Fast-growing Brazilian agency PeraltaStrawberryFrog split with its international partner today and expects to close a deal with a new international network in March.
Alexandre Peralta is buying back the 30% stake StrawberryFrog held in the Sao Paulo agency he started in 2007, and is holding discussions with various international agencies to potentially strike up a new partnership and help foreign shops enter Brazil. Among them is MDC-owned CP&B.
Mr. Peralta said he did the earlier deal with StrawberryFrog because he expected the agency to bring international clients to their Sao Paulo shop. Instead, he said, all his agency's clients were won locally, even its PepsiCo snack business.
"The fact that 100% of our clients belong to us made us rethink the partnership," Mr. Peralta said.
Brazil is a hot market for international agency networks, and even local ad execs in established partnerships sometimes look for a better deal as they see their rivals selling to holding companies like Publicis Groupe and Dentsu for high prices. Bartle Bogle Hegarty, for instance, owns a minority stake in Sao Paulo shop Neogama BBH, but is aware that CEO Alexandre Gama has been talking to other groups recently. BBH Group CEO Simon Sherwood said, "Ale wanted to get some sense of what his business might be worth. He's approached a lot because he's viewed as an independent." He said he expects BBH and Mr. Gama to stay together.
At the former PeraltaStrawberryFrog, Mr. Peralta last month repainted the Sao Paulo agency to remove the images of frogs that decorated the walls, in a clue to the coming split.
"There's no operational impact whatsoever in the business, since Strawberry Frog never interfered in our operation," Mr. Peralta said. "We have grown 30% every year since the first year of operation."
Mr. Peralta, a former copywriter who was a creative director at local agency Africa before opening his own shop five years ago, has 85 staffers and says he expects the agency to grow 50% this year. One of his biggest clients is Brazilian cosmetics and personal-care products marketer Natura, and he feared StrawberryFrog's business from Procter & Gamble's Pampers could become a conflict. His agency also handles both Natura and PepsiCo in other markets in Latin America.
Mr. Peralta said the most important thing about his next deal will be to find a network that will play an important role in his agency's growth, and share the same philosophy. He wouldn't confirm whether he is in talks with CP&B. Representatives for CP&B declined to comment on the matter.
Outside the U.S., CP&B has an office in Canada, Sweden and the U.K., but hasn't entered Latin America.
The split leaves StrawberryFrog, which has offices in New York, London and Amsterdam, without a foothold in Latin America.
"StrawberryFrog has chosen to adopt a different delivery strategy focused on providing integrated marketing and corporate positioning services to major global brands across all markets, including Brazil," said Scott Goodson, StrawberryFrog's chairman. "As a result, Alexandre and I mutually agreed to pursue independent paths."