BOZELL AT 75;MIDWEST ROOTS MELD WELL WITH BIG CITY;OMAHA SHOP THAT FOUND GLAMOR MERGER PARTNER CREATES LEADER IN AGENCY WORLD

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Bozell worldwide may or may not be celebrating its 75th anniversary this year. It depends on whom you ask.

To Charles Peebler, Bozell's chairman and son-in-law of Morris Jacobs, the story starts in Omaha in 1921. So there's really no doubt on the birthday. But to Leo-Arthur Kelmenson, the former chief of Kenyon & Eckhardt who once resigned Ford to take on Chrysler, it begins in New York in 1929.

WED LATE IN LIFE

This double vision is because the history of Bozell is the story of two agencies, neither one of which married until late in life, and each of which led a long and independent life of its own before the nuptials.

The first had toiled on the Nebraska plains churning out utility and financial advertising. It was far from the broadcast centers of Hollywood and Madison Avenue. If you were in New York and wanted tickets to the Perry Como or Ed Sullivan shows, you didn't call Bozell & Jacobs in Omaha.

The second was one of the glamor shops of that era when agencies consorted with the famous and produced the radio and TV shows that nurtured that fame. K&E had the coveted RCA and Ford accounts. It could not only get you tickets to the Como and Sullivan shows; it could get you a guest shot on them.

The marriage, when it came in 1986, was as implausible as that of Abie and his Irish Rose. Maybe the most unexpected result was that in the end the legendary name of Kenyon & Eckhardt was the casualty, swallowed by the shop from Omaha-now known as Bozell Worldwide, 12th-largest agency in the U.S. and, with 20%-plus growth for three consecutive years, double its size in 1992, possibly deserving of its reckoning as "the fastest-growing agency in the world."

Since May 1989, the K&E nameplate has survived only in the logo of the parent company, Bozell, Jacobs, Kenyon & Eckhardt. "Bozell makes ads," they say in the New York world headquarters on 23rd Street. "BJK&E makes deals."

BOZELL & JACOBS, 1921-86

Chuck Peebler married the boss' daughter at 22 and ended up owning the company at 30. But don't jump to the usual conclusions about nepotism.

That he got noticed early merely gave him more time to flex one of the most formidable dealmaking minds in the industry-and to build Bozell & Jacobs into an empire its founders never imagined in their most fanciful dreams.

For an agency that had it origins in the U.S. outback of Omaha, he needed extra time.

AN EXTRA JOB

B&J began as an extracurricular activity of Morris Jacobs, 24, who was night police reporter for the Omaha Bee-News; and Leo Bozell, 35, a former editor of the Omaha Daily News, then working for the local real estate board. The two had met at the Daily News when Mr. Jacobs covered local business and Mr. Bozell was his editor.

Their moonlighting was more public relations than advertising, a distinction neither man considered important. Today that lack of distinction is called "integrated communication."

In any case, the work was good enough to attract the Nebraska Power Co. And that enabled Messrs. Bozell and Jacobs to put journalism behind them by 1923 and form a full-time agency.

The new enterprise may initially have been typecast as a regional utilities shop, but while that wasn't glamorous it nurtured growth at 510 Electric Blvd. In 1933, B&J opened its first office outside of Omaha, in Indianapolis. A third office opened at 120 S. Michigan Ave. in Chicago in 1934 under brother Nate Jacobs, and a fourth in Houston in 1939.

It was a pro-bono account, however, that gained the national spotlight-Boys Town, the orphanage started by Father Edward Flanagan.

A B&J corporate history credits Morris Jacobs with coming up with the name and the PR push that eventually led MGM to film two Boys Town features and earned Spencer Tracy his second consecutive Oscar (1938), for his portrayal of Father Flanagan.

Amid the long list of utilities a few consumer clients appeared by 1942, including Roper, the kitchen range manufacturer, and the Amling Co., a regional floral retailer.

However, the pattern of B&J over its first four decades would be slow but steady growth within its utility and banking niche. In 1937, billings stood at just under $5 million, a Rubicon the agency wouldn't manage to cross for another eight years.

Meanwhile the network of offices spread: Shreveport, La. (1940); Seattle (1945); Minneapolis (1946; Los Angeles (1947); New York-Washington (1948); Baltimore (1953); and on and on.

