Read without ads and support Scribd by becoming a Scribd Premium Reader.
See Premium Plans
 
Modem Media Adapts to a Merger and Comes out on Top
Modem Media, a rapidly-expanding web advertising company purchased by True NorthCommunications, adjusted to its new role and kept its identity, as reflected in this discussion withG.M. O'Connell, Bob Allen, and Doug Ahlers, the three partners of Modem Media. 
 Pioneering interactive advertising agency 
Modem Media
married into the True North Communications family last year. Now "synergy" is the company's motto as Modem reaps the benefits of familyrelationships and adjusts as a rival-turned-sibling enters the fold through the latest megamerger.
Founded in 1987 by Doug Ahlers and G.M. O'Connell, Modem Media revolutionized the Web bycombining technology and advertising know-how to help create the still-immature industry of onlineadvertising. The Westport, Conn., startup pushed interactive brand identity forward with innovativecampaigns such as those executed for Zima and AT&T in 1995, the first year that online ads existed.Modem was a giant fish in the tiny $50 million pond of online advertising revenues, but industryanalysts were predicting an imminent flood.In October 1996 Modem merged with TN Technologies, an interactive holding company under thelarger umbrella of True North Communications, the $8 billion advertising colossus whose holdingsinclude Foote Cone Belding (FCB). O'Connell became the president and COO of TN; Ahlers became president of Relationship Technology Group (RTG), a TN company which developedtechnological underpinnings for Web sites; and Bob Allen, a Modem partner who had joined thecompany in 1989, became president of Modem.When
 Entrepreneurial Edge
last wrote about Modem (Vol. 3, 1997), the company was celebrating its10th year in business. However, in O'Connell's words, they were "in the top of the first inning" inrelation to playing on the TN Technologies team. A year later, they've been through the rotation,fewer players are on the roster, and Modem is TN's starting pitcher."As we got into it, we found out by far the company with the most potential within the holdingcompany was Modem Media," explains O'Connell, "and we made a conscious decision about threemonths into it to really try to consolidate all of our units around our strength."
Merge Ahead
Instead of being subsumed by the larger holding company, the agency became the dominant brand,absorbing sister agency Northern Lights Interactive and RTG. All of the Northern Lights officeswere converted to the Modem name, and the RTG unit run by Ahlers now operates within Modem.When Modem entered into the merger,
 Advertising Age
estimated its revenues at $11.5 million. Themerger instantly tripled its size, while the absorption of Northern Lights gave the company globalaccess far more quickly than they could have built from scratch (Modem now has offices inWestport, New York, Chicago, San Francisco, Toronto, London and Hong Kong). The cooperativerelationship with FCB also provided the thin end of the wedge at prestigious and lucrative FCBclients."We have a lot of synergy with FCB," admits Allen. "In several cases we've shared clients that pre-existed, but we've also gained access to some of FCB's star clients. Some of the clients who havecome out of the FCB relationship include Kraft, Nabisco, Lucent — we've gone and joined the pitchto do business and we've both won." 
 
While the merger gave Modem increased prominence, that advantage is being challenged within thecompany itself. On December 30, 1997, True North acquired Bozell, Jacobs, Kenyon &the parent of New York interactive power Poppe Tyson. Poppe, along with Modem and CKS(Cupertino, Calif.), had formed a triumvirate at the summit of the interactive industry in the mid-1990s.Early in 1996, before courting TN Technologies, Modem had approached Poppe for a merger, but theengagement had broken off a few steps from the altar. Now that the fierce rivalry betweenModem is sibling rivalry, no one, including Modem's founders, is sure how the relationship willwork."We're operating on a case-by-case basis now," says Allen. "We're competing against other True North companies, but generally we're looking for synergies to pitch a united front, particularly as wecontinue to target global markets, where Poppe's offices have a very strong international presence."
Adjusting To Changing Audiences
The increasing consolidation of interactive agencies is beginning to bear a resemblance to the worldof print and broadcast. That's no coincidence. In 1997 online ad revenues reached $700 millionworldwide, according to the Internet Advertising Bureau, and the number of individuals onlinereached 100 million. Those numbers describe a mass market, not the tiny niche the online worldonce was."It's not just predominantly a male, upscale audience anymore," says Allen. "That means because thetarget audience is becoming broader, we can appeal to a wider range of advertisers. So packaged-goods companies can now participate as well as high-tech product and service companies."The proliferation of high-quality, high-traffic, content-driven sites means that online advertising ischanging as well. A year ago, much of the buzz about Web advertising focused on the use of  breakout technologies like Java and Shockwave. Today the most influential innovations haven't beenin new technology but advancements in the way existing technology is used. For example, Modem'sZima.com campaign included one of the most successful sites of 1995, but the model of a graphic-heavy, content-light destination site just wouldn't work now."When we did Zima, it was easy because there were only two places you could go on the Web back then: Bianca's Smut Shack or Zima.com," explains Allen. O'Connell continues: "Now it's difficult tosee why someone would go to Zima.com. You either bought Zima and it's in your refrigerator, or itisn't. There's not a lot to build a Zima Web site around."For consumer products companies, Modem now stresses messaging by placing media-rich bannerson mass-audience or specialized content-based sites. One successful campaign was a Web sampling program for Mentadent, which delivered the toothpaste brand's message through Web sites thatmatched Mentadent user demographics.The other strategy Modem is using is one that O'Connell described to
 Entrepreneurial Edge
year: "Our underlying strategy is to harness what we call digital current. Businesses can link up witheach other in new and innovative ways because there is a common digital infrastructure that we can plug into. It's kind of like smart electricity, and if you just tap into the grid that is emerging you aregoing to be able to do great things with your brand and how your brand forms relationships withcustomers." Digital current has helped Modem produce sites like the one for Delta Air Lines, whichallows customers to plan trips and check SkyMiles accounts, or the AT&T Winter Olympicscampaign, which used collectible video trading cards to demonstrate how AT&T's digital network could link people around the world.
Search
Search History:
Searching...
Result 00 of 00
00 results for result for
  • p.
    • Notes
    Load more