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Frankel & Co.

Frankel & Co.

111 East Wacker Drive
Chicago, Illinois 60601-4507
U.S.A.
Telephone: (312) 552-5000
Fax: (312) 552-5400
Web site: http.//www.frankel.com

Wholly Owned Subsidiary of Publias Groupe S.A.
Incorporated:
1962 as Abelson-Frankel
Employees: 850
Sales: $95 million (2000 est.)
NAIC: 54181 Advertising Agencies; 54186 Direct Mail Advertising

Frankel & Co. is one of the leading marketing services firms in the United States. The company plans and executes marketing and promotional campaigns for a variety of top clients such as McDonalds, United Airlines, Frito-Lay, Visa, and the U.S. Postal Service. Notable Frankel successes include the creation of the McDonalds Happy Meal and Visas Read Me a Story charitable campaign. Founded in 1962 by Bud Frankel and Marv Abelson, the company was sold in 2000 to French advertising giant Publicis Groupe S.A.

1960s Beginnings

The history of Frankel & Co. can be traced to 1962, when two men met while working in the promotion department of Kling Studios in Chicago. Bernard Bud Frankel had studied marketing at the University of Buffalo before moving to Chicago and working as a media representative for Concrete Publishing Co. Migrating to Kling, he took a position as an account representative. There he met production manager Marv Abelson, with whom he would work after Robert Snyder & Associates bought the company. Frankel later left for a job at William A. Robinson, Inc., where he was disappointed to find that his creative suggestions were being ignored. Looking for a better situation, he called Abelson and suggested the two form an independent promotions agency. Abelson-Frankel was soon established in Chicago to perform sales promotion work. Early clients of the new firm included electronics manufacturers Zenith and Admiral.

Within a year, Abelson-Frankels offices were moved to a new location, and in 1965 the company hired a new creative director, John Forbes. The firms business grew steadily throughout the 1960s. In 1969, Abelson-Frankel responded to the socially conscious atmosphere of the times by developing the first so-called worthy cause promotion. Instead of the usual prizes or coupons, client Clark Gum donated 2.5 cents to charity for each empty pack mailed in by the public. By this time the firm of Abelson-Frankel had more than 20 employees.

Another important relationship for Abelson-Frankel was begun in 1973 when Illinois-based fast food giant McDonalds Corporation engaged the companys services. A major success was achieved for the burger company three years later when a promotion tied to the Olympic games, When the U.S. Wins, You Win, brought in record numbers of customers. McDonalds patrons were given a game piece that represented a particular Olympic event, and if the United States won that event, patrons could redeem the token for free food.

In 1979 Frankel staffers came up with a promotion that would have even more impact on the McDonalds bottom line and would soon enter the lexicon of American popular culture. This was the Happy Meal, a child-targeted combination of food and a giveaway toy that was an instant success with the public.

1980s: A Name Change to Frankel & Co.

In 1981 co-founder Marv Abelson left the firm to start a new company, Abelson-Taylor, which focused on healthcare clients. His ownership stake was bought by Bud Frankel, and the firms name was changed to Frankel & Co. At the same time, a move to new headquarters on Wacker Drive was made. The company now had more than 100 employees and annual revenues of $5.7 million.

Bud Frankels approach to the business was to focus on thoroughness. He felt that for his firm to best serve its clients, a working knowledge of the full range of a companys operations was necessary. To this end, Frankel staffers would study a client from top to bottom before planning a promotion. For McDonalds, this meant that many Frankel staffers attended that companys famed Hamburger U and even drove trucks and made sales calls. As Frankel told Advertising Age, You cant design something without being intimately involved [and being] sensitive to the needs of the trade. Its essential to know everything we can and weve spent a lot of time learning the clients business. Some companies were hesitant to allow complete access to all areas of their operations, and it occasionally took a certain amount of persuasion to convince the owners of the value of this approach.

During the 1980s Frankel & Co. continued to grow and add clients. In 1986 the company opened a branch office in Southern California. New relationships were established with Ford Heavy Trucks in 1986 and United Airlines and Federal Express in 1987. A popular promotion would later bring United together with McDonalds, via the Friendly Skies Meal that featured a burger, chips, and a toy.

Bud Frankel, who had been serving as president and CEO, turned over the presidency to Jim Mack in 1988. The following year saw Frankel & Co. named Advertising Age magazines Agency of the Year, and Bud Frankel become the first person inducted into the Council of Sales Promotion Agencies Hall of Fame. The Advertising Age honor was based on three recent Frankel campaigns. These included a direct mail business builder for Federal Express, a proof-of-purchase redemption plan for Scott Paper that rewarded schools with free equipment, and a campaign for Visa called Our Treat in which the credit card firm paid for randomly selected purchases of its cardholders. The latter promotion required Frankel staffers to handle a number of specialized tasks, including the creation of proprietary computer software as well as establishing relationships with the numerous banks that issued Visa cards. Frankel & Co. took care of all of these details for its clients, who had now grown to include such major names as Ameritech, Hallmark Cards, G. Heileman Brewing Co., Kellogg Co., and Planters Nuts.

