CRAMER-KRASSELT TAKES MIDDLE PATH; AGENCY THRIVES BY COURTING ACCOUNTS IN $5M-$10M RANGE

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CHICAGO- Cramer-Krasselt President Peter Krivkovich has the answer for the struggling midsize agencies of today: Work for midsize clients.

His agency, based in Milwaukee with offices here and in Orlando and Phoenix, projects it ended 1995 with $210 million in billings, up nearly 23% from 1994. The agency, in business since 1898, says its only unprofitable year came in 1937.

In the past 10 years Cramer-Krasselt has stacked its client roster with $5 million to $10 million accounts, with no single client representing more than 15% of total billings, Mr. Krivkovich said.

That's a plus for the client as well: "Ten-million-dollar accounts want sophistication," he said. "But they would get lost in the fray at megabillion-dollar agencies."

The business won during 1995 supports that point. In Chicago, new accounts include Cracker Barrel Old Country Store restaurants ($10 million) and Sportmart, LaSalle National Bank and Cellular One ($7 million each); in Orlando, the Orlando/Orange County Convention & Visitors Bureau ($3 million); and in Milwaukee, Mercury Marine and Gardetto's snacks ($3 million each).

The Chicago office now accounts for about half the agency's billings. Other clients include Wausau Insurance Co.; Beatrice Cheese Co.; Allen-Edmonds Shoe Corp.; US West; San Francisco's Bay View Bank; Walt Disney Co.'s Swan/Dolphin resorts and Walt Disney World; Johnson Controls; and Helene Curtis Industries' salon division.

"It isn't so much a turnaround-it's an acceleration," said Chairman-CEO Paul Counsell of the recent account wins.

Cracker Barrel was impressed with the agency's strategic understanding of the chain's business, said Jim Fisher, VP-marketing.

"Our decision was based on finding a strong strategic and creative partner for the future," Mr. Fisher said.

Also influencing the decision was the agency's experience with Southwest Airlines-an account Cracker Barrel found similar to its own expansion needs.

Cramer-Krasselt shares the Southwest business with GSD&M, Austin, Texas, and has kept pace with the airline's rapid growth during the past five years.

"Solid and sometimes spectacular" is how Dave Ridley, VP-marketing and sales for Dallas-based Southwest, describes Cramer-Krasselt's creative efforts. "Strategic thinking is the value-added."

Mr. Ridley credits Cramer-Krasselt with "solid strategic analysis" in devising an ad campaign that helped establish the airline in the Chicago business travel market-and produced Southwest's tagline, "Just plane smart."

While Cramer-Krasselt wins its share of awards, ads for the agency's clients are far from subtle. They hit with all the finesse of a bullet smashing ineffectually into a padlock (in a commercial for Master Lock Co.) or hockey players pulverizing a skating mascot (in an ad for the Chicago Wolves minor league hockey team).

Once a client hires the agency, "We essentially become an arm of their advertising department," Mr. Krivkovich said.

That helps to explain why Cramer-Krasselt has not completely lost a single client-with the exception of Sears Catalog Outlet Stores, which folded-in the past four years.

But there's more to Cramer-Krasselt's success than just staying clear of accounts that would overpower its resources.

For example, integrated marketing is one of the industry's current buzz phrases. But it's old hat at Cramer-Krasselt, where operations have been integrated since 1982.

No departmental walls separate the various specialties of the agency, which has a flat management structure and is organized around accounts, not advertis-ing disciplines. "We have a hard time when they ask us to break out billings" by media, Mr. Krivkovich said.

"Their strength is that they have been practicing successfully what everybody preaches" in terms of integrated marketing, said Bill Stein, president of McConnaughy Stein Schmidt Brown, another midsize Chicago agency.

Investments in technology and people have also paid off, Mr. Krivkovich said.

"The industry has been taken over by technology," he said. "We've maintained consistent growth and used the capital to keep investing in technology and people."

The payoff: In the last seven years, only one senior manager has left the company.

"We have two dozen key senior people, who are all a part of driving this company forward," Mr. Krivkovich said.

Pretty positive talk. But then, Cramer-Krasselt posted some pretty positive results in a year that saw headaches galore at other agencies, including the closing of Ally & Gargano; leadership changes and the loss of longtime client DeBeers Consolidated Mines at N.W. Ayer & Partners; a tailspin of business departures at D'Arcy Masius Benton & Bowles; and the continuing question of how to improve global capabilities for the likes of True North Communications and Euro RSCG.

Despite all the problems in the industry, Mr. Krivkovich doesn't see anything that will slow down his agency near term.

"I don't expect a growth rate any less than double digits," he said.

"This story's not over," Mr. Counsell said.M

Mr. Cahill is an associate editor at Crain's Chicago Business.

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