This month, Kansas City, Mo., ad agency Nicholson Kovac (formerly NKH&W), celebrates 25 years in business.
Starting out as a pure b-to-b agency serving agricultural and industrial clients in the Midwest, NK has evolved over the years to serve a variety of clients, including financial services, high-tech, business-to-consumer, industrial and agricultural.
Current clients include 3M, FMC Corp., Sprint DSL, Trimble and Wellmark Blue Cross Blue Shield.
Peter Kovac, co-founder and president-CEO of NK, spoke to BtoB about how business advertising has changed over the years and current issues facing the industry.
BtoB: What are your clients' marketing budgets looking like for 2006?
Kovac: So far, the majority of our clients are looking at more aggressive budgets than they were last year. This tells us that the marketing has been effective, so they are willing to invest more; and they are getting more comfortable with where the economy is going, so they are willing to take more risks.
BtoB: Are your b-to-b clients doing much online advertising?
Kovac: Our b-to-b clients fully embraced the concept early on. Once they became engaged with it, I think they leveled off. Now, it once again is one of the hottest things out there. At the end of the day, it is a measurement device, a tracking device, a collateral system, you name it. For b-to-b, online is even more important than for consumer products.
BtoB: Why is that?
Kovac: B-to-b clients need information immediately and need easily accessible Web sites. A lot of clients in b-to-b have an engineering background, so they're used to relying on the Web to get information.
If you believe that information is power, then having immediate access to information is critical to accessing that power.
BtoB: How has b-to-b marketing changed over the past 25 years?
Kovac: I think one of the big changes is how b-to-b has led the target marketing mind-set. B-to-b has always been about vertical pubs, direct marketing and highly targeted messages against highly defined prospects.
In the old days, we were doing more exciting things than the people on the consumer side. We were deeply engaged in database development, target markets and integrating tools together, while they were running newspaper ads, TV ads and radio spots. A lot of things that are happening in consumer advertising today are an outgrowth of what we learned in b-to-b in the '70s and '80s.
BtoB: You started out as a pure b-to-b shop. How much of your business is now b-to-b?
Kovac: We're 56% b-to-b. Most of our b-to-b clients have a consumer component (Sprint, Wellmark BCBS and Williams Seasonings). We worked with them on b-to-b and, because we did a good job there, those with a consumer aspect engaged us with their consumer business. We kind of grew into it out of b-to-b.
BtoB: How does b-to-c advertising compare with b-to-b advertising?
Kovac: B-to-c has been good for us from a creative perspective. B-to-b sometimes can wear down a creative mind. Having the opportunity to work on consumer assignments keeps us fresh. We can take the salesmanship required from a b-to-b standpoint and spike it with the creativity of consumer-type advertising.
BtoB: What changes has your agency made over the years?
Kovac: We became an employee-owned company a year ago through an ESOP program, and at the same time we changed our name from NKHW to NK. [Co-founders Paul Welsh and Steve Huntley left the agency; co-founder Nick Nicholson remains as chief creative officer].
About six months ago, we took a real hard look at ourselves and asked: Where is the business going? We hired Geoff Pickering to head up an interactive communications group. Now we have nine or 10 people in our interactive group.
We were like most agencies, doing a little bit here and there. We didn't really understand what it was. It wasn't a strategic tool. Now, it is truly a strategic tool that our clients have available to them. It is our fastest-growing service. M