The digital revolution has left major brands unsatisfied, unsure if they’re getting the most out of their marketing dollars. It has opened the door for smaller entities that are unencumbered by legacy business structures and are empowered by disruptive technologies, firms that can create groundbreaking work and compete with established holding companies for lucrative business from blue-chip brands.
That’s Mark Penn’s view of the marketing landscape and the impetus behind The Stagwell Group, an evolving holding company he founded last summer. He sees Stagwell, officially an investment advisory firm, as the challenger brand to the WPPs and Omnicom Groups of the world. He believes he can build a more collaborative, nimbler group of agencies.
“Stagwell is the new kid on the block,” he stresses during our interview in his K Street office in DC. “We are putting together a group of companies in the marketing services area with leading-edge creativity, great analytics, and strong depth in digital.”
There are self-implied dictates: No rosters of PR or marketing agencies doing virtually the same thing while competing against one another. Stagwell’s firms must be digitally driven. And agency CEOs must not look forward to retirement; rather, they must prove collaborative and work with sister shops in an era when household name brands seek their own version of cross-agency groups such as WPP’s Team Detroit.
Stagwell Group, founded by former Microsoft executive Mark Penn, has acquired a majority stake in creative digital agency Code and Theory.
The deal follows closely behind Stagwell’s acquisition of National Research Group from Nielsen at the end of November and PR and political consulting firm SKDKnickerbocker in October.
Code and Theory, co-founded in 2001 by Dan Gardner and Brandon Ralph, will continue operating independently within Stagwell. Its current management team will remain in place, and Mr. Gardner and Mr. Ralph still hold a minority ownership stake.
Mr. Penn said Code and Theory’s combination of “engineering and creative talent that goes to creating great digital experiences with great growth brands” is in line with Stagwell’s strategy.
Mark Penn’s Stagwell Group has agreed to acquire National Research Group from Nielsen for an undisclosed price.
The firm, which has over 100 employees and offices in Los Angeles and London, provides Hollywood studios with tracking data in the weeks leading up to the release of their movies.
“We are excited to welcome NRG into the Stagwell family of companies and as a market research practitioner for the last 40 years I’m particularly pleased to add these key capabilities,” said Penn. “NRG has been a global leader in Hollywood market research and we see product innovation as a key ingredient for success in a rapidly changing entertainment marketing landscape.”
SKDKnickerbocker, the Washington PR firm with deep ties to Democrats, is being bought by Mark Penn’s investment firm.
Penn, a former pollster and political strategist, worked on Bill Clinton’s 1996 campaign with Bill Knapp, a managing director at SKDK. Penn left Microsoft earlier this year to start a Stagwell Group, a private-equity firm focused on digital marketing with backing from Steve Ballmer, the former Microsoft CEO.
SKDK, which also has offices in New York, Albany and Los Angeles, has worked on political and corporate campaigns from Washington State’s ballot initiative on gun background checks to the U.S. Airways merger. Anita Dunn, another managing director, was White House communications director and senior adviser to President Obama’s presidential campaigns. Her husband, Robert Bauer, was Obama’s White House counsel.
“Stagwell is putting together a really exciting group of best-in-class companies and we think this is a huge opportunity to work together with sister firms in the future,” SKDK Managing Director Josh Isay said. “It’s a great opportunity for us to continue to operate our company the way it’s been operated and at the same time broaden our horizons.”
The private equity firm founded with a quarter-billion dollar check from the former Microsoft chief Steven A. Ballmer has made its first purchase.
The firm, the Stagwell Group, which is being run by the former advertising executive Mark Penn, will acquire SKDKnickerbocker, the public relations group best known for its advertising and campaign work for prominent Democratic clients.
It is the first step in what Mr. Penn said would be an attempt to create a cohesive group of advertising, research, public relations and marketing companies.
“The goal is to build a great group of companies that have a strong understanding of the digital world,” Mr. Penn said in an interview. “It’s a bit of a Noah’s ark, but we’ll have one of each kind.”
Mr. Penn said he also expected to acquire firms that specialize in digital design, Hollywood ventures, ad buying and financial communications.
Announced in June, Stagwell has $250 million in assets — most of it contributed by Mr. Ballmer, and some by Mr. Penn — and said it would use debt to strike deals worth as much as $750 million.
Mark Penn in September will leave Microsoft, where he has served as exec VP and strategy officer, to start a company that will invest in advertising, research, data analytics, public relations and digital marketing companies.
Ex-Microsoft CEO, Steve Ballmer, is an investor in the company, called Stagwell Group, which will be based in offices at 1700 K Street, in Washington D.C. The company has already closed $250 million in investment capital, but it’s not currently accepting new investors, according to a statement. Currently he and Mr. Ballmer are the only investors and will build their team over the next few months, said Mr. Penn.
