Independent media agency Mediasmith has a new owner – but clients might not notice.
The San Francisco-based agency, launched in 1978 by David Smith and Karen McFee, has sold to four members of its management team. COO John Cate, SVP and media director Greg Pomaro, VP of insights and technology Marcus Pratt and finance director Ryan Buensuceso will share equal ownership. Terms of the deal were not disclosed.
As part of the ownership change, Cate will replace Smith as CEO and Pomaro will become executive VP.
Smith will become chairman and continue to advise the agency. McFee will retire but remain as secretary on Mediasmith’s board.
“We have a great management team who’s basically run the company, product and clients for a few years,” Smith told AdExchanger. “It makes more sense to put it in their hands than somebody external that may not treat the employees, clients and company the same way.”
Mediasmith brought on Cate eight years ago with the intention of having him succeed Smith as CEO. “He does a fine job. He makes us money. He works well with the staff,” Smith said.
While Cate will continue pushing Mediasmith’s core tenets – independence, transparency and heavy use of data and technology – he wants to grow client education, consulting and systems integration as clients execute buys in-house.
“Day-to-day operation just isn’t where agencies have a great specialization at this point,” he said.
Under Cate, Mediasmith will invest more in comms planning, search and social capabilities and explore a distributed hiring model to attract talent from outside the Bay Area. The company will focus also on senior-level expertise in business development and client management.
“We’re not part of a holding company,” Cate said. “We have no required companies to work with. We have tool sets and clients of choice. In that way, we can be very desirable for those who want to work in an independent, entrepreneurial environment.”
Mediasmith will continue to advise ad tech companies, something Smith did over the years with big names including DoubleClick, Quantcast and DoubleVerify. That work gives the agency an early look at new platforms and features.
But given that the new management has already been running the agency for a while, not much will change for clients day to day – something Kevin Mayer, chief marketing officer of BJ’s Restaurants and a Mediasmith client, is happy about.
“We’ve been very happy with the management team,” he said. “Their independence is a huge advantage. I came from the agency side, and there are times were the client’s best interest isn’t always the first priority. At Mediasmith, our business is always first and foremost.”
One area the agency will have to step up is its own marketing, especially as it looks to expand into new cities. Mediasmith has relied heavily on Smith, a visible industry figure for many years, to get the word out about its services.
“We want to take a more systematic approach [to marketing],” Cate said. “[We need] a strategy that keeps the Mediasmith brand strong on a global basis.”
At the end of the day, Mediasmith’s sale to management signals a recommitment to the independent media agency model that many are questioning today.
“We see media agencies starting to roll up or even stop operations,” Cate said. “This deconstruction is going to create an opportunity for agencies to do what they started out doing: provide strategy, outside views, ideas and insights in an unbiased way to clients.”