Draft Eyeing Acquisition

Negotiating With Nightlife Marketing Specialist KBA
CHICAGO–Interpublic Group unit DraftWorldwide here is negotiating the acquisition of field-marketing agency KBA Marketing, according to sources.
A DraftWorldwide representative and Kevin Berg, president and chief executive officer of Chicago-based KBA, declined comment.
KBA has maintained a very low profile–it doesn’t publicize its promotional work and doesn’t appear on industry lists of top promotions agencies–but the agency claimed capitalized billings in 1997 of $120 million.
KBA specializes in on-premises promotional programs in upscale urban clubs and bars, which have become a major marketing channel for tobacco and alcoholic beverage companies. Sensitive to criticism that their marketing efforts reach underage consumers –whether intentionally or not–tobacco and distilled spirits companies especially are funneling more marketing dollars into venues such as clubs where the patrons are demonstrably of legal age to buy their products.
With a staff of 500 working from 30 offices in the U.S. and Mexico, KBA can execute promotions in a network of 1,600 nightclubs in every major market.
The agency produces a slick, hip, bimonthly nightlife magazine called Sweater that it distributes free of charge in trendy clubs. That provides another, age-certified advertising outlet for its clients, the largest of which is R.J. Reynolds Tobacco, according to sources. But KBA’s roster is broader than just tobacco and alcoholic beverage firms, including work for Audi (in the U.S. and Mexico), Cadillac and Nike.
KBA’s expertise in the largely untapped nightlife marketing niche is financially attractive to DraftWorldwide, but is also of personal interest to chairman and chief executive officer Howard Draft: He is co-owner of a posh Chicago club called 56 West.
KBA’s Berg was an executive vice president at Chicago media buyer CPM before founding the nightlife agency in 1990 with partner Michael Blattner.