Challenger holding company Stagwell is doubling down on its global affiliate strategy, adding 11 new partner companies to its worldwide network. All but two of the additions are based in Asia where Stagwell has now also opened a second office in Malaysia. The partners span China, India, Japan, Malaysia, South Korea, Italy, and the UK, extending and expanding the network’s media, scaled content and commerce capabilities. Together, some 1,400 marketing practitioners have now been added to Stagwell’s “functional global footprint.”
Some of the new affiliates, such as China’s SparkX and 99IE, bring specialty expertise in ecommerce and gaming respectively, while India’s Event Capital and Laqshya Live Experiences bring event and experiential chops.
If you separate the nine subsidiary partners within India’s Laqshya Media Group, the number of new affiliates grows to 19. Media was a key strategic focus, with BushAd also joining from Korea, digital media specialists SuperDrive and SearchGuru joining from Japan and Malaysia respectively, along with three Chinese media companies, including MarketIn and GIMC.
Not all these affiliate deals make Stagwell their exclusive partner. One of China’s oldest and largest local advertising groups, GIMC, has a track record of partnering with other groups, including joint ventures with Havas and Hakuhodo. Another new content affiliate, Malaysia’s Kingdom Digital, sold a majority stake to Hakuhodo last month. The two new affiliates added from Europe, Italy’s Caffeina and Digital Mill out of the UK, are both digital content specialists.
Stagwell’s chief affiliate officer Anas Ghazi and APAC managing director Randy Duax tell Campaign the new affiliations are the result of a mix of inbound interest, strategic planning around capabilities and geographies, but were mostly driven by tangible activations on behalf of clients.
The global programme
In total, Stagwell now is nearing 80 global partners in more than 60 different markets in less than two years since launching the affiliate programme. Under these deals, there is no immediate monetary investment – both sides merely agree to cooperate on client work.
For the affiliates, it expands their scope of opportunity beyond their local market without being forced to work for global clients and projects that they don’t want to. For Stagwell it’s a way to expand its global reach and capabilities without needing to raise capital for acquisitions. For both sides, affiliation is a trial period to feel each other out, which can be a precursor to eventual acquisition as it was with Brand New Galaxy (BNG), a European-based ecommmerce network that was one of Stagwell’s earliest affiliates before the two consummated their relationship through acquisition earlier this year.
But the programme is not without risk either. It’s hard enough for holding companies, with all their global connective tissues, to deliver the seamlessly integrated global service they’ve been pitching to clients for years, nevermind asking independent agencies with different cultures and objectives to interpret quality, standards, processes the same and deliver what the client wants on terms financially beneficial to all. But Ghazi already sees proof in acquisitions like BNG and in the number of new business wins emanating from affiliates, referencing a pipeline of yet-to-be-announced deals.
“With our affiliate partners worldwide, we’ve been able to punch up to win new business and land account expansions across Stagwell—from Hydraltye in Australia and Mashreq Bank in the UAE to our major Lenovo win across Europe, the Middle East and Africa, Latin America and North America,” Stagwell chairman and CEO Mark Penn added in a statement. “With our model, we’re not just placing random dots on a map, we’re able to provide clients with global execution rooted in local understanding.”
“It really is working,” Duax says, who explains that not a day goes by without an opportunity from clients pitching a need to expand to another market, or an affiliate referring a piece of business to be expanded out.
A second footprint in Asia
If many of the new affiliations are the product of client business, so too is Stagwell’s latest landing pad in Kuala Lumpur. A couple of global client wins together with new work for Ink (with Malaysian Airlines) and Assembly will see the latter hire a dozen new people in Malaysia and accelerated the set-up of an office there. These announcements follow Stagwell’s stated objective last November to expand aggressively in Asia Pacific, relocating Duax to Singapore where he soon after added Coconuts Media as a content affiliate in January.