Lighthouse Global Network has acquired Chicago-based IdeaScope Assocs., a strategy and innovation consulting firm with offices in Boston and San Francisco.

Lighthouse, which is backed by GTCR Golden Rauner and Frontenac Co., Chicago-based venture capital firms, recently acquired Morgen-Walke Assocs., New york, and Financial Dynamics, London.  The firm now has 15 consultancies with approximately 1,200 employees in the U.S., Europe and Asia.

FRITZ JOINS NEW HEALTHCARE FIRM AS CFO

Ed Fritz has been named chief financial/business development officer of Health!Quest Global Communication Partners, Metuchen, N.J.

The new integrated communications network, which is headed by Gil Bashe, was opened last month with $60 million equity financing from GTCR, a Chicago-based venture capital firm.

Until Nov. 1999, Fritz was CFO of CommonHealth, a WPP Group company.  Bashe had also been with CommonHealth.

THREE DRUG COS. TO PRESENCE

Eli Lilly and Co., Pharmacia & Upjohn and Wyeth have named PResence Euro RSCG for PR assignments, raning from pharmaceutical launches to women's health issues to the Internet.

The New York-based PR firm has also signed two online healthcare website clients, cancerfacts.com and allaboutvision.com.

Joseph Kennedy, who handles PR for PResence, said the accounts have combined billings of approximately $2 million.

MEDIA SPECIALISTS TO SHANDWICK PA

Sandy Gilmour, TV correspondent, NBC News, and Tanya Gibson, Air Force Media Specialist, have joined Shandwick Public Affairs, Media and Crisis Division as VP and Group Director, respectively.  The duo, based in Washington, D.C., will conduct media training and consult on media strategy.

Gilmour has served as a network TV correspondent in the White House, and in Moscow and London.

Gibson created a national media training program for the Air Force and provided media counsel to senior foreign military officials.

CITIGATE BUYS CORP. INVESTOR COMMS.

Citigate has acquired the 20-person stockwatch and shareholder intelligence division of Corporate Investor Communications.

The combined group, which has more than 40 professionals located in offices around the world, including New York, London and Tokyo, will operate under the Citigate Dewe Rogerson name.

Chris Taylor, who will head the combined unit, said the transaction will add approximately 100 U.S.-based clients.

Citigate is part of the Incepta Group, plc.

GAULKE SAYS AD INDUSTRY IS DYING

Ray Gaulke, president/COO of PRSA, said this is the golden age of PR and "advertising is in a death spiral."

In a tech-savvy world, "advertising doesn't work fast enough," said Gaulke, who is a former magazine ad salesman, and agency ad executive.

He spoke at PRSA/New Jersey's chapter lunch Feb. 16 to more than 30 members and guests.

"The speed of PR gives it an advantage.  PR can act as fast as business needs," he said.

Gaulke said the Council of PR Firms, which has 112 members, has had no impact on PRSA.

He said the CPRF, whose top 10 member firms pay annual dues of about $50,000 each, "happened at the wrong time.  It will be interesting to see if it survives if a large firm pulls out," he added.

PR is also benefitting from the phenomenal growth of the Internet, said Gaulke.

"Advertising doesn't relate to the consumer the way it used to.  With e-commerce, trust is more important than brands and only PR can build trust," said Gaulke.  "Advertising builds awareness."

Times are so good, says Gaulke, he overhead two PR executives talking and one said, we should take out an ad in The New York Times that says: "Attention CEOs, if you don't have a PR firm, tough, we're not taking any new clients for the next two years."

"Everybody is extremely proud of saying no," he said.  "Today's PR firm does not have to date everybody that knocks on the door," Gaulke said.

"We will begin to see a new form of advertising that is more informative, more interactive, and more content driven," said Gaulke.

He recommends that PR practitioners "be more of an earpiece and less of a trumpet.

PR FIRM DROPS CLIENT FOR LIMO REQUEST

The Benjamin Group, a Campbell, Calif.-based PR firm, dropped a client for requesting a limousine.

Sue Shellenbarger reported in her "Work & Family" column in The Wall Street Journal (Feb. 16) that the client, which she does not name, was dropped after the CEO for the Internet start-up called Lisa Zwick, who handled the account, at her California home at 4 a.m. to order a limousine for him in New York.

Shellenbarger said a growing number of professional service firms are dropping clients over "quality-of-life issues."

Ken Ferber, who was director of PA and media relations for the Los Angeles Police Commissioner, has joined Wellpoint Health Networks, Thousand Oaks, Calif., as VP/corp. comms.

Berkhemer/Clayton, an L.A.-based executive search firm, conducted the search.

DRUCKER FROM EDELMAN TO RF

George D. Drucker has left Edelman PR Worldwide, Los Angeles, to join Ruder Finn as executive VP of branding.  He will work out of the Los Angeles and New York offices.

Drucker, who spent a total of 21 years at Edelman, first joined the firm’s Chicago office in 1974.  He also worked briefly at Burson-Marsteller, and from 1993-95 he was a partner in Stawasz-Drucker Comms.  He rejoined Edelman in 1995 as EVP/GM of the agency's L.A. office.