The promotion marketing business had changed dramatically in the nearly three decades since the company was founded. New consumer products as well as variations on older ones were being introduced at a rapid pace, and advertising clutter was raising the bar for marketers attempts to reach their targets. Consumers were also continually becoming more sophisticated and were increasingly able to either see through hype-filled ad campaigns or to ignore them altogether. Additionally, recent technological changes had made managing promotions much more complicated, while simultaneously offering myriad new channels for communication. The development of the free-standing newspaper insert full of colorful ads and coupons, television watch and win sweepstakes, telemarketing campaigns, couponing systems that utilized checkout scanner data, and more all came into existence during Frankels first 30 years. In the early 1990s, the Internet was not yet a factor, but it too would add many new wrinkles in just a few short years. In addition to these changes, the overall goal of promotions marketing had evolved from simply drumming up more business to functioning as an essential part of a companys overall brand-building and market share boosting mix.

Continued Growth in the 1990s

In 1991 vice-president David Tridle was named co-president and chief operating officer, with Bud Frankel stepping back to serve as chairman. The following year the company celebrated its 30th anniversary and reached record sales of $22.4 million. Many more clients were added to the fold including Target Stores, Nestlé, and Hunt-Wesson. Frankel now employed more than 250 people.

In 1993 the company launched a campaign in conjunction with Baxter Healthcare that targeted patients in hospitals. Seven million coupon booklets were distributed as part of a standard admissions kit that Baxter handed out across the United States. The coupons were for health-oriented products made by companies such as Colgate-Palmolive. The admissions kits had previously contained free samples of such items as soap and hand lotion, but this was the first time that coupons were included.

The following year Frankel became the agency of record for Eastman Kodaks promotions of film, cameras, and photo-finishing. In 1995 both Microsoft Corp. and the U.S. Postal Service engaged Frankel to work on promotional campaigns. At this time the company also opened a full-service office in San Francisco which employed a staff of 15. Initially devoted to working for one client onlyVisathe office soon took on other assignments. Frankel also hired Editel-Chicago president Richard Mandeberg to serve as vice-president for electronic marketing, spearheading the companys ongoing efforts to integrate existing marketing techniques with the Internet, CD-ROMs, and interactive display kiosks to create new promotional opportunities.

Company Perspectives:

Smart brand marketing begins with an idea. At Frankel, we view our clients as partners, with the shared goal of delivering memorable, energized ideas into the global marketplace and making contact with consumers in the most effective way. Every time consumers connect with your products or services, its a moment for selling. Whether its breaking through the clutter at the point of sale, expanding your brand into the digital realm or creating one-to-one relationships with your customers, Frankel will help maximize every opportunity to attach meaning and value to your brand. A partnership with Frankel brings dedication and commitment to your business needs. We recruit the smartest and most creative people in the marketing industry. Right from the start, you will be confident that your brand is in the best hands and that it will enjoy an enduring relationship with consumers.

With Frankels sales growth consistently in the 30 to 40 percent-per-annum range for several years running, in 1996 the time seemed ripe to go public. However, after announcing plans to make an initial stock offering, the company postponed it indefinitely, citing unfavorable market conditions. In the meantime, a new contract was signed to do promotion work for General Motors Oldsmobile division. Frankel was first charged with creating a buzz around the launch of the carmakers new Intrigue sedan. Tactics included a Whose Intrigue sweepstakes at movie theaters, in which filmgoers guessed the manufacturers identity to enter a three-car giveaway. Starbucks Coffee Co. stores in ten markets were also utilized in the campaign, with attractive models giving out free cups of coffee along with postcards simply listing a toll-free phone number under the tagline Compliments of Intrigue. Other efforts included radio ads, billboards, and the projection of huge images of the cars at night on buildings in 16 cities. In 1997 Frankel opened an office in Southfield, Michigan, to help facilitate the Oldsmobile work. By this time the company was also assisting other GM divisions, including Cadillac.

Late 1990s: A New Subsidiary is Formed

Continuing to explore new methods of message delivery, Frankel launched a subsidiary called Siren Technologies in the summer of 1997 to produce a digital advertising display system for retail outlets. The flat-screen system was developed by a team led by Richard Mandeberg, and the company hired Tony Dillon, previously head of technology development for McDonalds, to run the new unit. Early users of the devices were McDonalds restaurants in the Chicago area, which showed video clips of food products to hungry customers who were waiting in line. The installation cost was put at between $5,000 and $20,000 per location. Advantages of the new technology included savings in development time and reduced labor costs in the field. Though Sirens first assignments all came from Frankel, it was not restricted to work generated by the parent company.

Another new technology-based campaign, this time from Frankel itself, was a CD-ROM produced as a cross-promotion for Compaq Computers and Atlantic Records. The giveaway item utilized an Anita Baker music video to promote four different Compaq models. The disc also featured TV comedian Paul Reiser, whose Atlantic label music CD was highlighted.

