Media Buying Briefing: How Bob Kantor used his agency life to build a different holdco model at Dawn

“Back then they didn’t have chat rooms, so I [posted on] the message board in the cafeteria, and I met a woman who was a writer in an agency who would convince a couple clients to come with her and needed a business partner,” said Cantor, a lifelong agency exec. “And I said, ‘Hey, I could do that.’ Next thing you know, we formed an agency and by the end of the summer, we had won four or five accounts.”

It’s been a long and winding road in agency land ever since (with one stint from 2005 to 2009 as founder and CEO of Hanger Network, which placed ads on dry cleaners’ hangers in affluent communities), as Kantor built his agency chops and client connections helming Publicis USA in the 1990s, Lowe at the turn of the millennium and then a decade at holding company MDC Partners until 2019, working closely with Miles Nadal, then its CEO.

“I met Miles who said, ‘Everyone tells me you’re a builder. Why don’t you come help me to build MDC?’” Kantor said. “So I was the first non-lawyer or accountant to join the group.” Because of Nadal’s lavish spending, which led to an SEC investigation, MDC ultimately lost much of its mojo and eventually became the foundation of what is Stagwell today.

But Kantor took some of what he learned from the MDC approach — mainly to incentivize agencies within the holding company by not buying them outright but giving them a stake in success and supporting them with business development centrally, while also taking a percentage of their new business — to form Dawn and build it into the network of agencies it is today.

“He’s the ultimate agency spotter,” said Kamran Asghar, CEO of Crossmedia, which was the founding agency behind Dawn’s creation in 2019. “He can find the great ones before they get too big. But he’s also got great relationships with clients. It’s like having an internal search consultant.”

He’s also happy, after being at MDC during the SEC investigations of Nadal, to now be running a private company.

Kantor explained to Digiday the approach and why he believes he has a better formula for winning in the race for success among agency holding companies.

The following interview has been edited for clarity and space.

What do you want to do differently from other holding companies?

The more I looked at the marketplace, I realized that the holding companies were really in a tough place, because the industry had changed so much in the last five years. I always think of them as portfolio managers. But fast forward, the majority of them are 20-30 years old. They’ve got to play the cards that they’re now dealt. A lot of them are generalist agencies. There was a time where generalist agencies were a great place to be when I started my career. But I don’t think today any client wants an agency that’s pretty good at a lot of things. They want to know who’s world class of this and who’s best at that.

So one of the first tenets for Dawn was specialization. It doesn’t mean that some of our agencies don’t have a couple of core competencies, but the world has gotten too specialized. You no longer can be great at too many things. We had an advantage because we could bring in agencies that were built for today’s marketplace, that were world class in their space.

Where does media fit in your roster of agencies?

I think we are the only group where media is our centerpiece, for three reasons. One is, media is where clients spend the majority of their money. Yet it’s never given the respect and appreciation for where 80% of your budget goes, so it should be front and center. Two, media owns all the data — and we’re at a place today where data is king and required in order to succeed. And I think the data transition in the last several years has been to measurement. These measurement capabilities — where the rest of the industry hasn’t had access to it or hasn’t chosen to access it — are why the big holding companies who bought measurement companies struggle to integrate them into their agencies. Our agencies join the group because they want to play to their strengths as specialists, and they want to have access to data and measurement and analytics that allows them to be their best. And then the third piece is, no matter what business you’re in, you want to sit across from an owner whose success is predicated on your success. And I saw many times, great agencies who didn’t have succession planning after the founders who sold. All Dawn agencies are run by and majority owned by the founders who built the agency who have plenty of runway, and want an accelerator to continue to grow their business.

Your financial model isn’t usually one of acquisition but rather of taking a stake then incentivizing the agency to grow. How does it work, and is it working?

Our agencies join the group because they want to play to their strengths and work alongside other super talented agencies. Their byproduct is collaboration in an industry that sucks at collaboration. The delta between sucking and pretty good is enormous.

No agency is going to introduce another agency to their client unless it’s a good reflection on them. The $20,000 [commission], or whatever number is based on some formula, is never going to be meaningful enough if it’s not a great reflection from that agency. I believe that forcing collaboration through a commission structure creates bad behavior. Our agencies do it because they want to, because it’s good for business, it’s good for the clients and it’s a great reflection on the agency.

What about when an agency isn’t doing well — how do you handle it?

The industry is littered with merging two sick agencies. And guess what happens when you merge sick and sick? You typically get sicker.  There’s very few instances where agencies who weren’t doing well were merged and solved the problem. But that’s what the holding companies do, because they don’t really have a lot of other options.

If I’m not a majority owner, I don’t really have a lot of downside, and my agencies have every reason to try and want to turn the business around. The centralized capability that we provide to our agencies, in addition to the analytics and measurement, is business development, and it’s where I spend a majority of my time. We’re able to feed the agencies opportunities that are right for them. Finding a good agency is difficult — finding the right model for the agency or agencies to exist in is where the magic happens.

Color by numbers

Precise TV offered an insightful look at teen TV preferences, ad recall and purchase intent among 1,000 families in the U.S., consisting of parents and teens (aged 13 to 17). One takeaway: Netflix and YouTube commercials are dominating for them — when compared across broadcast, streaming services, gaming and social media. It’s no wonder the dollars are going into YouTube to target American teens, noted Christian Dankl, co-founder of Precise TV. — Antoinette Siu

More stats:

• 27% of teens prefer ads on YouTube compared with 9% who prefer ads on streaming services, the latter of which are increasing in ad loads yet perceived to be low-quality in their eyes.
• Only 3% of teens’ purchase requests come from streaming ads.
• Most streamers are struggling to attract teens. Asked where they watch their favorite shows, teens said Netflix (27%) and YouTube (16%) are their go-to destinations. Hulu, Amazon Prime Video, Paramount+ and Disney+ all came in at 10% or below.
• Social media marketing helps build awareness, though: 38% of teens said they learn about new movies though YouTube, followed by TikTok (28%).

Takeoff & landing

• GroupM’s EssenceMediacom promoted Richard Hartell to be its next U.S. CEO, replacing Jill Kelly. Hartell most recently was global chief client officer for the agency’s Google account.
• In a mini-wave of AI-related moves across the agency spectrum, Accenture Song hired former IPG executive Arun Kumar as its new global head of data and AI; and Horizon Media named the founder of The Convergence Collective, Tim Rich, its head of AI solutions, although he’s been onboard there since May.
• Out-of-home SSP Place Exchange partnered with ad-tech firm Veridooh, which will provide independent verification services for any OOH buyers or brands that use the exchange.

Direct quote

“We set the viewability standard as a minimum gate, not as an objective. A lot of people made it an objective. I fear that might happen with attention, where they just optimize for attention, and then you just have non skippable, huge ads that never go away. And you annoy the consumer, and you don’t get outcomes. Just be careful to take that data point as a consideration. … There are no magic bullets in this [form of] measurement.”

— Ron Pinelli, svp of digital research and standards and associate director, Media Rating Council, talking about progress on accrediting attention metrics.

Speed reading

• Ready for this week’s trial of the century — the DOJ’s case against Google? Digiday will be covering it as thoroughly as we can, starting with Seb Joseph offering a rundown of the case, Ronan Shields looking at breakup scenarios should Google lose and Marty Swant providing an explainer of the code names behind several projects in the DOJ’s case.
• I broke down which agencies won what — and which lost out — with two major media accounts that selected their media agency partners last week, Amazon and eBay.
• Sam Bradley examined the cases for and against investing in CTV during this tumultuous election cycle in the U.S.