By Arun Sudhaman
CANNES: Miles Nadal, chairman and CEO of MDC Partners, has revealed that PR and social media agencies top the North American holding group’s list of potential acquisition targets.
Nadal spoke to the Holmes Report in Cannes, where he also said that the company currently possesses $200 million in excess capital. MDC Partners already owns a string of US PR agencies, including Allison & Partners, Sloane & Company, Attention and HL Group.
“I just believe PR is going to become more and more important going forward,” said Nadal. “There will be more effort and more dollars going into PR and it is going to have a much higher profile at the C-Suite and CMO levels.”
“We want to focus on areas where clients are spending more of their marketing dollars,” he explained. “PR, social media, analytics and experiential.”
Nadal also said that that PR industry is poised to become “the next industry that will go through transformational change, where the smaller, insurgent, agile, ideas-driven firm will succeed.”
MDC Partners is best-known for owning high-profile ad agency Crispin Porter & Bogusky.
Nadal pointed out that there are some “extraordinary entrepreneurs” in the PR industry. “People that have building business for five to 15 years that really are attracting exceptional clients. And we want to be their partner. If we can get in on the ground floor – these are people between 35 to 45 years of age, so they’ve got huge futures ahead of them.”
However, Nadal said that geographic expansion beyond North America, where all of MDC’s PR agencies are currently based, is not a priority.
“We’re not looking to put dots on a map. There will be geographic expansion, because we have client needs outside North America and we will look for firms to implement that capability,” he said. “But with 50 per cent of the global marketing business in North America and with the stability of the American currency, it’s quite satisfying to have taken the POV we have.”
Instead, MDC will continue to seek to take majority positions in PR agencies that Nadal described as “entrepreneurial”.
“The pendulum has swung from persuasion through traditional media to influence through trusted sources,” explained Nadal. “In addition, crisis comms is going to become more and more important. There are more crises, there is more government intervention, there’s a sterner regulatory environment.”
“All of that means that PR and strategic comms will grow in its importance and influence in how marketers and brand spend their dollars.”