During the call, Penn mentioned that he is bullish on AI, highlighting Stagwell's AI-driven PR company PRophet as an example of the company’s investment in the space. PRophet's product can generate an entire press release from just a few sentences in a prompt, Penn explained.
“I think over at Google they're saying how did Microsoft get the drop on this,” Penn said after being asked about his thoughts on Microsoft’s Bing AI capabilities. “And I think that Google has the engineers and the talent to bounce back. So I think for the first time we're going to see some real head-to-head competition in the tech industry to see who winds up the leader.”
Currently, Penn sees AI ready to be used for verbal work. “We’re building central AI resources that then can be utilized by all the Stagwell programs and agencies in terms of what they do,” Penn said. “I think that in terms of visual content, it's a more difficult situation, but in terms of verbal content, I think we're really seeing immediate applications.”
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Stagwell posted a fourth-quarter net loss attributable to common shareholders of nearly $6.5 million, compared to a profit of $837,000 a year earlier. The holding company also set a goal to cut administrative expenses by $35 million over the next two years, including HR, accounting, and office costs.
Stagwell's revenue gains in the quarter were led by its digital transformation capabilities business, which turned in organic net revenue growth of 33%. Organic Consumer insights and strategy posted organic growth of 17%, performance media and data grew by 12% and creativity and communications grew by 3%.
Other holding companies
Stagwell is the latest holding company to release its fourth-quarter and full-year 2022 results.
In February, Publicis Groupe reported that its organic revenue increased by 9.4% in the quarter and 10.1% in 2022, and predicted single-digit growth for this year. WPP predicted revenue excluding pass-through costs will increase between 3% and 5% this year from £11.8 billion ($14.2 billion) this year. Omnicom posted 7.2% organic revenue growth for the fourth quarter and 9.4% growth in 2022, and predicted organic revenue growth of 3% to 5% for 2023.