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Adweek

by Olivia Morley

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Beth Sidhu

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Stagwell Inc. (STGW) today announced strong revenue in the third quarter, driven by its recent MDC Partners merger and growth across most segments.

Stagwell’s total revenue reached $466.6 million in the third quarter ending September 30, up from $228.1 million in the same period last year, an increase of 104.6%. The company’s pro forma organic net revenue was up 22.8% in the third quarter.

The pro forma revenue calculation assumes that the company solidified its merger with MDC at the beginning of the year, instead of in August.

“The strength displayed across our businesses reinforced our conviction and the power of the new Stagwell platform, and makes one thing abundantly clear—the combination is working,” Stagwell Chairman and CEO Mark Penn said on an earnings call Wednesday.

Its merger with MDC fueled Stagwell’s ascent to being a prominent player in the agency ecosystem that can compete with major holding companies WPP, Omnicom Group, Interpublic Group of Companies, Dentsu, and Publicis Groupe. Well-known agencies under the Stagwell umbrella include 72andSunny, Assembly, Anomaly, Donar, Code and Theory, Media Kitchen and Crispin Porter Bogusky. The merger with MDC allowed Stagwell to work under a single P&L and leverage talent from across its expanding network.

This is the first quarter that Stagwell reported consolidated earnings. Stagwell and MDC finalized the merger on Aug. 2, and the company’s market cap now sits at $2.4 billion.

A single P&L model

Stagwell’s strategy hinges on global expansion and marrying its brands under a single P&L, made possible by the merger. It’s emphasizing the need for the industry to bring creative and digital together.

“While one could have done creative only, or one could have done digital only, to get to these larger accounts that the big four have a lock on, you really need to be able to show both, and you need to be able to show both synchronized well,” Penn told Adweek in an interview after the earnings call.

Stagwell’s digital business line contributed to its largest share of net revenue at 37%. The creative business line made up a close second at 34%.

New business wins across its agencies also drove revenue. The company reported 63.7 million in net new business wins in the third quarter, including high-profile accounts Fitbit, Hasbro, Groupon, Athleta and Aetna among others.

“We’re getting into larger pitches and winning larger combined assignments,” said Penn.

Stagwell saw growth that surpassed 2019 revenues across most of its brands in Q3. Its integrated agencies network and media network drove net revenue growth, up growing 20.9% and 30.9% year over year, respectively.

The Stagwell Media Network, which includes Assembly, MMI Agency, Media Kitchen, Grason, Gale, Multiview and Locaria manages $5.5 billion in media. Assembly, newly combined with ForwardPMX, makes up the largest share of the network.

“We reorganized the media department. I think that’s getting into significantly larger assignments and bigger pitches,” Penn said.

The company saw a loss in one segment, with net revenue across its communications network down by $3.2 million. Penn attributes the loss to an off year in the political cycle and expects the segment to rebound next year. With upcoming house and senate elections in 2022, he says industry experts are predicting record fundraising in the political space.

Investments in talent, tech, and global expansion

Stagwell avoided some of the hiring challenges that currently plague the industry.

Over the last six months, the company hired over 1,000 people with the help of its new central hiring database featuring over 250,000 applicants. Stagwell recruiters “report that the Stagwell combination has created an attractive place for marketing and advertising talent, especially relevant to competitors whose businesses and recruitment models are outdated,” Penn said on the earnings call.

Looking forward, Stagwell aims to expand its investment in technology, including software products. “We’re getting out M&A department in place, we’re beginning to review the first opportunities. We’re also going to be a player in having significant SaaS and DaaS products, and I’m beginning to turn to getting that organized in the way that I want that to be,” said Penn.

The company is also focused on expanding to global markets with an emphasis on Latin America, India and Asia. “I think that we are qualified for virtually any assignment in North America now. But we’re not qualified for any global assignment,” said Penn.

Stagwell plans to expand globally through its affiliate program and through targeted acquisition. The affiliate program includes 30 affiliates and Stagwell plans to grow the program to 50. Stagwell has also laid out $65 to $100 million dollars a year to facilitate its global expansion, Penn told Adweek.

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Third Quarter GAAP Revenue growth of 104.6%

Third Quarter Pro Forma Organic Net Revenue growth of 22.8%, 27.9% excluding Advocacy

Third Quarter Net Loss attributable to Stagwell was $2.1 million

Third Quarter Pro Forma Adjusted EBITDA of $100 million

Company Raises Full Year Pro Forma Adjusted EBITDA outlook

REPORTED THIRD QUARTER & YTD HIGHLIGHTS:

  • GAAP revenue of $466.6 million in the third quarter versus $228.1 million in the prior year period, an increase of 104.6%; and $857.4 million in the nine months ended September 30, 2021 versus $575.0 million in the prior year period, an increase of 49.1%.
  • Net revenue of $409.1 million in the third quarter versus $152.9 million in the prior year period, an increase of 167.6%; and $749.2 million in the nine months ended September 30, 2021 versus $434.1 million in the prior year period, an increase of 72.6%.
  • Net loss attributable to Stagwell Inc. common shareholders of $2.1 million in the third quarter of 2021 versus net income of $17.8 million in the prior year period; and income of $14.1 million in the nine months ended September 30, 2021 versus $34.1 million in the prior year period.
  • Adjusted EBITDA of $87.5 million in the third quarter versus $37.1 million in the prior year period, an increase of 135.8%; and $150.1 million in the nine months ended September 30, 2021 versus $79.0 million in the prior year period, an increase of 90.0%.

