Stagwell maintains outlook after 16% organic revenue growth in second quarter, sees ‘healthy pitch market’

Stagwell Inc. posted double-digit second-quarter organic revenue growth and maintained its annual forecast as the holding company plans to further mix its creative and media capabilities. “After years of procurement separating media from creative, the demands of the digital world are bringing them together again, and we are responding to this trend,” Stagwell CEO Mark Penn said on the company's quarterly conference call. “These new kinds of media and creative and commerce hybrid accounts are helping fuel 33% growth in the media capability.” The plan to bring Stagwell’s capabilities closer together includes having creative agencies Crispin Porter Bogusky, Forsman Bodenfors, Observatory, and Vitro join Stagwell’s media network to help expand the network’s “creative breadth.”Read more: Stagwell CEO Mark Penn on its media approach, competition and outlook Stagwell's second-quarter organic net revenue rose 16%. The results were calculated on a pro forma basis, as if the August 2021 acquisition of MDC Partners by Stagwell Marketing Group had been completed on Jan. 1, 2020. Unlike Publicis, Omnicom, and Interpublic Group of Cos. which raised their annual forecast estimates for the year, Stagwell has kept its guidance the same as last quarter. The holding company still predicts 18% to 22% net revenue organic growth in 2022. “While we continue to perform ahead of plan, we're taking a prudent approach to full-year guidance while incumbents have minimally raised outlooks to 6 or 7% growth we are reaffirming our already strong outlook for the year,” Penn said on the call. Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here Despite economic issues, Penn says he has seen a “healthy pitch market” this year. “After the rush of new business going into the beginning of the year, we saw a slight low then in pitches butut when we got back from Cannes we really saw a flood of new pitches,” Penn said. “We're now up for a raft of very significant $10 million pitches which are due between now and fall or late fall to be resolved. So we are seeing here a very healthy pitch market. Had I not seen that resumption, I might have been concerned, but what I really saw was a flood of those things.” Net revenue was $556.3 million. Digital services accounted for 57% of net revenue in the quarter and grew 28% on an organic basis, Stagwell reported. The media network, which includes agencies Gale and Assembly, posted 28.1% organic net revenue growth. Stagwell’s communication segment, which includes firms such as Targeted Victory and Allison+Partners, posted 27.9% organic net revenue growth. Observatory recently named a new CEO and president following the departure of its founder Jae Goodman. Penn also announced the creation of what he called Stagwell Media Studio to help its integrated agencies “bring media capabilities in-house.” “These moves will enable all Stawell agencies to offer different flavors of connected offerings, doing advertising and media to a broad mix of clients.” As has become custom over the past few earnings calls, Stagwell released a trailer-like version of its earnings. Shares of Stagwell were down 6.7% in late morning trading. Stagwell is the fourth holding company to release its earnings for the quarter. Last month, Publicis Groupe reported 10.3% organic revenue growth and IPG reported 7.9% organic net revenue growth compared to the year-earlier quarter. Omnicom Group reported an 11.3% increase in second-quarter organic revenue. Dentsu Group will release its results on Aug 10. While Stagwell’s video conference call ran smoothly as usual at one point noise could be heard off screen. Later on the call Michaela Pewarski, Stagwell’s VP of investor relations, apologized for the background noise that was apparently caused by window washers. “I just wanted to apologize for the background noise from the window washers here at One World Trade, we'll definitely clear our schedule with them beforehand next time,” she said.

Stagwell maintains outlook after 16% organic revenue growth in second quarter, sees ‘healthy pitch market’

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