Media Buying Briefing: How Gale became the ‘tip of the spear’ for Stagwell Media Network’s growing agency roster

revenue magnet

This Media Buying Briefing covers the latest in agency news and media buying for Digiday+ members and is distributed over email every Monday at 10 a.m. ET. More from the series →

As Stagwell Media Network continues to beef up its offerings by adding creative, commerce and other agencies to its roster, one of its lesser known properties is serving as an internal “influencer” agency — a model for how to build for the future of media, which is anything but media alone. 

Multi-discipline agency Gale was founded by CEO Brad Simms back in 2014, as a research and CRM-driven shop that always was intended to be built upon. It was when Simms injected media into the offerings that Gale hit another gear of growth. It now houses a full quiver of offerings from creative to commerce to media to content to research and insights. 

“The idea was let’s create something really stable, that we can put things on top of and integrate them,” said Simms, who is also head of product and strategy for Stagwell Media Network (SMN). “Back then we definitely saw that integration and kind of the reassembling of services was where the market was going, primarily driven by where the consumer is going.”

Fast forward to today, and Simms points to SMN having “created a global set of agencies that takes the blueprint that we have figured out at Gale that has gotten us to 700 people and applying it to a network of 5000 people. We built [SMN] in the frame of a complimentary not competitive set of agencies that allow us to replicate what we’ve done at Gale at the Stagwell level ”

Gale has grew its client roster by adding H&R Block a year ago, while also scoring work for Hertz, Hard Rock, Seagate and others. Since 2019, media spend grew from 0 to $850 million in 2021, and Simms expects that number to hit $1 billion by year-end. Given that growth, staffing also grew in that time frame from a little over 200 then to 650 this year. 

James Townsend, the global CEO for Stagwell Media Network (which is about to be rebranded to reflect its broader mission beyond media), credited Gale with offering a blueprint for the modern agency.  “Its success has guided our approach to the Stagwell Media Network,” said Townsend, adding that Gale “has cracked a cultural code of choreographing these diverse skills in a way that is driving exponential growth for its clients – and now too for the clients of the Stagwell Media Network.”

Jay Pattisall, vp and senior agency analyst, credited Gale’s versatility as a good model to emulate, but it’s harder to achieve when merging disparate agencies such as Crispin Porter Bogusky.

“With the lightning in a bottle that Gale has captured by by integrating its media and content and creative execution, Stagwell is attempting to replicate with the inclusion of Crispin Porter Bugusky, Forsman & Bodenfors and Vitro & Partners, which are now part of the media network,” said Pattisall. “It is a step for them to become part of the network, but it won’t truly succeed without the actual merger of a creative company and a media company together.”

Pattisall’s point is that Gale is like a Lego set that was meant to be built upon, whereas mergers are much harder to pull off because of established ground that one side or another needs to give up when merging. “It has to be an integrated proposition inside a single company,” he added. “So I don’t suspect that Stagwell will be able to recapture the lightning in the bottle without, for example, combining Crispin with Assembly. And that is a much more difficult proposition …  a bit of a Frankenstein.”

Still, within Gale, the organically varied offering has paid off for some clients. The yearlong work with H&R Block provides some insight into Gale’s approach to generating results. The 65-year-old brand, synonymous with tax season (and therefore not considered a 365-day brand in consumers’ minds), was looking to expand its business offerings to both consumers and other businesses, having launched mobile banking brand Spruce. Gale convinced the historically traditional brand to venture into content offerings, from six- or 15-second videos to email modules or SEO content Block’s website, said Sophia Zhang, Gale’s managing director in charge of the Block business. It’s the math and research that helped get them to those solutions, she said.

“There’s a desire and need for marketing and advertising to be quantified not just to show the number of impressions and the reach, but to actually really show incrementality,” said Zhang. “How much market share do they need to gain? How does that translate into actually a marketing target? And then how do we actually measure in a truly scientifically relevant way is really important?”

In the end, in a recent earnings call, Block cited Gale’s work as having contributed to the 5% year-over-year growth of the Block Advisors unit.

“I view [Gale] as the tip of the spear testing things out there, getting them to scale, taking some learnings and then bringing them back to Stagwell Media Network to scale them globally,” said Simms.