Drucker said he has participated in several new business pitches with Amy Binder, president of RF/Americas, in the past five weeks, which have resulted in eight new client wins.

HORN GROUP STARTS IR DIVISION

The Horn Group, San Francisco, has started a new IR division in order to make the firm a one-stop-shop for high-tech clients poised to go public.

Shannon Hall, partner at Horn Group, will oversee the division.  Commerce One, developer of online business-to-business portals, and Annuncio Software, automator of web and e-mail campaigns, are the first clients.

"There’s a huge need in the market," said president Sabrina Horn.  "All these dot-com companies are going public so fast, they need IR.  It’s a specialty we want to get right," she added.

JOB CHANGERS EARN HIGHER SALARIES

After two relatively flat years of modest salary gains, most 1999 mid-level PR job-changers received salary increases in the range of 18-35%, according to an annual compensation report published by Spring Assocs., an executive search firm.

Dennis Spring said the last percentage increase of nearly this magnitude occurred in 1996.

WPP STOCK DIPS 10% ON EARNINGS

WPP reported a profit increase of 23% to 172.l8 million pounds or 22.5 pence a share for 1999 but it was not enough to satisfy stockholders or analysts.

The stock dipped more than $10 to $79.25 on NASDAQ in the U.S. at one point because higher earnings were expected. It recovered late last week to$84.

Commerzbank Global Equities said WPP's earnings prospects do not justify its current price/earnings ratio. It also said WPP's price, which had tripled in the past year, was based too much on unrealistic expectations of dot.com advertising.

"They'll have to achieve better than that to justify the share price," Commerzbank analyst Gareth Thomas told Bloomberg. Reuters reported that Commerzbank had cut WWP from a "hold" to a "sell" rating while Bloomberg reported Thomas rates WPP as a "hold."

Marissa Marr of Reuters quoted one dealer as saying: "WPP's shares "are puffed up at unsustainable levels and it would have needed really sparkling results to keep them where they are. At 1,155 pence, they were the most expensive stock in the world in this sector."

PR outperforms adv. at WPP

The WPP Group said its PR and PA practices had performed strongly in 1999, with total revenues up 30.5% over 1998.

By comparison, the combined total revenues of WPP’s three largest ad agencies--Ogilvy & Mather, J. Walter Thompson and MindShare, which produce 46.8% of WPP’s total revenues--rose by 5.3% in 1999.

Total PR and PA revenues were 178.9 million pounds in 1999 vs. 134.8M in 1998.

Profit before interest and tax in 1999 was 23.9M pounds vs. 15.7M pounds in 1998. (1 pound equals $1.60.)

The London-based holding company, which also owns AlexanderOgilvy, Ogilvy PR Worldwide, Blanc & Otus and Hill and Knowlton, said the PR firms as a whole showed operating margins of over 13%, which was in excess of the company’s objective for 1999.

"Historically, listed PR companies showed operating margins of over 10%, which have now been more than matched by our own operations," WPP said in its preliminary year-end earnings report, which was released Feb. 17.

H&K’s revenues rose by more than 17% and operating costs by almost 18%.

Ogilvy’s worldwide revenues rose by over 79% and operating costs by approximately 71%.

The report shows PR firms now generate 8.2% of WPP’s total revenue and 8.1% of the total operating profit.

CASSIDY HIRES HEALTHCARE ADVISORS

G. Furman Barnes III and W. Campbell Kaufman IV, who had their own PA firm, have been hired by Cassidy & Assocs., Washington, D.C.

As principals in Barnes Kaufman, they advised healthcare providers, payers, and technology manufacturers and vendors on public policy and government relations issues.

Gerald S.J. Cassidy, chairman/CEO of Shandwick Washington, which now owns C&A, said    Barnes and Kaufman, who will be VPs, will provide advice on issues related to healthcare, telecommunications and information technology.

INTERNET MARKETER TO PR FIRM

Bernhard Schroeder, an Internet marketing specialist who helped launch Amazon.com, was named chairman of The Townsend Agency’s new strategic advisory board.

Schroeder has stepped down as GM of the San Diego-based PR firm, which was founded in 1993 by Jacqueline Townsend Konstanturos.

Townsend said Schroeder will provide clients with the "perfect third party input to tough strategic decisions" involving the use of the Internet.

Schroeder was instrumental in the launch of Amazon.com while working for CKS Partners.

NEW MAG TARGETS YOUNGER GOLFERS

News Corp. will publish a new sports/lifestyle magazine, called Maximum Golf.

MEDIA BRIEFS ______________________

FREE DAILY PAPER IS LAUNCHED IN PHILLY

PLACEMENT TIPS _____________________

PEOPLE _______________________________

Larry Manne is news director of WTVE-TV, a new Philadelphia UHF station that is now on the air.  Jim Sweeney, formerly news director at WRNN-TV in New York, is deputy news director of "Philly TV News.

M&As GET MOST INT’L COVERAGE

METRO TO BRING LUNCH TO THE OFFICE

NYFWA MEMBERS INVITED TO ‘DRINK NIGHT’

PLACEMENT TIPS ________________________

His E-mail address is [email protected]; fax: 312/268-6358.  Mail press kits and samples to 88 West Schiller, #602, Chicago, IL 60610.

