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Friday, Dec 9, 2022

Buddy Group Makes Friends: Sales Up 132%

Pete Deutschman, who named The Buddy Group after his dog, has found a lot to bark about in the past two years.

The Costa Mesa-based marketing firm reported $4.6 million in revenue for the year ended June 30, a 132% jump from the same period two years prior.

That growth was good enough for the No. 2 ranking among companies reporting less than $10 million on the Business Journal’s annual list of the Fastest-Growing Small Companies.

“We have pivoted our entire business around helping companies tell their stories,” Deutschman told the Business Journal, speaking of the company’s secret to expansion.

“The Buddy Group in its DNA is theater, film and television.”

OC Bred

Deutschman, who was born and raised in Orange County, picked up the entrepreneurial bug at a young age, often working as a disc jockey and for performing arts entities like  the South Coast Repertory.  

“I found I had a passion for marketing and the arts,” he said.

He went to New York City to learn how to become a producer, eventually obtaining a master’s degree in management and producing from Columbia University to go along with a bachelor’s degree in theater arts and technology from Pepperdine University.

He held management positions at internet-related companies such as Iconixx and working on Broadway shows such as the 25th anniversary of “Into the Woods.” He led internet efforts on brands such as Harry Potter, AOL, and Ashton Kutcher’s first web presence, AshtonKutcher.com.

Deutschman also came of age when social media was starting to take off, founding his company in 2005, the same year that YouTube started.

“We were the first in California to build a YouTube sound stage,” he said. “YouTube introduced us to all their partners.”

Deutschman became a white-labeled partner with YouTube and built a “very successful program for Hasbro.” He also worked with film studios like Warner Bros. and Sony Pictures.

Deutschman, who calls himself the “Chief Buddy Officer,” owns the company along with its chairman, Mike Gray, an entrepreneur who cut his teeth in family business St. John Knits, the iconic Irvine-based women’s apparel company, and who later started two other successful businesses.

No Overnight Success

The Buddy Group wasn’t an overnight success as it had to navigate turmoil, like the 2008 financial crisis.

“We’ve had all sorts of upside downs like most organizations, but we took the opportunity to pivot,” Deutschman said. “We transitioned to being a strategic partner to groups like Bain Capital, as well as several companies in Orange County.”

In the last couple of years, that partnership with Bain Capital, an investment firm with $140 billion in assets, has begun to pay dividends.

“We have found a secret sauce that works for us for both of us.”

For example, Bain in 2014 helped arts retailer Michaels go public and retained a large stake. As a result of the Bain connection, the Buddy Group was hired by Michaels.

“We were brought in for strategic programs to help them do their Investor Day—their vision for the future,” said Deutschman, who also took on the role as Michaels’ chief innovation officer.

Michaels was eventually sold earlier this year to Apollo Global Management Inc. for an equity value around $3.3 billion.

“Our story driven strategy of helping an organization define Michaels helped to trigger an exit,” Deutschman said.

New Trend

Gone are the days when brands could spend all their time creating one marketing and advertising spot, Deutschman said. Nowadays, brands must find where their customers are spending their time and tailor their messages to a multiple of sites, he said.  “You have to take your brand and find ways to relate to your audience,” Deutschman said.

It has executed 200 product and program launches, deploying their stories across mobile, the web and connected television.

Over the years, his clients have included Goodwill, Wells Fargo, St. Joseph Health and Experian. The company also built happymeal.com for McDonald’s.  

Direct Marketing News recognized Deutschman as a “Top 40 under 40” in 2013. Deutschman, who is on the board of Octane, the Aliso Viejo-based business accelerator, is often featured in industry trade publications and on panels.

His employee count has increased from six in 2019 to 30. He foresees growing his core team about 20% to 30% in the next year.

Deutschman wants to make sure customers understand that the Buddy Group is not an advertising agency.

“We have fought since Day 1 of people putting us in the bucket of an agency. We are certainly not that. We are a story-driven business consultancy.”   

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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