A Power Team Is Born -- Mogelgaard Muscle Joins Evans/Kraft Advertising Clout

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THE NEW EVANS/KRAFT

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- Chairmen: Don Kraft and Mike Mogelgaard

- President: Lon LaFlamme

- Creative director: Mike Mogelgaard

- Major accounts: Washington Natural Gas, Alpac, Washington Mutual Savings, Group Health, Goodwill Games, Puyallup Fair, Longacres, Eddie Bauer, The Seattle Times.

- Offices and divisions: Headquarters in Seattle, with satellite offices in Portland and Anchorage; also in Seattle are the Evans Food Group, Evans/Kraft Bean Public Relations and Evans/Spangler Design.

- Annual billings: $70 million systemwide.

In the week and a half since Don Kraft and Mike Mogelgaard announced their corporate marriage, pundits have questioned the success quotient of a match in which one partner (Kraft) drives a Mercedes and the other (Mogelgaard) drives a Ferrari.

But the story of the tanning bed may be a more telling symbol of how the relationship could work.

When Kraft, chairman of Evans/Kraft advertising agency, Thursday wrote out a check to acquire Mogelgaard, one of the assets Kraft bought was Mogelgaard's tanning machine. The machine, which Mogelgaard installed several years ago for his employees, became part of Mogelgaard & Associates' hip, unconventional corporate culture.

But sometime soon the machine will be relocated to Evans/Kraft's employee-fitness room, which already is outfitted with such traditional equipment as a treadmill and weights.

If the business combination proves successful, Mogelgaard's tanning machine may add a stylish polish to Evans/Kraft's muscle power, which is more or less the way the duo describe the agency they hope to shape. Though their hasty announcement surprised nearly everyone, Kraft and Mogelgaard say it makes sense.

``You take our offices and services and everything we have here and add the horsepower of Mike's creative team on top of ours, and we're in a position to challenge anyone in the Northwest, and we intend to,'' said Kraft in an interview last week.

Though Kraft bristles at the suggestion that his agency's creative work is considered ho-hum, he seems anxious to bolster its creative image. Known for its research and other support services, Evans/Kraft nevertheless recently lost at least one large account, the $10 million Alaska Seafood Marketing Institute account.

Mogelgaard also has lost business in the last few years. Partly it was because some clients felt his one-office agency wasn't big enough to support their regional advertising needs, and Mogelgaard says he was tired of being too small.

``Look, I've never had any clients leave because they said the creativity was (poor),'' said Mogelgaard. ``They never say, `We hate these ads.' Clients end up saying, `Hey, are we really getting the best media buy possible?' That's frustrating. You always hope the ads will speak for themselves, and for a while they do.''

Mogelgaard becomes co-chairman and creative director of Evans/Kraft,

considered Seattle's second-largest agency with 1989 billings of $50 million. Mogelgaard, who founded his agency in 1975, is the sole stockholder of Mogelgaard & Associates, which in 1989 had billings of $11.5 million. Three years ago the agency had billings of close to $16 million, making it one of the city's top 20.

Evans/Kraft is the largest agency in Evans Communications Inc., a Salt Lake City-based group of agencies. Kraft is chairman of the group. With offices in Portland and Anchorage as well as the Seattle-based advertising, public-relations and design divisions, Kraft says annual billings for all the groups are $70 million.

It may be a marriage of convenience, but there also seems to be plenty of good will and a conviction that each is what the other needs. A congenial man whom competitors describe as smart and savvy, Kraft knows the value of pizazz, even if it has sometimes eluded his agency.

As a photographer snaps a photo of him and his new co-chairman, Kraft asks hopefully if the shot is in color since he's worn a red tie for the occasion. Mogelgaard, whose tie is flashier even though it is blue and gray, instinctively strikes a casual, cocky pose.

On the question of how an executive known as steady, traditional and Brooks Brothers can share his agency with a high-profile former competitor known for fast cars and faster quips, Kraft said: ``The more we talked about it, I realized that Mike wasn't as much a maverick as he's described, and I'm not as stodgy as people think. And after a couple of glasses of wine . . . ''

``You mean a couple of bottles,'' said Mogelgaard.

``It seemed to make sense,'' said Kraft.

The pair says they barely knew each other before December, when Mogelgaard approached Kraft about the possibility of having Evans/Kraft's Portland office do some work for one Mogelgaard's clients. One thing led to another, he said, and soon they were discussing the possibility of teaming up.

