Leaner McMillan on the comeback trail after a ‘humbling’ 2019, founder says

Gord McMillan masked
Gord McMillan masked

A year after cutting most of its workforce and filing for creditor protection, a high-profile Ottawa ad agency is getting back on its feet thanks to a leaner, more focused business model, its founder says.

Once the city’s largest advertising agency, McMillan laid off nearly 40 employees ​– about three-quarters of its staff ​– on Nov. 14, 2019, a day before giving notice of intent to file a proposal to its creditors.

Now, founder and CEO Gord McMillan says the company that bears his name is on the rebound. 

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The company says it has settled with its creditors and started hiring again, bringing back several workers who were laid off last fall and boosting its headcount from nine employees at the beginning of the year to 22 in Ottawa today as well as a number of off-shore developers.

“I hear people say, ‘Oh, you’re still in business? I thought you guys went bankrupt.'”

“I hear people say, ‘Oh, you’re still in business? I thought you guys went bankrupt,’” McMillan says. “We really thought this would be the year that we would just try to survive and set that base. It’s been encouraging.”

The longtime ad exec says today’s pared-down firm is more selective when it comes to chasing new business, focusing on the bids it feels it has the best chance to win rather than launching expensive campaigns against global competitors for big-name clients as it did in the past. 

“It means that we’ve spent relatively little time on speculative ventures,” McMillan says. “The ones that we have gone after, we’ve really gone after.”

The strategy seems to have paid off. The company says it’s won nearly 90 per cent of the contracts it’s bid on in 2020 and has boosted its revenue per employee by 50 per cent over last year. 

Firm’s ‘fundamentals are good’

The firm’s list of new clients include local animation studio Mercury Filmworks, the Canadian Pharmacists Association, California-based health-tech firm HST Pathways and Israeli cybersecurity enterprise Opora. McMillan says revenues are up 60 per cent in the second half of 2020 compared with the first six months of the year. 

“All of the fundamentals are good right now,” he says. “It’s just a smaller enterprise.”

In addition, McMillan says the agency started transitioning to a virtual business model even before the pandemic hit after vacating its former office on Sussex Drive. That’s translated into lower overhead costs, and he says the company has been able to pass some of those savings on to clients.

“We had to drastically reassess how we delivered our services prior to COVID-19,” McMillan explains. “I think it’s a more effective model for us right now.”

At its peak, the agency employed nearly 60 people and boasted a client roster that included well-known U.S. and European enterprises such as Commvault and Schneider Electric.

Not dwelling on the past

But McMillan’s revenues plummeted 40 per cent in a tumultuous 2019 that saw it lose several major accounts. In January, the firm’s creditors ​– including dozens of former employees who were dismissed without receiving severance ​pay – agreed to a settlement that paid them 50 cents on the dollar.

While acknowledging the agency’s financial woes might have cost it a few potential clients this year, McMillan says he’s trying not to dwell on the past.

Even if the firm never returns to its former heights, he says he sees a much brighter future for the company today than he did 12 months ago.

“Do I have ambition to grow it further? Not specifically,” he says. “We’re just really encouraged with how things are going. Last year was a humbling year. Within that context, we don’t assume that just because we’ve had a good recovery year that it’s going to continue in 2021. We have to earn it.”

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