In 1998 Frankel added Frito-Lay to its roster of clients, initially focusing on that companys recently acquired Cracker Jack brand as well as the WOW! low-fat snack and Planet Lunch snack pack lines. Frankel subsequently terminated its relationship with Kraft Foods at Frito-Lays request, due to the Pepsico units discomfort over Krafts competitor status. Billings for Frito-Lay were estimated at $100 million, substantially more than what Kraft generated. Near the end of the year Frankel & Co. announced a restructuring into two business units. The first retained the Frankel name, while the second, dubbed New Ventures, performed development tasks.

The following spring Oldsmobile shifted the companys promotions work to its ad agency, Leo Burnett of Chicago. The ailing automaker was trying to cut costs in a bid to stay competitive, but the effort was futile, as GM shut down the nameplate the next year. Frankels Southfield office had few other major accounts, and was later dismantled. Despite the setback, annual sales continued to grow, reaching a record level of $95 million during the year.

2000 and Beyond

In January 2000 Frankel & Co. was sold to Publicis Groupe S.A. of France, a leading European advertising company. Publicis had recently been aggressively expanding into the United States, with four other U.S. firms acquired during the previous year. The companys founder, now 70, had owned two-thirds of the firm, with 15 others splitting the remainder. The sales price was estimated at $140 to $150 million.

The deep pockets of Publicis would enable Frankel & Co. to pursue its Vision 2003 plan, which consisted of investment in technology projects, international expansion, and increasing revenues and billings by a sizable margin. Frankel & Co. would continue to operate independently, keeping its name and identity intact. The company was now ranked by Promo magazine as the sixth largest promotional agency in the United States Management changes following the sale were minor, and founder Bud Frankel stayed with the company as chairman.

As it adapted to the change in ownership, Frankel & Co. remained focused on its clients needs and its goals for the future. The companys thorough yet sensitive approach to its work and its use of cutting edge promotional solutions continued, while the financial backing of new owner Publicis would enable it to develop still more ways to get its messages across. With founder Bud Frankel still on board, the firm neared its 40th anniversary in solid shape, and the road ahead looked bright.

Principal Subsidiaries

Digital [email protected]; Siren Technologies.

Key Dates:

1962:
Bernard Bud Frankel and Marvin Abelson found a promotions agency in Chicago.
1969:
Companys Clark Gum worthy cause promotion is first to donate money to charity.
1973:
McDonalds Corporation becomes a client.
1976:
Olympics-themed promotion for McDonalds proves a huge success.
1979:
Frankel helps McDonalds launch the Happy Meal.
1981:
Marv Abelson leaves firm; name is changed to Frankel & Co.
1989:
Frankel & Co. named Agency of the Year by Advertising Age.
1991:
David Tridle takes over as CEO from Bud Frankel.
1995:
A full-service office is opened in San Francisco.
1997:
Southfield, Michigan, office opens following receipt of the Oldsmobile account; the Siren Technologies subsidiary is formed to produce digital display systems.
1998:
Company is restructured into Frankel & Co. and New Ventures units.
1999:
Oldsmobile drops Frankel; Southfield office is closed.
2000:
Publicis Groupe S.A. purchases company.

Principal Competitors

Bcom3 Group; Cyrk, Inc.; Gage Marketing Group; The In-terpublic Group of Companies, Inc.; Modem Media, Inc.; Omnicom Group, Inc.; Snyder Communications, Inc.; Total Research Corp.; True North Communications, Inc.; WPP Group plc.

Further Reading

Agencies: Frankel Goes Global Via Publicis, Promo, February 1, 2000.

Agencies: The Long and Winding Road, Promo, March 1, 2000.

DeSalvo, Kathy, Mad About a CD-ROM, Shoot, September 19,1997, p. 32.

Ellison, Sarah, French Ad Firm Publicis to Expand in U.S., Buy Marketing-Services Firm, Dow Jones Business News, January 11, 2000.

Frankel & Co. Company Profile, Promo, June 7, 1997, p. 50.

Frankel at 35: The Founder and the Next Generation Map Frankels Growth, Advertising Age, August 11, 1997, p. C12.

Frankel at 35: The Frankel Years, Advertising Age, August 11, 1997, p. C2.

Frankel Divides to Conquer, Adweek, October 5, 1998, p. 4.

Frito-Lay Krafts Frankel Exit, Adweek, March 29, 1999, p. 2.

Green, Norma, Field Fits Frankel to a Tee, Advertising Age, September 12, 1988, p. S-6.

Halliday, Jean, Olds Fires Promotions Agency, Automotive News, April 26, 1999, p. 51.

, Promotion is Key for Oldsmobiles Launch of Intrigue: Buzz Tactics Range from TV to Movie Tie-Ins, Advertising Age, June 30, 1997, p. 38.

Hume, Scott, Frankel Honored as Agency of the Year, Advertising Age, December 18, 1989, p. 30.

Miller, Craig, and Paul Nolan, Promotion Marketing: Withstanding the Test of Time, Potentials in Marketing, January 1, 1993, p. 5.

Ratny, Ruth L., Innovative New POP System Saves Time, Chicago Sun-Times, July 29, 1997, p. 40.

Frank Uhle

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