After touting the advantages of independence and having built the company from the ground up, TargetCast Chairman-CEO Steven Farella is selling a majority share of his media firm to MDC Partners.
While he's handing off ownership as part of the deal, he's also broadening his portfolio, assuming responsibility for MDC's new media unit, Maxxcom Global Media. Maxxcom will serve as the umbrella for TargetCast and RJ Palmer, as well as MDC's Integrated Media Solutions, The Media Kitchen and Varick Media Management. Audrey Siegel will continue as president at TargetCast.
The deal marks MDC's second media acquisition this year following the purchase of RJ Palmer in January. Mr. Farella described why he chose MDC instead of other suitors and his vision for the future of the holding company's media unit.
Advertising Age: You're one of the few independent media shops left. Why, after resisting an acquisition for so long, was this deal with MDC appealing?
Steven Farella: Everyone else wanted to merge us with something else. We've seen that happen before with great agencies that are now gone, and we didn't want that for our staff or clients. What Miles [Nadal, CEO of MDC], wants to do is make TargetCast even more visible than it is and keep it independent.
Ad Age : How does this change your mission? You've said that clients aren't as well served when they're not at an independent shop, but now you're part of a publicly traded company that answers to shareholders.
Mr. Farella: The first thing you have to remember is that the MDC investment is not complete; it's not 100%. TargetCast will run as an independent like Crispin Porter + Bogusky [editor's note: Crispin remains a standalone agency but is 100% owned by MDC]. We are still our size [of 100 employees] and we're not going to be a $6 billion behemoth. That would be a different business strategy and one that 's not employed by this holding company. This doesn't change our positioning very much at all.
Ad Age : Which other holding companies were you talking to before inking this deal?
Mr. Farella: You know that these discussions are confidential, but you can imagine that if I'm having conversations with some of the other holding companies there are only four that they could be. The others only saw TargetCast as a way to bump up the size of one of their networks. None of those deals made sense. They wouldn't need two CEOs. What would I do?
Ad Age : You recently won the Deutsche Bank creative-technology business, which goes beyond the scope of media buying and planning. MDC already has digital creative muscle. In helping the holding company beef up its media offerings, will you stop chasing business outside the scope of media buying and planning?
Mr. Farella: I would say that regardless of the MDC acquisition, we have always been looking to add additional services. We bought our [creative technology] group when we bought Triumph360 two years ago. We'll continue to grow that .
Ad Age : What's your vision for Maxxcom? Will you consolidate any of the media resources? If so, how?
Mr. Farella: I think right now it's not fair for me to project. I haven't thoroughly spoken with or taken a look at each of the companies. We together are looking at the creation of a media group that keeps agencies independent. We'll take a real close look at the backbone -- research, for example, and technology, tools and training. But we're not going to be involved in the meddling of the four media agencies. They'll remain independent. That's MDC's mantra.