Scholz & Friends

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Founded by Juergen Scholz and Michael Menzel in Hamburg, July 1, 1981; Ted Bates & Co. buys a majority stake, 1985; West Berlin office opens, 1990; launches an international network, 1995; severs ties to Bates, becoming its own network within parent Cordiant, 1997; Cordiant acquires outstanding shares, 2000.

Juergen Scholz shocked the German advertising industry in the summer of 1981 when he joined Michael Menzel to set up their own shop. Scholz & Friends opened with 40 employees brought over from Team/ BBDO Hamburg, whose predecessor, Team, was founded by Mr. Scholz and three partners. It was the largest such split in German advertising history.

Four longtime clients followed Mr. Scholz to the new shop: coffee marketer Tchibo, owned by the Herz brothers; Mars Inc.'s Whiskas cat food; fashion designer Jil Sander; and Koenig Pilsener brewery. The new agency ended up paying $1 million to Team/BBDO to compensate it for the loss of those clients.

Despite its anti-network beginnings, Scholz & Friends, a Cordiant subsidiary as of early 2001, was the only German agency with a small international network.

Jil Sander account success

One of Scholz' biggest successes in brand building came with its campaign for the designer Jil Sander. Mr. Scholz convinced the shy, then 37-year-old Jil Sander to use her own photograph in ads for her product lines. After that campaign, the agency's business boomed. In 1982, its first full year, the agency had billings of $38 million; three years later, its billings reached $63 million.

In 1985, Messrs. Scholz and Menzel sold a majority share in the agency to Ted Bates & Co., New York. During the 1980s, international agency networks were striving to boost their presence in the West German market, offering shops huge sums of money to align with them.

By 1989, billings reached $122 million. Scholz & Friends had won BMW's German account in 1986, taking it from Düesseldorf-based Spiess, Ermisch, Abels. While the agency produced well-respected work for BMW, the relationship proved a difficult one.

Scholz lost the account in 1993, but BMW returned to the agency in 1995 for three more years.

In summer 1990, the agency opened an office in Berlin. Over the years, it became one of the most successful agencies in the city, eventually employing 200 people and working with such clients as Frankfurter Allgemeine Zeitung, Mercedes-Benz trucks and many local companies. The Berlin office brought Scholz & Friends its first award from the Cannes International Advertising Festiva—a Silver Lion.

Meanwhile, his relationship with Scholz deteriorating, Mr. Menzel left the agency in 1991 and set up his own shop. By 1992, Mr. Scholz, then age 63, felt it was time to retire. At that time, Scholz & Friends had grown into a $181 million shop.

International expansion

In 1995, agency Chairman-CEO Peter Schoening, encouraged by client Reemtsma, launched a small Scholz & Friends network in the markets where the marketer did business. Six offices—Athens, Budapest, Brussels, Madrid, Warsaw and Vienna—opened in 1995. Each outpost consisted of one person with a computer and local media expertise who adapted Scholz's work for local markets.

Prague followed in 1997, then Moscow and London in 1998. In 1999, the agency continued its foreign expansion, opening offices in Kiev, Milan and Paris. After two acquisitions in 2000 (Herman Beasley and CKMP), the London operation employed 65.

In 1997, the Bates connection was terminated, and Scholz & Friends became a unit of Cordiant, the parent company of both agencies.

In 2001, Scholz & Friends was the No. 8 agency in Germany, with gross income of $70.4 million, down 10% from the previous year, on billings of $559.5 million.

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