Modem Media should have reason to be nervous, with the online advertising industry in tatters and the few remaining Web agencies struggling to survive. The United States-based firm helps clients develop interactive marketing campaigns - something that few companies have come to grips with, even after a decade of online advertising. 'Most people who just begin to use the Internet or interactive marketing think it is a billboard on a screen,' said chief executive Marc Particelli. 'That is wrong. That is what it was five years ago without the use of technology. 'Interactive means 'digital' primarily. Interactive marketing is different from traditional marketing in how to influence your customers.' With clients increasingly understanding that their online marketing had to be integrated into all marketing channels, Modem Media had been working closely with traditional marketing and advertising agencies, Asia director Brett King said. 'All of these channels are ways to start a dialogue with customers. We have to teach and demonstrate to our client that there is real value in that different approach,' Mr King said. 'It is not just putting a Web page up . . . It is a value exchange. In order to make interactive marketing work, you have to ensure your customers get value as well as you getting value from your customers, which means they have to want to use the Internet.' Despite a troubled regional economic climate, Modem Media has maintained its Hong Kong presence for five years. Local clients include Cathay Pacific, CitiBank, Shangri-La Hotels & Resorts, Hong Kong Tourism Board and CSL1010. '[The commercial] Internet actually started in 1995 and we arrived very quickly in Hong Kong,' Mr King said. 'We managed to get a mature base of customers without any dotcom customers. Our clients are all global clients.' Based in Connecticut, Modem Media operates in the US, Europe, Hong Kong and Brazil. 'Even in these times of difficulties in the economy, we have lost no major clients. They have reduced their spending because they cannot afford as much as they used to, but . . . they know and understand and they are happy to invest in interactive marketing. It is too compelling,' Mr King said. However, the firm is not immune to local market variations. It recently shut down its Japan office after two years in operation. Mr Particelli said: 'The market there is very weak. Our capability there was not particularly strong. We were losing money and I did not see the business turning around very quickly.' Business also has been affected by the economic downturn, though Mr Particelli said it was 'basically breaking even'. 'The competitive landscape is changing,' he said. 'We still do not know when the market will come back, possibly in the next couple of quarters.' The company remains careful in choosing customers. 'We pick the right clients - major corporations which continue to connect to the digital marketing space and continue to invest,' Mr Particelli said. The company is moving slowly on the China market. Mr King said: 'Regarding the economic environment, when we go into China, we have to define our market strategy and make sure we can do it in the long run. 'In China, specifically now with the WTO [World Trade Organisation], there is a lot of pressure on Chinese corporations to have their employees skilled to compete on the global stage.' Modem Media is seeking partners in the mainland to offer business-to-education learning programmes.