Bozell Worldwide Inc. History

Address:

40 West 23rd Street
New York, New York 10010
U.S.A.

Telephone: (212) 727-5000
Fax: (212) 645-9173

Website: www.bozell.com

Private Subsidiary of True North Communications, Inc.
Incorporated: 1921
Employees: 2,695
Gross Billings: $3 billion (1997)
SICs: 7311 Advertising Agencies; 8743 Public Relations Services

Company History:

Bozell Worldwide Inc. is one of the preeminent advertising agencies in the world. With the merger between Bozell & Jacobs and Kenyon & Eckhardt in 1986, Bozell Worldwide is presently ranked as the 14th largest advertising agency across the globe. The company is famous for its highly successful advertising campaigns, including the persuasive Jeep Cherokee ads, the Milk Mustache ads with well-known celebrities, and other ads for Hush Puppies, Merrill Lynch, Mutual of Omaha, Chrysler, Excedrin, and the National Pork Producers Council. During the 1990s, Bozell Worldwide has implemented a comprehensive expansion strategy and presently has offices in 51 countries throughout the world.

Early History

The history of Bozell Worldwide can be traced back to its origin in Omaha, Nebraska. Morris Jacobs, who worked as the night police reporter on the Omaha Bee-News, and Leo Bozell, a former editor at the Omaha Daily News, combined their scant resources and decided to start a part-time advertising and public relations agency. The two men had become acquainted with one another while Jacobs wrote about local business and Bozell was his editor at the Daily News. Incorporating their business as Bozell & Jacobs in 1921, the young entrepreneurs worked part-time and contracted a few small accounts until they were noticed by Nebraska Power Company, the largest utilities firm in the state. With one of the largest accounts under contract, Bozell & Jacobs, Inc. opened its doors as a full-time operation in 1923.

Throughout the decade of the 1920s, Bozell & Jacobs was known as an agency that specialized in advertising campaigns and public relations work for regional utility companies. As the firm's reputation grew, however, more contracts were signed with utility companies in other states, such as Midland United, the holding company of Public Service Co. of Indiana. Along with this increasing business, the company decided to expand its operations to meet the needs of a growing client list, so new offices were opened in Indianapolis, Indiana; Chicago, Illinois; and Houston, Texas. By the end of the 1930s, Bozell & Jacobs was one of the most widely respected and well-known advertising agencies working in the Midwest. Perhaps the most striking fact about the company's accomplishment was that it occurred during the height of the Great Depression, when many other businesses in the United States were affected by distressing economic conditions that often resulted in bankruptcy and foreclosure.

In addition to the advertising campaigns designed for utilities and a handful of consumer firms such as Amling Co., a regional floral retailer, and Roper, Inc., a manufacturer of kitchen ranges, Bozell & Jacobs provided pro bono work for Boys Town, the home and school for boys located in Omaha, Nebraska. Founded by Father Flanagan and established in Omaha during the 1920s, Bozell & Jacobs contributed their services to publicize the good work Father Flanagan had achieved at Boys Town. By the mid-1930s, through the efforts of Bozell & Jacobs, Boys Town had become famous throughout the United States and Father Flanagan was a hero to adults and children alike. The growing publicity led to the filming of a major motion picture in 1938 called Boys Town, for which Spencer Tracy's warm and generous portrayal of Father Flanagan won an Oscar for Best Actor.

By the end of the 1930s billings for Bozell & Jacobs amounted to approximately $5 million, not a small achievement for an advertising agency operating in Omaha, Nebraska, far away from the major metropolitan areas of the United States where most corporations had established their headquarters. Slow but steady growth occurred throughout World War II and the postwar era, with new offices established in Shreveport, Louisiana; Seattle, Washington; Minneapolis, Minnesota; Los Angeles, California; New York, New York; and Washington, D.C. The agency's largest and most prominent account, contracted in 1949, was Mutual of Omaha, the sponsor of the long-running television show "Wild Kingdom."

Growth and Expansion During the Postwar Era

From 1951 to 1956, Bozell & Jacobs increased its billings from $9.3 million to $20 million. Yet the billings rested upon an unstable client base amounting to 350 accounts, all companies with modest budgets and not immune to the fluctuations of the U.S. economy. Leo Bozell had died in 1946, but Morris Jacobs, still a driving force at the company, grew apprehensive about the future. Fortunately, he found the right man for the right job--his son-in-law, Charles Peebler, Jr.

