MDC Partners CEO Scott Kauffman: Consultancies are ‘not something I lose sleep over’ (MDCA)

scott kauffmanMDC Partners CEO Scott KauffmanMDC Partners

Scott Kauffman, the CEO of MDC Partners, the holding company which owns creative agencies 72&Sunny, Anomaly, and CP+B, told Business Insider the encroachment of consulting companies in the advertising industry isn't something that worries him.

Kauffman said he doesn't believe consulting companies can integrate creativity into their business and believes the culture of creative agencies is what allows them to consistently deliver creative work:

"The thought that that could happen inside of a traditional management consulting company or technology company that has built a nice marketing cloud solution, is just not something I lose sleep over and we don't typically lose accounts over [it] or new business pitches either," he said.

Consulting companies and IT firms made a lot of noise in 2016 by acquiring agencies and adding creative marketing services to their offering: Accenture Interactive acquired British creative shop Karmarama, Deloitte bought up creative agency Heat, IBM acquired two smaller creative agencies in Germany and another in the United States, and Capgemini bought the design agency Fahrenheit 212.

Kauffman explained that MDC Partners is structured in a way that allows each creative agency to operate independently, contrary to the model that other major holding companies are adopting to bring everything under one roof:

"This really speaks to how creativity happens, we haven't necessarily cornered the market on it but we've certainly made a very valuable market in it recently. I'd put our agencies alongside of any other agencies, in terms of creativity, and I think we win hands down," he said.

The CEO of the group explained the advertising industry's shift to consulting wasn't something he paid much attention to. "Everyone is talking about it, we've been doing it for a long time. Our most effective relationships, and enlightened marketers are realizing that more and more, are when we have that deep strategic relationship directly with the key decision makers within a brand," he said.

The holding's agencies don't have dedicated consulting divisions, instead Kauffman wants them to focus on their creative work, something he thinks management consulting companies can't do: "I welcome those other entities in and I'm happy to partner with them when they figure out they can't do it themselves."

The comments follow similar ones from Interpublic Group CEO Michael Roth, who said he would be open to partnering with management consultants in the future.

In November 2016 the company was rumored to be exploring a sale. It sold a 15% stake to Goldman Sachs for $95 million in February 2017 in an effort to strengthen its balance sheet.

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