Others say that Mogelgaard, buffeted in the last two years by losses that reduced his billings by 30 percent, has been looking for a partner for some time. Ron Elgin, president of Elgin Syferd agency, said he and Mogelgaard flew to San Francisco late last year to see if Elgin Syferd's new parent company, DDB Needham, would also be interested in acquiring Mogelgaard & Associates.

``I've wanted to have Mike become a part of our agency for seven years,'' said Elgin, a longtime friend of Mogelgaard's. ``But when he finally agrees, I don't own it anymore.'' Elgin said DDB Needham wasn't interested in another Seattle acquisition.

Neither Mogelgaard nor Kraft will reveal financial details of the deal. And both are vague on the question of how many of Mogelgaard's 25

employees will follow him to Evans/Kraft. Mogelgaard says Evans/Kraft is buying ``the majority of our people, mostly creative people and account executives.'' But some insiders say no more than 10 or 12 are expected to be added to Evans' roster. And Mogelgaard's name will not be added to the agency - though for public-relations purposes Evans/Kraft's receptionists will answer phones for the next few months with ``Evans/Kraft and Mogelgaard.''

What Mogelgaard clearly brings to the relationship is $6 million in billings and his creative savvy.

His biggest accounts are Group Health, Eddie Bauer, The Seattle Times and Longacres. He resigned the estimated $5 million Seafirst account as part of signing the deal with Evans/Kraft. Evans/Kraft handles Washington Mutual's advertising. The move is the subject of much speculation in the advertising community since the Seafirst account is bigger.

Faced with the decision to resign Washington Mutual or Seafirst, Kraft says he decided to let go of Seafirst. ``We have a loyalty to Washington Mutual that goes way back,'' said Kraft. ``Seafirst is somewhat bigger, though not twice as big.''

Although some speculate that Mogelgaard's grip on Seafirst was getting shaky, Jack David, Seafirst senior vice president and advertising director, said, ``We didn't fire Mike. They resigned. Nobody was mad at anybody. Everyone around here thinks they did an outstanding job for us.''

Even though Mogelgaard's credentials as a marketing major and account executive are not the kind usually carried by successful creative directors, Kraft says Mogelgaard will make a good one.

``The talent of a good creative director is critiquing, motivating and cajoling,'' said Kraft. Mogelgaard likens his new position to a chef, ``who seldom cooks but tastes everything that goes out the door. You hire the chef for his taste.'' Even though he gives up some of his autonomy, Mogelgaard said the deal allows him to spend more time on the things he most enjoys including doing some of his own copywriting.

Kraft said Mogelgaard will ``have creative control here,'' which Mogelgaard says means that ``I'm only accountable to Don.'' Dick Paetzke, former Evans/Kraft creative director, will be considered ``a senior member of the agency's expanded creative department,'' according to Kraft. Paetzke also remains executive vice president.

Seattle's advertising community is watching the deal with interest, even though few expect the restructured agency to have a big impact on their business.

Mogelgaard and Evans/Kraft ``are just exactly what each other needs,'' said Dick Harvey, president of Sound Marketing Services, a Seattle consulting firm. ``Mike gets strong account services and Evans/Kraft gets his marketing talents . . . His stuff for Longacres was superb and the stuff for QFC (Mogelgaard resigned the account last year in the wake of making a pitch for the Safeway account, which ultimately went to another agency) was so good they're still using it.''

John Brown, president of Brown & Hadley and Partners, said the marriage will only work if Mogelgaard truly gets creative control. Brown joined Evans/Kraft in 1975 as creative director.

``I left Evans/Kraft after 5 1/2 months,'' said Brown, ``and I think Don's interest then was similar to what he's doing now. He wants a creative guy. And it might work if Mogelgaard has 100 percent creative control. But that was my problem, Don didn't want to be 100 percent cut out. But if Mogelgaard has the control, and if he's as good as his reputation, it might work.''

Hank Barber, general manager of McCann-Erickson, said Mogelgaard is something of a risk for Evans/Kraft.

``Don Kraft has been very successful in running an agency over a very long time. He's a marathon man and he attracts clients who must like his style. So when you add a totally different culture to the agency it is a very high risk,'' said Barber.

One agency president who does expect fallout from the acquisition is Dave Sharp, president of Sharp Hartwig Inc. He said he is already reviewing resumes from Mogelgaard staff members. He added that such consolidations inevitably breed small new entrepreneurial agencies and cause some small accounts to move. Sharp said companies with advertising budgets under $1 million often feel they get less attention when their agency suddenly grows a lot larger: ``So the spinoff for me is that I can look a $500,000 to $1 million account in the eye and say, `You'll be important to me.' ''