PRO FORMA REPORTED THIRD QUARTER & YTD STAGWELL INC. HIGHLIGHTS:

  • Pro Forma GAAP revenue of $568.3 million in the third quarter versus $511.5 million in the prior year period, an increase of 11.1%; and $1,612.4 million in the nine months ended September 30, 2021 versus $1,445.8 million in the prior year period, an increase of 11.5%.
  • Pro Forma net revenue of $498.1 million in the third quarter versus $397.8 million in the prior year period, an increase of 25.2%; and $1,407.1 million in the nine months ended September 30, 2021 versus $1,185.4 million in the prior year period, an increase of 18.7%.
  • Pro Forma organic net revenue increased 22.8% in the third quarter and 15.6% for the nine months ended September 30, 2021.
  • Pro Forma adjusted EBITDA for the three months ended September 30, 2021 was $100.3 million versus $89.3 million in the prior year period, an increase of 12.4%. Pro forma adjusted EBITDA Margin was 20.1%, compared to 22.4% in the prior year period. Excluding the impact of the advocacy business, adjusted EBITDA margins would have been 20.1% in the third quarter of 2021 and 19.3% the third quarter of
  • Pro Forma adjusted EBITDA for the nine months ended September 30, 2021 was $275.3 million versus $205.9 million in the prior year period, an increase of 33.7%. Adjusted EBITDA Margin was 19.6%, compared to 17.4% in the prior year period.
  • Net New Business wins totaled $63.7 million in the third quarter.

New York, NY, November 3, 2021 (NASDAQ: STGW) – Stagwell Inc. (“Stagwell”) today announced financial results for the three and nine months ended September 30, 2021.

“Stagwell’s third quarter results make one thing very clear: the combination is working. We delivered pro forma organic net revenue growth of 23%, a pro forma adjusted EBITDA margin over 20%, and are pleased to raise our full year adjusted EBITDA guidance on the basis of our results to date,” said Mark Penn, Chairman and Chief Executive Officer of Stagwell. “Our growth this quarter was driven by double-digit, pro forma net revenue growth across nearly all our client offerings, including digital transformation, communications, media and data analytics. On a year-over-year basis excluding the advocacy business, pro forma organic net revenue grew 28%. With net new business of $64 million, this is a strong first quarter as a newly combined company.”

Frank Lanuto, Chief Financial Officer, commented: “The Company reported strong third quarter pro forma results with GAAP revenue of $568 million, net revenue of $498 million and Adjusted EBITDA of $100 million. Organic pro forma net revenue growth of 23% for the quarter, as well as growth from 2019 of 14%, are evidence of the Company’s recovery from the pandemic and transition to a new phase of overall growth.”

Third Quarter and Year-to-Date 2021 Pro Forma Financial Results

Pro Forma net revenue for the third quarter of 2021 was $498.1 million versus $397.8 million for the third quarter of 2020, an increase of 25.2%.

Pro Forma organic net revenue increased 22.8%, and foreign exchange and acquisitions, net of dispositions, had a positive impact of 0.7% and 1.6%, respectively. Organic net revenue increased primarily due to a continuation of the recovery in spending by clients begun in the first quarter.

Net New Business wins in the third quarter of 2021 totaled $63.7 million.

Pro Forma adjusted EBITDA for the third quarter of 2021 was $100.3 million versus $89.3 million for the third quarter of 2020, an increase of 12.4%, primarily driven by strong revenue growth. Pro Forma adjusted EBITDA margin in the third quarter of 2021 was 20.1%, down from 22.4% compared to the same period in 2020. Excluding the impact of the advocacy business, adjusted EBITDA margins would have been 20.1% for the third quarter of 2021 and 19.3% for the third quarter of 2020.

Pro Forma net revenue for the first nine months of 2021 was $1,407.1 million versus $1,185.4 million in the prior year period.

Pro Forma organic net revenue for the nine months ended 2021 increased by 15.6% and foreign exchange and acquisitions, net of dispositions, had a positive impact of 1.3% and 1.8%, respectively.

Pro Forma adjusted EBITDA for the first nine months of 2021 was $275.3 million versus $205.9 million in the first nine months of 2020, an increase of 33.7%. This led to an Adjusted EBITDA Margin of 19.6% versus 17.4% in prior year period.

Financial Outlook

2021 financial guidance is as follows:

  • Revenue for 2021, on a pro forma basis giving effect to the combination as if it was completed on January 1, 2021, is estimated to be $2.150 to $2.180 billion, including approximately $755 million for legacy MDC for the seven-month period ended July 31, 2021.
  • Adjusted EBITDA for 2021, on a pro forma basis giving effect to the combination as if it was completed on January 1, 2021, is estimated to be $370 to $380 million, including approximately $124 million for legacy MDC for the seven-month period ended July 31, 2021.
  • Guidance assumes no impact from foreign exchange or acquisitions or dispositions.

