Russ: This is The BusinessMakers Show, heard on the radio and seen online at thebusinessmakers.com. It's guest time on the show and I finally have a targeted guest that I've been after and wanting to have here on this show for probably about three years. With me now is Bill Fogarty, co-founder, principal and co-chairman of FKM. Bill, welcome to The Business Maker Show.

Bill: Oh, happy to be here, Russ. My pleasure.

Russ: You bet. Well, let's start by you telling us about FKM.

Bill: Well, FKM is an organization that was founded by myself and Rich Klein as Fogarty and Klein Inc. and that was in 1980. We, at that time, were an advertising agency. Now, over the years, we have added substantial capabilities to our organization and today, we define it as a marketing communications company.

Russ: Well, and what from what I understand, too, it's based here in Houston, but you have clients pretty much all over the country.

Bill: Right, that's correct. It's headquartered here in Houston. We have offices in Dallas and Austin.

Russ: I even see, sometimes, clients outside of Texas as well.

Bill: Oh, absolutely. We work with clients all over the United States.

Russ: Okay. Well, I've always wondered - I mean, how do you do that? How are you good enough to attract companies that need advertising and marketing help from way outside of the geographical area?

Bill: Well, with each client, the answer is slightly different, but I think it always boils down to having partners and active management units that have real expertise in a particular category. Clients today expect you to understand their business almost better than they do, and to understand the consumer, which is really critical. So it's the quality of the individuals. It's the past performance of our organization. It's samples of campaigns that we've created that have been highly productive for our clients and that leads to other opportunities, and that's basically how you grow.

Russ: That's real cool. When you sort of started explaining that, and you said, "Well, today, clients expect you to kind of understand in detail their company and in detail their clients" that might imply that back in the beginning, which would have been - of FKM - 31 years ago, maybe you didn't have to do that back then. Is that right?

Bill: That's partially correct. The reason that it really becomes significant today is there are so many different ways that you can reach prospects and consumers today. Different media, different technologies. And the demands of clients are much greater today because the amount of money they're spending is substantial and they have every right to expect expertise in every area.

Russ: Okay. Now, I mentioned, 31 years and you sort of mentioned that change. I expect that we have some sort of young viewers right now who think that marketing and advertising really has changed in the last five years, but has it kind of always changed?

Bill: Well, the facts are is that like every other business and every other activity, advertising is constantly changing. When I started in this business, believe it or not, there was no such thing as video tape. That's how long ago I've been in this business. You talk about disruptive technology; video tape had an incredible impact on our industry and lots of other industries and the television industry. There was no such thing as a Xerox machine. We used mimeographs. I mean, I hate to tell ya, but this goes back a long way. So the way you do things, the options that you have available to you, are constantly changing. On the other hand, clients and companies, their expectations have rarely changed. They still expect performance. They expect their communications to be successful and they expect to get a return on the investment they make in advertising.

Russ: Now, I know, 31 years - once again, that's how long FKM's been in the business, but you were in the business way before then and I say that in the context of your video tape comment. When did you start in advertising?

Bill: Well, I know, it kinda makes me a dinosaur. I started in this business in 1957.

Russ: Whew. Okay.

Bill: I'm a native of Omaha, Nebraska. When I got out of the service, I hit the streets looking for a job and somebody suggested that I talk to Bozell and Jacobs. I was looking for a public relations job without really understanding what that does and implies and he told me that they didn't really have a position open, and so I went to several other meetings. I went home. My mom was at home and said, "You got a call from Bozell and Jacobs this afternoon. They wanted you to come back in tomorrow morning" so I did and they hired me.

Russ: Wow. And they were located in?

Bill: And they offered me $250.00 a month.

Russ: Big money. Well, you probably were kind of pleased with that at the time.

Bill: At the time, yeah. I had no problem with that. It was a job. To this day, I believe that the key to anybody achieving anything is to get on the bottom rung of that ladder and take that as an opportunity and work like hell to make something out of it and that's basically, what I did.

Russ: And so what did you do? I mean I assume they trained you a little bit?

Bill: I was assigned to an account team that worked on packed goods. We worked on Cudahy packing company, which was hams and bacons and things like that. Skinner macaroni, which was a pasta company, made Skinner macaroni products; I worked on a great account team. I was the bottom guy. I did all the grunt work, but I also learned the business.

