On April 1, 1978, James F. Kobs and Thomas B. Brady opened Kobs & Brady Advertising in Chicago as the successor agency to Marshall John & Associates, which was started as an in-house direct agency by Bankers Life & Casualty.
Kobs & Brady began with about a dozen people, including Howard Draft of Stone & Adler, who became Mr. Kobs' protege. The agency grew swiftly. By 1982, K&B's revenue had doubled to nearly $26 million.
At the time, major general agencies were eagerly buying direct shops. Recognizing that it wanted the resources of a big agency, K&B agreed to a trial relationship with Ted Bates Worldwide, New York. K&B, New York, opened Oct. 4, 1982, with Mr. Draft in charge.
New York growth
Within a year, the New York office was bigger than the Chicago office. Much of the volume was spillover from the Bates roster (Home Box Office, Chesebrough-Pond's), but Mr. Draft won Avis on his own, and when HBO moved to Batten, Barton, Durstine & Osborn, it kept its direct business at K&B.
Mr. Draft returned to Chicago in February 1985 as president and chief operating officer of the agency. His philosophy of agency structure differed from Mr. Kobs', who saw direct marketing as a distinct specialty and did not share Mr. Draft's view that the agency could no longer operate on a project basis but needed to move to contractual relationships.
Their differences were temporarily outweighed by a 35% growth spurt in 1985 that made K&B the envy of the big general agencies. Even during the relationship with Bates, other agencies came calling. But negotiations with Bates were too far along. On March 6, K&B worked out an agreement with Bates, with a sale price said to be more than $10 million.
Six weeks later, Bates sold itself to Saatchi & Saatchi. Saatchi merged Bates with Backer & Spielvogel in July 1987 to form Backer Spielvogel Bates Worldwide. In Chicago, K&B marked its 10th anniversary on April 1, 1988, by changing its name to Kobs & Draft.
Meanwhile, the parent company wanted to move Mr. Kobs to Europe to help build an international network of Kobs & Draft direct marketing agencies. Instead, he suggested a number of alternatives, even proposing to buy back the Chicago office himself and letting Saatchi & Saatchi have the New York and international operations. Negotiations went on for months, and in April 1988, Mr. Kobs took a leave of absence and never returned.
By 1994, however, Cordiant, the Saatchi holding company, was out of cash. When the agency's board fired Maurice Saatchi that December, Mr. Draft took advantage of the panic and offered $22 million in a buyback offer. The board rejected the deal. Eight months of negotiations followed, during which Saatchi lost 6% of its business and fired 470 employees.
Finally, Cordiant agreed, and on Aug. 1, 1995, in a deal valued at $27.2 million, the shop was soon renamed DraftDirect.
In February 1996, Mr. Draft was again in talks, this time with Interpublic Group of Cos. Within about four weeks, DraftDirect agreed to become part of Interpublic for a sum said to exceed $100 million.
Within 18 months, Draft saw its revenues double to $1.3 billion while it built specialties in the medical field, minority marketing and business-to-business selling, among others.
In 1997, DraftWorldwide (as the company was renamed) bought D.L. Blair, MCA Marketing, Adler Boschetto Peebles & Partners and Lee Hill Inc. Draft acquired AG Worldwide, New York, in March 2000. Mr. Draft remained chairman-CEO.
Worldwide gross income in 2001 was $380.9 million, down 3.3% over 2000, on billings of $3.2 billion, which were down 3.7%. Draft had U.S. gross income of $240.9 million, down 4.2% from 2000, on billings of $1.8 billion, down 4.8%.
In late March 2003, DraftWorldwide and Lowe & Partners Worldwide announced that they were aligning under the Lowe & Draft banner—with Mr. Draft as chairman and Jerry Judge of Lowe, president-CEO—although each planned to maintain a separate business model. DraftWorldwide also shortened its name to simply Draft
In some countries, Lowe and Draft share back-office operations; however, management of both agencies insist a complete merger is out of the question.