Prior to joining Microsoft, Mr. Penn served as CEO of WPP PR firm Burson-Marsteller and before that he was co-founder and CEO of Penn Schoen Berland, a market research and polling firm that eventually became part of WPP and Burson-Marsteller. He has been a senior adviser to political leaders including U.K. Prime Minister Tony Blair, Israeli Prime Minister Menachem Begin, Senator Hillary Rodham Clinton and President Bill Clinton.
He talked to Ad Age about what he wants his company to look like, why the small holding company trend makes sense today and how he expects to compete with the big holding companies for marketing dollars and agency acquisitions.
Ad Age: What types of companies will you invest in?
Mark Penn: We’ll put together a mix of companies. One of the problems in big holding companies is that there are 10 people competing against each other. One of the things we can do there is take a best in class in key disciplines so they can support each other. I think we’ll have to have a mix of creative companies, companies that have research and data analytics at their core and companies with experience in new digital placement, whether it’s new forms of programmatic buying or [firms] that are really able to sweep the most effectiveness out of your digital buy.
Ad Age: What will you do differently from existing agency networks?
Mark Penn: I hope to also bring together this experience to create a new kind of fund and one that also is managed by people with deep experience in their fields. Too often people who are doing these investments and managing and growing a firm have experience in accountancy and not deep into the fields themselves. I want to be more helpful in nurturing and growing great mid-sized companies into being really big companies.
Mark Penn, a Microsoft senior executive who formerly worked at WPP, is leaving the technology firm to found a new company that will invest in digital marketing services.
Mr. Penn’s new fund, Stagwell Group LLC, has raised $250 million in funding, including from former Microsoft Chief Executive Steve Ballmer, who is a core investor in the new company.
Stagwell Group also has the capacity to use leverage to make up to $750 million in acquisitions, the company announced Wednesday. Stagwell Group will focus on investing in companies that are “digital-first” and can use technology and data to inform creative work, Mr. Penn said. In addition to digital marketing services, the fund said it may invest in advertising, research, data analytics and public relations.
“There’s a lot of room for new blood in the advertising and marketing industry,” said Mr. Penn, who will leave his current role as executive vice president at Microsoft by September. “Every client is looking for how to combine good advertising creative with good data analytics. I don’t think they’re getting those answers from the companies they’ve got, even if they’ve got some of the biggest companies in the world.”
Satya Nadella is still decorating his new office as Microsoft CEO, but he’s wasted no time making sweeping executive changes. In the same internal memo that announced the departure of senior leaders Tony Bates and Tami Reller, the company revealed that Mark Penn is Redmond’s new chief strategy officer.
Penn joined Microsoft as a full-time employee in 2012 after two decades of advising Microsoft co-founder Bill Gates. He worked for decades as a political advisor and pollster, coming to prominence with partner Doug Schoen with their work on Ed Koch’s 1977 mayoral campaign. Along with Michael Berland, they had founded polling and market research firm Penn Schoen Berland (PSB) a couple of years earlier.
Penn served as an advisor to President Bill Clinton from 1994 to 2000, and later assisted Sen. Hilary Clinton in her successful Senate runs and unsuccessful presidential bid in 2008.
Prior to joining Microsoft, he was CEO of Burson-Marsteller, leaving the PR firm in 2012 to become a corporate vice president and strategy specialist in Redmond.
“Mark brings a blend of data analysis and creativity that has led to new ways of working and strong market outcomes such as the ‘Honestly’ campaign and the Super Bowl ad, both of which were widely cited as examples of high impact advertising across the industry,” Nadella said in a memo.
Penn’s work also includes the famed anti-Google “Scroogled” campaign, as well as the Google-versus-Bing “blind taste test” advertisements, the New York Times pointed out.
Reporting to Nadella, Penn has earned a spot on the Senior Leadership Team (SLT) and will continue aiding Microsoft’s competitive research and analysis departments. He will, however, turn over the company’s advertising budget to executive Chris Caposella.
“I am looking forward to applying Mark’s unique skill set across a broader set of challenges facing the company, from new product ideas to helping shape the overall areas of strategic investment,” Nadella said.
SEATTLE — Mark Penn made a name for himself in Washington by bulldozing enemies of the Clintons. Now he spends his days trying to do the same to Google, on behalf of its archrival Microsoft.
Since Mr. Penn was put in charge of “strategic and special projects” at Microsoft in August, much of his job has involved efforts to trip up Google, which Microsoft has failed to dislodge from its perch atop the lucrative Internet search market.
