WHEN BUYERS BECOME SELLERS;POPPE TYSON LEADS LIST OF AGENCIES EXPLORING A RISKY NEW BUSINESS

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New media call for new ideas, James Walter Thompson thought back in the 1880s.

So he gathered up 30 of the best magazines-titles like Harper's and The Atlantic-and began peddling them to advertisers.

Some, like Lever Bros., became not only buyers of the medium but his clients. And thanks to the man who had named his agency J. Walter Thompson Co., magazines became the first national ad medium.

JWT long ago abandoned ad sales for ad creation. But with the phenomenal growth of the Internet as a marketing medium, agencies are salivating over the potential profits from being not only designers of World Wide Web pages but sellers of ad space, or "links," on popular sites.

The attraction is obvious, but when buyers become sellers the ramifications are enormous.

Consider the potential conflict when an agency charged with getting the lowest price possible for its marketer client is also supposed to get the highest price possible for its media client.

Poppe Tyson, the business-to-business and interactive marketing arm of Bozell, Jacobs, Kenyon & Eckhardt, is the first agency to cross the line. But others-including CKS Group and Foote, Cone & Belding-are approaching it.

Poppe is selling space for the Web sites of Netscape Communications Corp. (http://www.netscape.com), Playboy (http://www.playboy.com) and Votelink (http://www.votelink.com). The agency has hired three salespeople to call on not only its own clients and clients of sister agencies Bozell and Temerlin McClain, but any marketer that has a Web site.

Poppe expects interactive ad sales to account for 1% to 2% of its expected $18 million in income this year.

"This is the agency of the future," said Fergus O'Daly Jr., New York-based chairman-CEO. "This isn't going to go away. This is what marketers are going to expect from an agency."

But is it? What Poppe has done is stirring debate among marketers and media alike.

"Using plain logic, you want to get the best price possible," said Mary Lou Floyd, manager of interactive advertising at AT&T. "I see it somewhat as a conflict if you are repping a medium and also [creating for] it."

Other marketers aren't as quick to judge.

"Everybody's trying to find a way to leverage this new media," said Bryce McTavish, director of advertising at Sprint. "I don't begrudge an ad agency for having closer contact with how that money is be ing made."

BJK&E President-CEO Charles Peebler defends Poppe's business plan.

"If a client gives us responsibility for construction of their Web site and if they're open to selling ad banners...... then we believe it's the responsibility for us to coordinate ad sales on the site."

For Poppe, the decision to sell was a natural outgrowth of its business creating Web sites for clients including Valvoline and Chrysler Corp.

David Carlick, senior VP-general manager of the Mountain View, Calif., office and head of BJK&E's Poppe.com interactive marketing unit, was the one who proposed the agency learn how to sell Web media.

"The idea of cyberspace reps struck me as very intriguing," Mr. Carlick said. "I was of the opinion that agencies are going to have to experiment, so that's what we did."

Poppe's first sales client was Netscape. The agency helped redesign the browser marketer's Web page, and when Netscape Chairman Jim Clark jokingly mentioned the company should take ads, Mr. Carlick jumped on the opportunity.

Poppe has helped Netscape land advertisers including AT&T, MasterCard International and Adobe Systems.

For Playboy, Poppe serves solely as a sales rep, calling on accounts that don't normally advertise in the print magazine.

"It was too expensive for our sales staff to cover [Web advertising] on a global ba- sis," said Richard Kinsler, Playboy publisher. Poppe gets a standard commission on sales, just as a traditional media rep would.

Mr. Kinsler acknowledged the possibility of conflicts as a result of Poppe possibly calling on its own or its sister agencies' clients. But he insisted the agency follows a strict rate card.

"They're playing by Playboy rules," he said. "They can't offer Chrysler [a Bozell client] a lower rate than General Motors."

Others say it's impossible not to play favorites, new media or old.

"There's just no way we can do it," said Greg Stuart, VP-director of interactive marketing at Wunderman Cato Johnson, New York. "It's a difficult enough thing when some of these media companies are our [advertising] clients. But to be their sales force-that's stepping over the line."

"I think it's very dangerous for an agency to do that if they don't do it very, very carefully," said Mark Kvamme, president-CEO of CKS Group, Cupertino, Calif. But he admits selling interactive ads is a lucrative business he's seriously considering entering.

"If you can get a piece of those dollars one way or another, it's very interesting," he said.

FCB's True North Media is also developing ways to sell ad space on interactive content created for clients.

"If you start thinking about how to make money on this stuff and you look at what's out there, this is a clear opportunity," said Lynn Bolger, VP-director of new-media technologies.

Poppe's Mr. Carlick admits he's not sure how long the agency will stay in the sales business or even if it's a viable source of income in the long term. But he decries those who say it's an either/or issue.

"All agencies sell space. If they deny that, they're nuts," he said. "There's absolutely nothing new here except that it's being reinvented in a new medium."

"I don't think this is going to be huge for us," he added, "but it isn't something we're going to get out of."

Still, some conflicts already are erupting.

In an embarrassing turn of events, Poppe agreed to sell sponsorships for an Internet scavenger hunt run by CompuServe Internet Division, a competitor to Netscape. After Netscape complained, Poppe handed the business to Bozell, which was pitching the CompuServe ad account and hoped to win some leverage.

Did it work? Bozell ended up being cut from the review, and hasn't yet taken on any more sales opportunities.

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