* The Company has excluded a quantitative reconciliation with respect to the Company’s 2021 guidance under the “unreasonable efforts” exception in Item 10(e)(1)(i)(B) of Regulation S-K. See “Non-GAAP Financial Measures” below for additional information.

 

Conference Call

Management will host a video webcast and conference call on Wednesday, November 3, 2021, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and nine months ended September 30, 2021.  The video webcast will be accessible at https://kvgo.com/corporate-services/stagwell-group-earnings-call-q3. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the conference call.

A recording of the conference call will be accessible one hour after the call and available for ninety days at www.stagwellglobal.com.

Stagwell Inc.

Stagwell is the challenger network built to transform marketing. We deliver scaled creative performance for the world’s most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing.  Led by entrepreneurs, our 10,000+ specialists in 20+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

Basis of Presentation

The acquisition of MDC Partners (MDC) by Stagwell Marketing Group (SMG) was completed on August 2, 2021. The results of MDC are included within the Statement of Operations for the period beginning on the date of the acquisition through the end of the respective period presented and the results of SMG are included for the entire period presented.

Non-GAAP Financial Measures

In addition to its reported results, Stagwell Inc has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) defines as “non-GAAP Financial Measures.”  Management believes that such non-GAAP financial measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company’s results. Such non-GAAP financial measures include the following:

Pro Forma Results: The Pro Forma amounts presented for each period were prepared by combining the historical standalone statements of operations for each of legacy MDC and SMG. The unaudited pro forma results are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or consolidated financial condition would have been had the combination actually occurred on the date indicated, nor do they purport to project the future consolidated results of operations or consolidated financial condition for any future period or as of any future date. The Company has excluded a quantitative reconciliation of adjusted Pro Forma EBITDA to net income under the “unreasonable efforts” exception in Item 10(e)(1)(i)(B) of Regulation S-K.

(1) Organic Revenue: “Organic revenue growth” and “organic revenue decline” refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposition) component is calculated by aggregating prior period revenue for any acquired businesses, less the prior period revenue of any businesses that were disposed of during the current period. The organic revenue growth (decline) component reflects the constant currency impact of (a) the change in revenue of the partner firms that the Company has held throughout each of the comparable periods presented, and (b) “non-GAAP acquisitions (dispositions), net”. Non-GAAP acquisitions (dispositions), net consists of (i) for acquisitions during the current year, the revenue effect from such acquisition as if the acquisition had been owned during the equivalent period in the prior year and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues for the applicable periods, and (iii) for dispositions, the revenue effect from such disposition as if they had been disposed of during the equivalent period in the prior year.

(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(3) Adjusted EBITDA: Adjusted EBITDA is defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.

(4) Financial Guidance:  The Company provides guidance on a non-GAAP basis as it cannot predict certain elements which are included in reported GAAP results.

Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. Statements in this press release that are not historical facts, including without limitation the information under the heading “Financial Outlook” and statements about the Company’s beliefs and expectations, earnings (loss) guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as “estimates”, “expects”, “contemplates”, “will”, “anticipates”, “projects”, “plans”, “intends”, “believes”, “forecasts”, “may”, “should”, and variations of such words or similar expressions are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section.  Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

      Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:

  • risks associated with international, national and regional unfavorable economic conditions that could affect the Company or its clients, including as a result of the novel coronavirus pandemic (“COVID-19”);
  • the effects of the outbreak of COVID-19, including the measures to reduce its spread, and the impact on the economy and demand for our services, which may precipitate or exacerbate other risks and uncertainties;
  • an inability to realize expected benefits of the redomiciliation of the Company from the federal jurisdiction of Canada to the State of Delaware (the “Redomiciliation”) and the subsequent combination of the Company’s business with the business of the subsidiaries of Stagwell Media LP (“Stagwell”) that own and operate a portfolio of marketing services companies (the “Business Combination” and, together with the Redomiciliation, the “Transactions”);
  • adverse tax consequences in connection with the Transactions for the Company, its operations and its shareholders, that may differ from the expectations of the Company, including that future changes in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on the Company’s determination of value and computations of its attributes may result in increased tax costs;
  • the occurrence of material Canadian federal income tax (including material “emigration tax”) as a result of the Transactions;
  • the impact of uncertainty associated with the Transactions on the Company’s businesses;
  • direct or indirect costs associated with the Transactions, which could be greater than expected;
  • risks associated with severe effects of international, national and regional economic conditions;
  • the Company’s ability to attract new clients and retain existing clients;
  • reduction in client spending and changes in client advertising, marketing and corporate communications requirements;
  • financial failure of the Company’s clients;
  • the Company’s ability to retain and attract key employees;
  • the Company’s ability to achieve the full amount of its stated cost saving initiatives;
  • the Company’s implementation of strategic initiatives;
  • the Company’s ability to remain in compliance with its debt agreements and the Company’s ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to redeemable noncontrolling interests and deferred acquisition consideration;
  • the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities; and
  • foreign currency fluctuations.

 Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in Exhibit 99.2 to our Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2021, and accessible on the SEC’s website at www.sec.gov., under the caption “Risk Factors,” and in the Company’s other SEC

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NEW YORK, Oct. 27, 2021 /PRNewswire/ — Stagwell today announced that two of its agencies, Anomaly and 72andSunny, were recognized at The Association of National Advertisers (ANA) 2021 Multicultural Excellence Awards.

Anomaly and 72andSunnny combined for six total wins across an array of multicultural marketing categories including: Asian, Demonstrated Growth, LGBTQ+ (Lesbian, Gay, Bisexual & Transgender), Print, Small Budget and Socially Responsible, where Anomaly capped off a highly decorated evening with a Grand Prize win for its ‘When We all Vote’ campaign in partnership with Vote Loud. With four total wins, Anomaly was the recipient of more awards than any other agency at the event. 72andSunny received two wins for “Football is For Everyone” winning in both the LGTBQ+ and Small Budget categories.

Additional client partners recognized include National Football League, Netflix, Can-Am On-Road and Don Julio.

“ANA Multicultural Excellence Awards spotlight the agencies raising the standard of work for multicultural marketing across the advertising industry. These accolades are a testament to Stagwell’s core belief that the marriage of data-driven insights and eye-catching, authentic creative leads to effective marketing outcomes.”

Mark Penn

Chairman & CEO

Winning campaigns include:

  • When We All Vote – A component of Michelle Obama’s When We All Vote initiative, this campaign from Anomaly was a rally cry to engage and challenge Gen Z to prepare to vote ahead of the 2020 Election season. It is the Grand Prize winner in the Socially Responsible category.
  • Football is For Everyone – 72andSunny teamed up its long-term client partner the NFL to show support for Carl Nassib, the first active NFL player to come out as openly gay, and plant a flag for what they believe: football is for everyone. The team created a powerful film in partnership with LGBTQ support organization The Trevor Project, driving donations to the non-profit.
  • Don Julio Cinco de Mayo – Anomaly worked with Don Julio to encourage consumers to support their favorite local establishments, as well introduce a fund in honor of the brands’ founder that will commit $1 million in aid over the next four years to charities supporting Mexican bartenders and restaurant workers.
  • Welcome to Our World – Effort between Anomaly and Netflix to celebrate the various AAPI entertainers and creators who have bolstered Netflix’s expansive global content offering and spotlight contributions of AAPI talent to the entertainment industry.
  • Can-Am On-Road Women’s Mentorship Program – Anomaly and Can-Am teamed up to launch a program designed to help overcome the barriers that prevent women from experiencing the power of motorcycle riding through inclusivity and education.

The ANA Multicultural Excellence Awards program showcases best-in-class examples of multicultural marketing — work that features powerful cultural insights that ultimately helps brands to effectively connect with diverse consumers.

For more information on Stagwell, please visit www.stagwellglobal.com

ABOUT STAGWELL

Stagwell is the challenger network built to transform marketing. We deliver scaled creative performance for the world’s most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing.  Led by entrepreneurs, our 10,000+ specialists in 20+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

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Serviceplan and Stagwell have announced a transatlantic team-up for media buying and planning

Stagwell Group and Serviceplan Group have teamed up across the Atlantic for a strategic media buying partnership. What’s behind this transatlantic team-up?

Stagwell Group, the American ’challenger’ agency network led by former Microsoft executive Mark Penn, and Serviceplan Group, the largest independent agency network in Europe, have struck a strategic partnership across their media operations.

The alliance between the two agency groups will see Serviceplan’s Mediaplus Group work ’hand-in-hand’ with Stagwell Media Network, with the aim of expanding their respective footholds in the US and western Europe. Clients of either group will be offered services derived from the other, the groups said.

Chairman and Stagwell chief executive officer Penn said: “This strategic alliance creates a solid alternative to the legacy holding companies that until now have been a marketer’s only option when they want global scale. Collaborating with Serviceplan enhances our ability to deliver integrated customer experiences and targeted media strategies tailored to local markets in Europe and Asia-Pacific.”

Serviceplan boss Florian Heller said: ”Stagwell’s technology-first approach and deep expertise in media, creative and digital transformation are well matched to our capabilities and pave the way for rapid growth, scaled solutions and deeper local market expertise. This strategic alliance positions both companies to deliver unmatched business results for our clients.”

Why have the two groups teamed up?

The partnership will oversee some $10bn in media. Stagwell will gain access to Serviceplan’s extensive media network and its AI-based buying systems – it’s the largest indie media buyer in Europe – while the Munich-headquartered group will in turn be able to access its New York counterpart’s suite of SAAS platforms, such as Koalifyed, CUE, PRophet and Harris Brand Platform. The recently-established Stagwell Media Network includes Assembly, MMI Agency, Media Kitchen, Grason, Gale, Multiview and Locaria.

Speaking to The Drum, Deirdre McGlashan, chief media officer, Stagwell, said that the alliance will help multiply the strengths of each partner. “With Serviceplan’s strong capabilities in local markets and the cross-border approach we both take, our globally combined 15,000 team members have exactly the right mix of digital and traditional media capabilities to drive greater results for our clients.”

