Storyboard | The ‘Big 4' ad holding firms got too big: Stagwell's Mark Penn

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#Ad agency, #Advertising, #agency network, #Ashish Khazanchi, #collaboration, #content, #creative agency, #Enormous ad agency, #global alliance, #Mark Penn, #Stagwell Group

Mark Penn, chairman and CEO, Stagwell.

Independent Indian creative agency Enormous recently joined The Stagwell Group’s global affiliate network, giving Stagwell a foothold in India and an opportunity to expand its global content offering in a lucrative market. The New York-headquartered group that brands itself as the “challenger holding company” recently merged Stagwell and MDC to create Stagwell Inc. Globally, Crispin Porter Bogusky, 72andSunny and Anomaly are among the other independent agencies part of the affiliate network.

Storyboard’s Shibani Gharat caught up with Mark Penn, chairman and CEO, Stagwell, and Ashish Khazanchi, managing partner of Enormous, to find out more about the partnership and Stagwell’s Global Affiliate Program. Interestingly, Penn and Khazanchi met for the first time on Storyboard. Edited excerpts:

Tell us about your partnership with Enormous, and how it might benefit Stagwell?

Penn: We didn’t have a real partnership in India, and what we want to do is extend our business globally. Right now, I think we can win any pitch in North America. And collectively in partnership with Enormous, I think we will be able to win any pitch in the rest of the world. Enormous presented incredible creative content and online possibilities to start a very strong partnership in India which is one of the highest growth markets in the world.

Ashish, as a homegrown agency, what are you looking forward to and expecting from this partnership with the Stagwell network?

Khazanchi: Stagwell gets a fully grown content and creative agency out here. What we get from Enormous’ perspective is an entire wealth of best practices, digital technology and also a foothold into a lot of the global clients who may be there with their alliance and maybe looking at India as their prime markets. So we are here, we can service them seamlessly across boundaries with the same set of knowledge and insights and the same set of best practices can be extended through us to those clients in those countries as well.

Mark, what are your plans for the India market? Are you looking to add more agencies to your network?

Penn: Right now we have added 34 affiliates and we are also beginning to reopen the acquisition window. We have been through a merger that brought Stagwell together, and with these agencies together it is now over 70 members which we have organized into 6 clear networks. I am very bullish on the India market. It has got the largest growing consumer base in the world. Consequently, I think that the partnership with Enormous has a tremendous potential for growth. I personally will be out there in India as soon as travel is restored because I think this is an enormous opportunity for marketing, particularly as more and more consumers in India are online.

Globally, how is Stagwell stacked up against the Big 4 holding companies – WPP, IPG, Publicis and Omnicom?

Penn: When you look at the marketplace for marketing services, it is about $120 billion. The ‘Big 4’ have about half of that marketplace. We are a challenger group. We think that the ‘Big 4’ got too big and were left behind on technology. And the consulting companies were all technology, no creativity. We tried to have the right balance between creativity, creative talent and technology and how that drives marketing today.

Tell us how it works. What does it really mean to have a global ‘Affiliate program’ in an era when holding companies are talking about consolidation, integration, power of one, and the like? Is there synergy and integration within Stagwell’s roster of agencies?

Penn: These partnerships are new. We started them a few months ago. We are going to bring the people together, we are going to find commonality in terms of standards. These partnerships and procedures and exchanges will be set and I hope we exchange people. Some of the agencies will say let me put some people in your office in New York. It will also be great for us to bring people out to India. I think the more we integrate the policies and the procedure, and as people get to know each other, it will be a seamless team.

Ashish, what is your wish list from the network?

Khazanchi: Coca Cola… (laughs)

I have seen some work that 72andSunny has done on Coca Cola and it is really great. My wish list would be two-fold. One, business growth. A newer set of global brands coming and working with us, our people getting exposure to global agencies and global ways of working. And, at a slightly more holistic kind of level, I have a secret wish that when you have the Cannes Lions top 10 networks of the year, Stagwell should be one of them.

#Ad agency, #Advertising, #agency network, #Ashish Khazanchi, #collaboration, #content, #creative agency, #Enormous ad agency, #global alliance, #Mark Penn, #Stagwell Group
Ashish Khazanchi, managing partner. Enormous.

You mentioned how the ‘Big 4’ have got too big. Also, some of the global networks and holding companies are of late marred with corruption charges, allegations of financial wrongdoings and such. Is it rampant across this industry? What will it take to clean up?

Penn: I think what happened with the larger holding company was an exception. I don’t think that’s the way advertising is run today. It’s not what I have seen.

Khazanchi: I have been a part of networks and one really hears about some things here or there, but I think they make news essentially because they are outlier incidents.

How would you do things differently at Stagwell?

Penn: The most important thing is to have a culture of collaboration. The holding companies got too big. They had too many duplicative firms and so a piece of new business was like feeding piranhas. That was unpleasant. So we’ve taken a ‘Noah’s ark’ kind of approach – get one or two of a kind. We do that to make sure that the people have the ability to cooperate, build up our platforms across services, don’t smoosh together cultures that shouldn’t be smooshed and respect people. Get them to work together and collaborate. That I think is the basis at Stagwell, which is in contrast to what I saw out there in the marketplace.

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