Drawing on his background in polling, data crunching and campaigning, Mr. Penn created a holiday commercial that has been running during Monday Night Football and other shows, in which Microsoft criticizes Google for polluting the quality of its shopping search results with advertisements. “Don’t get scroogled,” it warns. His other projects include a blind taste test, Coke-versus-Pepsi style, of search results from Google and Microsoft’s Bing.
The campaigns by Mr. Penn, 58, a longtime political operative known for his brusque personality and scorched-earth tactics, are part of a broader effort at Microsoft to give its marketing the nimbleness of a political campaign, where a candidate can turn an opponent’s gaffe into a damaging commercial within hours. They are also a sign of the company’s mounting frustration with Google after losing billions of dollars a year on its search efforts, while losing ground to Google in the browser and smartphones markets and other areas.
Microsoft has hired Mark Penn–a well-known political strategist, pollster and CEO of the Burson-Marsteller public-relations firm–to a new corporate strategy role reporting directly to Steve Ballmer. The initial focus: igniting more consumer use of Bing, the Microsoft Web search engine.
In an interview, Mr. Penn said he is assembling a “SWAT team” to work on thorny strategy questions around Microsoft consumer projects. His initial priority, Mr. Penn said in the interview, would be Bing, which lags far behind Google in market share and revenue despite billions of dollars of investment from Microsoft. Mr. Penn, whose appointment was announced Thursday, will have a new post as corporate vice president of strategic and special projects.
Mr. Penn said coming to Microsoft reflects his interest in technology, stemming from his youth when he built his own computer from a kit. “You could say fairly that politics and technology have been my two passions since I was about 12,” Mr. Penn said. He has consulted for Microsoft previously, including during the U.S. government’s antitrust lawsuit against the company a decade ago.
Mr. Penn said his new post germinated from a review he conducted about six months ago — at Mr. Ballmer’s request — of how Microsoft products are presented to the public. During that period, Mr. Penn said he became intrigued with Bing’s quality as a search engine. For Mr. Ballmer’s part, Mr. Penn said the Microsoft boss was intrigued with Mr. Penn’s comparison of the marketing challenge of Bing to pitching a political candidate. With search engines, Mr. Penn said, “People these days are making a choice, just like they’re making a political choice.”
By MARK PENN
Published April 19, 2011
While The King’s Speech was a great movie, it was also a great example of how to advise a CEO or other important leader. As the story unfolds, Lionel Logue, the King’s speech therapist, goes from the unwanted outsider to the trusted adviser through a process that dates back to Joseph and the Pharaoh. The relationship is based on trust, respect, a proven process, evidence-based advice and confidence. These are the same essential elements of advising a CEO, and all of them are illustrated as the movie unfolds.
Lionel teaches the King a few lessons in humility and self-respect. However, he also teaches all of us who get a chance to advise influential people just how to form that special relationship. The movie also underscores that just as important as having good advice is being able to deliver it in way that those you advise can hear it and use it.
Tony Blair said to me one day when planning out his third re-election campaign – “I feel like I am standing in front of a locked door without a key.” The point of that process was to help him find the key to his most difficult problem. And that is what Lionel did – he did not solve the King’s problem; rather, he helped the King find the fortitude within himself to overcome the obstacles standing in his way.
Mark Penn ranks #13 on PRWeek’s PR Power List of the 25 most powerful leaders in the communications industry in 2010.
Worldwide president and CEO, Burson-Marsteller
Love him or hate him, public affairs guru Mark Penn has the ear of some of the most powerful people in the world, having worked with luminaries such as Bill Clinton, his wife Hillary, and former British Prime Minister Tony Blair.
In terms of Washington power brokers, Burson-Marsteller’s Penn stands right at the top of the food chain. His challenge is to remain relevant and influential in a rapidly changing global political climate, and to lead his Burson- Marsteller empire from the front and ensure key staff members come along for the ride.
Download the PR Power List 2009 (pdf format)
Mark Penn ranks #10 on PRWeek’s PR Power List of the 25 most powerful leaders in the industry in 2009.
Mark Penn [’08 rank - #10]
Last year wasn’t easy for Mark Penn. His candidate lost the presidential primary, and his actions were publicly cited for the loss of his firm’s client, Colombia. Yet Penn remains resilient. He is active on client work, including pitching key accounts, and he doesn’t shy away from defending the industry. When MSNBC personality Rachel Maddow took Penn and his firm to task for its client roster, including AIG, Penn defended the importance of its services, even to embattled companies, in an internal memo. And despite Hillary Clinton’s defeat, there’s no doubt that Penn will remain politically influential in the future.