“Today, companies operate transcontinental, so we also have to set up the strategy, planning and buying of media across all borders. With Stagwell, we have found our counterpart as an independent yet internationally active agency network on the other side of the Atlantic,“ added Matthias Brüll, chief executive officer at Mediaplus International.

How did the partnership come together?

According to Brüll, the alliance has been in the works for the last six months, aided by the shared history of several Serviceplan and Stagwell executives, who all worked together at WPP’s Mediacom earlier in their careers.

”As independent players, we share some similarities. We talked about how we approach the market. What is the strength in being independent? What does the market really need? What questions do clients have today? And what were the barriers when we were on the other side?” said Brüll.

According to McGlashan, the move is about both companies gaining scale ”in the modern way.”

”Quite frankly, as integrated and complex as media has gotten, it really is about having the right skill set, leveraging the right knowledge across the markets. That’s why this coming together of these two independents – with each of our capabilities and additional ancillary capabilities – is more that we bring each other.”

Can it make Stagwell and Serviceplan more competitive?

McGlashan argues the alliance gives each group an edge over the dominant holding companies. ”With their strong capabilities, our strong capabilities in the market, and the fact that both of us take a cross-border approach … we are going after business that would normally have gone to the traditional holding companies. We are in quite a few pitches with them,” she said.

”If you rewind … five years ago, we were small independents that were growing. [Now] we are outpacing them in terms of growth.”

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by Kyle O’Brien

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Stagwell is expanding its creative, content, media and marketing communications capabilities throughout Latin America with a new partnership between Stagwell agency Allison+Partners and Latin American heritage agency Grupo Garnier.

The partnership will see Grupo Garnier rebranding offices in eight markets as Allison+Partners, including in Costa Rica, El Salvador, Guatemala, Panama, Honduras, Ecuador, Peru and Mexico. In addition, the agencies will field a joint team in Miami, led by Allison+Partners general manager David Baum and business development director Tomas Saiz to counsel North American brands entering Latin America. Together, the agencies will bring enhanced capabilities across public relations, digital and content marketing to the region.

Mark Penn, chairman and CEO, said in a statement that he has long known Latin America as a “doorway for businesses eyeing global expansion. With more than 600 million people across South America, representing 8% of the population, this collaboration creates an advantage for brands looking to engage the growing market.”

Grupo Garnier, a Stagwell global affiliate, was founded in 1921 and is one of the leading marketing groups in Latin America.

Growing around the globe

Stagwell has been on a growth spurt lately, especially after its merger with MDC Partners was finalized several months ago. In addition to Grupo Garnier, Stagwell added Anchor Worldwide and The Lab to its Global Affiliate network this year, and Allison+Partners entered a strategic partnership with Orient Planet Group to grow in the Middle East. It opened its Miami office in June 2021.

“We began our global expansion through the affiliate partnerships with strategic partners earlier this year, where we have gone into 11 strategic regions. We now have 34 partners in the strategic regions, overseeing almost 96 cities in almost 50 countries,” Anas Ghazi, chief strategy officer for Stagwell, told Adweek.

Ghazi added that the rapid expansion lets the network go deeper in areas of traditional and digital media, ecommerce and content creation. In Latin America, thanks to Grupo Garni, Stagwell inherits strategic partnerships that will help it compete and collaborate in the region’s key markets, especially when it comes to data-driven public relations, which is a key focus for Allison+Partners.

For Grupo Garnier, the partnership gives the storied agency group an infusion of investment into the region, with new PR technologies and training, and the ability for scalable growth. “The brands need a different type of approach with consumers. They’re more concerned about wealth and about intimate relationships,” Arnaldo Garnier, CEO of Grupo Garnier, told Adweek, adding that Allison+Partners and Stagwell brings an “entrepreneurial spirit” to the region.

For Allison+Partners, it immediately adds 100 people in markets throughout Central and South America, which gives the agency a big reach for its existing clients and for new business opportunities. “We’ve been sorely underrepresented in Latin America…to have Allison+Partners team members in those pitches and working for clients just gives us a lot more consistency across the network from a global perspective,” Jonathan Heit, COO, Allison+Partners, told Adweek.

The U.S. and Latin American markets will be centralized through the Miami office of Allison+Partners, which will include support of the Hispanic and Latin markets in the U.S. It will allow the agency to bring its global clients to Latin America, like Toyota, and bring Latin American clients to a global stage.

Allison+Partners and Grupo Garnier join a growing roster of Stagwell peers in Latin America, including creative, localization and content agencies Locaria, Ink and CPB Brazil in Brazil and digital design agency Code and Theory in Argentina.

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The Drum

by Sam Bradley

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Mark Penn, the co-founder and chief executive officer of Stagwell Group, has been discretely building his alternative agency network for six years. ”I think it’s fair to say we snuck up on the marketplace. It’s been part of the strategy,” he says.

Last week, however, Penn broke cover and ended Stagwell’s time in ’stealth mode’ with a move intended, at least in part, to set off alarm bells at his agency rivals. Specifically, Penn showed up at Nasdaq on Times Square, ringing the stock exchange’s closing bell.

