The Scene
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CANNES — For a week each summer, ferris wheels and mobile nightclubs occupy the beach. They’re intended to make a splash with the advertising industry, gathered for its annual awards ceremony.
This summer’s buzzy entrant is Sports Beach, featuring a pickleball court and athletes including Carmelo Anthony and Maria Sharapova, and sponsored by Stagwell — which almost nobody in Cannes seems to have heard of.
Stagwell’s CEO, Mark Penn, is not a sportsman, and would not be mistaken for one of those smooth-as-silk advertising executives who seem at home on the Riviera. (“I enjoy water,” he told me when I asked.)
When he first came to Cannes after getting into the ad business eight years ago, he stayed in his hotel room. But last year, he said, he was getting meetings. So this year he donned a white polo shirt and seersucker shorts for a kind of coming-out party for Stagwell, whose brand is also splashed across the front of the Palais, the main Cannes venue.
Stagwell is the largest of a set of new holding companies — including Martin Sorrell’s S4 and the private-equity backed Dept — seeking to break into the ranks of multibillion-dollar marketing conglomerates like WPP and Publicis.
“No person in Washington understands that I run a 12,000-person public company,” Penn remarked in an interview from his home there before the festival.
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Like many American journalists of my generation, I met Penn when he was cementing his reputation as one of the most widely-disliked men in Democratic politics. A onetime wunderkind pollster, he’d helped steer Bill Clinton to the center in the 1990s, and masterminded Hillary Clinton’s futile campaign against Barack Obama before he was ousted. By 2019 the Washington Post reported that he was visiting the White House to advise President Donald Trump on impeachment. (An aide confirmed that they met but called the report that he advised Trump “completely false.”)
Penn, now 69, will still offer his opinion — that both parties should move to the center — to anyone who asks. But lately only Fox News asks, he said, so that’s where you’ll find him. His wife, a former Democratic fundraiser, now runs a rogue group called No Labels that’s seeking to challenge U.S. President Joe Biden, and few in DC buy Penn’s vague disavowals of it.
But politics these days is merely Penn’s hobby. Even while he worked for Hillary, he was an executive inside a PR firm owned by WPP. He left in 2012 after it became clear that Sorrell, then CEO, would never let him run the giant holding company. (Sorrell remarked pointedly that Penn’s successor was “collegial with good people skills.”)
Penn left with a different point of view. WPP was “behind the times, it’s not digital enough.” He could, he thought, “take my 40 years of experience across advertising, marketing, and digital campaigns and do a better job.”
First, Penn went to work for his Harvard Crimson friend Steve Ballmer, then the CEO of Microsoft, on hard-edged attacks on its rival Google. He left after the now CEO Satya Nadella shifted to a less confrontational posture. In 2015 Ballmer staked him $250 million that allowed Stagwell to begin buying up agencies to build a rival to WPP.
Ben’s view
Penn’s thesis was that marketing, like other industries, was slow to switch to digital technologies, and a digital-first holding company without legacy assets would arrive with an immediate advantage. His early acquisitions include perhaps the most central Democratic Party consulting firm, SKDK, which is notably close to the Biden White House, and a set of digitally focused firms. In 2020, he changed course, picking up a set of high-profile, old-fashioned creative agencies like Anomaly and 72andSunny in the acquisition of MDC, a rival holding company that faced an accounting scandal. (Penn said he had encountered the CEO, Miles Nadal, and thought: “If that guy can run this company, I sure could.”)
The deal seemed to work: Stagwell’s stock price rose steadily, peaking over $10 in the fall of 2021. But Penn’s original thesis has grown a little murky. As in other media industries, legacy players have bought or copied their way to technological parity, and Stagwell now has its own mixed model. The stock is trading around $7 — giving it a market capitalization of around $2 billion on revenues of $2.7 billion in 2022.
Still, Penn had reason to be proud at Sport Beach. He was, he said several times, “a shoemaker with shoes” — a marketer who could stand out among marketers. And he doesn’t mind his outsider image. (His staff, in preparation for the piece, had in fact sent me a lukewarm profile in Ad Age that included a description of him as a “cultural misfit.”)
Penn’s old polling partner Doug Schoen, with whom he parted on difficult terms more than a decade ago, said that “what Mark has done is an extraordinary accomplishment: having a vision in this space, realizing it, and having the success he’s had.”
Another top Democrat who worked closely with Penn put it differently: “The tragedy for Mark is that he’s a pretty good businessman and a pretty lousy political consultant — but he wants to be recognized as a political visionary.”
Room for Disagreement
Stagwell may still have a path to the top tier, through a merger with another holding company, perhaps Vivendi’s Havas, executives suggested to Ad Age.
Notable
- The New York Times christened Penn “the guru of small things” when he was guiding Hillary Clinton’s 2000 Senate campaign: “He has wondered, Should Hillary Clinton push for more federal money to widen the Long Island Expressway? This is a politics of discrete problem-solving and assiduous service, a sort of concierge politics.”
- Penn remains competitive with his old boss Sorrell: “Martin’s a lot older than I am, so he may not have the patience that it takes to build this up,” he said in the Ad Age profile.
- Jim Messina, Barack Obama’s former campaign manager, captured the anger of Democrats at No Labels: Penn and his wife, Nancy Jacobson, are “no longer relevant within the party, so now they’re going outside the party looking for relevancy.” He continued: “Besides giving directly to Donald Trump’s campaign, the best thing you can do to elect Donald Trump is to support No Labels.”