecca for Brits who come and work over here," Kirshenbaum says. "I'd love it."
MDC PARTNERS' AGENCIES
AGENCY BASED CLIENTS INCLUDE
Allard Johnson Coms Toronto Wal-Mart, RBC Royal Bank
Ambrose Carr Linton Caroll Toronto Honda, Toshiba
Colle & McVoy Minneapolis Novartis, Nestle Purina
Crispin Porter & Bogusky Miami Ikea, BMW, Mini Cooper
Fletcher Martin Ewing Atlanta Carvel Ice-Cream, Precept Golf
Interfocus Network London Lloyds TSB, Xerox
Kirshenbaum Bond New York Timex, Target, Citibank
Margeotes/Fertitta New York Bacardi, Casio