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Stagwell EMEA CEO: We want to be in the ‘Goldilocks zone’

Stagwell EMEA CEO: We want to be in the ‘Goldilocks zone’
The Media Leader Interview

James Townsend speaks to The Media Leader about the challenger agency group’s plans for expansion and why he believes consolidated holding groups provide “opportunity” for account wins.


“My only stipulation is we had to be on one floor.”

When Stagwell EMEA CEO James Townsend moved back to the UK from New York to lead Stagwell’s newly opened European headquarters out of London’s Blue Fin building, he wanted to ensure a strong sense of collaboration between the agencies that comprise the group.

“We want to create serendipity,” Townsend explains as he takes The Media Leader on a tour around the office — a rectangular circuit with a skylit central open area. The Thursday afternoon atmosphere is lively. Staffers are playing table tennis and chatting over lunch.

Agencies are dotted around in an orderly fashion: for example, media shop Goodstuff Communications, which Stagwell acquired in 2022, has its desks to the south; staff from creative agency Forsman & Bodenfors are to the north, with creative and media meeting together to the west. Facing east are the comparatively quieter desk spaces of research consultancy HarrisX, which are located next to a bustling staff mess area.

Townsend, who was previously global CEO of Assembly before his promotion to group level in December 2023, allows individual agency leaders to define their own work-from-home policies, rather than take a top-down approach, as controversially advocated by the likes of WPP’s Mark Read.

However, he notes, Stagwell has a high in-office attendance — roughly four-fifths of employees are in the office four days a week, despite the lack of a mandate.

European expansion

Townsend has been tasked by group CEO Mark Penn with substantially growing Stagwell’s EMEA footprint. Currently, he says, around 80% of the challenger holding group’s revenue derives from its US businesses, with 20% from international operations. Over the next few years, the goal is to even that ratio closer to 60:40.

To that end, Stagwell has sought to aggressively expand via international acquisitions. Townsend says key regions for growth include MENA and APAC, while within Europe, Germany, France and Italy have emerged as key targets.

Indeed, Stagwell Italy officially launched last month. Diego Ricchiuti joined from MullenLowe Italia to lead the office as its inaugural CEO, reporting to Townsend.

Three other European acquisitions were made by Stagwell in 2024, among 11 total acquisitions worldwide. These include media intelligence company Unicepta in Germany, digital brand and marketing consultancy What’s Next Partners in France and specialist digital agency collective Sidekick in the UK.

It is part of Stagwell’s broader strategy of heavily reinvesting capital to grow its business into new markets. In the company’s latest earnings, it revealed that total revenue increased 15% year on year to $711m; organic net revenue increased 8% in the same time period, in comparison.

Stagwell CEO Mark Penn: how a former Clinton pollster built a $2bn ‘Big Four’ challenger

Building a ‘Goldilocks’ agency group

Reflecting on the relatively strong business results (Publicis Groupe, which officially became the largest advertising holding group when it reported earnings this week, saw 6.3% organic growth in Q4, albeit with a much larger market share), Townsend exudes confidence: “The challenger mindset seems to be the order of the day.”

Amid a trend of holding group consolidation — Interpublic is set to be acquired by Omnicom, pending regulatory hurdles — he views this as a positive for challengers like Stagwell.

“I wish them well and I see it as an opportunity for us,” Townsend admits. Whereas Stagwell will be operating “up and out”, with an eye towards strategic acquisitions, the merged IPG-Omnicom entity will be “down and in”, focused on rebuilding synergies between their amalgamation of agencies.

“Establishment players are too big — and getting bigger,” he adds.

In contrast, Stagwell wants to sit comfortably in the “Goldilocks zone” — not too big like the enlarged holding companies and not too small like the independent agencies it has subsumed. Other comparables include The Brandtech Group and Brainlabs.

Townsend believes that right level of scale is key to taking more business from competitors by offering more personal relationships with clients with the scale and capabilities provided by a global group.

“We want to keep stealing shit,” he jokes.

‘Skin in the game’

Of course, with growth often comes growing pains and Townsend is well aware of the need to manage territorial expansion with responsibility.

He tells The Media Leader that his eyes are fixed on the “quality-scale equation” — the ability to maintain the same level of standards with clients even as the broader group continues its buying spree.

According to Townsend, the key to preserving quality is creating a culture that values both entrepreneurial spirit and honesty.

Penn, he says, has been an “incredibly empowering leader” who inspires deputies to challenge the status quo. That includes planting a flag in support of digital news journalism; Stagwell’s Future of News research has recently uncovered a strong business case for supporting publishers — something that Townsend says are “under-penetrated” by competitors.

Indeed, a recent pre-Davos survey of CEOs and board directors conducted by HarrisX found that industry leaders broadly view news media as a powerful advertising tool and believe brand-safety efforts have been over-applied.

Internally, Stagwell’s equity structure incentivises quality output from staff at all levels, according to Townsend. Its more even distribution relative to other holding groups, including a buy-in scheme for junior members and stock rewards for hitting key performance indicators, means staff “have skin in the game”.

Shares of Stagwell have traded relatively flat since 2021, generally hovering between $6 and $8. Over the past 12 months, the stock has dipped 2.65% as of the time of publication, albeit with volatility around earnings releases.

So what broader challenges agency leaders must focus on in 2025? Townsend thinks agency remuneration models need to be reconsidered industry-wide. A November report from MediaSense found three-quarters of advertisers want to change their agency compensation model.

“We, as a challenger, want a performance-based model,” says Townsend, adding: “We back ourselves.”

Rethinking agency remuneration in 2025 — with MediaSense’s Ryan Kangisser

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