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4 stars

Ogilvy & Mather Direct, New York, makes O&M an undisputed leader (and this report's only four-star winner) among agencies blazing a trail into interactivity.

The shop's Interactive Marketing Group was formed in 1983 and started out handling videotext projects for a handful of clients, including Kraft General Foods.

Since then, the department has expanded and now includes 40 full-time staffers working on virtually every major interactive platform. (The agency's home-shopping and infomercial activity is not part of the interactive unit.)

But with the group's high-profile founder departing to answer the call of a regional bell operating company, O&M Direct is at an interactive intersection.

Martin Nisenholtz, a leading new-media pioneer and one of the biggest names in the emerging interactive industry, will join Ameritech next month as director of content strategy. His successor has not yet been named, but one leading internal candidate, VP-Account Director Meredith Flynn, may leave for a post at U S West.

Among the O&M Direct projects: interactive advertising discs (Equitable, Forbes, House of Seagram); kiosk-based systems (Kraft General Foods, Campbell Soup Co., Ogilvy & Mather); interactive TV (AT&T); and online services (Hewlett-Packard, American Express).

The interactive unit is working closely with AT&T on the Viacom/AT&T test in Castro Valley, Calif. O&M Direct also recently issued one of the first agency guides on Internet advertising, and has formed alliances with software publisher Knowledge Adventure and Mecklermedia Corp.'s MecklerWeb Internet project.

Now, it's up to O&M Direct to maintain its edge in the coming year, with other agencies gaining ground, and without Mr. Nisenholtz.

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