”It’s a bit of fun,” says Penn, speaking to The Drum on the morning of the bell-ringing ceremony. It comes shortly after the completion of Stagwell’s merger with MDC Partners, a deal that has been in the making since 2019. ”Everything’s come together now, so we’re capping it off with the bell-ringing. But of course, the work has just begun.”

With the merger finished – a process that has brought Stagwell’s headcount to almost 10,000 and dozens of respected agencies within its umbrella – the network is looking to compete with the holding companies on a level playing field.

Extra horsepower

The addition of creative shops such as 72andSunny and CPB adds ”a little creative horsepower” to Stagwell, alongside its research, media and strategy arms, he says.

”Our goal is to increasingly compete with them on their terms. Part of our strategy, of putting together creative and digital talent, is to be able to turn around and say [that] if you’ve been using those four majors, but you’ve been dissatisfied, they’re not digital and their creative isn’t immersive enough, that we can be a real alternative.”

”We aim to dislodge some of that $60bn that’s sitting over there in the majors, because they’re the people that most clients love to hate,” he continues. ”The marketplace is ripe for this kind of opportunity.”

The first half of 2021 saw a deluge of client activity and ad spend, and though Penn agrees with Publicis’s Arthur Sadoun on its ”exceptional” nature, he’s optimistic about market conditions.

”There are two aspects. One is more temporary – the renewal of marketing efforts that were halted during the pandemic. The other is more permanent, which is the shift toward increased digital transformation, increased online shopping and, as a consequence, increased online advertising. I estimate this is a three-to-five-year acceleration of those trends.

”We had Zoom and Peloton before, but we didn’t use them. A lot of these tools, such as InstaCart, were developed before the pandemic, and then they kind of had their day.”

In this context, Penn is betting on Stagwell’s triple-headed offer to clients – digital media, creative and strategy – to tear strips off account incumbents. ”The combined company really has the capability not to do one or two of those things, but to do all three well, and that’s what clients are looking for.”

The company formed the Stagwell Media Network in August, a parcel of media agencies (including Media Kitchen, Assembly and Multiview) that account for a quarter of its staff and close to $5bn in media spend.

”Some people think it’s all about old-style creative and some people think it’s all about having a black box. I believe it is really about having the right combination.”

He also points to Stagwell’s stable of research and insights firms, and its political consultancy units – Penn was a pollster and political strategist on scores of presidential campaigns, including the Clinton election bids – as magnets for further growth. Political fundraising is ”the fastest growth market of them all,” and one that he claims the company enjoys a 40% stake in.

Expansion opportunities

Next on the to-do list is overseas growth, particularly in Latin America, Russia, the Middle East and India. Penn has ambitions to grow through international acquisitions, particularly in the former territory. ”We’re very strong in Europe, Canada, the United States and reasonably strong out of Asia. I think we’ve got room to definitely grow.”

Recruitment is Stagwell’s other focus. Penn says the network can offer would-be recruits something its holding company rivals can’t: space and forward motion. ”Stagwell agencies have a tremendous kind of entrepreneurial control. We’re not a big bureaucracy … I’ve worked to really foster an atmosphere of collaboration.”

It appears to be working; over the last six months, Stagwell has hired 1,000 new staffers across its agencies. ”We’re on the way up. That’s where people want to go, somewhere that’s growing and growing.”

Despite his own experience of the US tech sector (Penn was chief strategy officer at Microsoft until 2015), which has been lately credited with drawing agency talent away from advertising, he says the sector should still be considered a decent place to make a career.

”Frankly, the industry has a lot of great jobs in it. You get to express your creativity, you get highly paid, with a college degree (without having to get a second or third degree). I think it’s actually an industry of opportunity … I think we will continue to draw very strong talent around the world.”

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CONTACT

Beth Sidhu

FEATURING

NEW YORK, Aug. 30, 2021 /PRNewswire/ — (NASDAQ:STGW): Stagwell announced it will visit the Nasdaq MarketSite in Times Square on Wednesday, September 1, 2021, as it continues to celebrate the completion of the company’s launch in August. 

In honor of the occasion, Mark Penn, Chairman and CEO of Stagwell, will ring the Closing Bell. A live stream of the ceremony will be available on NASDAQ’s site at https://www.nasdaq.com/marketsite/bell-ringing-ceremony. 

Earlier this month, Stagwell Marketing Group LLC and MDC Partners Inc. combined to form Stagwell, a top-10 global marketing services company built to transform marketing.

About Stagwell Inc.
Stagwell is the challenger holding company built to transform marketing. We deliver scaled creative performance for the world’s most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing.  Led by entrepreneurs, our 10,000+ specialists in 24+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients

For more information, visit www.stagwellglobal.com

Contact:

Beth Sidhu
beth.sidhu@stagwellglobal.com
(202) 423-4414

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by John Glenday

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Beth Sidhu

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Stagwell has announced a six-month sponsorship of Creative Equals Business to provide in-person and virtual training for female creatives. Designed to shatter the glass ceiling the program will furnish participants with the skills they need to fast track their entry to the boardroom.

