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MDC Forecasts 7% to 9% Growth in Organic Revenue

By Judann Pollack, Ad Age 

While both Omnicom Group and Interpublic Group of Cos. in recent earnings reports predicted they would be in positive organic growth territory for the year, MDC Partners did them one better today by forecasting a number: The holding company says it should come in with around 7% to 9% organic growth revenue for the year.

That could take some work, since its organic revenue fell 13.7% for the quarter and 13.9% for the full year 2020, attributed by the company to “reduced spending by clients due to COVID-19.” MDC also reported its revenue of $328.2 million in the fourth quarter was down 14.1%; for the year it dropped 15.3% to $1.20 billion.

Chairman and CEO Mark Penn, however, cited silver linings in MDC’s 15.8% sequential revenue growth for the third quarter, and the company’s gain of $90 million in net new business. “The business continued to see rebound from pandemic lows, with strong sequential improvement driven by double-digit growth in most client sectors, led by consumer products, technology and healthcare,” he said.

The new business wins cited on a call with analysts were Jimmy John’s, Hotels.com, Fetch Rewards and Netflix at Anomaly; Indeed at 72andSunny; Yeti and Polestar at YML; Skyy Vodka and Lifespace at Mono; Miracle-Ear at Doner; Behr Paint and Niantic at Allison & Partners, Tretorn and Visit Sweden at F&B.

The new business wins cited on a call with analysts were Jimmy John’s, Hotels.com, Fetch Rewards and Netflix at Anomaly; Indeed at 72andSunny; Yeti and Polestar at YML; Skyy Vodka and Lifespace at Mono; Miracle-Ear at Doner; Behr Paint and Niantic at Allison & Partners, Tretorn and Visit Sweden at F&B.

On a conference call with analysts, Penn said since the first quarter of 2020 was one of MDC’s strongest in history, the company will be up against a tough comparison.

Penn is particularly bullish on MDC’s pending merger with Stagwell Group, which he said is the centerpiece of the company’s plan to become a top 10 marketing services company with state-of-the-art capabilities in digital and data. The deal should close in the first half.  MDC also touted its new global affiliate network which is aimed at giving it presence in countries where it has lost out in pitches to networks with local offices, and its appointment of a chief media officer, Deirdre McGlashan, to give it more heft in “global media pitch opportunities and solutions that drive superior business results,” said Penn.

Penn also touted the company’s “outsize” presence in the Super Bowl, noting that MDC shops accounted for seven national spots, or 10% of total load, despite the company controlling only 1% of the ad market.

Asked by an analyst whether CMOs are ready to open up their purse strings, Penn said, “I think CMOs are in a get-back-to-business tone. They have been in hibernation for a period of time but we are seeing a relative flood of RFPs coming up for bid.” He added, however, that it’s a “bit uncertain” whether a full comeback will hit in summer or fall.

(Source: Ad Age)