STAFF STRIFE HITS O&M INTERACTIVE

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Ogilvy & Mather Direct's Interactive Marketing Group, vaunted as the agency world's most advanced new-media unit, is threatened by a management gap three months after losing a pair of high-profile executives.

The 37-member department has been leaderless since the early August departures of Senior VP-Director Martin Nisenholtz and Account Director Meredith Flynn, who left nearly simultaneously for senior interactive posts at Ameritech and U S West, respectively.

"I think if it was a huge priority for them they would have done something by now," said one agency competitor.

"If they don't start to move and create some momentum" with interactive projects, "it's going to disappear," added a former executive at the unit.

O&M Direct Chairman Jerry Pickholz, charged with replacing the executives, has so far been unable to do so. He initially tapped agency Managing Director Pam Larrick to run the interactive group on an interim basis, but she left a month later amid a massive layoff of 55 staffers that followed the loss of AT&T's $150 million-plus account.

The search now appears to have moved outside the agency. Among those who have been approached is Gerry O'Connell, a partner at Westport, Conn.-based interactive agency Modem Media. Mr. O'Connell wouldn't comment on O&M discussions, but it's believed he declined an offer; Mr. Pickholz couldn't be reached.

The department is being run, at least temporarily, by four executives who were each promoted to VPs: Andrew Frank, Mitchell Rapoport, Richard Mason and Margaret Clerkin.

"We're definitely investigating that option of replacing Martin, but it is possible if we see this is working well that we may not proceed forward on that," said Ms. Clerkin, VP-business development director, who until last summer worked at O&M Direct's media department.

At least one of the agency's clients says it's irritated by the lack of direction and management continuity within the interactive group.

"They recognize they need somebody who can kind of act as a visionary," said Richard Shaw, VP-marketing communications at House of Seagram, whose conceptual plans for a new interactive project have been delayed by the management issues. "It's hard when you talk to an engineer or a guy that's proficient at digitalization to refine a concept of where and how you want to move."

But O&M's Mr. Wright said he has agreed to step in and help out, adding that replacing Mr. Nisenholtz is "not a critical issue as far as we're concerned." Completion of a handful of projects in the next several weeks will allow the agency to "sit back and examine our strategic direction for the business," he said.

In addition to the AT&T account loss, Mr. Nisenholtz's departure led to the demise of O&M's separate consulting work on AT&T's interactive tests. But the agency is trying to re-establish those ties even as it seeks direct business from new worldwide client IBM Corp., whose win sparked AT&T to fire the agency.

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