MODEM ADDS 3 CLIENTS, OPENS DIGITAL SERVICES UNIT;AS TN TALKS LINGER, AGENCY PUSHES ON WITH GROWTH PLANS

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Modem media, still in the throes of protracted acquisition discussions with True North Communications, is making major expansion plans of its own.

The interactive agency signed on three new clients in recent weeks: Hasbro, John Hancock Mutual Life Insurance Co. and Reader's Digest Association.

Modem also opened a new unit, Modem Media Digital Services, to develop and market Internet tools and handle short-term Web production assignments.

TRUE NORTH STILL ON HOLD

Some had expected True North would announce its acquisition of Modem at last week's board meeting, but no deal materialized.

Modem is proceeding with its growth plan "in case something doesn't happen with anybody," said agency partner G.M. O'Connell. That means realigning the agency to focus not only on creating advertising for a particular medium but designing and developing marketing vehicles that take the medium to the next level.

Hasbro will work with Modem on several assignments, including a Web site for the board game Scrabble. Modem won a pitch that included Hasbro Interactive agency Griffin Bacal, New York.

For John Hancock, Modem will create Web sites and handle other marketing projects. The agency will handle media buying and planning for Reader's Digest, which opens on the Web later this year.

A BOOST FOR NON-AT&T BUSINESS

The wins fill a void left by MasterCard International, which split with Modem earlier this year. The new clients also bolster the non-AT&T side of Modem's business; AT&T may account for as much as 70% of Modem's work.

The Digital Services unit, housed in Modem's Westport, Conn., headquarters and reporting to partner Doug Ahlers, will launch with 20 to 30 employees, culled from Modem's Webmaster, technology and graphics groups.

TOOLS FOR SALESPEOPLE, RETAIL

Among the projects in the works: a tool for salespeople to connect to corporate intranets called "Delivra," and an electronic commerce tool that retailers can use to construct an online or kiosk-based store.

"These are actually market niches that are not currently filled by other products," Mr. Ahlers said. Modem will build a small sales force to license the software to companies outside the agency's client roster.

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