• by Richard Whitman , Columnist, November 8, 2021

Back in May, Stagwell CEO Mark Penn told analysts the company was gaining traction with some SaaS (software as a service) products that could possibly be spun off into a separate company.

But that was before Stagwell completed its merger with MDC Partners. Now the more likely plan is to package those services up and pitch them as a suite of in-house marketing tools.

Penn told analysts and shareholders about the plan at the company’s Investor Day presentation held Monday afternoon. It was held  live in New York and virtually.

The suite includes PRophet, an AI PR tool that helps determine how a piece of news will be received before it’s pitched. Another product is an influencer-marketing platform called Koalifyed, developed with P&G.

A third is called CUE, or Consumer Understanding Engagement, a platform that crunches first-party and other data to create target audiences for clients. It’s been tested internally and will be released in the coming months, said Penn.

The firm is also developing a smart phone survey tool the Harris Poll is taking the lead on, as well as services utilizing NFTs, Augmented Reality and QR codes.

Penn said he was “confident” the company would be generating organic growth of between 7% to 9% in the near future, although he stressed he was not talking about 2021. He would not be pressed into to a specific time frame for that growth at this point.

The company has ambitious expansion plans and a $450 million annual M&A budget to help realize those plans.

“We can’t sit at $2 billion,” said Penn, referring to the company’s current annual revenue. “We have to get to $3, $4 and $5 billion” and “we have to scale wisely.” Part of MDC’s problem in earlier administrations, Penn said, was the company took on too much debt as it expanded.

That won’t happen again, he insisted. By 2025, the company could be a $3.4 billion enterprise, with core digital services accounting for 65% of revenues. Longer term, that figure is expected to rise to 80%.