Crispin Porter Bogusky Moves Into the Stagwell Media Network, the Holding Company's Fastest Growing Group

Stagwell is expanding its media network by moving more of its agencies under the Stagwell Media Network (SMN) structural umbrella, including Forsman & Bodenfors, Crispin Porter Bogusky, Vitro and Observatory. The change is effective today and comes as SMN posted 33% net revenue growth in the second quarter, making it Stagwell’s fastest-growing network. In the coming months the network will be renamed with a moniker that accurately reflects its focus on creative, media and commerce. To gain market share after its 2021 merger with MDC, Stagwell needed to empower its agencies to effectively collaborate so that it could more seamlessly offer clients a variety of services. It grouped a number of like-minded agencies together, launching SMN last August. A year later, Stagwell is bringing more of its creative and commerce brands into the SMN fold as clients realize the benefits of bringing media and creative services back together. Unlike other holding companies that established dedicated media or creative networks, Stagwell is taking a different tact by putting media and creative agencies side-by-side within a single network, eliminating the need to merge them. By contrast, WPP has addressed the issue by combining subsidiaries like VML and Y&R. “This isn't a group that was put together because it drives holding company efficiencies,” James Townsend, SMN’s global CEO, told Adweek. “It's a group that was put together to serve a client need in the marketplace.” Developing networks When SMN launched, it included Stagwell’s media agencies—Assembly, ForwardPMX, Grason, MMI and MediaKitchen—and a few specialist agencies—the creative consultancy Gale, B2B agency Multiview and the transcreation agency Locaria. Some of those agencies later merged. MediaKitchen folded into MMI while ForwardPMX merged with Assembly. SMN isn’t the holding company’s only network. There’s also the Anomaly Alliance, the Doner Partner Network, the Communications Network and Constellation, the expanding creative network that includes Stagwell brands 72andSunny, Brand Citizens, The Harris Poll, Hecho Studios, Instrument, Redscout and Team Enterprises and, until now, Crispin Porter Bogusky (CPB). CPB is now leaving the Constellation network to join SMN because its creative service offering is in lockstep with media insights, according to Brad Simms, president and CEO of the SMN agency Gale. “If you look at the long arc of unbelievable work, it is a tightly-coupled creative idea and media execution. That actually is at the core of why folks come to CPB,” Simms said. Stagwell growth The changes within SMN come as Stagwell posted growth in the second quarter. The firm’s pro forma net revenue during the period was $556 million—a 16% increase compared to the same period last year. The pro forma calculation assumes that the company merged with MDC at the beginning of 2021, instead of last August. Up a total of 33% compared to last year, the media agency network’s revenue is growing fastest compared to Stagwell’s other entities. Its integrated agencies network grew less—by almost 9%—and its communications network by nearly 28%. Stagwell’s commitment to technology investments is paying off, with its digital business comprising 57% of its net revenue. The holding company is now developing its branded SaaS offering, the Stagwell Marketing Cloud, and already offers its clients some standalone SaaS products. Penn told Adweek that he expects to see the portion of revenue derived from digital to increase to 65% over the next few years before eventually reaching 80% and more, assuming it's augmented by Stagwell’s SaaS and DaaS offerings. “We have both creativity and digital together so that we can scale up and now we're bringing those two even closer together,” Penn told Adweek. Its agencies are winning bigger accounts, with net revenue gleaned from its top 25 clients totaling $6 million—up 30% versus last year. The CEO would like to see the number increase to an average of $10 million over time. The company is now comfortably winning $10 to $15 million projects, Penn said. The “next level” for the holding company is to capture projects worth $25 million or more, and he hopes to achieve this in roughly another year. Recent wins for the agency include Lenovo, which in April announced its partnership with Assembly following a review. The brand said Stagwell’s Stage audience insights platform and the agency’s support for Lenovo’s in-house agency influenced its decision. No more SMN consolidation Agency consolidation is recurrent. Recently Dentsu Media announced its Dentsu Creative network, simultaneously eliminating the DentsuMB, Isobar and U.S.-based 360i brand names in favor of pitching a cohesive creative offering. Stagwell’s approach differs because although new agencies are joining SMN, they will retain their brands, leadership and cultures. The impetus for the move, SMN leaders told Adweek, is to foster collaboration. It is one of a minority of holding companies—WPP and IPG are others—that still focus on amplifying individual agency brands. Assembly and MMI each recently updated their brands. The agencies may maintain their character and cachet, but simultaneously must keep up with other holding companies that now pitch their services as a group instead of as individual companies. With SMN and its other networks, Stagwell wants to offer clients a flexible solution. SMN has no plans to consolidate any of the brands, according to Townsend. “We see these creative agencies having distinct roles—being highly complementary—and we're delighted to have them,” he said. Stagwell Formalizes Constellation Network Offering With Leadership Changes