MDC's second quarter revenue plunges and a housing crisis brews: Friday Wake-Up Call
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MDC Partners’ revenue dropped 28.3 percent in the second quarter, despite $82 million in cost-cutting measures in the first half of the year, including layoffs at Anomaly. Organic sales in the U.S. were down 26.1 percent, and Chairman-CEO Mark Penn predicted organic revenue declines of 10 to 15 percent for the year for the holding company on an earnings call on Thursday.
“Penn declined to comment on the proposed merger of The Stagwell Group and MDC Partners,” writes Ad Age’s Lindsay Rittenhouse. “Announced in June, the merger of the two companies led by Penn would form a $2 billion agency group and is estimated to generate $35 million in cost synergies.” The process is still continuing though, Penn said.
The holding company did generate $20.5 million in new business wins, including work for Budweiser, Skyy Vodka and Welch's Food, and Penn confirmed that Anomaly won Coca-Cola's North American creative business.
It’s bad news when bad news sounds like good news. Nearly 1.2 million people filed for unemployment benefits last week, a number that dwarfs records from most of the past century. But in the context of coronavirus layoffs, when 30 million Americans are unemployed, the latest jobs report is better than it has been since March, with 249,000 fewer claims than two weeks ago.
Meanwhile, the additional $600 weekly jobless benefit from the CARES Act has run out, and Senate Republicans can’t agree on whether to renew it or cut it in half. But without that stipend, many people are facing the prospect of eviction. According to a new survey by Apartment List, 32 percent of Americans had unpaid housing bills at the beginning of August, and 20 percent owed more than $1,000.
Condé Nast is experiencing firsthand the oft-stated but rarely heeded business case for diversity. Yes, inclusive organizations make more money. But companies that don’t prioritize it also suffer financially. Two months after the editor-in-chief of Bon Appétit stepped down after a racist photo resurfaced, three (of the six) people of color who appear in the magazine’s Test Kitchen videos announced they will no longer do so, saying Condé failed to offer them fair compensation after five weeks of negotiations.
One of the hosts, Priya Krishna, called Condé’s efforts “lip service” in a post on Twitter. “I refuse to be part of a system that takes advantage of me, while insisting I should be grateful for scraps,” she posted. She, as well as Sohla El-Waylly and Rick Martinez will still write for the magazine. They had been appearing in remote videos in the early days of the pandemic, as did the rest of the Test Kitchen hosts (plus Priya’s parents in Dallas and Sohla’s doggos).
The YouTube channel hasn’t posted a video in two months, after El-Waylly revealed that she was paid much less than some of her white counterparts under a compensation scheme that tiered presenters into different verticals, even when they often appeared in the same videos for the same amount of time.
Facebook has been stepping up enforcement against false content. On Thursday the platform removed hundreds of fake accounts posing as African Americans claiming to support President Trump and the conspiracy figure QAnon, as well as hundreds more accounts linked to The Epoch Times, the Falun Gong-owned publication that often supports far-right politicians.
It also banned posts from pro-Trump super PAC The Committee to Defend the President, citing posts that didn’t pass muster with independent fact-checkers. (Anyone else get strong Committee to Re-elect the President vibes from that name?)
This, just a day after it temporarily suspended Trump’s campaign account after it posted coronavirus misinformation—a clip of Trump himself claiming that children are “almost immune” from the disease. They are not, as reopened schools in many states demonstrate.
After her divorce, The&Partnership President Agnes Fischer found herself in her mid-30s, single and childless. So she decided to freeze her eggs and get on with her life. “It made me realize this is actually all a little bit fragile and I need to protect it," she says on the latest episode of the Ad Block podcast. “Freezing my eggs gave me that freedom and that option and that flexibility."
She ended up writing a book about it, "Eggs Unscrambled: Making Sense of Egg Freezing, Fertility, and the Truth about Your Reproductive Years” and has been fielding questions about the process ever since. Now, during the pandemic, when meeting new people is potentially dangerous, egg freezing can be a good way to put fertility on pause, just like the rest of the world.
Small wonder: Ad Age’s first remote Small Agency Conference was a hit, and execs from small shops from across the country shared secrets of success, commiserated over the pandemic—and snagged a few awards. “Pitching through Zoom is a giant flattener,” said Lisa Clunie, co-founder and CEO of Joan Creative. The flexibility of small shops is also a boon during uncertain times like this, said Mischief Chief Creative Officer Greg Hahn. And an Ad age poll found that 80 percent of small agencies say they need to work on diversity.
Super Sonic: A drive-in seems like the perfect dine-in experience these days. “I don’t think that there’s any doubt that our physical format absolutely was in line with exactly how we are living during this pandemic time period,” Sonic Drive-In President Claudia San Pedro tells Ad Age’s Jessica Wohl on the latest episode of the Marketer’s Brief podcast. Only 2 percent of its locations have dining rooms, and as the chain expands, that’s not likely to change.
Spinning lockdown into gold: Remember the good old days, when a stationary bike seemed like a bad holiday gift? But during the pandemic, Peloton is having the last laugh. The fitness brand hired two people for its top marketing positions. Carbon’s Dara Treseder becomes senior VP, head of global marketing and communications, and Karina Kogan is promoted to senior VP-head of global product marketing. “In its third quarter, Peloton reported a 66 percent rise in revenue to $524.6 million, noting that its subscriber base grew 94 percent over the year-earlier period,” writes Ad Age’s Adrianne Pasquarelli. “As a result, Peloton said it was pulling back on marketing and re-examining its strategy moving forward as it was able to rely more on word-of-mouth marketing and organic growth.”
That does it for today’s Wake-Up Call. Thanks for reading and we hope you are all staying safe and well. For more industry news and insight, follow us on Twitter: @adage.
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