Download the PR Power List 2009 (pdf format)
Psychology Today: A Personal Interview with Mark Penn about Getting Through Tough Times in Life and Politics
Why don’t you start by telling me some of the toughest moments you’ve been through when advising people in tough situations.
The truth is that in today’s world, there’s no success without failure. If you can’t tolerate a failure, it’s virtually impossible to have a successful life. The road to success is paved with roadblocks. Difficult moments, things that have gone wrong, attacks you didn’t expect. To be successful you have to be able to overcome and learn from failure. The moment you lose that perspective, you don’t climb back from that.
Maybe it’s easier said than done. How do you remind yourself at the toughest moment that it’s an inevitable part of success and that you just need to get through it? How do you keep a long-term view?
You’re right to say that it’s not easy—to really understand what you’re about, where you’re going. If you look at movies, almost all movies and popular culture are based on the idea of someone who’s different standing up. But in reality, being different and standing up and having a counter view is one of the hardest things to do in our society.
I try to remember that it’s not necessarily about what everybody else thinks at that moment. It’s really about, “Are you going to have the kind of strength and fortitude to carry through with what you believe in, even against the odds?” That’s what’s made me a tough competitor and a fighter that people relied upon through their difficult situations. When you find yourself in difficult situations, are you the shoemaker without shoes? You have to be able to find some of that personal fortitude.
Are you thinking of any movies in particular?
I grew up on movies like Mr. Smith Goes to Washington and Inherit the Wind that were always about standing up for what you believe regardless of the pressure. Today you can go to even kids’ movies and they are always about the bee, the penguin, or the cub who grows up by standing up.
My most successful strategies—like “soccer moms” in ‘96 for President Clinton or the Upstate Strategy for Hillary in 2000—were always opposed by just about everyone, and I can tell you that fighting for things outside the zone of conventional wisdom will always take a lot of flak, and a lot of energy to sustain.
Mark Penn is a self-described numbers junkie who started out as a shy boy from the Bronx, N.Y. Penn’s shyness has actually become an asset — he wanted to discover what people were thinking without having to ask them.
Penn conducted his first poll at age 13. It was a poll about race relations in America, and the moment he sent it out, he said he realized, “Wow, I can find out what different people thought by sending out flyers and analyzing them, and being a different detective. & I always found it fascinating from this very first poll.”
He now polls on everything from the Iraq War to what television shows people watch (Republicans like “24,” he said. And for the last 10 years he has been the man that Bill and Hillary Clinton have enlisted to help them figure out what voters think.
“…For more than a decade now, Mr. Penn, 53, has functioned as the Clintons’ left hemisphere, drafting and interpreting meticulous and incessant surveys to furnish them, along with his other clients, with the market-tested language and policies to get them into power—and keep them there.
In the words of Doug Schoen, his polling partner for more than 30 years in the firm Penn, Schoen & Berland Associates, “Mark is somebody who is very, very comfortable with quantification. He is very comfortable with numbers and very comfortable to be able to see things in black and white.”
One gets the impression, talking to Mr. Penn, that he’d be happy enough dealing with data and nothing else…”
With Data and Slides, a Pollster Guides Campaign Strategy
It was fairly simple, Mark J. Penn said calmly to Vice President Al Gore, reporting the findings of an exhaustive survey he had conducted in the early stages of the 2000 presidential campaign. Voters liked Gore’s policies. They just didn’t like Gore.
Gore laughed, according to people who attended the meeting. He had heard that before. But the vice president, worried about the effect President Bill Clinton’s scandals might have on his campaign, had another question for his pollster: Was there any evidence of this “Clinton fatigue” that people kept talking about?
“I’m not tired of him,” Penn replied. “Are you?”
One night a week, a select group of White House aides and Cabinet members would file into the Yellow Oval Room in the White House residence. And Bill Clinton, the most polished and talkative politician of his era, for once would let someone else do the talking: a disheveled man who even friends say was ill at ease except when the conversation turned to numbers.
The man was Clinton’s pollster. The weekly residence meeting was the place where this president got his fix of the data that drove a presidency.
As Clinton prepares to leave office 20 days from now, even his sharpest critics bow to his mastery of politics. This was a president who understood his times and became the dominant voice of them, who faced every conceivable adversity yet managed still to survive and prosper. What is less understood is that Clinton’s political gifts were more than the magic of personality. They were a set of precise techniques that relied on constant gauging of public opinion, and constant responses to it in ways large and small.
So Clinton’s legacy is in many ways a story about polls. It is not true, as some critics say, that Clinton always did what pollster Mark J. Penn’s numbers told him to do. It is true that no previous president read public opinion surveys with the same hypnotic intensity. And no predecessor has integrated his pollster so thoroughly into the policymaking operation of his White House.