Technology & Innovation

Podcast — 10 Jul, 2025 MediaTalk | Season 3 | Ep. 28 - Stagwell CEO Mark Penn Talks The Future of Marketing Amid AI Revolution By Mike Reynolds "MediaTalk" host Mike Reynolds sits down with Mark Penn, chairman and CEO of Stagwell, to discuss what sets Stagwell apart in the realm of marketing networks. Stagwell is a digital-first global marketing network that thrives on innovation, creativity, and technology. With a presence across 45-plus countries and an impressive workforce of 13,000 employees, Stagwell is redefining the marketing landscape by offering scalable and seamless solutions that merge top-tier creativity with cutting-edge technology. One of the standout features of Stagwell is its pioneering use of artificial intelligence in marketing. Mark highlights how Stagwell has been at the forefront of AI integration long before it became mainstream. The company's Marketing Cloud is a testament to this, offering a suite of tech-enabled tools that drastically reduce the time required for tasks such as writing news releases and media monitoring, making them efficient and highly effective. Stagwell's innovative approach includes AI-based global media monitoring, influencer marketing platforms, and automated brand tracking, all designed to enhance the precision and impact of marketing campaigns. Moreover, Stagwell's commitment to AI is further underscored by the appointment of John Kahan as the inaugural Chief AI Officer, overseeing the infusion of AI across the company's products and services. By combining human ingenuity with AI, Stagwell is not only saving costs but also elevating the quality of advertising, making it more personalized and impactful. As Mark puts it, Stagwell's goal is to become the next great marketing company, leveraging AI to deliver the right ad to the right person at the right time. More S&P Global content: MediaTalk | Season 3 | Ep. 19 - Disney's Upfront Unveiled: Navigating the Future of Sports and Streaming MediaTalk | Season 3 | Ep. 18 - NBCU Ad Exec Previews 'The Greatest Collection of Content Assembled by One Media Company' Featured experts: Mark Penn, Chairman and CEO of Stagwell Credits: Host/Author: Mike Reynolds Producer/Editor: Sarah James Check out the MediaTalk podcast series Click Here View Full Transcript Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence's tech, media, and telecom news team. Welcome to "MediaTalk," a podcast hosted by S&P Global, where the news and research staff explore issues in the ever-evolving media landscape. Today, I am joined by Mark Penn, who is chairman and CEO of Stagwell, a digital-first marketing network. Mark's career spans over 40 years. Before founding Stagwell, he served at Microsoft Corp. as Executive Vice President and Chief Strategy Officer, managing a $2 billion advertising budget. He was the founder and CEO of Penn Schoen Berland, a market research firm that he sold to WPP PLC. At WPP, he also became CEO of Burson-Marsteller, one of the world's largest PR firms. For six years, Penn served as White House Pollster to President Bill Clinton and was chief strategist of his 1996 re-election campaign. He's also authored a pair of marketing insights books, “Microtrends: The Small Forces Driving the Big Disruptions Today” and “Microtrends Squared: Small Forces Driving Today's Big Disruptions.” Stagwell, as I mentioned, is a digital-first global marketing network that delivers scalable, seamless solutions through a combination of top creativity and leading-edge technology. Headquartered in New York, Stagwell also has a significant presence in Washington DC, operates in more than 45 countries overall, and counts 13,000 employees. Stagwell trades on NASDAQ under the symbol STGW. Mark, thanks for joining us today. How are things going? Mark Penn: Great. Thank you for having me. Things are going quite well. Reynolds: Alright. My introduction hardly does Stagwell justice. Mark, can you give us a sense of the company, its various agencies, its missions, and how you brought this all together? Penn: Sure. As your introduction suggested, I have decades of experience across all of the disciplines in marketing. What I realized was that most of the big companies out there, the behemoths of marketing, are behind the times. They're not digital-first and are having trouble adapting to the technology world. Actually, when Steve Ballmer exited Microsoft, he said to me, "That idea you had for a new marketing company, I'll be your core investor." So, nine years ago, Steve and I set out to create Stagwell. Nine years later, after a reverse merger into another marketing company that put us on NASDAQ, we're 13,000 employees in 45, maybe even 50 countries. At this point, we're one of the world's biggest providers, although we're still the challenger network because we're coming up in scale. As we come up in scale, we provide core marketing services, advertising like those you see on the Super Bowl, social media that you see online, public relations, great research with the Harris Poll. We provide media and e-commerce. We offer extensive digital transformation, whether you see the CNN Magic Wall or the NBC Olympic site. We have a strong advocacy group that works in politics and political campaigns. Finally, we have what we call the Marketing Cloud, which is a suite of self-service tools. Our vision here is to be the next great marketing company and to cover the field from global full-service down to platform self-service. I always say at our kind of nine-year anniversary, now we're just a teenager. Whatever you see us as today, we're going to be a lot bigger tomorrow. Reynolds: And this teenager got on the NASDAQ Exchange when, Mark, forgive me? Penn: Three years ago. Reynolds: Alright. I believe Stagwell is in the process of reorganizing a bit to become more aligned with how its clients use Stagwell services and products. Is this going into effect, Mark, or has it gone into effect? Penn: Yes, this is going into effect over the next couple of months. Clients judge you on your marketing services, your media, your digital transformation advocacy. They look at those almost separately, and so we're making sure that the divisions correspond to the scale the clients are looking for. I think this is helping us move up into larger and