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J Walter Thompson Co. is going outside its ranks to solidify its position in interactive marketing.

The agency's San Francisco office this month will open a separate operating unit for interactive media, led by Management Supervisor Hunter Madsen and Account Director Tig Tillinghast. Mr. Tillinghast, a former member of Leo Burnett USA's Chicago-based interactive team, joins JWT today.

The move follows JWT's formation last month of a non-exclusive alliance with Magnet Interactive Studios, a Washington-based multimedia developer.

"We've been operating very efficiently and very well in this [interactive] area for the past five years," said Ron Burns, president-CEO of JWT North America. "[But] there's a lot more to learn."

Magnet, known primarily for its CD-ROM work for clients like American Express Travel Management Services and Dow Jones & Co., opened in 1989. The company and JWT share Eastman Kodak Co. as a client, but Magnet will work on projects for other JWT clients, possibly including Kraft Foods, Scott Paper and Unilever.

The Magnet deal may also help the agency keep a client.

Bell Atlantic is currently reviewing its $50 million-plus account, divided between JWT and Tierney & Partners, Philadelphia, and is said to have expressed concern over work JWT San Francisco has been doing for client Sprint.

"We have Sprint and Bell Atlantic and we have some conflicts that have to be taken care of," said one executive familiar with the situation.

Mr. Burns disputed that assertion, saying, "That's not the reason" the Magnet deal was struck. Bell Atlantic wouldn't comment.

JWT was an early player in the interactive realm through its J. Walter Thompson/Online unit in Detroit. But like many agencies, JWT is now juggling a glut of projects from clients while fending off a new pack of rivals.

"At the end of the day, the client will go out and hire an interactive agency if the [traditional] agency can't prove they have that capability," said Basel Dalloul, 32-year-old chairman-CEO of Magnet.

JWT considered acquiring an interactive agency before deciding to link with Magnet, executives said.

Unlike agencies that have a centralized interactive unit, JWT has divided its resources. The New York office handles interactive TV; Detroit oversees online, kiosks and Ford Motor Co.; and San Francisco works with clients Sprint and Sun Microsystems, mainly on Internet and online marketing.

JWT helped create Sprint's World Wide Web site ( that opened last month.

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