The agency's best-known account was Mutual of Omaha, whose weekly "Wild Kingdom" with Marlin Perkins, was to become one of TV's longest-running programs.

WIDE CLIENT BASE

According to Mr. Peebler, the agency grew steadily until the '50s, then hit a plateau. The B&J structure was far-flung but shallow and fragmented. Between 1951 and 1956, billings rose from $9.3 million to $20 million, healthy growth by any standard.

But the billings rested on a huge base of clients, all with modest budgets. By 1960 B&J's Red Book entry filled six pages with more than 350 clients.

By contrast, future partner-to-be K&E stood at nearly $90 million on a base of about 25 clients.

"We came from a different milieu," explains Mr. Peebler. "We were not a club agency. We played the game differently. We did what people said couldn't be done. You couldn't move from here to there, you couldn't build simultaneously. The press never understood us because we didn't start in a center that was on their radar screen."

In 1958, when Mr. Peebler joined the company, that began to change. He was born in Omaha in 1936 and dropped out of Drake University with youthful dreams of a tennis career. One of his local tennis partners was Omaha department store owner J.L. Brandeis, who induced Mr. Peebler to join his company and train for management. Mr. Peebler never returned for his junior year at Drake, and after 21/2 years ended up supervising a staff of 150, raking in a bonus equal to his starting salary and fully expecting to become the youngest president of J.L. Brandeis & Sons.

BETTER OFFER

He might have made it, too, if he hadn't met and married another Brandeis employee named Susie Jacobs, whose father, Morris Jacobs, was 63 and eager to build a young management team of his own to take over B&J. Mr. Jacobs had a better offer up his sleeve for his new son-in-law.

So, in 1958, Mr. Peebler joined the agency as the anointed heir. He became president in 1965.

"I guess I would say I got where I am on talent," he says today with a smile, "but it certainly didn't hurt to have the boss' attention."

(Mr. Peebler and his first wife subsequently divorced; he remarried in 1977.)

As president he set aggressive growth goals. In his first year, billings moved from $20 million to $23 million. He also expanded the agency's profile outside Omaha, and in 1967 made his largest move to date, taking on a living legend.

HEADS EAST

Emerson Foote, 60, a founding partner of Foote, Cone & Belding and the man who ran that agency's Lucky Strike account for 10 years, was coming out of a misbegotten partnership and needed money. Mr. Peebler needed connections and a stronger New York office than he had.

In August, B&J bought Emerson Foote Inc. for $500,000 and a New York billing base of about $7 million. Added to the $2 million to $3 million in B&J New York billings, it gave Mr. Peebler an eastern base of nearly $10 million. Mr. Foote remained with B&J as director and consultant for the next decade.

Three months after the Foote acquisition, Morris Jacobs retired and sold controlling interest to Mr. Peebler, who became CEO, and to Alan Jacobs, a nephew. Mr. Peebler spun off B&J's offices in Minneapolis, New York and Washington to their executives, and spent more time in the Big Apple where the Foote offices at 575 Lexington Ave. became not only B&J's eastern flagship but the new corporate headquarters.

$50 MIL BY 50

With a strong New York base not tied to Midwestern clients, B&J began its assault on the big time. Over the next five years the agency added more billings than in its previous 45 years, reaching $50 million on its 50th anniversary.

Though his account roster still lacked sparkle, Mr. Peebler pressed on with a strategy of buying growth that was generating momentum. The plan received a big boost in 1974, when B&J acquired Glenn Advertising, a $29 million Dallas agency whose accounts included pieces of American Airlines and Quaker Oats Co.

B&J not only acquired billing and account muscle on its buying spree, it bought talent as well. Along with Glenn, for instance, came its vice-chairman, J. Liener Temerlin, whose present agency, Temerlin McClain, is a $550 million asset in the Bozell, Jacobs, Kenyon & Eckhardt holding company.

In 1975, the purchase of Knox Reeves in Minneapolis not only brought into B&J its first General Mills business but Bozell's future chairman, David Bell; Worldwide Creative Director Ron Anderson, creative Pygmalion to Tom McElligott; and Nancy Rice.

