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After months of trying to maintain two distinct interactive agencies, True North Communications finally will merge Modem Media and Poppe Tyson.

Analysts estimate the combined company has almost $60 million in annual billings, almost twice as big as its nearest competitors.

G.M. O'Connell, formerly president-chief operating officer of TN Technologies, will become chairman-CEO of the combined Modem Media-Poppe Tyson. Kevin Clark, chairman-CEO of Poppe Tyson, will become vice chairman and Bob Allen, president of Modem Media, will become president.

"We tried to make a two-brand strategy work, but we found it was not in the best interest of our clients or our staffs," Mr. O'Connell said.

True North picked up Poppe Tyson in December when it bought its parent, Bozell, Jacobs, Kenyon & Eckhardt, New York.


Before the merger, both agencies had filed for their own public stock offerings, and a refiling is eventually expected by the joint entity, although a government-mandated waiting period must first be observed.

The combined company did have to relinquish one client, Poppe Tyson's Chase Manhattan Bank, because of a conflict with Modem Media's relationship with Citibank.

Clients of the merged shop include AT&T Corp., Delta Air Lines, Lycos, J.C. Penney Co. and Sony Entertainment.

Industry analysts said that while the move creates a mega-digital agency dwarfing the competition, smaller interactive agencies should not be trampled in its wake. Modem Media-Poppe Tyson will appeal to global marketers that want a full range of services.

"This is going to scare the you-know-what out of the Ogilvys, Saatchis and Omnicoms of this world," said Forrester Research analyst Jim Nail. "Those are the ones left in the dust, because those are the ones doing the traditional agency business for those global marketers and bringing that business over to their interactive" units because they haven't had much competition before from a stand-alone digital shop.


"Leapfrog is the wrong word because there are not too many competitors even close to us, and none ahead," said Mr. O'Connell. "Let's say we're putting a significant amount of daylight between the services we can provide next to any competitor's offerings."

The new company will leverage the international strength of Poppe Tyson and the media buying and digital business strategy power of Modem Media.

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