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Emirates global account quandary as Strawberry Frog splits with Amsterdam

July 11, 2013

emirates46_460If what I hear is correct, Scott Goodson, chairman of micro-network Strawberry Frog, hasn’t been kissing enough princes lately.

The mercurial Goodson – famous for saying his agency wasn’t up for sale, while putting the finishing touches to a deal with PR group APCO – has had a bust-up with his Amsterdam agency, Media Catalyst. That’s Amsterdam agency number two. He also managed to alienate Amsterdam agency number one, headed by SF co-founder Brian Elliott, which now trades as Amsterdam Worldwide. And then he fell out with his Brazilian partner, Alexandre Peralta, of Peralta Sao Paulo – an agency that has gone on to rather greater achievement without him. So, there’s a bit of history to this kind of thing.

But I digress a little. The latest split is unusually serious, because SF Amsterdam/Media Catalyst is the lead agency for SF’s backbone client, Dubai-based Emirates Airline – one of the world’s largest. The Frogs won the account against considerable competition from the likes of BBDO and Grey, back in 2010. And what an account to win: lead agency for a global rebranding campaign worth (according to AdAge at any rate) $300m. This wasn’t just a feather in the cap, but full plumage for a small digitally-inspired creative boutique making its way in the world. Timely sticking plaster as well, given the above-mentioned ructions going on elsewhere in the organisation.

It’s important to point out that most of the credit for winning – and retaining – this account seems to have been down to Amsterdam CEO Hans Howarth, the majority shareholder in Media Catalyst. Goodson, with his habitual talent for self-publicity, owned about 30% of the agency from which he has now been ejected, but somehow managed to maximise most of the plaudits.

The Emirates brief was to turn the airline into an aspirant, lifestyle brand (isn’t one enough in the world?) and SF duly delivered with “Hello Tomorrow”, announced with great pizzazz last April by Sir Maurice Flanagan, executive vice chairman of Emirates Airline : “Our new corporate image and global marketing campaign both underline the confidence we have in our existing products and services, and the vision we have for the future growth of the airline. Emirates is not just offering a way to connect people from point A to point B but is the catalyst to connect people’s hopes, dreams and aspirations.” What this boils down to is getting a younger “audience” hooked on the brand by dextrous use of social media.

Only last month, Omnicom – in the guise of BBDO New York and Atmosphere Proximity – won Emirates North American business, against competition from WPP’s Grey and JWT. At the time, we were assured that the pitch would not in any way affect Strawberry Frog’s tenure of the global branding account. But that was before news of the split with Amsterdam broke. It would be surprising if some of these agencies’ biggest guns are not, at this very moment, on a Boeing 777 heading for Dubai airport. An Emirates one, naturally.

Where all this leaves SF – apart from picking up the pieces – is anyone’s guess.

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“Not for sale” StrawberryFrog sold – to PR agency APCO

February 16, 2012

StrawberryFrog – the maverick advertising micro network – up for sale? Come again?

When, late last year, I had the temerity to claim that was indeed the case, SF founder, chairman, chief executive and great panjandrum Scott Goodson took venomous issue with my impudent suggestion.

Yet, less than 3 months later he has done just that – sold out. More specifically, APCO, a PR agency specialising in crisis management, has acquired a controlling interest in the financially troubled New York agency. (It is not yet clear how the sale will affect SFNY’s freewheeling Amsterdam counterpart.) The sale comes hot on the heels of news that Goodson has also parted company with the only profitable part of his organisation, StrawberryFrogPeralta, in which he held a 30% stake.

The spin on the APCO deal is that it is an inevitable sign of the times. As digital becomes the key communications channel between marketers and consumers, the traditional lines between PR and advertising are being extinguished. If anything, PR is culturally more sensitive to the “conversational” requirements of social media than advertising, but often lacks the technical expertise to be found in advertising agencies. Consequently, many PR firms have taken to hiring Madison Avenue creative executives over the past few years.

StrawberryFrog is indeed an accomplished expert in digital creativity. Goodson and his co-founder and fellow Canadian Brian Elliott (once best friends, who set up the company on Valentine’s Day, 1999, but later spectacularly fell out) early realised that strong creative ideas combined with digital know-how was a winning way of undercutting the big agencies, tied as they were to the bureaucratic “account team” legacy of traditional advertising.

And for a time, they were spectacularly successful. Even today, nearly 4 years after Elliott broke away, StrawberryFrog can boast a client list that includes Procter & Gamble (Pampers), Emirate Airlines and bourbon-maker Beam Inc.

But it is also a troubled agency, headed on a downward financial spiral and suffering from an unenviable reputation as a place to work (not least because of Goodson’s mercurial temperament).

Last year, I reported that agency staff had been cut from 76 to 40 in New York, while revenues had plummeted from $17m in 2010 to an estimated $12m in 2011. In the event, that last figure has proved a bit conservative – The Wall Street Journal cites $10m revenue. So, while Goodson may be quite right in asserting that the APCO deal will “give us the ability to work with clients in more markets around the world” (APCO has about 30 offices), it’s also true to say Goodson had to sell – or else suffer financial disaster.

APCO will be wise to treat its new acquisition with kid gloves. As one source familiar with StrawberryFrog put it to me: “Placing a value on this agency will not have been easy. What’s the IP value? How are they going to deal with the reputation issue? And has outstanding litigation with former staff been settled prior to the deal being signed?”

One thing APCO won’t have to worry about in the short-term, however, is dealing with StrawberryFrog’s prickly CEO. I understand he’s rather busy at the moment promoting his first book: “Uprising: How to build a brand and change the world by sparking cultural movements”. Perhaps some unintended irony in that title, the way things have turned out.


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