MDC Building New Health Care Agency From Scratch

Move Is a Departure for a Holding Company That Typically Buys Agencies

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Jennifer Deutsch
Jennifer Deutsch

MDC Partners is building a health care agency from the ground up in an effort to help both health and non-health brands find new revenue streams in a changing healthcare system.

The move to build instead of buying an existing shop, a departure from MDC's tendency to grow through acquisition, is the brainchild of three existing MDC agency executives who will lead the agency, dubbed Antidote 360: Doner's Jennifer Deutsch, Yamamoto's Kathy McCuskey and Kwittken's Aaron Kwittken. Each exec will retain his or her existing agency leadership duties while overseeing the new shop and its standalone P&L. Antidote, which can borrow resources from MDC siblings, is starting off with two dedicated employees and four clients. It does not yet have dedicated office space.

The goal, according to the leaders, is to support new and existing MDC clients across disciplines such as advertising, PR and digital marketing, as well as seeking new health-oriented revenue streams for both health and non-health brands. Staffers called "client navigators" will hire or pluck talent from existing shops as needs grow.

The effort was inspired by a rapidly evolving health care system, including growing marketing budgets from both wellness and pharma brands, as well as general-market brands' move to align themselves with healthcare, with wearables and fitness trackers, for example, from companies such as Apple and Nike.

"The dramatic pace of change and significant pressures affecting the health care industry necessitate a transformational and entrepreneurial approach to driving the most effective marketing communications solutions," said Miles Nadal, chairman and CEO of MDC, in a statement.

"The fuel for this was the Affordable Care Act," Ms. Deutsch told Ad Age. "It is providing tremendous opportunities for organizations who haven't played in the health and wellness space to get into the space."

Aaron Kwittken
Aaron Kwittken

In one suggestive instance, the Antidote team proposed to managers at Skinny Pasta, whose owners already work with an MDC advertising shop, that the brand target not just health-oriented consumers but also people with chronic diseases such as diabetes. When Skinny Pasta agreed, Antidote asked a San Francisco-based company that delivers meals to time-pressed consumers' homes to extend its business to encompass a health component and arranged a partnership between the delivery company and nurses who draw up health plans for discharged hospital patients. The delivery company began bringing Skinny Pasta to the discharged patients.

That type of partnership could help hospitals keep discharged patients healthy and costs low because ACA guidelines incentivize health practitioners to encourage good outcomes, said Ms. Deutsch. "It helps the hospital reduce its readmission rate, it's helping the client get into a new marketplace, and it's helping consumers who are generally pressed for time and who can't cook properly," she said.

Beyond the potential for added revenue, a major selling point is cost-savings for a client that would typically tap into a few different specialist agencies, said Mr. Kwittken.

"The savings to the client is somewhere between 12-20% for the integrated model," he said. "Instead of three agencies on retainer, we're building the team and using the team as needed so there's one bill to the client. The promise of an integrated offer for enlightened companies is coming to fruition thanks to social and digital and the blurring of the lines."

Among its four new clients are a hospital system and medical device company.

It's also a new type of growth strategy for MDC, which typically acquires agencies when it sees an opportunity for growth, as opposed to building them from scratch. "This is a unique situation built on a collaborative model that has grown within MDC," said an MDC spokeswoman. "Everything has been more buy than build in the past, but in the past few years there has also been a lot of collaboration across the network within agencies and among agencies."

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