"Knox Reeves founded the agency on General Mills business in 1935," says Mr. Bell. "Reeves was the guy who wrote the line, `Wheaties, Breakfast of Champions.' It was an incredibly proud agency and the one that produced `Jack Armstrong' on radio for years. In 1972, after management screwed up and lost most of the GM business, the CEO asked [Mr. Anderson] and me if we wanted what was left of the agency. We said yes. I was 29."

B&J was now a $100 million company with certified membership in the top 20 club of U.S. agencies. By 1979, it nearly tripled to $287 million.

But one night Mr. Peebler shook the hand of Mr. Kelmenson in New York's "21," and neither man knew that together they would forge the biggest deal yet.

KENYON & ECKHARDT, 1929-86

In looking at the winding trail to a corporate beginning, K&E can actually go back a bit further than is today acknowledged. In 1896, Ray D. Lillibridge Co., a small technical agency, hired a 38-year-old engineer named Otis Kenyon in 1918. Mr. Kenyon had worked with the Railroad Test Commission and came to Lillibridge to work on the Canadian Pacific Railway business. He had an engineer's faith in numbers and believed the key to advertising lay in research.

Eight years later, Mr. Kenyon found a bright young fellow 14 years his junior with a similar penchant for facts over faith.

Henry Eckhardt joined Lilli-bridge at 32 in 1926, and within two years was running the copy department. He was a literate man who had begun in journalism and possessed a reformer's zeal for professional ethics.

ENTER KENYON & ECKHARDT

When Mr. Lillibridge decided to retire in 1929, the two men bought him out and formed Kenyon & Eckhardt. It was October 1929.

To many advertisers in those days, Mr. Kenyon's mania for research was just another complication in a basically simple business. The client who prided himself on knowing his customers and felt advertising was in his bones had no wish to see his approach replaced by a lot of mathematical voodoo. So Mr. Kenyon closeted his research operation in a separate company with separate offices from the K&E base at 247 Park Ave.

The new owners were eager to break out of the industrial ghetto into consumer advertising. The first opportunity came with the Axton Fisher Tobacco Co. and Spud smoking tobacco, which K&E built into a credible brand in the 1930s.

Kellogg Co., a small Battle Creek, Mich., breakfast food company, came in 1934 with Kaffee Hag Coffee, followed soon by All-Bran and Gro-Pup dog food. By the end of the decade, K&E had won Knox, Bosco, Abercrombie & Fitch, Munsingwear, Stetson and Quaker State.

THE NEXT GENERATION

As the agency expanded, a second generation of management rose over the horizon. First was Thomas D'Arcy Brophy, 37, who joined in 1931 as a rainmaker, but whose career was almost snuffed out in a fireball two years later when an auto accident burned him severely.

After 13 plastic surgeries over 18 months, he returned to K&E in the fall of 1935 and in 1937 became president-CEO, succeeding Mr. Eckhardt, who took the newly minted title of chairman. (In a tragic irony, Mr. Brophy would be involved in another car accident in 1967, this one fatal.)

Mr. Brophy had hired Ed Cox as copy chief in 1933. (He created the famous slogan: "A hog can cross the country without changing trains-but you can't!" for the Chesapeake & Ohio Railway.) After Mr. Brophy's accident it was Mr. Cox who suggested that Dwight Mills be brought in to handle new business. When Mr. Brophy returned, the three became heirs apparent and the growth engine that moved K&E to the top tier of New York agencies by 1941.

In July 1942, Henry Eckhardt died unexpectedly at age 48. Otis Kenyon, the elder partner, who had been content to run his research office and serve as treasurer, now assumed the titular post of chairman until his death seven years later in 1949.

Real authority fell to Thomas Brophy, who would succeed Mr. Kenyon as chairman and finally retire in 1957. Under his stewardship, the Kellogg business expanded to Bran Flakes and Pep, and by '47 Raisin Bran, Rice Krispies and the coveted flagship, Corn Flakes. The list of other package goods multiplied as well: Wesson oil, Morton salt, Borden, Pepperidge Farm and Bristol-Myers.

LEWIS JOINS SHOP

As the client list multiplied, so did K&E involvement in network radio. In 1944, the agency opened offices in Chicago and Hollywood. It needed a solid radio man to command a growing broadcast department and that year Mr. Brophy hired one of the biggest-William Lewis.

