PR Week: Evolving the Agency Model

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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.

Read the full article at PR Week

Advertising Age: Mark Penn’s Stagwell Group Buys Majority Stake in Code and Theory

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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.

Read the full article at Advertising Age

Variety: Movie Tracking Specialist NRG Bought by Mark Penn’s Stagwell

variety

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.”

Read the full article at Variety

Politico: Mark Penn’s private equity group to buy PR firm SKDK

politico

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.”

Read the full article at Politico

The New York Times: Mark Penn’s Stagwell Group Will Acquire SKDKnickerbocker

nytimes

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.

Read the full article at The New York Times

Advertising Age: Mark Penn Wants to Build a New Kind of Holding Company

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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.

Read the full article at Advertising Age

The Wall Street Journal: Microsoft’s Mark Penn Forms New Digital Marketing Investment Group


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.”

Read the full article at The Wall Street Journal

PC Magazine: Microsoft Names Former Clinton Aide Mark Penn Chief Strategy Officer

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.

Read the full article at PC Magazine

The New York Times: A Political Brawler, Now Battling for Microsoft

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.

Read the full article at The New York Times

The Wall Street Journal: Mark Penn, Microsoft’s New Strategist, Hopes to Boost Bing



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.”

Read the full article at The Wall Street Journal Digits blog

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