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Hello from the man who said “Tchau” to StrawberryFrog

March 6, 2013

Alexandre-Peralta-766x1024It’s over a year now since Peralta founder and CEO Alexandre Peralta expunged (literally so) the StrawberryFrog images sprayed all over the interior of his Sao Paulo hotshop. How’s he getting on in the wake of his split with mercurial and moody SF panjandrum Scott Goodson?

The other day I caught up with him and had a chance to find out.

Peralta, it may be recalled, is a copywriter by background who worked at some of the big multinational agencies such as DDB before moving to local Brazilian agency, Africa, as its creative director. When he set up shop with New York-based Goodson in 2007, the idea behind SFPeralta was to provide Goodson’s micro-network with an arm in the booming BRIC market and Peralta with access to international clients.

It didn’t quite work out like that. Peralta did indeed acquire international clients, such as PepsiCo’s snack business – but no thanks to StrawberryFrog, which became increasingly beset by financial and managerial crises. The result was an amicable (well, more or less) decision to go their own ways. Goodson needed the money (he had a 30% strategic stake in SFPeralta, but no managerial interest) and Peralta felt his agency would be better off without him.

Rightly so, it turns out. At the time, the Peralta Sao Paulo business had revenues of about $8.5m and was growing 50% a year. It has won new international business, including Bacardi Brasil (Martini and Grey Goose) and two Mondelez brands (i.e. Kraft of yore); more business from existing clients Pirelli and personal care company Natura; plus Vigor – the Brazilian dairy company giant. So much so that the agency is putting in place for the first time a chief operating officer.

063e7c5The new COO is Jairo Soares, a partner and media vice-president of Peralta these past five years.

At the time Alexandre Peralta dissolved the StrawberryFrog link, his agency was being actively courted by MDC-owned CP&B. Nothing came of that overture, and Peralta Sao Paulo retains its independence. However, the founder remains open-minded on the need for a collaborator:

“An international partner can be welcome in the future if it is capable of improving our portfolio even more,” Peralta tells me.

You read it here first.

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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.


Brazilian partner Peralta says “Tchau” to StrawberryFrog

February 1, 2012

Relief for StrawberryFrog, the maverick but financially-challenged New York advertising micro-network, is nigh.

SF founder Scott Goodson has realised his 30% investment in Sao Paolo agency StrawberryFrogPeralta, which he set up with Brazilian creative whizzkid Alexandre Peralta in 2007.

The way Peralta tells AdAge the story, break-up was all his idea. SF NY has never had operational control over Peralta’s outfit, but it does boast a string of enviable global clients, such as Emirates and Pepsi, that were expected to spread their love to Brazil via the association.

No dice, says Peralta. All his clients, even Pepsi, were won locally. “The fact that 100% of our clients belong to us made us rethink the partnership.”

That may be true, but the fact is Brazilian hotshops are not above playing fast and loose with their international allies. Thanks to growth rates of 30% or more a year, they can more or less set their cap at who they like – once out of contract. In Peralta’s case, this currently seems to involve flirtation with MDC-owned CP&B. Certainly he was coy on the subject when pressed by AdAge.

Just before Christmas, I highlighted a similar situation at Neogama BBH. Founder Alexandre Neogama was giving his UK partners a hard time, even threatening to defect to a rival network. In the event, this seems to have been a bluff aimed at leveraging his existing position, although we cannot yet be certain of that.

For Goodson, parting with Peralta must be a mixed blessing. On the one hand, he can congratulate himself on a shrewd financial investment. SFP is profitable, enjoys an estimated $8-9m revenue and, according to Peralta, is expected to grow by 50% this year. On the other, when is Goodson likely to come across such an opportunity again?


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