Jacobs convinced his son-in-law, a dropout from Drake University who had previously worked at the management level of a department store, to join Bozell & Jacobs in the production department. Bozell, of course, was grooming Peebler to assume control of company operations, and in 1965 at the tender age of 28 Peebler became president of the company. As the new president, Peebler set extremely ambitious goals to increase the company's billings, and within the first year of his tenure billings jumped from $20 million to $23 million. But this effort was just the first indication of Peebler's talent.

In 1967, in what was later regarded as a major turning point in the history of Bozell & Jacobs, Peebler purchased Emerson Foote, Inc. Emerson Foote, one of the founders of the famous advertising agency Foote, Cone, & Belding, and the man who originated the legendary Lucky Strike cigarette campaign, had fallen out with his partners and formed his own company. But Foote was in need of cash, and Peebler not only hired Foote as a consultant but acquired his company for $500,000. Foote's company had billings of $7 million, and when combined with Bozell & Jacobs's New York office billings, Peebler had built an East Coast base of nearly $10 million in billings. When Morris Jacobs retired during the same year and sold his controlling interest to Peebler and a group of close associates, Peebler became CEO and immediately relocated the agency's headquarters to the Lexington Avenue offices of Emerson Foote's company in New York City.

Working out of the New York City office, with a solid base of clients on the East Coast and no longer dependent upon Midwestern customers, Peebler implemented one of the most aggressive campaigns to increase billings in the advertising industry. By 1971 his efforts had been rewarded when Bozell & Jacobs announced that billings amounted to approximately $50 million for that year alone. But Peebler was not content to rest on his laurels, and he continued to pursue aggressively ever larger and larger accounts. His strategy included the purchase of Glenn Advertising Agency, a firm located in Dallas, Texas whose clients included American Airlines and Quaker Oats Company. In 1975, Peebler purchased Knox Reeves Advertising Agency, a Minneapolis-based company that had a large account with General Mills. With these acquisitions and the new accounts they brought to the company, Bozell & Jacobs reached the $100 million billing milestone by 1975. By 1979 billings had skyrocketed to $287 million, and Bozell & Jacobs entered the elite and prestigious list of the top 20 advertising agencies in the United States.

The 1980s: A Decade of Transition

As the company continued to add new accounts and increase its billings during the early 1980s, Peebler arrived at the conclusion that Bozell & Jacobs had grown as large as it possibly could in the U.S. market. The time to expand into the international sector had come, and Peebler began to look for a candidate with worldwide contacts and foreign accounts with which Bozell & Jacobs could merge. Lorimar Telepictures, a holding company for television productions such as "Knots Landing," "The Waltons," and "Dallas," had purchased Kenyon & Eckhardt Advertising in 1983. When Peebler was approached by executives from Lorimar, he happily agreed to merging with Kenyon & Eckhardt. In 1985 Lorimar purchased Bozell & Jacobs, with billings of $808 million, merged it with Kenyon & Eckhardt, whose billings amounted to $412 million, and formed the 14th largest advertising agency in the world.

The merger between Bozell & Jacobs and Kenyon & Eckhardt was a good one, both philosophically and operationally. Kenyon & Eckhardt had its roots in an agency founded by Ray D. Lillibridge in New York City in 1899. Otis Kenyon and Henry Eckhardt worked for Lillibridge at the small firm and, when the founder decided to retire in 1929, Kenyon and Eckhardt purchased the company and transformed it into an advertising agency. The firm grew rapidly during its first decade in business, with the client list including Kellogg Company, Abercombie & Fitch, Munsingwear, Stetson, and Quaker State Oil. In 1948 Kenyon & Eckhardt Advertising Agency won its largest account up to that time, Ford's Lincoln-Mercury Automotive Division, which pushed the firm's billings to more than $20 million for the year. By 1956 billings had increased to $81 million, and in 1975 Kenyon & Eckhardt reported billings amounting to $100 million.

The largest and most important account in the company's history, however, was signed in 1979 when Lee Iacocca, the president of the near-bankrupt Chrysler Corporation, handed over the car firm's entire advertising budget of $120 million to Kenyon & Eckhardt. Billings skyrocketed overnight to $328 million but, most important, Kenyon & Eckhardt garnered a reputation within the industry as the firm that helped turn Chrysler around and make Lee Iacocca one of the most recognized and admired personalities in the United States. When Lorimar purchased Kenyon & Eckhardt, both companies saw the acquisition as an opportunity for growth. And when Lorimar merged Bozell & Jacobs with Kenyon & Eckhardt, the former gained access to a worldwide office network, while the latter gained an astute and experienced management team that was regarded widely as one of the best in the advertising industry.