Russ: Well, when you said you went and applied for the job, afterwards you thought it was in PR or something and you got the job. Did you know what you were gonna be doing

Bill: No, I didn't. You know, I'll tell you the truth, I had no idea what an advertising agency was. I didn't even know there was such a thing.

Russ: Okay. And there you were and here you are today.

Bill: There I was and here I am. I discovered a great business. And that great business discovered me, so it worked both ways.

Russ: Okay. And how long were you with that company?

Bill: In 1960, I'd been there three years. They bought a small agency in Sioux City, Iowa. From 1964 to 1967, I went back to Omaha to manage the Northern Natural Gas again, but I never gave up the thought of again managing an office.

Russ: Because that appealed to you more than an account

Bill: I really enjoyed the heck out of it. It was one of the - I've always told people, it's one of the few things in this world that I could do and then do well, so I felt like If I had another opportunity I would take it. So one Saturday, I get a phone call from Chuck Peebler, who's a CEO at Bozell. And he said, "Do you have time to have lunch with me today?" and this was on a Saturday and I said, "Usually I could, but today my brother's getting married and I have to be at church in like 30 minutes and so I can't". So we met on Monday, and he said he liked to talk to me about moving to Houston, And since it kind of fit it to what I really felt like I wanted to do and my wife and I talked about it and immediately said, "Yes" actually. Now, I had never been in Houston in my life and I'd been in Texas once for a Cottonbowl game so this turned out to be a bigger step than moving to Sioux City.

Russ: Right. I bet so. So 1967, how many people did Bozell have in Houston, Texas?

Bill: Number one, they had two offices. They had an office in Shreveport and an office in Houston and the office in Houston was a service office for United Gas Corporation which was a big - and obviously one of the reasons they asked me to do it is I knew, by this time, the gas pipeline business. So there were six people in the office here. Probably another six or seven in Shreveport.

Russ: And that reported in to you in Houston, yeah.

Bill: Exactly. Now the problem was, is that the prior November, the Pennzoil Company, which was Hugh Litke and Bill Litke and at one time George Bush, had made one of the very first hostile tender offers for United Gas stock over the Thanksgiving day holiday, on a Friday, when the markets were open but all of the management team from United Gas was duck hunting, which they had done every year is gone duck hunting over - and so they weren't even in the office and so the company was acquired by the Pennzoil company very rapidly. They required 51 percent of the stock. Finally bought the company. So even though it was a client of ours, it had a new owner.

Russ: Right. That was probably pretty exciting.

Bill: That was the first challenge was to survive that. Which we did.

Russ: And that was right after you got here?

Bill: Yeah. Oh, I mean like day one. And I immediately recognized that if I had gone to the University of Texas or Texas A and M or any of the big schools in Texas, I'd be a hell of a lot better off than some guy from Omaha who really didn't know anybody in town. But we survived. We got through it and again, grew the company. Enjoyed a great deal of success, actually.

Russ: How big did you get things as Bozell?

Bill: Well, somewhere along the line, Rich Klein joined the company and Rich was a really strong business development guy and he managed new business in both Houston and Dallas for Bozell. We really went on a hot streak. We won a lot of business. We got the Texas Instruments Digital Systems Division. Cameron Iron Works was a client of ours. Smith International - Gosh, we just were loaded down. Marathon Manufacturing. NTEX, which came out of the United Gas Corporation. We still had United Gas. So anyway -

Russ: And this is all with Bozell.

Bill: Yeah.

Russ: Right. Okay. And so eventually, the idea or the opportunity crossed your mind, "I want to do my own agency now", you and Rich Klein.

Bill: Well, a couple of things occurred to me. Everything I've learned in life, I kinda learned going along and observing. And one of the things that finally occurred to me was number one, if you want to be a capitalist in a country that rewards capitalism, you have to have capital and I had not capital. I had no money. The second thing is, I mentioned Chuck Peebler, he was used to sending out condensed versions of business publications that he had read that he thought would be helpful in training his management team. And one of those books was a book called Think and Grow Rich, which is one of the classic and basic business books of all time. The thesis that it presents is that you can achieve your goals in life, but there are certain disciplines that you need to follow to do so. And they're relatively simple. First of all, you have to have some idea as to what you want to achieve and why you want to achieve something that's not financial. You have to figure out the amount of capital that it would require you to initiate this activity. And then the third and the toughest part is you have to act. So I was a great planner. By this time, I recognized that capital was important and I had the good fortune of having some stock from Bozell that had grown substantially. The act part was the scary part, because you had to walk away.

