Stagwell Doubles New Business Team as Holdco Competition Heats Up, Says CEO Mark Penn

Stagwell CEO Mark Penn said the agency holding company will double its new business team after posting a 45% year-over-year increase in new business revenue, reaching $171 million in Q2, and winning accounts including IBM from WPP's Ogilvy, Hershey's, Allwyn, and Haier. Penn attributed the growth to Stagwell's technology-first approach and its ability to help brands adapt to AI, positioning the company as a scaled alternative to larger holding companies.

As the largest agency holding companies enact sweeping layoffs and consolidate, Stagwell CEO Mark Penn sees new opportunity. “We’ve achieved something that nobody really has achieved in 50 or 100 years,” Penn told ADWEEK, “which is to form a real competitor company at scale.” Stagwell posted 6% net revenue growth in Q2, which Penn attributed to Stagwell’s ability to help brand marketing departments adapt to AI. This quarter, Stagwell won IBM’s account from WPP’s Ogilvy—which had served as the creative agency of record for 32 years—along with Hershey’s, Allwyn, and appliance maker Haier. During the investor call, Penn described a record-setting second quarter that saw $171 million in new business, a 45% year-over-year increase. Penn plans to capitalize on that momentum by doubling Stagwell’s new business unit. In particular, he hopes to make inroads with CPG clients, and he intends to use the success of Sport Beach—the activation that began at Cannes Lions in 2022 and expanded to CES earlier this year—to attract sports clients. This interview has been edited and condensed for conciseness and clarity. ADWEEK: You position Stagwell as a holding company coming out of challenger status. In what way? MARK PENN: There are really only four companies that you can go to now for a global marketing campaign, and you see in the string of wins with companies like Mondelez and IBM, we’re clearly taking and beginning to take share away from the majors at a much bigger scale and level than we’ve ever done before. Revenue from new business increased 45% this quarter. Was this because of a strategic push? We’re in the process of doubling the new business team because we were having such success. Now, one agency doesn’t go into a pitch. It’s really a group of agencies working collaboratively. Our win rate this year is well north of a third, so that we’re winning more than our share of the pitches that we’re going into. We’re also learning it takes a while to integrate these bigger accounts. So, a lot of the upside from those accounts will be seen really next year or later this year because the integration time is significant. Is there a sector that you see room for improvement in at Stagwell? We’re already in the process of expanding the talent in our media group. A lot of the other companies are focused on media. Almost their whole company is focused on media. For us, the other divisions are really the growth engines of the company right now. But we believe that our performance-oriented, technology-first approach is something that we’re going to really ramp up in terms of introducing it into the marketplace. Last year, Stagwell announced a 35% stake in Real Clear Politics. What was the reasoning behind that? We’re developing an owned media portion of what we do. We’re making sure Real Clear Politics gets the kind of advertising and operations that it really deserves. All it does is get incredible high-level political junkies on the site. So it’s going to be monetized well for the election. How is the current market disruption impacting Stagwell? We think that it is a market of opportunity for us. We’ve gone from being a group of companies that had good reputations but weren’t really at scale to be a unit. Now more clients are saying, ‘Well, who’s really a scaled alternative to the holding companies that can get our work done on a global basis?’ We’ve achieved something that nobody really has achieved in 50 or 100 years, which is to form a real competitor, a real technology-first, creative competitor at a scale where you can give us IBM, you can give us Mondelez, you can give us those kinds of major brands. You said that Stagwell is fourth in the holdco power rankings. Are you content being fourth? What is your growth mindset? I’m happy to be fourth in revenue, but first in digital transformation. I think some of the other companies have gotten too big, and when they got too big, they couldn’t really adapt to technology. I like to say that most of our competitors are figuring out how to lay off the next 1,000 people, and we’re still looking at the next 1,000 people that we’re going to hire. We’re 13,500 people. I think that’s a great scale to have in a world of transformation. It’s big enough to handle these kinds of scales, but it’s small enough to adopt new technologies. How has the war in Iran impacted business? Only 3% of our business is in the Middle East. It has slowed down some. Tourism is not exactly thriving at the moment there, and we do have some tourism clients, but it’s overall such a small part of the business. I’m hopeful of its overall growth over time.