Two Major Seattle Ad Agencies To Merge

In a major shakeup of Seattle's advertising industry, Evans/Kraft Inc. announced today it will merge with Mogelgaard & Associates Feb. 1.

The move pairs one of the city's most creative talents with an old-line, conservative firm that has been in Seattle for nearly a century.

The combined firm will retain the name Evans/Kraft and will remain Seattle's second-largest ad agency with 1989 billings of $50 million. Evans/Kraft traces its local roots back to 1897.

Don Kraft, chairman and chief executive, said the combination ``allows us to challenge anyone for creative leadership in the Northwest.''

The merger had been rumored in the local advertising community for about a week.

As late as yesterday afternoon, Kraft and Mike Mogelgaard, president of his 15-year-old firm, confirmed they had held merger discussions but both said no agreement had been reached.

But in today's announcement, Kraft said Mogelgaard had already resigned its largest account, Seafirst Bank, in order to avoid a potential conflict of interest with one of Evans/Kraft's largest clients, Washington Mutual Savings Bank, which has had its account with Evans/Kraft for more than 25 years. Seafirst said it was notified

this morning that Mogelgaard was resigning the account.

The move means the Seafirst account, one of the largest and most prestigious, is up for grabs by other agencies.

Kraft said Evans/Kraft and Mogelgaard ``joined forces'' last week to successfully seek the advertising account of HealthComm, a marketer of health programs and nutrition products in Gig Harbor. He said the Evans/Kraft-Mogelgaard proposal prevailed over 38 competing agencies.

Kraft also announced today it has added three new clients, Genetic Systems, a division of Bristol-Meyers Squibb; Van Waters & Rogers, a division of Univar; and the Westin Hotel in Seattle.

Mogelgaard last year was the city's 13th-largest agency, with billings estimated at $11.5 million.

The enlarged Evans/Kraft agency still trails Cole & Weber, which had 1989 billings of $93 million.

Kraft said the merger ``fits our goals for the '90s beautifully. We are strong strategically and have the full range of communications services clients need today.''

``This is exciting news for all of us at Evans/Kraft,'' said Lon LaFlamme, Evans/Kraft president. ``Mike Mogelgaard has a tremendous reputation. He has built a great creative culture in his agency.''

Mogelgaard will become co-chairman and creative director of Evans/Kraft. Dick Paetzke, who has been Evans/Kraft creative director, will become executive vice president.

In the past year, Mogelgaard has lost several major accounts, including Cellular One and Pay `N Pak. Evans/Kraft, which has satellite offices in Portland and Anchorage, lost a major client, the Alaska Seafood Marketing Institute.

But those losses may not have prompted the merger.

``This is the normal ebb and flow of the advertising business, so I would be a little surprised'' if the client losses led to the merger, said Larry Asher, creative director of Borders Perrin & Norrander, an agency roughly the size of Mogelgaard.

``This is just speculation, but from Evans/Kraft's point of view, they would see (the merger) as a way to enhance their creative product,'' Asher said. Mogelgaard is regarded as unconventional but one of the city's top creative talents.

A brief item in this week's Adweek magazine mentioned the Evans/Kraft-Mogelgaard merger talks and said Mogelgaard had also discussed a possible merger with Elgin Syferd, another of the city's largest agencies.

Dave Syferd, chairman of Elgin Syferd, said he and Ron Elgin ``have been friends of Mike and have had on-again, off-again discussions (about a merger) for the last five years.'' But he said none of those talks was recent. ``We are not part of the picture at all,'' Syferd said yesterday.

Corporate mergers are nothing new to Evans/Kraft, which assumed its present form in 1984 when Kraft's agency became part of Evans Communications Inc. in Salt Lake City, which added the Seattle operation to six other regional ad agencies.

Evans/Kraft merged with a public-relations firm in 1986 and acquired a graphic-design firm in 1988.

-------------------------------------------------------------------------

MOGELGAARD;

-------------;

Here are some major clients.;

-- Seafirst ;

-- Group Health Coop. ;

-- Seattle Times ;

-- Longacres ;

-- Eddie Bauer ;

-------------------------------------------------------------------------;

EVANS-KRAFT;

--------------;

Here are some major clients.;

-- Wash. Natural Gas ;

-- Alpac ;

-- Wash. Mutual Svgs. Bank ;

-- Goodwill Games ;

-- Puyallup Fair