Distractions during training actually do help the younger dogs learn to pay attention. It sounds like there may have been a little too much for your first time. Try again a different time or a different class. It sounds like the person running a day care and trying to train at the same time has their hands full. Working a reactive dog while just beginning a puppy class is probably not all that smart for the trainer unless they were just killing time until everyone arrived. You can work eye attention at home using a clicker and treats and when you are in a situation like the one you encountered your dog will look to you with eye attention for a cue as to what is happening. Maybe take a short time (a couple weeks) to work on eye attention and then try again, if not at the same place possibly a different one. I always train the same command in several different places and from several different positions. Once in class our trainer had us all sit in folding chairs and give the commands while sitting. Once everyone had conquered that some of us gave lying on the floor and giving commands a try. It was great fun. The dogs enjoyed it and we got several kisses (from our own dogs) while lying on the floor. The dogs learn that the command means the same thing where ever you are and what ever position you are in.
Snake Vom Eselspfad RN CGC (AKA Raina) 3/5/08
Pyrate CGC 4/1/03-5/16/12 RIP
Too many to list waiting at the bridge but remembering them all