The new company consists of 14 executives from Simon Worldwide's Simon Marketing, who previously worked with McDonald's Corp. on its Happy Meal business.
Premium Surge will operate as a separate company, reporting into Draft's promotional agency, Surge at DraftWorldwide, which is led by president Lee Hill. Most of the 14 staffers will be in Draft's Chicago office, while others will work in the agency's Hong Kong location and a new office to be opened in Los Angeles, where Simon is based.
Looking to expand
Jordan Rednor, president-chief operating officer at Draft, told AdAge.com the agency had been looking to expand into the premiums area for some time, considering either acquisitions or partnerships with other companies in the category. McDonald's firing of Simon after the alleged games and sweepstakes scandal last summer presented an opportunity for Draft to step in.
The company's intitial focus will be to offer the premiums capability to existing Draft clients such as Burger King Corp. and Kellogg Co.
Mr. Rednor would not comment on whether the 14 former Simon employees that make up Premium Surge were let go from Simon before Draft hired them.
He stressed that the formation of the new company was not a response to Burger King but an effort to expand its promotional offering for all Draft clients.
Burger King play?
"We hope [Premium Surge] will work on a lot of clients, and we hope that one of those is Burger King," Mr. Rednor said. "We didn't do this to satisfy any requirements at Burger King; we did this because it seemed like a good opportunity for us to expand our capabilities."
Burger King's premiums agency of record is currently Equity Marketing, Los Angeles, and Mr. Rednor was "not aware of any change in Equity's status at Burger King."
Omnicom Group's Alcone Marketing Group, Irvine, Calif., previously handled some Burger King premiums assignments but has lost the business, according to insiders. Alcone and Burger King did not return calls for comment at press time.
Mr. Rednor also recognized that premiums assignments will need to be won, even among Draft's existing clients, which will be the company's initial focus.
"We fully recognize that we will have to earn our way everywhere, and we're prepared to do that," he said. "In the current environment, one should take nothing for granted."
Staff writer Kate MacArthur contributed to this report.