New York-based holding company Stagwell’s pro forma organic net revenue was up 11.3% in the fourth quarter and 14.5% for the year.
Stagwell Marketing Group merged with MDC Partners in August 2021 and the pro forma organic revenue calculation assumes the merger was in place at the start of 2021, rather than in August when the deal was finalized. The merger has brought a large number of agencies under the Stagwell umbrella including MMI (which was merged with Media Kitchen in January), DonerNorth (created by the merger of Union and 6 Degrees in December), Anomaly, Assembly, and Veritas, all of which have offices in Canada.
Stagwell CEO Mark Penn told investors on Tuesday that the company’s earnings are proof the merger is working and faster than was expected.
“Three key factors are propelling the network. First, our high concentration of digital capabilities aligns us with the fastest growing areas of the market. Second, we scale the new markets through key acquisitions and a network of global affiliates. And third, our focus on flexibility, integration and collaboration is resonating with larger clients, leading to bigger, more impactful wins throughout the network,” Penn told investors.
In Q4, Stagwell reported a 31% increase in its performance media and data practice, with 11% growth for the whole year. This was attributed to large contract wins at Assembly and the consolidation of the digital marketing agency ForwardPMX under the Assembly brand. The agency now generates more than 75% of its revenue from digital channels and Penn said the digital-first offering is resonating with bigger clients looking to consolidate their media partnerships as the landscape becomes “increasingly complex.”
Stagwell’s creative and communications practice grew 7% in both the fourth quarter and full year, attributed to its public relations agencies as well as Anomaly, whose clients include Diageo and Google, and new business with Nespresso and Amazon.
Penn said the company generated a record $75 million in new business in the fourth quarter and won eight contracts in 2021 that are each expected to generate $10 million in revenue. Additionally, the company expanded relationships with Nike, Apple, Epic Games, Johnson & Johnson, and Abbott Labs. He went on to say the company ran seven ads during this year’s Super Bowl, including ones for Meta, Expedia, and the NFL and created digital client activations for Captain Morgan, Groupon and Budweiser.
Stagwell has already seen a strong start to 2022 and expects pro forma net revenue results of 18% to 22% this year, and anticipates significant growth in its Advocacy businesses, driven by anticipated record spend for the 2022 U.S. midterm elections.