Color by numbers

We’ve covered the record midterm political spending expected for this year, with growing interest in streaming services and TikTok as ad vehicles leading into the election next month. Digital ad platform Basis has been working with thousands of advocacy groups and candidates, and observed that social spending is moving to newer platforms – but social media may not be the most effective way to drive voters. The company expects half the spending for this midterm season to be spent in the final 30 days before the elections, so let’s break down what that actually means.

  • Basis is seeing a more than four times increase in political ad spending through its platform during H1 2022 compared to H1 2020. Average spending for all its clients has increased, with about half of that spending slated for October and November.
  • Basis saw connected TV ad spend go up 15 times in volume, with a 1,500% increase in spending on CTV devices from political advertisers during H1 2022 compared to H1 2020.
  • The CTV budget is also rising, making up one-third of political advertisers’ programmatic spend in H1 2022. That’s a 72% increase from 2020, when CTV represented 19% of their programmatic spend.
  • There may be more room for streaming audio to grow, currently at only 4% of the programmatic spend today — but up 100 times over H1 2020. That said, that comparison is between a general election (in 2020) to this midterm election. — Antoinette Siu

Takeoff & landing

  • IPG’s Magna unit offered a sobering look at total media revenue in the near future in its latest U.S. Ad Forecast. The report predicts that a “weaker economic environment will cause several industry verticals to reduce ad spend in the second half,” which will be partially offset by strong political spending, leading to $323 billion in total 2022 media owner revenue — the first time ever to cross the $300 billion threshold, and a 9.8% above 2021 levels (8.1% if taking out “non-cyclical ad spend” and political dollars). Magna predicts continued sluggish growth in 2023, a mere 4.8% over 2022.
  • Big Day is a new San Diego-based agency formed by ex-Wunderman Thompson ECD Peter Sayn-Wittgenstein and managing director Kristie Brown alongside  Gut Branding founder, Ahab Nimry. Launch clients include Casper, YMCA, HexClad, the Royal Caribbean Group and the BNP Paribas Open. 
  • Personnel news: Independent media agency Crossmedia named Dr. Ram Singh its chief performance media officer … Fellow indie agency Novus made several hires and promotions: Montrew Newman was promoted to senior vp and head of strategy; Paul DeJarnatt is the new vp of digital, having spent some 18 years across Publicis agencies, most recently Digitas; and Chris Aubin is vp of integrated client strategy, having joined from Starcom … Consultancy MadTech Advisors named Heather Macauley its president, charged with growing revenue as well as marketing and product strategy. She’s formerly the global head of ads monetization at Zoom.

Direct quote

“What worries me is when marketers and brands don’t value agencies the way that they should, treating them like a partner versus a vendor — and that’s when payment terms come up. … I very strongly believe in the power of creativity and the power of an external perspective with a breadth of understanding that has incredible talent. There’s a very unique type of people in agencies.”

— Marla Kaplowitz, 4A’s president and CEO

Speed reading

  • Digiday senior reporter of marketing and technology Marty Swant looked behind the headlines of TikTok’s latest self-assessment of how it’s policing itself around content that violates its policies. 
  • Senior ad tech reporter Ronan Shields explained the reasons why it’s harder for marketers to take programmatic efforts in-house despite a desire to buy more media that way. 
  • And senior news editor Seb Joseph sat down with Ebiquity CEO Nick Waters, who explained the reasons Facebook and Google’s walled-garden approach to ad revenue is starting to show cracks.

More in Media

NewFronts Briefing: Samsung, Condé Nast, Roku focus presentations on new ad formats and category-specific inventory

Day two of IAB’s NewFronts featured presentations from Samsung, Condé Nast and Roku, highlighting new partnerships, ad formats and inventory, as well as new AI capabilities.

The Athletic to raise ad prices as it paces to hit 3 million newsletter subscribers

The New York Times’ sports site The Athletic is about to hit 3 million total newsletter subscribers. It plans to raise ad prices as as a result of this nearly 20% year over year increase.

NewFronts Briefing: Google, Vizio and news publishers pitch marketers with new ad offerings and range of content categories

Day one of the 2024 IAB NewFronts featured presentations from Google and Vizio, as well as a spotlight on news publishers.