Stagwell, the US-based marketing holding company, is making good on its recent pledge to grow in Asia-Pacific through its global affiliate programme with a new partnership deal reached with Southeast Asian online news publisher Coconuts Media.
Under the affiliate partnership deal, there is no immediate monetary investment. Rather, Stagwell and Coconuts will collaborate on scaled media placement and distribution across the Coconuts network in Southeast Asia. In addition, Stagwell’s agencies, such as 72andSunny, Forsman & Bodenfors, Allison and Partners, Assembly, Ink and others can team up with Coconuts’ in-house marketing agency, Grove, on joint pitches, marketing campaigns and branded content. Revenue sharing will be split on a project by project basis depending on what is involved.
Coconuts Media, founded by journalist entrepreneur Byron Perry in 2011, has grown steadily over the past decade, publishing online news and lifestyle content to millions across eight local markets (Bali, Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Manila, Singapore, Yangon) including documentaries and videos for major streaming services and networks like Discovery and Netflix.
“We’re eager to collaborate with Byron and the Coconuts Media team to offer our leading mix of digital and media services to strengthen the APAC offering for our clients,” says Stagwell’s chairman and CEO, Mark Penn. “With the opening of Stagwell’s first-ever APAC headquarters in Singapore and our agencies’ continued success in the region, we’re investing heavily in Asia-Pacific as part of our global expansion this year.”
In November, Stagwell announced its SVP of executive talent, Randy Duax, would lead the APAC office as managing director starting this month to drive "rapid growth" and expansion. The Coconuts partnership is among the first of these regional efforts from its new regional base. Duax tells Campaign Asia-Pacific the two sides were mutually attracted, with Coconuts already having been on his radar for many years before connecting through the affiliate programme.
“We’re super excited about Coconuts,” Duax says. “For us, they’re in a lot of different markets, they’re deep into social commerce, they’ve got first-party data. It fills in a lot of gaps that some clients have been looking for in this part of the world. And they’re very collaborative, which is something we look for.”
While it’s less common for news-media publishers to join hands with a single advertising holding company, the deal should allow Coconuts to tap into Stagwell’s media services and research resources and give the company access to a global client base it may not have had before. The latter could be particularly important as Grove, Coconuts’ in-house creative studio for brands, becomes an increasingly important focus for the company.
“With our publishing roots as a foundation, we are growing our creative and media-buying services and the business of serving clients as a modern creative agency,” says Perry, the company's CEO. “Partnering with a challenger marketing network like Stagwell makes total sense as we work with larger, more complex global clients.”
Affiliate versus acquisition
What is significant about these affiliate deals is that they’re designed to be the first step on the road to a mutual acquisition agreement. This is something Stagwell made very clear when first announcing its affiliate programme a year ago.
“It’s a way to soft introduce [Coconuts] to the holding company,” Duax explains. “We’re not taking ownership, we’re not saying you have to move into this office location. For an entrepreneur, if you want to retain control, that’s the appeal.”
Since it launched a year ago, Stagwell has signed up nearly 50 affiliates, including others in APAC such as Metric Design Studio in China, Enormous in India, This is Flow in Australia, and Hong Kong-based Beyond Media Global.
Making the distinction of how these affiliate deals represent a very different approach from "top-down, holding-company acqusitions", Duax explains the programme is designed for entrepreneurs looking for global opportunities to bring their own local opportunities and resources in return without the pressure of being forced to work for global clients and projects that they don’t want to.
Similar to the Worldwide Partners network of purely independent agencies, Stagwell’s affiliate collective is a network of successful entrepreneurs and businesses that want bigger opportunities.
“You've got creative agencies in some of these markets who maybe have never had a media or research component," Daux explains. "Maybe they have a client that just needs to reach into one specific market and they don't have that connection. But they don’t [yet] want to sell to a bigger holding company. So for us it’s an opportunity to see if the partnership works out and if they can execute some of the bigger pieces of business we could bring.“