On a call with investors Tuesday morning Stagwell CEO Mark Penn said that the tech companies, which implemented “dramatic cutbacks” in 2023, are starting to “ease up” on the strict spending controls imposed last year. In Stagwell’s case, cuts in tech amounted to approximately $150 million in 2023. “I’m not saying it’s back to full spend yet,” said Penn, “but it started in Q4 and is continuing into Q1.”  

And by mid-year Penn added, he expects “the flood gates will open” on tech ad-marketing spending as the sector transitions from a “year of efficiency” to a highly competitive battle to win marketplace support for various artificial intelligence products being developed.  

“Nobody owns AI,” said Penn. But the technology will transform many aspects of daily life and tech firms will compete for as big a share of the AI market as they can get.  

And Penn anticipates that Stagwell will be getting many AI-related client assignments.  

As to political spending, Penn predicts “an all-out slugfest of the highest dimensions” that will result in record spending of around $12 billion. 

He also said the company will continue to look at shedding non-core assets from the company’s portfolio of company’s while continuing to acquire firms that bolster key capabilities. Last year the firm sold healthcare marketing company ConcentricLife to Accenture Song for $245 million. He said the firm is exploring another disposition about half the size of that deal.  

Penn’s remarks followed the release of the firm’s fourth quarter and full-year 2023 financials earlier in the day.