While other ad holding companies roam the world looking for acquisitions, Brazil's Grupo ABC is starting its global expansion in its own backyard as Grupo ABC-backed San Francisco agency Pereira & O'Dell opens an office in Sao Paulo.
The 4-year-old U.S. agency will handle social media in Brazil for Fiat. Chief Creative Officer P.J. Pereira has a long relationship with Fiat and Joao Ciaco, Fiat Latin America's director of advertising and marketing, from the days Mr. Pereira, a Brazilian, worked as a leading digital creative director in Sao Paulo.
"They asked if we wanted to present some ideas, and it was the opportunity we were looking for to get a team in Brazil," Mr. Pereira said. "The idea is more to have a global outpost in Brazil rather than a local shop."
He said the Sao Paulo office will have about 10 people this year, headed by mobile expert Michel Lent as managing director.
"Brazil has an entire generation that is literally skipping the internet and going straight to mobile," Mr. Pereira said. "It's not an age thing, it's more economics as people who went to internet cafes now buy smartphones with cheap data plans. That changes the dynamics of the market completely."
He said that focus on mobile can help the agency learn how to do mobile better in other markets, including the U.S.
Pereira O'Dell is 51% owned by Grupo ABC, the 18th-biggest company in Ad Age 's ranking of the world's 50 largest agency companies. All of Grupo ABC's 2011 revenue of $448.5 million came from Brazil except $14.8 million from Pereira O'Dell in the U.S. (Grupo ABC also owns a 31% stake in Dojo, another San Francisco shop with a Brazilian partner, Mauro Alencar, but Ad Age rankings don't include revenue from minority stakes). Grupo ABC's revenue grew by 24% last year.
ABC's founder and chairman, Nizan Guanaes, has focused on growth in Brazil -- ABC stands for Advertising, Branding and Content -- while other up-and-coming holding companies like Cheil Worldwide, two slots above Grupo ABC at No. 16 in Ad Age 's ranking of agency companies, pursue acquisitions around the world.
"I don't think acquisitions are out of the question, but they only make sense if there's a strong cultural bond," Mr. Pereira said. "At least for the first steps it's better to learn a few things at a time."
For now, Grupo ABC's international brand is an aspiring global micro network under the Pereira & O'Dell name, and Mr. Pereira says the next steps will probably be an office in Europe and another one in Asia.