What's up with TN Technologies?

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TN Technologies laid out an ambitious course of action when it filed for an initial public offering last fall. After acquiring Modem Media in a complex transaction, the company began an even more difficult task: combining a group of separate interactive businesses into a coherent offering.

There have been several bumps in the road. Three top Chicago office managers left earlier this year to start their own shop. Last month, TNT restructured its San Francisco office to focus mainly on Internet production work for client Levi Strauss & Co. (AA, April 21).

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Company Chairman-CEO Greg Blaine talked with Interactive Media & Marketing Editor Debra Aho Williamson about the agency's plan for the future.

Advertising Age: TN Technologies still hasn't gone public yet. What's the status of the filing?

Greg Blaine: We remain on file with the SEC. The primary issue is timing.

Two dynamics in any IPO influence timing: condition of the company and condition of the market. Only one of those do we control: our company. This, of course, is the focus of all our efforts.

At this point, the market looks pretty soft in the space that we would occupy. But markets change and we have to be ready.

AA: Interactive agency stocks have had mixed performance on Wall Street. How strong is the category?

Mr. Blaine: I see the category as remaining very vital, certainly growing and maturing. But some seasonality is clearly emerging in 1997.

AA: What sort of seasonality?

Mr. Blaine: There are two sources for the seasonality.

One is as interactive advertising becomes integrated with overall marketing programs, we are seeing it become more closely tied to the marketing calendars of specific companies and brands. That will particularly be seen in banner advertising.

Another source of seasonality that is harder to dimensionalize is the rollout of new interactive technology applications, which we see picking up steam in the second and third quarters.

AA: TNT is a combination of the existing TN Technologies, Modem Media, R/GA Interactive and Relationship Technology Group. How is the operation doing?

Mr. Blaine: In our first 100 days as a combined enterprise [the Modem acquisition was final on Dec. 31], I have been pleased with how well the operations are doing within the new structure. I can't cite figures, nor specifics, due to SEC restrictions while we are on file. But I smile much more than I frown.

AA: Last month, you moved San Francisco office General Manager David Clauson off the Levi interactive business and restructured the office. Why?

Mr. Blaine: The San Francisco reorganization had to do with better aligning our resources to the needs of Levi's. We needed a tighter focus, and that led to the reorganization.

AA: Do you see a tighter alignment happening elsewhere?

Mr. Blaine: We certainly see rapid maturing in the category, wherein clients' interactive programs are becoming much more strategic than tactical.

AA: What does that mean for your business?

Mr. Blaine: We need to assure clients we can meet their specific needs as they mature to address both strategic and tactical needs. For example, we are finding that more and more marketers want to upgrade their tactical executions and are connecting with [TNT unit] R/GA Interactive directly to meet these needs.

AA: You and President-Chief Operating Officer G.M. O'Connell have spent a considerable amount of time getting the finances of the holding company in order. Did it cause you to take your eye off the ball in San Francisco?

Mr. Blaine: I don't know know if I would say ``eye off the ball.''

G.M. and I got together recently and said, ``We're 100 days in[to the year], where are we?" Early in the year, we were still consumed in the IPO. Since that point, have we really gotten back to what we enjoy doing the most, which is not a process, but running a company.

AA: One thing you've discussed was moving online media buying to Modem Media. Have you formally moved that work there?

Mr. Blaine: All buying is there now. . . . To me, there is a need in all the operations for an on-site media strategist. Below that, the work should be centralized.

AA: When will you hire media strategists?

Mr. Blaine: End of the summer. Right now, when we need that work in developing a plan for a client, we move somebody, we have somebody travel.

Modem's media resources group--I'm just so high on them. Gosh, do they get it. They're as excited about it as I used to be 25 years ago about media.

AA: What areas do you want to work on most in the coming year?

Mr. Blaine: Growth. Growth. Client development, obviously.

Our focus has to be on what is exciting in the business: ever-changing product development, expanding client needs and trying to fulfill the leadership position that we have set as our goal in the market. The good news is that all of that is fun.

Copyright May 1997, Crain Communications Inc.

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