Unit Formed

Looking to stay abreast of its 70-odd dot-com clients’ changing offline advertising needs, Initiative Media North America has launched internal unit Lou Schultz, Initiative’s chairman and CEO, said the 15-person unit is designed to operate as a “virtual agency” within the media shop. Initiative claims $750 million in total dot-com billings.
The unit, which includes Initiative executives from across the U.S., will be responsible for the “whole gamut” of dot-com offline ad efforts, Schultz said, including local and national broadcast and direct marketing. “We have experts in each of those areas. … When we [acquire a dot-com client], they will come together,” he said.
The unit includes vp/associate director of network Betty Pumpian and account director Robert Holtkamp in L.A.; network radio buyer Gary Carr in New York; and a broadcast director, not yet named, will be based in San Francisco. All staff will report to Mike Lotito, Initiative president and COO.
Initiative’s New Media unit will continue to buy online media for all clients. Lynn Bolger, an Internet ad expert who formerly ran Ammirati Puris Lintas’ digital unit, recently joined to head up New Media. is a response to a challenge all media agencies are facing as they struggle to cope with the nuances of the dot-com world; rapidly changing offline objectives and strategies; and competition from a host of digital, interactive and online specialty shops.’s organic approach–incorporating specialists within the fabric of the main agency–is one of several models, along with acquisition of online ad agencies, creation of autonomous in-house units and other variations.
All of the approaches, though, are based on the assumption that dot-coms have a unique “sentiment, work style and mentality,” said David Verklin, president/CEO of Carat North America. “The sentiment is instantaneous results; the work style is speed of decision making is paramount; and the mentality is change needs to be made at the last minute. Add to that the fact that a lot of these companies are new advertisers spending real money [from whom] media sellers demand special terms and options.”
The clients, too, are rethinking their offline ad approaches.
“A while back, it was OK for a dot-com to do broadcast advertising across a broad spectrum. Now we’re finding broadcast didn’t generate the returns in terms of driving traffic,” said Craig Rexroad, vp of marketing for vertical portal, Bellevue, Wash. “Dot-coms are growing up and saying maybe it isn’t enough to do big, flashy ads.”
Schultz said the recent financial bumps in the Internet industry’s wild ride only accentuate the need for “When markets start to fluctuate, people say ‘Well, this is going to go away.’ But there are a lot of new dot-coms that need help to minimize the risk factors,” he said.
So far, each model for handling dot-coms has enjoyed success from a billings standpoint. Carat’s dot-com billings are handled by Carat Freeman, the Newton, Mass.-based high-tech shop that now has 70 dot-com clients billing $600 million. KSL Media opted for an in-house unit, Drive-to-Site Media, that in less than a year has won more than 20 dot-coms and specializes in driving Web traffic. The Media Edge’s Internet arm, The Digital Edge, already has 12 dot-com clients and bills $100 million.
For many of these clients, offline advertising remains a key tool.
“We have clients like, which does want to develop a strong brand and is primarily an offline advertiser,” said Alan Schanzer, The Digital Edge managing director. “We encourage all of our clients to explore lots of different media mixes.” K