This failed advertising man (he had been at J. Walter Thompson Co. before joining CBS in 1935) already had sown the seeds of his own small legend. As head of programming for CBS, he had sent Edward R. Murrow to London in 1937 and put Orson Welles and Norman Corwin on the air the following year.

"Bill was the best damn boss in the world," recalls Mr. Corwin. "He had a sensitivity to quality and a willingness to back it that was rare in broadcasting, let alone advertising. I once said that he made creative people feel cherished and gave them freedom. He praised good work, and above all he saw they got credit for it.

Norman Corwin wasn't the only man impressed by Mr. Lewis' intelligence and charisma. Another was Henry Ford II.

During the war, Ford Motor Co. was so sloppily managed the government considered seizing it to keep B-24 bomber production going. In 1943, Washington ordered Henry Ford II out of the Navy and back to Detroit, where his grandfather clung to power.

The situation was ominous. Unable to wield decisive power, the younger Mr. Ford went to the media in an effort to control the storm of terrible publicity. At CBS, he met William Lewis.

After the war, with Mr. Lewis now at K&E, Henry Ford II tried to lure him to the car company as head of corporate communications. But Mr. Lewis was happy in New York, and he had a better idea. If Mr. Lewis wouldn't come to Ford, perhaps Ford might come to Mr. Lewis, and to K&E.

In March 1948, that's what happened. While the Ford Division remained at JWT, K&E won, first, all Ford corporate business ("Ford has a better idea"); and soon after, the Lincoln-Mercury division and the Lincoln-Mercury dealer account.

It came just in time for TV. In June 1948, Ed Sullivan went on a three-station CBS network strung together by coaxial cable with a variety program called "Toast of the Town." Mr. Sullivan was no stranger to broadcasting; he had introduced Jack Benny to the U.S. on a similar radio variety show in the '30s.

And William Lewis was looking for an opportunity to take Lincoln-Mercury into TV. That, and perhaps a lingering loyalty to CBS, were all he needed to snap up the program after Emerson Radio pulled out in 1949.

Ed Sullivan and Lincoln-Mercury became synonymous in the '50s, appearing at hundreds of Ford corporate events.

A SPLASH ON TV

With Ford money to spend, K&E wrote more than its share of TV history. In 1949, "The Ford Theater" presented live monthly dramas. Ten years later, Ingrid Bergman made her TV bow on "Ford Startime" (in "The Turn of the Screw") with John Frankenheimer directing.

On June 15, 1953, Mr. Lewis cooked up a once-in-a-lifetime concoction that the industry would dub TV's first "spectacular." "The Ford 50th Anniversary Show" was a 2-hour, $500,000 compendium of show business that NBC and CBS carried simultaneously.

In March 1954, K&E won the RCA account and helped launch the first color TV sets into the U.S. market in 1955-56. Agency billings reached $68 million in 1955 and $81 million in 1956, putting it briefly ahead of Ted Bates & Co., Leo Burnett Co. and FCB.

A TOUGH DECADE

Yet, it wasn't an easy decade. Burnett had begun to pry open K&E's grip on Kellogg and, in July 1951, won the Corn Flakes business. Then during the "black spring" of 1952, the last of the Kellogg business went to Burnett a week after National Distillers and Piel's beer walked.

The total loss was nearly a fourth of the agency billings.

Salvation came just before Christmas 1955 when Pepsi-Cola Co. dropped its $6 million account down K&E's chimney, two months after the agency's near win on Coca-Cola Co. against McCann-Erickson.

For K&E the victory would mean profits, stability and seventh place among U.S. agencies. For Pepsi, it would mean the "Pepsi Generation" campaign and a chance to swipe several K&E executives before dropping the agency in May 1960.

Growth slowed after 1956, yet by 1961 billings stood at around $90 million.

After William Lewis became president of K&E in October 1951, and later chairman in 1960, he continued to hover over the Ford and Lincoln-Mercury business. (Lincoln left K&E in 1955, then returned in 1958.)

After his retirement in 1967 to run the American Cancer Society, the Ford mantle passed to Leo-Arthur Kelmenson, then 40, who had formidable credentials.

