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The meeting that changed everything two years ago for Ottawa marketing group Fuel Industries almost didn't happen.

The company had won all the nominations for the Billboard Magazine DEMMX Awards' advertisement-based video game category and was sure to win at a ceremony in Los Angeles. But CEO Mike Burns was considering skipping the high-profile digital entertainment and marketing conference.

November, 2006, had been a busy time for Fuel and he yearned to be with his family. It was lucky for Mr. Burns and Fuel Industries that colleagues goaded him into changing his mind. He wouldn't have met the McDonald's Europe executive to whom he pitched the Fairies and Dragons video game concept that convinced the fast-food giant to revolutionize its classic children's Happy Meal.

Shielding his laptop from the glare of the Southern California sun at a tony poolside L.A. bar, Mr. Burns and Fuel creative strategy director Sean MacPhedran showed McDonald's Europe family marketing director Ursula Weixlbaumer a simple electronic storyboard on a PowerPoint presentation.

Mr. Burns had connected with McDonald's Europe months earlier. They set up the meeting when he decided to attend the awards.

Mr. Burns nearly bubbled over as he demonstrated to the McDonald's executive how the cartoon fairy character he created for fun for his daughter's eighth birthday had evolved into a children's video game that could transform McDonald's Happy Meals.

When the 90-minute meeting ended, Mr. Burns and Mr. MacPhedran walked away stunned. "Holy smokes, what just happened?" Mr. Smith said, turning to his colleague.

What had happened was the beginning of a deal that would see the small Ottawa marketing firm reinvent the 29-year-old Happy Meal for more than 30 million children in Europe.

McDonald's wanted Fuel to provide 33 million new-concept Happy Meals for more than 40 European countries throughout a summer-long campaign. Fuel would redesign the Happy Meal box that would hold a fairy figurine for the girls' meals and a set of dragon action cards for the boys. The box would also contain a CD-ROM in a plastic dragon's egg that contained two children's video games. Once loaded onto a child's computer, a fantastical cartoon world popped up on the desktop and the two games, revolving around either fairies or dragons, could be played.

As well as the core product, Fuel was to design a website and online games portal and a commercial to promote the new Happy Meal across Europe.

The financial details of the deal are confidential.

McDonald's saw that advertising was changing and that children spend a lot of time online. It was time to do something different to promote the Happy Meal.

The fast-food giant had been looking at gaming as a way to boost its brand and, when they learned of Fuel's Fairies and Dragons concept, they decided to try it on its European market before considering it for the rest of the world.

Mr. Burns had been trying to promote the idea of digital toys to promote products and brands for years, but potential clients shied away from the responsibility of maintaining and operating the online components that came with such initiatives.

Within weeks of beginning the project, Fuel launched a new licensed property division to deal with the extra workload, added 25 new staff to its work force of 60, and has since increased annual revenue to $8-million from $5-million. As well, Fuel more than tripled its office space and purchased state-of-the-art sound and digital video studios. It also shifted from a pure services agency model — providing "advergames" (online video games created around a certain brand) and other entertainment services to big-name, international companies through marketing and advertising agencies — to an interactive agency model that would now also speculate on its own properties.

To enable Mr. Burns to concentrate on developing Fuel's new division and the McDonald's project, long-time client Warren Tomlin, who was then head of e-business strategy and product development at Canada Post, was hired as chief creative officer.

It took a while for it to sink in that Fuel had captured the size of deal that normally went to media powerhouses such as DreamWorks Animation or Pixar Animation Studios, but fear kept everyone sharp.

"Every day we came in we were excited, exhilarated and terrified," he said.

"If we [screwed] up, the whole world would know." One month before the European launch, Fuel almost did fumble. Fuel had failed to purchase the website URL for Spain — one of 15 URLs required for the pan-European campaign — and someone in Mexico City already owned it. What if the owner wasn't willing to give it up?

"I dropped the ball on that one," Mr. Burns said.

McDonald's was not pleased.

Fortunately, one of Fuel's designers spoke Spanish and persuaded the owner to give up the site for a reasonable price. "It could have been a train wreck," Mr. Burns said.

The Happy Meal toy transformation landed Fuel huge international media exposure, including here in North America.

In October, Canadian Business magazine listed Fuel as one of Canada's fastest-growing companies.

Fuel is now working on creating licensing partnerships with DreamWorks, Walt Disney Co. and Nickelodeon. It is also talking to McDonald's about bringing the new Happy Meal to the North American market while it continues to do more interactive Web design for the restaurant chain. At the same time, it is developing three PC-based games for Microsoft and a retail console game.

Despite a threatening global recession, business has never been better for the Ottawa shop, Mr. Burns said. "We're projecting a 20-per-cent growth from last year to this year and we're likely to expand our team," he said. "We're having our best quarter in Fuel's history."

Special to The Globe and Mail

• Connect with Mike Burns

  Mr. Burns will take your questions at 1 p.m. ET. Click here  to submit your question.

• Expert insight

  "I would argue there's a big difference between playing a game and buying something, and there are two different processes. It's great and it doesn't hurt, but to think it's a be-all and end-all is naive," says Chris Staples, founder and creative director of Vancouver, B.C.-based Rethink Advertising. He will discuss the advergaming industry and advergaming's effectiveness as a branding and promotional tool in an online Q&A, and will take your questions. Click here for more.

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  Know a business that has experienced a big breakthrough? We want to hear about it. Email: nhulsman@globeandmail.com.