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Ad Spending Seeing 'Double-Digit' Growth: Agency CEO

Friday, 30 Jul 2010 | 2:53 PM ET

The only way to grow in a difficult economic environment is "through marketing innovation," Miles Nadal, chairman and CEO of the eighth largest ad agency in the world MDC Partners, told CNBC today.

That innovation is starting to pay off for both advertisers [companies and brands] and their agencies.

"We're seeing very big pickups in ad spending," with "significant double-digit increases" because clients have taken a point of view that "if we invest now in a stable environment—with moderate growth as the expectation—then we are going to pick up share," the CEO of MDC Partners said, adding, clients are "lean, mean and efficient."

Take MDC's clients: Domino's Pizzareported a 52 percent increase in profits and Microsoft saw a 22 percent increase in profits.

With $1.8 trillion of excess cash on corporate balance sheets here in America, "they have to find places to put them," and there is a "fundamental need" for companies to spend on marketing—in a very targeted way, Nadal said.

Behind the Real "Mad Men"
Insight on the state of ad spending, with Miless Nadal, MDC Partners and the Strategy Session team.

However, the "pendulum for how you build brands has changed" from traditional media—newspaper, radio and television—to trusted [on-line] sources, such as YouTube and Facebook, he said.

The reason for this change? The consumer is now "empowered to control the dialogue" between consumer and the brand and back to the consumer, Nadal said.

For instance, Old Spice launched a campaignrecently with amazing results: 106,000 active participants, 720,000 participants on Facebook, and a 106 percent increase in sales.

"We are no longer in the advertising and marketing businesses, we are in the investment management business. Clients spend $600 billion a year globally on marketing investment and they are looking for tangible, measurable impact," Nadal concluded.

"The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.

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