larger clients. We recently won clients like Visa Inc., Starbucks Corp. and Target Corp., and so a significant number of larger-scale clients. I think as they see that we've got the right blend of creativity and technology and the right scale emerging, consistent with what a modern marketer needs. Reynolds: I gotcha. You guys are launched or are about to launch Unreasonable Studios, which is a production and creative content company led by Justin Barocas. Mark, can you please give us a little rundown on Unreasonable, if you will? Penn: Yes. Unreasonable is a great new group, which we basically took several of the agency's production capabilities and centralized them in one scaled combination group that can handle this production element. When you think of marketing, some people come up with the ideas, and then that goes to a group of people that make them, and that's called production. So we're centralizing the production. This group can do anything from making a thousand variations of the content of your sneaker to producing a Super Bowl-quality advertisement. Justin is incredibly experienced across both technology and creativity. Reynolds: Let's talk about the Cannes Lions International Festival of Creativity. You were in France last month, I believe. Congratulations are in order. Penn: Thank you. If you look through the press, we took the award at Cannes, which really was to create an experience that illustrated to our clients that we were a shoemaker with shoes. We created something called Sport Beach. We do the branding, the building, the experience. We bring together name athletes who volunteer for the experience with our brands to talk about the combination of athletics and branding. This has proven to be incredible. We started this three years ago. Clients really love it. We get whole marketing teams who come to meet with us and study Sport Beach and how the branding works. Reynolds: Who are some of the athletes that joined you this time around? Penn: Carmelo Anthony, Sue Bird, A-Rod, Billie Jean King, Serena Williams. Reynolds: These are A-listers. Good job, man. Penn: Yes, we had about 7,000 people come through the experience for one panel or another. We really became the talk of the festival. As I said, it's also a demonstration project to clients of the level of our work, and internally it gets everybody working together to produce this big event. Reynolds: Okay, so big sports doings in June in France, and then again in February around that little game known as the Super Bowl. Stagwell agencies worked with a number of clients for Super Bowl 2025 and in prior years. Can you give us a little bit of a recap of what you guys were involved with in the NFL Championship game this past February? Penn: Sure. We do a little Sport Beach Café kind of experience where we bring athletes together because sports marketing is becoming critically important. We do the work for the NFL. We did a major ad for Starbucks. Even though we're 1% of the market, we'll often be somewhere between seven and 10% of the Super Bowl ads, particularly all of those NFL ads that you see. Reynolds: Big push this year for flag football. Penn: Yes, exactly. You see the quality of our creative work. In today's world, I always say some of the other companies have abandoned creativity. Creativity remains incredibly important. We marry it with technology. We don't do one without the other. It's a false choice. Reynolds: Alright. The 2026 February Super Bowl is at Levi's Stadium in Santa Clara, California. NBC and Peacock will be covering the Winter Olympics from Italy, and then the NBA All-Star game is at your boss Steve Ballmer's Intuit Dome in LA. Busy time for you guys ahead. Can you speak about what may happen in February? Penn: It's a little early. People don't really make their Super Bowl plans yet. The Super Bowl is just one of the tent poles for marketing. I always say that there are news junkies, sports junkies, and entertainment junkies. Marketing really surrounds each of those different groups. It's too early to really say what's going to happen. People like to keep their Super Bowl plans secret until the last minute when you unveil it, hopefully to a very positive reception. Reynolds: Okay. Earlier, Mark, you mentioned the Marketing Cloud. It's your tech-enabled marketing system. Can you give us a little bit more depth here? Penn: Sure. We've been doing AI before AI was a thing. We have a whole set of communications tools that help write news releases, figure out who's going to cover them, do all the placement for you. They really take something that might take somebody 10 hours in the old days and reduce it to an hour. We have global media monitoring that tells you what everybody is saying and gives you an AI-based report on it. We have an influencer marketing platform so that you can run influencer campaigns, which are increasingly popular. We have do-it-yourself research, communities, automated brand tracking. We have an incredible suite of products for people in media research and communications. We just renamed it the Marketing Cloud. In the long term, we create some investment opportunities around this. These are primarily SaaS-based software products that come out of our central innovation team here that does innovation for all the agencies and for the cloud itself. Reynolds: It sounds like AI. You guys have been involved with it for quite some time. The whole world is there now. Meta Platforms Inc. talked a little bit about how by the end of 2026, all of its creative and planning opportunities will go the AI route. Your take on that, sir? Is that where this world is heading? Penn: We see AI as our friend because we do a lot of digital transformation, meaning we create a lot of client-centric experiences for companies that are based online. We help design some of the interfaces for some of the tech companies. We were very much a tech company's tech company. The FANG companies are typically among our top four or five clients, with extensive relationships across them. AI is something that's infused in the business, will make it somewhat more efficient, will make production much easier because you can create images that you couldn't create before. But it's also, I think, going to change how every company relates and