Russ: And so you and Rich Klein did this together, right?

Bill: Right. And I felt, for a long time, that sooner or later the opportunity would present itself to make it possible for me to act and walk away. And it really never did. We continued to grow and they liked me. I was a valuable part of their management team. Finally, we encountered a situation where we had pitched British Caledonian Airlines, which was establishing their US operations here in Houston and cleared it through the organization that we could pitch it and we did and won the business. And we were to meet with board of directors at BCAL on a given date and at 5:00 the day before, I get a call from the Dallas office saying, "You can't take that business". They didn't tell me why. But I could figure it out why. Because they were romancing American Airlines. And that was what finally led me to decide to move on.

Russ: Wow. And were you and Rich Klein always just totally in sync with doing this?

Bill: Yeah, I think so, yeah. Yeah. We were.

Russ: But it was still a big step to -

Bill: It was huge, but in the intervening period, they had asked me one time to move to Phoenix to take over that office and I turned it down because I was smart enough to realize that whatever reputation I had, I had created it here in Houston by this time. And that was the equity I had if I was gonna fulfill the rest of my plan which is to start my own business with Rich and so a year later, we left and started Fogarty and Klein and we had no clients. We had a no compete clause in our business contracts. The first two clients we got were North Side Bank, which wasn't exactly a dynamo but it was managed by John Hazard, who was a good friend and he was a good banker. And the other client we picked up instantly was James Coney Island.

Russ: Wow. Very interesting.

Bill: And Jimmy Papadakos and Louis Servos, who owned it, had often said that when asked if they would ever advertise is that "when Hershey decides to advertise, we'll advertise" and Louis said, "You know, one day I heard a Hershey commercial and I thought 'Oh my God'".

Russ: Great story.

Bill: So anyway, that's how it all started.

Russ: Great story. Talking to Bill Fogarty co-founder and co-chairman at FKM and we'll be back with more with Bill after this. This is the BusinessMakers Show, heard on the radio and seen online at thebsuinessmakers.com. This is the BusinessMakers Show, heard on the radio and seen online at thebsuinessmakers.com continuing on with Bill Fogarty, co- founder, principal and co-chairman of FKM. Okay, so FKM is launched. You got James Coney Island and North Side Bank as clients.

Bill: And a receptionist. There was essentially three of us.

Russ: All right. Right. Cool. So how did you grow it from there?

Bill: The first step is that we made office space available to a very capable and highly productive designer - an art director/designer - and she worked for her own clients, but she also fulfilled our creative needs and we hired -

Russ: And creative needs like what?

Bill: Designing and laying out all the artwork that we use, which is outdoor, it's magazine, newspaper, trade magazines, direct mail - everything is designed. We also gave office space to Suzie Jennings who is an incredibly skilled copyrighter. So by this time, we had three employees, Rich, myself and a secretary and two freelancers that we're officing in our facility that work for us and we paid them when they worked for us and we made a heck of a team. I mean, we really did. And the work we did for James Coney Island was outstanding. Got tons of attention in the marketplace. And as I said before, that's what attracts others. Very rapidly, we had media sales people that became very familiar with us and kinda spread our gospel a little bit. We grew it rapidly and very successfully and very profitably.

Russ: Okay. To the point where today, how big is the company?

Bill: Well, to the point where by the mid to late '90s possibly, we handled probably seven or eight major brands for Conagra Foods. We handled Pinnacle Foods in New Jersey. Conagra had big offices in Newport, California, Newport Beach. We worked with James Coney Island, we acquired the Nissan Dealers Association and worked with Nissan during a period when gasoline prices went out of sight and they were the only ones that had high mileage vehicles to sell. And we worked with Randall's for many years; the remarkable store was our client. We later worked for Kroger. We worked for Builders Square, which is owned by Kmart, which is a national store that competed with Home Depot. Lots of clients, lots of wonderful people and naturally, to service that amount of load which exceeded $200 million in annual billings by that time.

