Michael Tesch, 44, is a small, intense product of Brooklyn and nearby Far Rockaway. Like the stereotypical New Yorker, he's impatient and combative, but, according to his friends, the bearded artist often can be softspoken and sensitive, a designer of scope and ambition.

He seems to have little time for neckties or fancy Manhattan dinner parties and works out of a dark office that he seldom exposes to much sunshine.

Tesch also may be the hottest ad man in New York as a creator of the Federal Express advertising campaigns. He is one of the principal reasons why the firm he works for, Ally & Gargano, is considered an iconoclastic, innovative outfit that is one of the most highly regarded on Madison Avenue today.

Tesch and copy writer and fellow Federal Express ad creator Patrick Kelly have dominated many of the awards given in the hotly competitive ad business. In fact, they've won every major prize for that continuing campaign and just last month won a gold award at The One Show, a top ad industry awards program where Ally & Gargano won five first-place prizes--more than any other agency.

Tesch's speech is rich in New York accent and blunt in the city's tone. "Comedy is very serious," he said, citing a recent Sid Caesar interview that described that comic's personal struggle with humor. "If you lose, you lose badly.

"I never want to be embarrassed by anything I do," Tesch said. "I see a lot of formulas around, and we don't want to succumb to jingles. We don't have to be serious to be competitive. I make people laugh and enjoy themselves. That's a wonderous thing."

The Federal Express campaign began with ads designed to sell a concept unique to American business--the notion of the overnight delivery. "America, you've got a new airline" was the theme.

Then the firm conducted a test in which packages were sent out via both Emory Express and Federal to compare their ability to deliver packages in one day. The agency says Federal's packages showed up within 24 hours close to 99 percent of the time, double Emory's rate.

The second stage of the campaign was designed to sell that dependability; in other words--"when it absolutely positively has to be there overnight." (Chief Executive Amil Gargano says the firm introduced comparative advertising in the early 1960s with a campaign comparing Volvo, one of their clients at the time, to American automakers.)

The Ally & Gargano team then threw in a little history, with a commercial consisting of a series of scenes, beginning in 1776 with a Revolutionary War figure insisting that he needed a delivery in "three months, or the deal is off."

Later, with the company and the importance of its overnight speed established, the duo came up with actor John Moschitta's portrayal of the fast-talking executive named Spleen.

Moschitta's "I know it's perfect Peter that's why I picked Pittsburgh Pittsburgh's perfect Peter May I call you Pete" telephone conversation is considered a classic in advertising circles, and the ad program with Moschitta--whom Kelly saw first doing his routine on television's oddball "That's Incredible"--has become a standard for contemporary American advertising, as has the humor, deftness and directness of the entire Federal Express campaign.

But Tesch's talent and growing fame tell only part of the Ally & Gargano story. Whether it's the MCI Commmunications spot of the old woman falling off her rocker when presented with the phone bill or the grinning sumo wrestlers posing for a Pentax picture, the ads convey the sense of humor, warmth and success which in recent years has pervaded much of the firm's work.

Gargano calls the tone that the firm's advertising has taken "artful persuasion."

The firm does not "play with people's brains or talk down to them," Gargano said. "I've never been fearful of saying anything too intelligent in an ad or worrying that we were going over people's heads. If you believe in what you're doing and feeling, the creativity gets into your work."

Today, Federal Express and MCI dominate the Ally & Gargano client roster, although the agency also handles Time Inc., Saab, SAS, Timberland shoes and Calvin Klein Actionwear, among others. Somehow, the underdog role--Federal Express taking on Emory, MCI challenging AT&T, Timberland challenging Topsider--brings out the best in Ally & Gargano.

In fact, it is the Federal Express and MCI campaigns and a smaller contract with Pentax that saved the firm from virtual collapse in 1978. Pan American Airlines, then still thriving, suddenly abandoned the agency despite its award-winning "Discover Your Heritage" campaign. Created by Tesch, that effort took advantage of the "Roots" phenomena and sold the search for personal history as a way to put people into airplanes. Fiat left, too, and the two lost accounts wiped out close to half of the firm's billings.

Tesch and others at the firm were stunned by the departure of Pan Am, which eventually took its work to N. W. Ayer Inc. "We were shellshocked," Tesch recalled. "We were close to their people."

Pan Am's decision was attributed to its desire to have a single agency of international scope. Ally & Gargano has never had overseas-based operations and relies, when necessary, on relationships with foreign firms.

But Carl Ally, who had known Federal Express founder Fred Smith for many years, and chief operating officer Edward Gallagher, a classmate of MCI founder William McGowan 25 years ago, were not deterred. "They're the kind of people we like to identify with," said Gargano.

Like the Federal Express campaign, the MCI effort had to sell the notion of a different kind of service to the public. Focus groups demonstrated that the public didn't blame AT&T for its long-distance bills. "They blamed themselves for talking too much," Gallagher said. Thus, the MCI program was born, with the theme "You're not talking too much, you're paying too much."

Today, with MCI, like Federal Express, a major national success story, humor is coming more into play. For instance, Ally & Gargano is up to something similarly adventuresome, a plan to advertise MCI on television using only stand-up comedians.

"Now," says the comic, "my imitation of a long-distance call on Bell Telephone." The comic lifts the phone and quickly shouts: "I can't talk now; the call is costing a fortune."

"Now," he continues, "a call on MCI," and proceeds to launch a leisurely conversation with a friend about the weather and just about anything else that comes along.

Whether that ad ever shows up on television will depend upon an evaluation process that includes the omnipresent testing and research that dominate the work of even the most offbeat ad agency.

Ironically, the agency once represented Hertz during the mid-1970s, combating the aggressiveness of No. 2, Avis. International Business Machines Corp. also was a client, while today Ally & Gargano handles Commodore Computers. "If the agency has had two lives, the first was almost the opposite of what is going on now," said the firm's senior vice president, Tom Messner. "We had the big guys."

There's no mistaking the allure and profitability of running ad campaigns for upstart ventures, however. The private firm's billings are expected to reach $175 million this year, doubling the equivalent measure just two years ago, and they are expected to go as high as $240 million to $250 million next year, according to Messner.

But Gargano has no ambitions of making the firm the size of a Young & Rubicam or J. Walter Thompson. "We don't want to be a threat to them, at least in terms of size," he said.

That's not what Tesch wants, either. In the back of his mind is the dream of being a filmmaker, an aspiration that brought him to Ally & Gargano in the first place. "My lifelong ambition is to make documentaries," he said.