WHERE OLD BRANDS AND NEW THINKING MERGE;LEO BURNETT'S 38TH FLOOR PLACES AD VETERANS AND WEBHEADS ON THE SAME PLAYING FIELD

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Alternative rock music plays in one corner of the 38th-floor office, energizing the handful of twenty-somethings working on a CD-ROM for Oldsmobile.

An account executive stops by to make sure the jingle being burned onto the disc is exactly what the client wanted.

Meanwhile, about 10 steps away, Rishad Tobaccowala and Doug Ryan, co-directors of Leo Burnett USA's interactive group, discuss strategy for other accounts. The rhythm of the Dave Matthews Band floats into their offices, underscoring the department's open-door atmosphere.

AN AGENCY HYBRID

To meet the technological challenges of marketing today, Burnett has created an internal interactive unit that understands new media and how it relates to traditional brand advertising. But it has also partnered with a multimedia group called Giant Step Productions, which operates as an independent company within the agency.

The result is something of an agency hybrid-a group of 15 people who can talk brand strategy and clickstream; can wear suits and ties as well as jeans and sneakers; and can be part of the Burnett philosophy, yet independent thinkers who've set up shop a few floors above the Chicago agency's main office.

"We see our role similar to a priest's at a wedding-marrying brands with technology," said Mr. Tobaccowala, Burnett's VP-account director of interactive media. "Our interactive unit works hand-in-hand with a client's lead strategy team to make sure that marriage is successful."

`NO SHORTCUTS'

Burnett this month extended its commitment to Giant Step, run by brothers Adam and Eric Heneghan, by acquiring an equity stake in the company.

"Our model is working because Burnett has great client relationships and we've committed ourselves to the new world-no shortcuts," said Mr. Tobaccowala. "However, we also know we have to earn our stripes, and many times that means convincing a marketer that an interactive project wouldn't be appropriate."

Burnett has worked on projects for clients including United Distillers' Dewar's scotch, Walt Disney World, Kellogg Co., McDonald's Corp., General Motors Corp.'s Oldsmobile and Maytag Co.

Some, like Maytag's Web site (http://www.maytag.com), were conceived and executed entirely in-house. But in the case of McDonald's upcoming Web site, Burnett found a developer, Organic Online, and then backed off, letting the client and Organic work together.

WORKING WITH OUTSIDERS

"A certain sense of fear does exist when it comes to competition [from other agencies and smaller shops]," said Mr. Ryan, VP-account director. "We're not intimidated by other shops, but once you stop being nervous about business, then you tend to lose your competitive edge."

Although Organic has the Web site contract and will be paid by McDonald's directly, Burnett previously created McDonald's "McFamily" area on the Microsoft Network and America Online.

"We recommended Organic for the work because we thought they'd be better for the project," said Eric Heneghan. "Burnett is `solution neutral'; we're flexible and secure enough in our expertise to recommend outside shops."

After Burnett briefed Organic on McDonald's creative strategy, the project officially became Organic's.

"It's a small industry, and we've known the people at Burnett for a while," said Jonathan Nelson, president of Organic. "We mutually respect each other and wouldn't step on each other's toes."

However, there are other instances when a client chose to take its business elsewhere. Reebok International, for example, created its Planet Reebok Web site (http://www.planetreebok.com) with On Ramp, New York, without ever consulting with Burnett.

And while Burnett created Kellogg's site on the Microsoft Network, Kellogg tapped Washington-based production company Magnet Interactive Group to create its corporate site on the Web (http://www.kelloggs.com).

"Of course we would like to have total creative control of our clients' brands," said Mr. Ryan. "But our goal is to keep the client happy, and we're not crazy enough to assume we'll do everything."

The concept of "solution neutral" is central to Burnett's philosophy and strategy for growing its interactive business.

"The clients' needs come first-bottom line," said Mr. Tobaccowala. "We can visit smaller Web shops and recommend other companies to do some work for our clients because we're doing good work, our clients are happy and we're making money."

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