Gabriel deGrood Bendt (GdB), a small Minneapolis ad agency whose creative work includes Summit Brewing and Red Wing Shoes, is going national.
The 18-year-old shop has been acquired by a St. Paul holding company, Clear Night Group (CNG), that is a division of a South Carolina media conglomerate called Evening Post Industries.
The transaction gives GdB access to resources it previously lacked and jump-starts the goal of Clear Night Group to be a player in the marketing arena through the acquisition of multiple advertising and marketing firms over the next several years.
Terms of the deal were not revealed, but GdB will retain its name, its existing downtown Minneapolis location and current leadership, CEO Tom Gabriel and Creative Director Doug deGrood.
“We sought to identify potential firms that would be a good fit for us, and GdB just bubbled up,” said CNG CEO John Hyduke. “We had a chance to get to know each other, match our cultures and it seems to be a good fit.”
The deal was about 18 months in the making.
“We want to build something of long-term value,” said Gabriel, a veteran advertising executive. “They’re interested in what we’ve already built, and we feel we’re gaining momentum.”
The driving force behind the new marketing operation, Evening Post Industries, is a family-owned business whose roots date back to 1896 with the purchase of the Charleston, S.C., Courier, now known as the Post and Courier.
Evening Post Industries today operates a multimedia business with 10 newspapers in South Carolina and 14 network-affiliated television stations spread over the United States in small to midsize markets.
The broadcast operation is run out of St. Paul by Cordillera Communications. Websites for the TV stations operate out of the same offices under the direction of Informed Interactive, Inc. CNG is also housed in the same downtown location.
Hyduke, a Hibbing native and former hockey goaltender for the University of Minnesota Duluth, said Evening Post Industries is looking at creating a marketing group as part of a long-term media strategy, which was an attractive feature to GdB.
“This isn’t some private equity group looking to flip an ad agency in three to five years,” said deGrood. “They’re not looking to cut redundancies and eke out margins. They remind me a lot of Cargill. They’re not just out to make money tomorrow.”
Hyduke said he can envision acquiring as many as six additional agencies to be part of the group.
Holding companies with multiple agencies under their wing have become common in the advertising industry, largely for economies of scale with centralized corporate structures.
That can be good, and it can be constraining. Agencies can lose autonomy when they report to a larger platform but they also gain the potential for new resources.
Jennifer Johnson, an advertising professor at the University of Minnesota who spent 20 years in the agency world sector, said she found the transition from a stand-alone agency to a holding company to be exciting.
“GdB is run by a group of experienced, smart individuals,” Johnson said.” They have, most likely, created an understanding with the holding company that they can solve their clients’ business problems better than a board of directors.
“The downside is not having the ability to offer a new hire significant ownership or profit-sharing in the agency,” she said.
GdB’s client list ranges from consumer goods to packaged foods and health care. The agency’s work is often upbeat and humorous.
For the Black Forest restaurant in Uptown Minneapolis, GdB unleashed a series of outdoor billboards with messages such as “Spaetzel orders don’t upset us,” and “Tofu? Nein.”
For Summit Brewing, GdB created an interactive campaign under the title “Get to the bottom of it” in which consumers of Summit provided frothy questions to contemplate over a beer including “Which is a better social medium — beer or Twitter?” and “Why can’t we invent a grass that only grows 2 inches tall?”
In a campaign for Gillette Children’s Specialty Healthcare, GdB ads featured kids coping with disabilities under the headline “Pity. It’s 100% curable.”
“We like the culture and the leadership here,” Hyduke said. “You just get a feel for it when you walk in.”