Russ: Wow, $200 million.

Bill: We had a lot of employees.

Russ: Well, I know eventually you got to the point where you brought in younger people in leadership positions and that's pretty much the way it is today, but you're still playing an active role as well, right?

Bill: I've been fortunate I've lived long enough to see the beginning of our company and today Rich and I and Tom and Ro are who are the three major stock holders are actually in the process of transitioning to the second generation of management. There's four individuals in our company that will be buying our stock over the next two or three years and they today have taken roles as CEO, Chief Operating Officer, Executive VPs - they've taken on major roles. We're showing up every day, but we're trying to stay out of their way and kind of step back a little bit and help them with clients where we have relationships. We stay active, but in order for them to be successful, they're gonna have to do it themselves.

Russ: Right, well, that must be very fulfilling to get to that point.

Bill: Yeah, it really is. It really is. It's very satisfying. It's been a good life. I've been a really lucky guy. And I almost couldn't ask for anything more and I honestly believe that by good fortune I just found a business where I could be successful. I've told many people that in reality, I'm a real misfit as are most people in our business because they're creative and they don't follow the standard line and I said, "If any of them secured a job at Exxon, they might last a week before they get bounced".

Russ: When you say different world, we've already talked a little bit about the change that's taken place in marketing and advertising during your career. What do you think about the way that marketing and advertising is executed now here in 2011? It's quite different.

Bill: Well, as you know, the things that had been the principal mediums for many years - newspapers, magazines, trade magazines, radio, television - they have all had to make room for some incredible competition and that came through the digital revolution that we continue to go through. And today, Facebook, for example, people will spend six and a half hours a month on Facebook. Twitter has 200 million people using it. Mobile communications is absolutely gonna be the primary principal medium for marketing going forward in this world. You'll be able to go into a grocery store and read the bar code on a product and it'll tell you how many calories it has and where it came from and if it came from a sustainable garden and if you need recipes you can click on it - I mean, it's incredible the amount of information that's available today.

Russ: Well, it sounds like you're totally up to date and describe it almost in terms as though you think it's exciting.

Bill: It takes a different mix of people. I mean, you know, when this digital revolution started, we thought an electric typewriter was the be all and end all.

Russ: I was there, I know too, yeah.

Bill: And now virtually every young kid that comes out of college or comes to us from virtually any place, they know the technology, they know the processes. They really do know it.

Russ: Okay.

Bill: My grandson, who is 10 years old, we were having dinner a while back and he mentioned that his older brother had a date that night. And I said, "Who'd he have a date with?" well, he told me and I said, "Well, what's she look like?" and he said, "Well wait a minute" and he pulls out his device. He said, "Right here" picture of the girl that was on her Facebook. Anyway, that's what's going on today. It's exciting.

Russ: Well, speaking of younger people, before I let you go, Bill, let's imagine that we have a young, aspiring business person sort of watching you right now and they're totally interested in the creative world, the marketing world, the whole communications thing of the future. What kind of general advice would you give him or her?

Bill: Okay, well, number one, I really am a big believer that you have to have passion for what you want to do. If you're looking on it as a job, I'm not sure you'd find it fulfilling. But if you have passion for the communications and the culture of our industry, I've already told you the secret. I'd start by deciding what it is that I wanted to get out of life and in my particular case, I wanted to own my own agency. Other people might want to fly planes to Venezuela. The second thing I would suggest is Think and Grow Rich is still a heck of a book to read. It's an easy read. It isn't a heavy read. I would establish some general ideas as where I want to go with my life. I would be most willing to take the bottom rung of the ladder and I would see that as an opportunity to demonstrate my skills and my strengths and my personality and my ambition and my passion and all of those things. And you can grow in the industry very rapidly. I mean, age is not anything that holds people back if they've got skills.

Russ: Cool. Well, I really appreciate you sharing that and your story with us today.

Bill: I'm happy to do it. It's kind of been a rambling story, but -

Russ: Well, now it's been a successful life and a successful story is the way I would interpret it so thanks a lot, I appreciate it.

Bill: I've enjoyed it.

Russ: You bet. That's Bill Fogarty. Co-founder, co-chairman and principal with FKM. And this is The BusinessMakers Show, heard on the radio and seen online at thebusinessmakers.com.