 

Digital marketing agency network Stagwell will sponsor Creative Equals Business for the next six months. Stagwell, which recently agreed a merger with MDC Partners, will back the program as it hopes to level the professional playing field of the creative industry.

What does the sponsorship involve?

  • Stagwell will provide financial backing to Creative Equals Business to further its mission to level the playing field in the creative sector and see more women assume leadership roles.

  • The holding company will fund a six-month curriculum combining in-person and virtual training to equip a new generation of female leaders with the business and management skills needed to ascend to the top of advertising and marketing.

  • Courses emphasize innovation, creativity and profitability, ensuring that participants gain all the information, advice and skills necessary to build successful teams, pitch and sell, build a personal brand and develop senior relationships.

  • Throughout this process systemic inequalities are identified, enabling attendees to seed behaviour and policy change upon their return to the workplace.

Why has it teamed up with Creative Equals?

  • Mark Penn, chairman and chief executive of Stagwell, said: “We can only create meaningful, effective work for clients when our teams reflect the diversity of the audiences our clients are looking to reach. We are proud to sponsor Creative Equals Business for the second year with the hopes of reducing the barriers to success for female leaders looking to ascend to the C-suite level.”

  • Helen James, joint founder of Creative Equals Business and managing director at CPB London, added: ”According to the IPA’s Diversity Survey, only 32.4% of C-suite positions in advertising were held by women in 2020, down from 34% in 2019. It’s a shocking reality that requires our immediate attention.

  • ”We can only solve this challenge if people of all gender identities come together to lend their expertise and support to the cause. I’m grateful to Stagwell for their enthusiastic support of this initiative and look forward to continuing to work together to create a marketing industry that is fairer and more inclusive, and therefore, more creative and effective.”

  • Creative Equals advocates gender equality in the workplace.The organization opened a business leadership school to address an imbalance in the sexes among executives.

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Beth Sidhu

FEATURING

Days after shareholders approved the merger of ad agency networks MDC Partners and Stagwell Group, the newly-formed ad holding company Stagwell, Inc. announced its first major realignment.

The company will combine eight agencies focused on ad-buying, content production and business-to-business marketing to form Stagwell Media Network. 

Stagwell plans to use the combined services of Assembly, ForwardPMX, Media Kitchen, MMI, Grason, Gale, Multiview, and Locaria to punch above its weight when competing with larger rivals such as WPP, Omnicom and Publicis. The network will combine forces to pitch for accounts that would be too big for its individual agencies to win on their own, said ForwardPMX CEO James Townsend, who will also serve as CEO of Stagwell Media.

The agencies will continue to operate as separate brands.

Brad Simms, CEO of Assembly and Gale, will be global chief product officer, leading the new network alongside Townsend and Stagwell Chief Media Officer Deirdre McGlashan.

The launch came in response to advertisers’ increased demands to have a range of services in one place so they can avoid hiring several different agencies, said Townsend. The larger Stagwell also tries to facilitate cross-agency collaboration by organizing profit-and-loss statements around individual clients like Nike rather than by agency or office.

Simms said Stagwell Media hopes to stand out against bigger rivals by emphasizing digital advertising over print and broadcast while also having the scale to participate in events like the annual network upfronts, where billions of dollars in TV and streaming ads are sold.

“We have the capabilities of the traditional networks without the baggage,” he said. “We’re led by the client, not the finance department.”

MDC Partners first reorganized its ad-buying agencies in 2019 after Mark Penn’s Stagwell bought a minority stake and then created three networks led by agencies Anomaly, 72andSunny, and Doner, respectively.

But unlike those other networks, Stagwell Media Group will serve as the larger organization’s “backbone,” since all Stagwell agencies can access its data, media, and tech services, Simms said.

Townsend said Stagwell Media Group, which now employs more than 2,500 people in 15 countries, is on a hiring spree across departments and does not plan to reduce its headcount. He also said the network will be very active in the M&A market over the next six to twelve months, with a focus on rounding out its offering and expanding its presence in Europe, Asia, and the Middle East.

Stagwell CEO Mark Penn said the newly-formed company will report $2.1 billion in annual revenue, putting it just below Havas, the smallest of the “big six” holding companies.

A spokesperson declined to comment on how much of that total comes from the Media Group agencies but said they collectively manage close to $5 billion in annual ad buys.

On August 4, Stagwell Group and MDC Partners reported second-quarter organic revenue growth of 33% and 26%.

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Beth Sidhu

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Stagwell Inc. brings together the digital-first capabilities of Stagwell Marketing Group with the creative talent of MDC Partners, creating a top 10 global marketing services company

Combined Company will trade on the Nasdaq under the ticker STGW beginning on August 3

NEW YORK, Aug. 2, 2021 /PRNewswire/ — Stagwell Inc. (“Stagwell”) announced today that Stagwell Marketing Group Holdings LLC (“Stagwell Marketing Group”) and MDC Partners Inc. (“MDC”) have officially completed a business combination (the “Combination”) following a successful shareholder vote on July 26, 2021, creating a top 10 global marketing services company. The combined company is called Stagwell Inc. and will trade on the Nasdaq under the ticker symbol “STGW” beginning Tuesday, August 3, 2021. Under the continued leadership of CEO Mark Penn, Stagwell’s roster of world-class clients will benefit from award-winning creative talent and the latest connected technologies to drive the most effective marketing outcomes.

