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On a cold day earlier this month, interactive teams from some of the country's top ad agencies traveled to the Midwest. Armed with details of recent new-media successes and brimming with ideas for future projects, the agencies put on their best face for a tough and demanding client.

Some had established formal interactive units more than a year ago, others only recently. All hoped to convince the marketer their agency had the best mix of knowledge and experience.

It was one of the first formal pitches for interactive agency of record status. And for Procter & Gamble Co. and its agencies, it was an eye-opening experience.

With the new year only a few weeks old, the marketing world is already grappling with a new animal-the interactive AOR. Agencies longing to demonstrate their prowess are vying for the attention of marketers with brand new interactive budgets.

Nearly simultaneously, P&G and AT&T opened interactive reviews; other major marketers, possibly including Anheuser-Busch Cos. and PepsiCo, are considering similar routes.

But the path is fraught with uncertainty. Agencies are pitching business with prestige but little real revenue possibility in the near term. If they don't participate, they leave the door open for interactive specialists to steal the business. It's also a tacit admission the agency is not up to snuff in new media.

More to the point, some of those pitching interactive AOR accounts aren't even sure marketers should be conducting such reviews.

"You've got marketing execs who want to do this because it's going to look good for their marketing department or their resume, vs. something that is a marketing tool or a marketing need for the company itself," said one agency executive.

Still, the first weeks of 1995 have been a mad scramble as agencies cart out multimedia presentations and newly christened interactive gurus in an attempt to prove themselves to a client still grappling with its place in this new realm.

"We don't even know what interactive is, let alone agency of record," said Gary Moss, VP-global advertising at Campbell Soup Co. "When it comes to the whole question of interactive agency of record ... most major advertisers feel like we should be doing something, but most don't know what."

Such was P&G's philosophy, executives said, when the company began its review for an interactive AOR.

P&G, perhaps driven by the agenda set in Chairman-Chief Executive Ed Artzt's speech to the American Association of Ad- vertising Agencies last year, or by the more recent departure of Senior VP-Advertising and Information Services Robert Herbold to Microsoft Corp., called on its agencies to submit projects and ideas on how the package goods giant could market its products using new-media technologies.

But P&G executives have indicated the marketer may not name a single interactive AOR. Among those pitching the business are Leo Burnett Co., Chicago; and New York agencies Grey Advertising; Saatchi & Saatchi Advertising; N W Ayer & Partners; D'Arcy Masius Benton & Bowles; Wells Rich Greene BDDP; and Jordan, McGrath, Case & Taylor.

P&G declined to comment. But outsiders said the marketer should have thought twice before considering such a review in the first place. "I think they're making a mistake looking at interactive as totally separate from their communications process," Mr. Moss said. "I don't see the need for another separate unit ... with its own AOR, away from all the other traditional planning and buying."

Campbell earlier this month consolidated media, including interactive, at Campbell Media Alliance, a customized unit of Foote, Cone & Belding's True North Media.

Regardless of how P&G decides to handle its interactive projects, the marketer has started a trend that others will follow in the coming months.

AT&T will hear interactive AOR pitches from several agencies next month. Among those vying for the business are Ayer, McCann-Erickson Worldwide and Young & Rubicam, all New York; and interactive specialist Modem Media, Westport, Conn.

"The premise for our search is that advertising in interactive media is a different animal compared to broadcast or print advertising, and we need a different type of process for it," said Dick Martin, AT&T's VP-corporate advertising. "We've decided to look at it just as we do our agencies of record for different dayparts in network TV media buying."

AT&T hopes to consolidate advertising on computer online services, CD-ROMs, entertainment software and other high-tech venues.

Interactive AOR reviews may be on the horizon for Anheuser-Busch and Pepsi, industry executives said. Both have been meeting in recent months to assess the capabilities of their existing agencies as well as interactive shops like Modem.

Pepsi didn't return calls; Anheuser-Busch executives were traveling and couldn't be reached.

But another major marketer, General Motors Corp., is removing itself from the interactive AOR fray.

"We don't think the way to get focus is through one single agency," said Philip Guarascio, VP and general manager-mar- keting and advertising for North American Operations. "Our approach is to create an architecture internally that lets us create our own focus and manage outside resources working on different pieces of the pie, but we're the ones still putting together the pie."

At some companies, like GM rival Ford Motor Co., interactive AOR status has been unofficially delegated to the agency most willing to pick up the ball.

"We have some relationships with clients I would consider to be very similar to AOR status," said Roland Sharette, director of interactive resources at J. Walter Thompson USA, which has assumed interactive responsibility for Ford. "In essence we have stepped in where some agencies have not been up to date or involved."

Naming an interactive AOR may also take flexibility away from marketers at a crucial time.

"There's so much happening in interactive that marketers could do it on a project basis," said Bill Harvey, president of new-media consultancy Next Century Media, New Paltz, N.Y. "If the AOR thing prevents this, it's not a good idea."

And some agency executives said they would have strong reservations about pitching interactive AOR business.

"We would not necessarily say, `I want to be a direct marketing agency of record or an interactive agency of record,'*" said Dick Hackenberg, who oversees interactive media for Chiat/Day, Venice, Calif. "We want to be agency of record."

"To have an interactive AOR is fine in theory, but what's their job?" said Barry Layne, VP-director of Ketchum Interactive Group, Los Angeles. "Where's the Generation X AOR? Where's the baby boomer AOR? At some point this is getting silly."

Contributing to this story: Kate Fitzgerald, Raymond Serafin, Melanie Wells and Pat Sloan.

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