Winds of change blowing in Chicago

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In recent days, three of the country’s most prominent b-to-b agencies have made or are in the process of making significant business decisions regarding Chicago:

• Cincinnati-based HSR Business-to-Business officially announced March 8 that it has opened a Chicago office.

• On March 5, Minneapolis-based marketing communications firm Colle+McVoy acquired Chicago-based Mobium Creative Group from R.R. Donnelley & Sons. Financial terms of the deal were not disclosed. (Note: This information is updated from the print version of this story published March 8.)

• Kansas City-based NKH&W is postponing its plans to open an office in Chicago and has instead established a branch in suburban Minneapolis headed by former Colle + McVoy CEO Jim Bergeson.

Although HSR flirted with the idea of buying a local Chicago agency, the much-decorated firm—it is a three-time BtoB Agency of the Year honoree—eventually decided to enter the market with a satellite office. "I don’t rule it out, but we don’t need merger and acquisition partners to be successful here," said Rick Segal, HSR CEO. HSR currently has two Chicago-based clients: Allianz Global Risks U.S. and CCH, a legal publishing unit of Wolters Kluwer.

The Chicago office opens with an estimated annual gross revenue approaching $2 million, Segal said. "I could see this becoming our headquarters location," he said. "The only reason we’re in Cincinnati is that’s where our mothers gave birth to us."

George Rafeedi heads HSR’s Chicago office as VP-managing director. The office expects to have six employees shortly. A former HSR employee, Rafeedi was most recently a marketing executive with Baxter Healthcare Corp.

Segal has a grand vision for HSR. He sees the lack of a b-to-b agency with a national brand name and presence as a void in the sector. His goal is for HSR to become b-to-b’s answer to, say, Ogilvy & Mather and McCann-Erickson in the consumer space.

To begin expanding its presence beyond Cincinnati, HSR recently opened a Washington, D.C., office in part to pursue aerospace and homeland security marketers in the region.

Mobium, which has been among the leaders of Chicago b-to-b agencies for two decades, plans to defend its turf tenaciously, according to partner Gordon Hochhalter.

A much-decorated agency with a client list that include NEC-Mitsubishi, Mobium was named the Business Marketing Association’s agency of the year in 2003. Colle+McVoy, whose clients include Medtronic and3M Corp., is owned by Toronto-based MDC Partners. Colle+McVoy also has offices in New York and Los Angeles. Mobium will retain its name and function as a unit of Colle+McVoy.

Industry observers said Donnelley likely stepped up efforts to shed Mobium because of the printing giant’s pending merger with Moore Wallace Inc. and an intention to focus on its core businesses.

NKH&W confirmed late last year that it planned to open an office in Chicago. Unlike HSR, it planned to enter the market by acquiring or merging with a local agency, according to the firm’s CEO, Pete Kovac.

The firm mulled deals with several Chicago-area agencies. But it decided to postpone its foray into the market and chose instead to open an office in the Minneapolis suburb of Eden Prairie.

NKH&W already has two new clients in the Minneapolis market. It declined to name them.

Bergeson, who is president of the new office, said: "Minneapolis affords us a tremendous opportunity. There aren’t a lot of large independent agencies up here. Most of them are gone, and it’s an opportunity to grow an agency in that market."

NKH&W said that neither its establishing the Eden Prairie office nor parting ways with its mergers and acquisition executive, which the firm did last month, meant that it was no longer interested in Chicago. "Actually, we’re still looking at it," Kovac said. "We’re still trying to find the right recipe for success. Chicago is still very appealing."

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