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Another Indie Shop Sells Out

By: Dwayne W. Waite Jr.

The agencies in AdLand have tough decisions to make when things get difficult. When a shop loses a client, that usually translates to a layoff of employees, a decrease in revenue, and a handful of unfavorable write-ups. When a high-profile employee leaves willingly, then the shop faces a culture shift, with the potential loss of clients, team members, and everything already discussed.

But amonst those things, a shop can still keep its independence. At least, that used to be the case. Enter: holding companies.

Yes, the OmniComs, IPGs, Publicis, Havas, and now MDC Partners have changed the way the agency world mitigates its losses. It is a way that large indy shops can look for a way out when things on the horizon look tough. Holding companies help shops by spreading out the costs, providing a wider access to resources, and adds stability to a considerably unstable environment.

Which shop made the dive in? Doner, the third largest independent agency behind the Richards Group and W +K. The New York Times reports that MDC Partners, a holding company that owns all or part of over 50 agencies, just bought a minority stake in Doner, which is estimated to be between $15-20 million, with an option to get a majority stake and additional payments contingent on future performance.

The execs of Doner obviously do not see this as a bad thing. One of them even said that their partnership with MDC Partners will build them build on the creativity and DNA of Doner, and building upon it. And they could be right.

This event happened right after Madison Ave blew up with the news that Havas, the French holding group, bought a majority stake of crowdsourcing gurus Victors & Spoils.

Can you blame independent shops for accepting bids from holding companies? The stake, however large or small it is, will give them a leg up on the competition against other indy shops. The playing field is tipped to the advantage of holding companies and the agencies who are a part of them, so why not join the winning team?

The rub comes that when AdLand begins complaining about the lack of creativity and talent, we all refuse to talk about the giants in the room. And when those giants go to agencies fighting to compete and offers them a way to make business easier, many leap at the chance.

Let's not get ahead of ourselves: we have yet to prove that holding companies have made the agency world harder for independent shops to compete, and are systematically sucking the creative and "risky" thinking out of the air as we know it, but we haven't found data against the thoughts either.

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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