Mr. Kelmenson arrived at K&E as a senior VP in March 1967, from Norman, Craig & Kummel. The next year he was president-CEO and began the process of taking K&E international.

HOOKING UP WITH IACOCCA

But Mr. Kelmenson had a rendezvous with destiny and a chap named Lee Iacocca that dwarfed all that. When Mr. Kelmenson came to K&E, he didn't have to look hard for the Ford wonderboy. Mr. Iacocca had already built the Mustang and lent his face simultaneously to covers of Time and Newsweek.

Over the next decade, the two men became more than business friends. They developed the kind of closeness Bill Lewis and Henry Ford II had 25 years before, the kind of closeness that pre-empts all corporate protocols and makes anything possible.

Suddenly in July 1978, anything was possible. Mr. Ford fired a frustrated Mr. Iacocca, who promptly accepted the top job at a moribund Chrysler Corp.

"The company had 250,000 cars rusting in Detroit," says Mr. Kelmenson.

Mr. Iacocca had to do something. If he couldn't change the product overnight, he decided, he could certainly change the advertising. Starting in early December, Messrs. Iacocca and Kelmenson met frequently and secretly.

They rendezvoused in New York one week, Las Vegas another, Los Angeles after that, avoiding restaurants and public places where they might be spotted by car-wise eyes. There were no preliminaries, no "feeling out," no presentations. It was...cut to the climax.

When Mr. Iacocca called a press conference for March 1, 1979, Wall Street held its breath. Reorganization? Merger? Chapter 11?

Within minutes, though, Wall Street relaxed and Madison Avenue blinked. Mr. Iacocca disclosed that he had fired Young & Rubicam, BBDO and Ross Roy Inc. and delivered all $120 million in consolidated Chrysler billings to K&E. It lifted the agency to $328 million, according to Advertising Age 1979 billings reports.

The shock wave quickly ricocheted to Detroit, where K&E sent a hand-delivered note to Mr. Ford telling him his $75 million account was going over the side. No doubt Mr. Iacocca would have enjoyed being the messenger.

BIGGEST SHIFT EVER

It was the largest account shift in U.S. history, and though larger shifts would come later, none would pack the quirky surprise of Chrysler at K&E.

That night as everyone celebrated at "21," a stranger came over from another table. "You don't know me," he said to Mr. Kelmenson, "but I wanted to congratulate you on your great success today."

Mr. Kelmenson got up, smiled and for the first time shook the hand of

Chuck Peebler.BUT FIRST, ANOTHER DEAL After Chrysler stabilized its

financial position and its advertising came together, Mr. Kelmenson began

to think about the way agencies used to produce programming for their

clients.

TRYING TV PRODUCTION

"I believed we could preempt the industry," he says, "by getting an

entree into TV production that we could bring to clients. If Chrysler and

Colgate could fund their own shows, they could not only have some impact

on the quality, they could profit from distribution overseas."

Mr. Kelmenson didn't find a partner exactly. But he found Lorimar, then

producer of TV's "The Waltons," "Dallas," "Knots Landing," and just

ahead, "Falcon Crest."

"Our objectives were not similar," he says. "They wanted to get a lock

on our clients. I wanted to get the best programming for our clients."

LORIMAR LOOKING

What Lorimar really wanted was a good investment, and K&E, then the 23rd

largest agency, billing $434 million, looked like a terrific one. In 1983,

Lorimar acquired the agency for $21 million, and Mr. Kelmenson went on the

Lorimar board.

Lorimar's stock went from $20 to $31 in six months, and by 1985 it had a

reserve of $58 million in financing for more shopping. Chairman Merv

Adelson talked the party line about being a "communications company."

But basically Lorimar wanted to be rich. And Mr. Adelson's partner, Lee

Rich, a former Benton & Bowles executive who had worked with Sheldon

Leonard to secure "The Dick Van Dyke Show" for Procter & Gamble Co.,

knew the stability of a couple of big agencies could help smooth the boom

and bust of TV production.

So, in 1985, Lorimar put together the 14th biggest agency in the

country-it acquired Bozell & Jacobs for $41 million and merged it with

K&E. Mr. Peebler, who had been looking for a suitor with international

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