“I am excited about the unique opportunity we have to build a new kind of holding company that can transform the industry and create enhanced opportunities for growth and value in the marketplace,” said Mark Penn, CEO, Stagwell. “Stagwell is born from the understanding that modern culture demands the highest levels of agility and creativity to drive unique, connected experiences. Given the depth of our combined talent, we are uniquely positioned to build new marketing solutions help our clients achieve their business results. Madison Avenue, get ready for Stagwell.”

Stagwell targets growth to $3 billion in revenue by 2025, including acquisitions, organic growth, and new products. Stagwell expects its next-level growth to be driven by four key drivers:

Leading-edge digital transformation: Stagwell boasts a digital engine that understands the fastest growing segments of the marketing and advertising industry, such as e-commerce, platform building, online advocacy, influencer marketing, and global performance marketing. 

Scaled creative performance: The combined company will break down the artificial divide between brand marketing and performance media to help clients deliver effective advertising at scale, powered by higher levels of creativity. 

Innovative SaaS digital marketing products: Stagwell will continue its investment in building SaaS marketing products that solve for key gaps in the marketing ecosystem based on industry know-how and engineering heft.

Integrated solutions at global scale: While the top four marketing holding companies have historically had a stranglehold on these opportunities, the combined company can easily create global teams with the potential to win contracts at the highest levels.

These growth drivers will be supported by Stagwell’s culture of collaboration, which leverages the best in connected technology to bring together agencies across disciplines. The combined company’s nearly 10,000 employees and affiliates bring a wealth of experience across creativity, digital transformation, data analysis and audience targeting to help identify, design and execute the right solutions for modern marketers. 

Stagwell now includes renowned brands including creative agencies such as 72andSunny, Anomaly, Doner and Forsman & Bodenfors, cutting edge digital transformation firms including Code and Theory, YML and Instrument, media powerhouses Assembly, ForwardPMX and GALE, public relations leaders Allison+Partners, SKDK and Hunter, and market research firms the Harris Poll and NRG. The combined company is expected to generate between $2.135 billion and $2.180 billion in total revenue and between $372 million and $387 million in Adjusted EBITDA in 2021 on a pro forma basis including $30 million of projected synergies. Stagwell’s clients include best-in-class marketers such as P&G, Nike, and Google.

“As we move forward as Stagwell, I could not be prouder of the incredible work our agencies have already achieved together on behalf of clients like Nike, Google and P&G,” said Penn. “As we enter this new phase of our partnership, I have no doubt we have the right talent, creativity and connected services to continue our combined legacy of industry-leading client work and truly transform the future of marketing.”

Designed and created by Doner, Stagwell’s new visual identity colorfully symbolizes the combination of MDC and the Stagwell Marketing Group, and the combination of creativity and connected experiences. Code and Theory designed Stagwell’s new website: www.stagwellglobal.com 

About Stagwell Inc.
Stagwell (NASDAQ: STGW) is the challenger holding company built to transform marketing. We deliver scaled creative performance for the world’s most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing.  Led by entrepreneurs, our 10,000+ specialists in 30+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

Cautionary Statement Regarding Forward-Looking Statements

This communication may contain certain forward-looking statements (collectively, “forward-looking statements”) within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended and Section 21E of the U.S. Exchange Act and the United States Private Securities Litigation Reform Act of 1995, as amended.  Statements in this document that are not historical facts, including statements about Stagwell’s beliefs and expectations and recent business and economic trends, constitute forward-looking statements. Words such as “estimate,” “project,” “target,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “create,” “intend,” “could,” “should,” “would,” “may,” “foresee,” “plan,” “will,” “guidance,” “look,” “outlook,” “future,” “assume,” “forecast,” “focus,” “continue,” or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section. Such forward-looking statements may include, but are not limited to, statements related to: future financial performance and the future prospects of the business and operations of Stagwell; information concerning the Combination; and the anticipated benefits of the Combination. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement, including the risks identified in our filings with the Securities Exchange Commission (the “SEC”).

These forward-looking statements are subject to various risks and uncertainties, many of which are outside Stagwell’s control. Important factors that could cause actual results and expectations to differ materially from those indicated by such forward-looking statements include, without limitation, the risks and uncertainties set forth under the caption “Risk Factors” in Stagwell’s Annual Report on Form 10-K for the year-ended December 31, 2020 under Item 1A and under the caption “Risk Factors” in Stagwell’s Quarterly Report on Form 10-Q for the quarter-ended March 31, 2021 under Item 1A.

You can obtain copies of Stagwell’s filings under its profile on SEDAR at www.sedar.com, its profile on the SEC’s website at www.sec.gov or its website at www.stagwellglobal.com. Stagwell does not undertake any obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement.

CONTACT:  
Beth Sidhu 
Stagwell Inc.
202.423.4414 
Beth.sidhu@stagwellglobal.com

SOURCE Stagwell Inc.; MDC Partners Inc.

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