Except After C? Contess may go as DVC realigns along practice areas.

Dugan Valva Contess confirmed that principal Neil Contess might be leaving as the agency undergoes a restructuring. “Neil Contess is still a full-time employee. We are in talks about his possible departure,” says DVC vice chairman Peter Dugan.

A former AT&T exec, Contess brought a significant amount of that company’s business to DVC, and helped the fast-growing agency build a client list that also includes Coca-Cola, Pillsbury, Schering-Plough, Johnson & Johnson, and the NBA.

Sources said there were some layoffs caused by the realignment, but Dugan denied rumors that more than 20 people had been laid off. “We will finish this year with more people than we had at the end of last year,” he says, putting the current payroll at 273.

The Morristown, NJ, agency reorganized its operations into practice areas, which it said will help provide clients with integrated services in both traditional and online marketing communications. The restructuring comes six months after DVC purchased Visient Technologies and Muffin-Head, providers of Web technology services and design, respectively. The acquisitions added 70 employees to the fold.

DVC moves from the more traditional account-group structure to a model focused on four practice areas: promotion and marketing communication, healthcare, Web development, and information technology. The change “will allow us to deliver to our clients marketing, communications, and technology solutions better, faster, and with enhanced value,” says chairman and ceo George Valva. He adds that the revamp “will put us into an advantageous position for an initial public offering in the future.”

Sue Furlong was named group president of DVC Communications to head two of the new areas: DVC Communications, the promotion and marketing practice, and DVC ActiveCare, the healthcare marketing specialty. Executive vp and group director Laura Mindell remains manager of DVC ActiveCare. A manager for DVC Communications has not been named.

Paul Ivans, group president, will head the Web development and IT practice areas, with senior vp-account director Jennifer Martin managing the Web development side and senior vp Kevin Green the IT area. The combined IT and Web practices are known as DVCi Technologies, an e-solutions company.

The restructure includes the formation of an Integrated Services Group that will provide creative, production, and marketing services to each practice area as needed.

Leave it to Virgin Atlantic to forgo frequent flier miles.

The London-based airline has made loyalty marketing one of its top priorities this year, but don’t look for its frequent flyers in U.S. airports. Instead, Virgin is sending them shopping with American Express cards.

Virgin began a card promotion in March to court business travelers for its frequent flyer program, Virgin Freeway. The program has 200,000 members in the U.S., a fraction of American Airlines’ 32 million members worldwide. Flights between eight U.S. cities and London don’t give Virgin enough destinations to make U.S. passengers want to collect miles. Still, if it could get travelers to “sample” the airline once, Virgin execs feel sure its superior service would win converts.

“We want to get people to try Virgin, then push them through the loyalty cycle until they become evangelists for us,” says director of marketing Sarah Buxton. “Virgin loyalists become almost like a sales force for us – they rave to their friends.”

Enter the shopping spree card. Passengers who buy round-trip tickets and then enroll in Virgin Freeway get AmEx stored-value Persona Select cards worth $50 (for coach passengers) or $500 (for the “upper class”). Cards are good at 150 merchants, mostly high-end retail and travel services “with a high level of remembrance,” says Darryl Hutson, ceo of American Express Incentive Services, Fenton, MO. “We want people to feel special about what they buy, so we stay away from staple items.”

Cards have more cachet than cash. Virgin considered cash rebates – a growing trend among foreign airlines – but “it wasn’t very Virgin,” Buxton says. The appeal of techno-goodies like Palm Pilots was too narrow. But the card has wide appeal, and “we can market it as a shopping spree, instead of just bribing people with cash,” Buxton says. (Virgin Freeway members also earn travel rewards and “activity rewards” like tandem skydiving, hot-air ballooning, and off-road driving as well as miles.)

Response to the Persona card offer was so strong Virgin extended the promo another three months through September. When Buxton travels for business, she queries seat mates. “Lots chose Virgin for the card, and are impressed by the flight,”