Holding company MDC Partners has bought a minority stake – with the option to upgrade to a majority interest at its discretion – in longtime independent Doner, The New York Times first reported yesterday. The investment follows a rough patch for the Michigan-based agency, which came under new ownership in late 2009 after being embroiled in a public legal battle over the handling of its pension funds, and then lost flagship client Mazda the following year. Adweek caught up with David DeMuth, Doner's co-CEO, and Rob Strasberg, co-CEO/chief creative officer, to discuss the news, their efforts to turn the agency around, and their work with clients like Chrysler.
DD: Well look, I don't think it's a question of selling. It's more about partnering. We felt that we over the last couple of years here at Doner have turned a corner and we're building momentum. We were looking for ways to accelerate that momentum. And we feel like this partnership with MDC is going to allow us to do that.
DD: The opportunity came. The time felt like it was right, we feel like we're ready to take the agency to another level. The opportunity to have a supportive partner to help us do that was very appealing.
What does MDC provide that you can’t get on your own?
DD: Well, I think a number of things. Capital. [Laughs]. Access to resources, not that we couldn't get on our own, but I think they can deliver rather well in the areas of talent recruitment, business development, and then some back-end services that we think will help us generate some efficiencies. I also think it's very good for the agency's profile. We like the company that we're now in, with agencies like Crispin [Porter + Bogusky] and 72andSunny, and some of the other world class partners that they have. We think it will help raise our profile.
RS: Speaking to that, I've been here four years now. We've been on a journey to get better on every level, and our creative product being at the highest order there. I really think that we've evolved the agency to a great place, the partnership with MDC is just further proof of what we're accomplishing here creatively, and the belief of what we can accomplish in the future.
DD: Above all, this demonstrates a belief in the momentum that we've generated here at Doner. If you talk to Miles, he will always say an agency's reputation is either three years behind or three years ahead of its work. And I think he felt like our reputation was three years behind the work that we're doing today. So there's a lot of runway ahead of the agency and there's a lot of potential for growth. We're doing some very exciting things here, we're integrating really well with digital and other media, we're working with some world class clients we're having a great impact on their business. Our work is getting better every day. But we haven't gotten a lot of credit for that — and part of that is because we haven't been out, you know, pursuing the credit as a full time job because we've been here trying to make a difference. So I think MDC saw a lot of opportunity with Doner.
Rob… How did your experience at Crispin under MDC influence your decision to sell a stake to them?
RS: Well, it took away a lot of the fear. MDC was an incredible creative partner the years I was at Crispin. They supported the risk-taking that was done there. It gave me the belief that they'll support the risk taking that we want to take here. And give us the support we need to reach new heights creatively. When it came to working at Crispin, they were as big a cheerleader as anybody with the stuff we were doing, and they've gotten a look at the things we're doing here and have been blown away.
What changes have you made in the creative department at Doner since buying the agency in 2009?
RS: It's really been an evolution that began four years ago, and maybe even a little bit before I got here to sort of hyper-infuse the creativity into the agency. The amazing thing I found out about Doner when I first looked into the agency when David came to talk to me about it was how incredibly integrated the agency was. You know, no silos. It was all about creating work. What we've been able to do is, number one start by attracting talent from around the world. We have people here from Amsterdam, from L.A., from New York, San Francisco, who have helped bring in an integrated approach to everything we do, which has evolved a lot over the years as we got better and moved from a television-centric agency to a fully integrated offering, as good as anything I've ever been a part of.
One of the things we did is move the interactive/digital group, which when I first got here functioned sort of as a piece to the creative department that enhanced the ideas that were happening. As we evolved… we then disbanded that and embedded it directly into the creative department. Instead of having groups, if you will, we created ecosystems. So we have three “ecos” that each function like it's own small creative agency within an agency, and all creatives working on all media to find the best idea and then execute [where appropriate]. And then our production facilities — as a fully integrated production support house, whether it's building an app, creating a site, creating a television commercial, and making sure that everything is being made and distributed at the same time, we have the production facilities to get it done across the board.
RS: Well, each one handles a certain amount of clients and handles them on every level. So if there's a digital need, a television need, a big idea need, a radio need, a promotional need, a retail need, whatever… It all comes from the same eco, all the same brains are working on it, there's nothing that's divided up with the people that are working on any account.
Have you seen a significant shift in terms of revenue percentages towards digital?
RS: David can talk to the revenue… Creative wise, our digital interactive offering, we've been growing whatever, X-fold, we're doing more and more of it all the time, it's actually creating a lot of innovation into what we're creating. The number breakdown, I don't about that. I worry about doing great ideas and executing appropriately.
DD: Most of our assignments with clients are sort of integrated assignments, where we're delivering creativity across any number of platforms. If I had to sort of back into what percentage of the revenue or the workload on those engagements is digital, I'd say it's probably in the range of 20 to 25 percent.
How's the rest split across other media?
DD: The predominant one would still be TV, because of the media expense and the production expense for it. There's other stuff in there too, there's radio, there's print there's outdoor, there's promotions, shopper marketing type stuff, collateral design, we're really delivering for clients across all those mediums.
RS: And a lot of social media activations.
DD: We're managing the social media presence for probably seven or eight of our clients now.
Any in particular worth noting? What new clients have you taken on recently?
DD: Over the last year or two we've won clients like Perkins Restaurants, Choice Hotels, Auto Zone. Our engagement with Chrysler is a really important one for is, and was something that's pretty monumental for the agency. It's an engagement that grows every day and deepens every day. As part of that we're now working on projects for the Fiat brand. I don't know if you saw the spot for the Fiat 500 Abarth with Charlie Sheen. That was ours. The spot with J Lo was ours. We're doing some really wonderful print advertising for them right now.
Are you still handling the dealer and retail work for Chrysler?
Are you a lead on Fiat or is that project based?
DD: It's a little bit project based. I would say we're the project-based lead. They do work with other agencies as well, but we're happy to be a part of Team Chrysler …
RS: And Team Fiat.
When you bought the agency in 2009, were you aware of the extent of the problems you would inherit? Anything you would do differently in hindsight?
DD: We were aware of them. The extent of them we weren't necessarily aware of. But we're really proud of the way we managed and led the place through that. It really…getting through those issues really helped galvanize the team here.
RS: Going through the loss of Mazda was a very painful time for the agency, but it also I think strengthened our resolve and in the end proved out the creative model that David and I had been building so that when the opportunities with Chrysler appeared, we were able to pounce.