NEW YORK: Peppercomm co-founder and CEO Ed Moed is exiting the firm next month to launch an affiliate brand called Hot Paper Lantern.
Other staffers departing Peppercomm for the new firm include partner and president Ted Birkhahn, who will be president of Hot Paper Lantern; chief digital officer Mike Friedin, who is chief strategy officer; CFO Deborah Salerno; and MD Sara Whitman, who is joining as chief people officer.
"We’re still part of the same family, but we’re operating independently," said Birkhahn, when asked to define "affiliate brand." He added the firms will share clients, services, and office space.
They will all stay at Peppercomm until the new agency officially launches in July. Hot Paper Lantern will have 50 employees working across its New York and London offices.
Staffers staying at Peppercomm include Steve Cody as CEO; Jacqueline Kolek as president of financial services and CMO; Ann Barlow as West Coast president; Deborah Brown as president of media strategy and analytics; and Maggie O’Neill as president of consumer and lifestyle branding. Peppercomm has also made two new hires: Ariel Mojena as CFO and COO; and Tara Lilien as chief talent officer.
"This is not two firms going in different directions," Birkhahn added. "We are trying to unlock value for the parent brand in Peppercomm and the new brand in Hot Paper Lantern and the distinct services they offer."
Peppercomm's 2017 U.S. revenue was $19.3 million, a 2% year-over-year increase, according to PRWeek’s 2018 Agency Business Report.
While Peppercomm’s core focus is financial and professional services, consumer lifestyle, and industrial b-to-b, Hot Paper Lantern is not focused on specific industries.
‘[Hot Paper Lantern] is more of a solutions play," explained Birkhahn, who said the firm has clients onboard already, but could not disclose names.
Hot Paper Lantern will offer clients marketing, comms, and tech solutions and consulting services to help clients tell their stories in a digital ecosystem.
The firm will also focus on "digital enablement solutions" to create tailored products for clients that will address specific marketing comms challenges.
Additionally, Hot Paper Lantern is creating security solutions for data and digital products, tying in closely with the requirements of GDPR and helping clients navigate related regulatory issues.
"Those solutions will be delivered through more than a dozen partnerships we have created with tech providers that will enable us to put together a tailored digital solution for each client," said Birkhahn.
When asked about his exit from Peppercomm, where he has worked for 20 years, Birkhahn said it "doesn’t feel like a departure" since the firms are still working together.
Hot Paper Lantern was formed after a lengthy strategic review of the Peppercomm business, explained Birkhahn. The firm is seeing a change in expectations and needs from clients.
"The advancement of tech and impact on marketing and comms is dramatically impacting the ways agencies are structured, go to market, and value they provide clients," he said. "This will unlock value for us and enable us to provide most value to clients."
Hot Paper Lantern is named after one of the hottest habanero chili peppers as "a connection to the Peppercomm brand and the legacy that [new] brand is borne out of," Birkhahn said.
In an emailed statement, Cody explained that Peppercomm was named after his late black lab Pepper.
"Peppercomm has a 20-plus year history of entrepreneurship and innovation," Cody said. "This move allows us to invest in new ways that will drive growth for both brands, create more opportunities for our people, and most importantly, bring new solutions and approaches for our clients."
Editor's note: This story was updated with comment from Cody on June 13.