• by Susan Sardone , June 17, 2002

Sometimes it pays to get in the door first. Founded in 1987 by G.M O’Connell and Doug Ahlers, Modem Media saw the potential of interactive media early on—and continues to be a leader in online advertising to this day.

Its history is rife with innovation: With the Internet still in its infancy, Modem Media built the GEnie online mall for inaugural client General Electric. In 1993, Modem developed the web’s first marketing programs for AT&T and Zima (Coors Brewing Company). AT&T’s campaign, an online tour of the world’s leading art museums, was built for the launch of HotWired magazine and generated the highest click-through rates of any campaign ever to appear in that seminal publication. Zima.com, in what was heralded as a revolutionary approach to branding in 1995, featured an interactive fridge that made it the talk of the web.

In 1996 the agency sold a major interest to True North Communications. Two years later Modem merged with Poppe Tyson, another digital marketing pioneer and part of the True North organization. And from 1995 on, Modem Media has earned the distinction of ranking among the Top 10 interactive agencies every year.

What keeps Modem Media on top? A bold, invent-the-rules approach to online marketing, a network of ten worldwide offices with more than a thousand employees, and the decision to provide e-business services to Fortune 500 companies and well-conceived dot-coms. The Norwalk, CT-based agency’s Internet-related services include strategic planning and consulting, engineering, visual and information design, media distribution, and project management for clients that include Citibank, General Motors, IBM, Kodak, John Hancock, Starwood, Unilever, Weight Watchers, Avon, Intel, Sony Entertainment, and Toyota.

Recently, Modem Media introduced Me-businessSM solutions, a unique customer-focused approach. Applying Me-business strategy, Modem Media eschews the typical e-business “how can I sell to customers” mentality in favor of a “how can I reach and help the customer” approach intended to provide more relevant experiences for web users.

“On a client website, it’s all about navigation, answering the customer’s needs easily,” explains Modem Media’s vp director media Sharon Katz. When it comes to online marketing, “We think about media and advertising as distribution: How to take the client’s message off the site—and go where the customers are.” So Katz’s media group focuses its efforts on meeting those same needs not by dragging web users to a client site but by offering them a relevant message where they’re browsing.

To accomplish this, Modem Media sometimes “builds a microstore based on a client’s services and goes where customers are.” Like molecules bearing the DNA of the client’s website, these microstores are placed by Modem Media as advertising on other websites where potential customers linger. Three major clients who’ve found success populating the web with microstores are Delta Air Lines, JC Penney, and Kraft. Delta’s microstore functionality enables customers to buy tickets online. JC Penney’s features brands such as Levi’s 501 Jeans on sites as diverse as Women.com and Sonystation.com.

The Kraft Interactive Kitchen Campaign, a presence on Foodtv.com and related sites, consists of a banner campaign, rich media, and branded sponsorships. Offering a variety of mealtime ideas, rather than simply selling Kraft products, the banners provide recipes and tips intended to help busy people “make something good.” Through Kraft’s partnerships with @Home and Enliven, in other banners Modem Media applied rich media to enable sound, video, and animation.

The interactive tools successfully delivered Kraft’s message: Simple banners averaged a 1.6 percent click through rate (CTR); rich media boasted an 11.3 percent interaction rate. And editorial sponsorship of “What’s For Dinner” on AOL averaged an impressive 22.3 percent CTR.

Planning for these and other campaigns begins in the media department, which is structured as a pod led by a media director. “Since the areas of responsibility have blurred,” says Katz, “there are no longer specific buyer or planner titles. All department members are cross-trained in planning, buying, and operations.”

To accomplish its goals, the media department works closely with the agency’s in-house creative teams, who handle banners and websites, as well as a database marketing group, which manages distribution. In the past few months, the media department has also spent time renegotiating clients’ expired three-year alliance deals signed with major portals in 1997. “We analyzed whether to renew the deals, and if so how to make them more productive,” says Katz. “Many of the initial deals were made with just a dollar figure, with concerns about impressions minimized.

Hindsight revealed “it’s all about context, and not having that much ROS space. You can still have a good AOL deal,” she points out, “but it’s important to understand the client’s end objective and the portal’s different content areas for optimal placement. And since media changes so much, having flexibility in contract terms is essential.” Katz is also a proponent of hybrid deals, which have an up-front fee as well as payments for each click or sale.

Although the Internet economy has for the moment stalled, Modem Media continues to advance its interactive marketing strategies. Katz is enthusiastic about coming developments in two areas: Data—”working more closely with our database marketing department in understanding and targeting customers even better”—and delivery—”using other digital channels and platforms such as wireless and interactive playspace media in airports and hotels to bring clients’ messages directly to their customers.” It’s clear that nearly 15 years after it began, Modem Media is still thinking like a pioneer.

Susan Breslow Sardone can be reached at bresloco@writingthatsells.com.