WEDNESDAY, JULY 15, 1998 Burnett Adds Technology Marketer Leo Burnett is acquiring TFA Communications, a business-to-business technology marketer. TFA, which had billings last year of $68 million, has more than 30 high-technology clients, including Avid Technology, Motorola and NewsEdge. Stuart Elliott: Advertising. [C6] Advertising Stuart Elliott A new Leo Burnett acquisition will bestow on the agency company that T-word cachet. In another ambitious effort to im-prove its competitive position on Madison Avenue, the Leo Burnett Company said yesterday that it would join rival agencies in the rapidly growing field of business-to-business technology marketing by acquiring TFA Communications L.L.C., a leading shop in that realm. Financial terms of the deal between the two privately held companies, both based in Chicago, were not disclosed. The agreement calls for TFA to become a separate business unit of Burnett under the name TFA/ Leo Burnett Technology - giving Burnett, which has long been perceived as a stodgy, traditional agency, the cachet of the T-word amid a frenzy for anything redolent of bits and bytes. TFA had billings last year of $68 million, which ranked it fifth on a list of agencies in its category compiled by the trade publication Marketing Computers. Billings are estimated to reach $88 million this year and $123 million in 1999. TFA competes against agencies like Anderson & Lembke, part of the Interpublic Group of Companies, and CKS Partners, a unit of CKS Group. TFA has more than 30 high-technology clients, including Avid Technology, Motorola, News Edge, Open Market, Pervasive Software and - because no such list is complete without a company starting with an "X" or a "Z" - Zygo. By comparison, Burnett has only one high-technology client, Motorola. The deal, which was negotiated in a quick six weeks, is the most recent in a burst of acquisitions by Burnett, which once prided itself on expanding its service offerings slowly and through internal growth. But that approach was jettisoned last year after Burnett, the world’s 13th-largest agency company, with billings of $6 billion, became bedeviled by lost accounts, turmoil in the executive suite and a palpable belief that it was lagging behind its big rivals in revamping to reflect the industry’s radical transformation. "We have a vision for what we are trying to do," said Linda S. Wolf, group president of the Leo Burnett North America unit, who came to midtown Manhattan to discuss the deal with reporters. "We want to diversify, to get into high-growth areas such as technology," she added, "but we don’t want to make acquisitions only for their earnings stream. We want to make them because they’re right, for the clients and for the agency." Other aggressive expansion efforts by Burnett include Internet marketing, with a majority stake in an agency named Giant Step; health care advertising, with a minority stake in Williams-Labadie Advertising; urban marketing, with the formation of a shop called Vigilante, and the acquisition of a 49 percent interest in Bartle Bogle Hegarty, one of the world’s hottest creative agencies. Also, Leo Burnett U.S.A. has been decentralized into seven business units, and the Burnett media services operations have been spun off into a division named Starcom. "I never thought in a million years I’d be sitting here being acquired by Burnett," said Sean B. Bisceglia, chief executive at TFA, who joined Ms. Wolf for an interview. Mr. Bisceglia, 32, opened TFA in 1991 after working for, agencies like Grey Advertising and what is now Lois/U.S.A. TFA began, he said, "with a $7,000 loan from my father, three employees and two clients." "In a year and a half, we decided to focus on technology," he added, "because of studies by Gartner Group and others saying this would be an exploding area." Mr. Bisceglia becomes chief executive at TEA/Leo Burnett Technology and an executive vice president at Burnett U.S.A. TEA/Leo Burnett Technology will continue specializing in advertising, direct marketing, public relations and Internet marketing for business-to-business clients rather than consumers. But the deal will help the agency respond to important changes among such marketers, many of which are refocusing their efforts to reach consumers, too, running commercials during the Super Bowl in addition to peddling their wares at computer conventions. "A lot of technology companies are very product - and engineering - centric," Mr. Bisceglia said, "but as competition increases, the need to become more sophisticated, to brand, gets very, very important." So as the needs of clients evolve, the affiliation with Burnett will give the 83 employees of TFA/Leo Burnett Technology the ability to tap the consumer expertise of an agency that handles accounts for the likes of Coca-Cola, Walt Disney, Philip Morris and Procter & Gamble. It also offers access to Burnett’s media and research services as well as its international offices. All that could also help TFA/Leo Burnett Technology land clients in the areas of what Mr. Bisceglia described as "consumer technology and retail technology - the Compaqs and the Dells." Asked if Burnett’s problems have made him leery of talking with Wolf and other top Burnett executives about a deal, Mr. Bisceglia plied: "Burnett’s not going anywhere. Burnett is not struggling.’ Moreover, he added: "We had many frank conversations in which I asked ‘Do you understand what you’re getting, because we’re a little bit different?" But Burnett embraced our entrepreneurial spirit, which we’re all about." Mr. Bisceglia contrasted that ~ the attitudes of managers of publicly traded agency companies in Chicago and New York, which declined to identify, who he said were also interested in TFA. "With them, it was a trophy issue," he said. "They wanted some earnings to get their stocks up a point or two because they’d just lost 200,000 shares." The TFA employees in Chicago will move into the Burnett headquarters office. After TFA’s other offices in Boston and Dallas are renamed, they will give Burnett its first representation in those cities. TFA/ Burnett Technology also plans open an office in San Francisco, another new town for Burnett. A public relations agency in which TFA has a minority interest, Corporate Technology Communications in Chicago, becomes minority-owned by Burnett; Paul M. Rand continues as its president and chief executive officer. Next Article Press Archive