At first sight, everything appeared to be developing smoothly for Lorimar's new wholly owned subsidiary BJK&E. In 1986 a major account was won when Merrill Lynch and Company contracted the company to manage its advertising, and one year later BJK&E unveiled its soon to be famous "Pork--the other white meat" campaign for the National Pork Producers Council. Yet the high-level executives at both Bozell & Jacobs and Kenyon & Eckhardt were dissatisfied with Lorimar's management approach. Rather than strong direction coming from the parent company, the two agencies discovered that they were both left to operate autonomously. In addition to the lack of a strategic vision and strong management, BJK&E became increasingly suspicious about Lorimar's ventures into wholly unrelated businesses, such as real estate and theme parks, and concluded that management at the parent company had lost its focus.

BJK&E was determined to extricate itself from an unhealthy situation and, since Lorimar began losing money on its wide array of investments, bought itself back for a mere $133 million in cash. The two agencies, which had entered the merger as medium-sized, well-respected firms within the industry, came out on the other side as an independent company on the threshold of becoming one of the top international advertising firms in the world.

The 1990s and Beyond

BJK&E started out the decade of the 1990s in an auspicious manner when it won the $80 million J.C. Penney account in 1991. Additional accounts such as Bristol-Myers' Excedrin, PepsiCo's Taco Bell, Chrysler's Jeep, Bell Atlantic/Nynex Mobile, and the famous "Milk mustache" ads soon followed. Along with its success in garnering new and lucrative accounts, BJK&E implemented a comprehensive reorganization plan that combined the company's international and national divisions into Bozell Worldwide and appointed David Bell as its president. Charles Peebler, Jr. became the president and CEO of BJK&E, a communications holding company for the various advertising efforts of the entire firm, and still remained a driving force behind the scenes. From 1993 through 1996, BJK&E achieved a growth rate of 20 percent per year and had developed into a company with billings of more than $3 billion.

A significant amount of this growth occurred during the early and mid-1990s when Bozell Worldwide pursued an aggressive expansion policy. In Asia the company formed a close association with Dentsu, the premier advertising agency in Japan, resulting in Dentsu's purchasing large amounts of Bozell Worldwide media. In India the company managed to jump into seventh place among the top ten advertisers in that country, and in China Bozell Worldwide made significant, long-term investments in a potential blockbuster market. Europe provided the company with its largest revenues from overseas, but the market grew increasingly competitive, especially in France and Germany. By the end of fiscal 1997, BJK&E had offices in 51 countries across the globe, with an international headquarters located in London and world headquarters situated in New York City.

In 1997, BJK&E was the holding company for a total of eight divisions and 30 operating units, including, among others: Bozell Wellness Worldwide, the third largest health care marketing services firm in the United States; Bozell Sawyer Miller Group, a public relations and medical communications firm; Poppe Tyson, a company specializing in interactive advertising and web site development; and Temerlin McClain, a full-service advertising agency with high profile accounts such as J.C. Penney, Sara Lee Corporation, American Airlines, GTE, and NationsBank. In 1997 alone, still adhering to its aggressive growth strategy, the company acquired Terre Lune in France, Direct Friends in Germany, McCracken Brooks in the United States, and Charles Barker, plc in England.

In January of 1998 an unexpected development occurred when True North Communications, Inc., an advertising and communications agency located in Chicago, Illinois with approximately $2 billion in billings and the owner of Foote, Cone & Belding, acquired BJK&E in a brief courtship. True North, looking for a White Knight to help it resist a hostile offer from Publicis SA, one of France's most prominent ad agencies, found the perfect partner in BJK&E. The combination of the two agencies created the sixth largest advertising firm in the world. Charles Peebler, Jr., once again the mastermind behind the scenes, assumed the position of president at True North Communications and immediately set about the task of reorganizing the entire company. Many industry analysts predicted not only a comprehensive restructuring of the new agency, but the spin-off of many operating units.

Since tying the knot with True North Communications, the opportunities for BJK&E's continued growth seem limitless. The new company's combined resources include astute management, a high degree of creativity, and a worldwide network of offices to attract new accounts. One of the major advertising agencies in the world, BJK&E is thoroughly prepared for the 21st century.

Principal Subsidiaries: O'Connell, Norton and Partners.

Principal Divisions: Food Marketing Division of Bozell Worldwide.

Bozell Worldwide Inc. History

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