communicates to its customers. Our Code and Theory network is very much at the front line of what's called agentic AI. Reynolds: John Kahan recently became Stagwell's inaugural Chief AI Officer. What's he involved with? Is there a particular mandate that you've put him in charge of? Penn: Yes, I was very pleased. I knew John at Microsoft. He was head of data and analytics at Microsoft and before that had a similar job at International Business Machines Corp. He is overseeing our overall AI efforts within the company, within the brands, and particularly overseeing how we're infusing it into the product. We're as far removed as the old kind of "Mad Men" image of advertising. It's, yes, creativity, but yes, technology and AI, and the two of those together are what can make us the right kind of growth company over time. Reynolds: AI, I think you guys have said it's going to help Stagwell with cost savings. Big money to be saved here. Penn: Yes, we're building something we call "The Machine" internally. It is the central platform that all accounts will be run on. It deeply incorporates AI and other technologies that we have developed that help place media or do research. Everyone in every company will be on this single platform. It will be an enormous saver in terms of labor and manpower, as well as give us a state-of-the-art offering to clients because it's also the way the clients will interface with their workflows with us. Reynolds: That savings is part of a bigger initiative, which you announced at a virtual investor day back in early April. Take us through that. Penn: Yes, we're taking out somewhere between $70 million and $80 million of costs. I think there'll be additional opportunities on top of that as we see AI. You shouldn't get the wrong impression that marketing is going to be a black box and you won't need marketers. You should get the right impression that just like movies got more sophisticated, they didn't go back to silent films. Don't expect marketing to become more primitive because AI helps us. Like movies after Star Wars and Pixar, they will become increasingly sophisticated, better targeted, more personalized, but the images themselves will be even more moving and more evocative because people see a lot of advertising that is really useless. I think you're going to see the industry and us do an even stronger job at making more impactful advertising that leverages human creativity, AI, and the worldwide web to reach you. Reynolds: You guys have a 5x5 initiative by 2029. Give our listeners, Mark, a little bit of a sense of what you're looking to accomplish. Penn: Exactly. In the last nine years, we've come from zero to close to a $3 billion company. Our goal is in the next five years to get to a $5 billion company, to do that with a combination of organic growth, which I think is going to be fueled by the scale that we take on so that we get bigger clients. We're just winning, for example, our first government contracts, and that's a market that should be 10 or 15% of our business. AI contracts are coming in on the digital transformation side. Larger clients are coming in, so to get to $5 billion in the next five years. Of course, we're also active in the M&A space because we're a growth company, and M&A is an important part of that growth. Reynolds: Let's isolate a little bit on 2025. How are you guys forecasting for this year? Given world situations, Trump tariffs, and policies, how does that perhaps impact the ad business generally? Penn: I think this is going to be a good year for the ad business. I think it's going to be a year of modest growth in the overall industry. We've been through some rough years. We went through a pandemic where everybody canceled everything. Then we went through a post-pandemic period where everybody was on a kind of sugar high of getting back. Then we had a year of fear of recession and technology cutbacks. Right now, technology, which is our biggest client sector, is on a roll. They know that they've got to interest and attract consumers with new AI products, and we're intimately involved in that. Obviously, we don't pay tariffs for the human creativity that we have. We're not finding a big effect with the kinds of clients we have in terms of tariffs. There are some car companies, some retailers, but by and large, this is a good marketplace. It should have good growth overall. Good growth starts with GDP, and then you say, "Can you achieve something above GDP?" I think this will be an above-GDP year for marketing. Reynolds: Alright, we're getting to the end here, Mark. What's the Wall Street opportunity for Stagwell? Shakespeare said all the world's a stage. Don Draper must have said it, and Mike Reynolds agrees. All the world's a pitch. Can you give us yours? Penn: Sure. You invest in Stagwell because you believe in the vision that we can build the next great marketing company here for the modern marketer, and you should believe it because I started with myself and an assistant and an investment from Steve Ballmer nine years ago. We've come this far, we've got about 4,000 clients. Some of the most important clients, whether they're tech companies, retailers, or providers like Starbucks and Visa, and car companies like GM. We're just going to keep going. That's my 5x5 plan. My 5x5 plan is we're going to get to five-by-five and then have an EBITDA of 800 to a billion and have incredible cash flow. Operationally, I think this is going to be based on "The Machine," based on AI, and based on this great combination of creativity and technology that should get what we always say: it's all about getting the right ad to the right person at the right time. Understand that we're still growing, we're investing in that growth. It's important for us to get that scale. You're investing in a teenager. But when we grow up here in the next five years, I think you're going to see an incredible company. Reynolds: That concludes this episode of "MediaTalk." I want to thank our guest, Mark Penn, for giving us a look into Stagwell, the Challenger Marketing Network he heads and is guiding toward a greater digital future. Thanks for joining us, Mark. Penn: Thank you. Reynolds: Alright, and this is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next episode of "MediaTalk."