PR PROS SAYS ‘NET CAN’T DO IT ALL

Atlanta PR consultant Joseph M.A. Ledlie believes it would be a bad idea to let the Internet replace face-to-face classroom instruction as suggested in an article in The New York Times Feb. 13 "Week in Review" section.

In letter to the editor, Ledlie said, "The idea that distance learning by Internet will somehow replace classrooms and even campuses ignores the intensely social aspect of the college experience."

Ledlie, a former newspaperman who got his undergraduate degree in 1965 from Spring Hill College, a Mobile, Ala.-based Jesuit school, said the strongest proponents for using the Internet tend to be the investors and the professors whom they seek to sign on as talent.

"Better to consider the Internet as one more marvelous communications tool that can bring variety to the human experience, enhancing the social experience but hardly replacing it," Ledlie said in his letter.

Ledlie’s letter was published in the Feb. 16 edition of the Times, the same day as a page 1 report on a new study that shows "the more hours people use the Internet, the less time they spend with real human beings."

The survey was conducted by Stanford Univ.’s Quantitative Study of Society.

John Markoff, a Times reporter, said the study, which has not been made public, also details how the Internet is leading to a rapid shift away from mass media.

The study reported that 60% of regular Internet users said they had reduced their TV viewing, and one-third said they spent less time reading newspapers.

TWINLAB NAMES SWORDS HEAD OF PR

James J. Swords has joined Twinlab Corp., Hauppauge, N.Y., manufacturer and marketer of nutritional products, as corporate comms. director.

Swords had been CC manager for Allied Domecq Spirits USA, after leaving Texaco.

He also worked for W.R. Grace & Co. in several PR positions before the company moved its headquarters from New York to Boca Raton, Fla.

CONSULTANT AUTHORS BOOK FOR EXECS

Granville N. Toogood’s new book, entitled "The Creative Executive," has just been published by Adams Media, Holbrooke, Mass.

Toogood, who runs his own consulting proactice, is also the author of "The Inspired Executive" and "The Articulate Executive."

In his new book, the publisher said Toogood "takes business people on an eye-opening journey into new territory where almost anyone can shine and virtually anything is possible. Readers learn how to harness the universal gift of creativity to build a business, stimulate productivity, improve processes, spur profits to new heights and bring joy to the task."

The 192-page hardcover book sells for $16.

TOP-PERFORMERS INTEGRATE COMMS.

Anders Gronstedt, Ph.D., president of Gronstedt Group, a Colorado think tank, says 14 of the top-performing companies integrate communications with the most profitable customers and stakeholders.

The companies, detailed in his book, "Customer Century," Routledge, New York, include Hewlett-Packard, Motorola, FedEx and ABB.

He examines how these companies are transforming themselves from the "Production Century" model of building products and finding customers to a "Customer Century" model of building customer relationships and integrating communications.

The communications programs he describes integrate communications externally with key customers, vertically between senior management and frontline workers, and horizontally across departments, business units, and geographic boundaries.

‘CYCLE OF BLAME’ HURTS HEALTHCARE

The "cycle of blame" is eroding people’s trust in the healthcare sector, according to Kathy Lewton, PRSA national chair-elect.

She feels healthcare PR can help put an end to the tendency of people to create various scapegoats to explain the woes of medicine.

"First, pharmaceutical companies were blamed for charging too much for drugs," she recently told PRSA’s Washington, D.C., chapter.  Doctors and hospitals were next, and then critics started fingering HMOs for everything that is wrong with healthcare.

"This cycle just keeps repeating itself," noted Lewton, who says the rising cost of home healthcare is a current alarm.

"Once trust is destroyed, it’s very difficult to get it back," said Lewton. "It takes 20 years to build trust, 20 days to destroy it, and 50 years to renew it."

She rapped physicians, hospital and drug company executives for failing to work together, and for being out of touch with the needs of consumers.

Rx Misconceptions

Lewton, a Fleishman-Hillard exec, debunked what she feels are the biggest misconceptions in healthcare. They are:

1. Consumers want to feel "empowered." They want to help decide their treatments. Most patients, says Lewton, just want to do what the doctor says.

2. Big hospital costs frighten consumers. Lewton believes most people are concerned with out-of-pocket outlays and deductibles.

3. The Internet is a good tool in getting healthcare information to the general public. Many, Lewton notes, do not have access to the `Net, so it is only useful when targeting very specific audiences.

4. People demand a complete overhaul of healthcare. Most want to just tweak the system, she says.

5. Healthcare providers who spend millions to develop a "brand" will build a greater awareness of their services, than those who rely mainly on PR.  Hospitals waste millions for advertising that has very little impact on consumers, according to Lewton.

PRSA leader Patrick Jackson, although quoted in the textbook "PR Strategies & Tactics" as saying that "we’re all spinners--because it simply means marshaling the data from your viewpoint," told this NL that he does not favor the term as a general description of PR.

"I am opposed to the term because it’s demeaning to PR," he said. "It implies a dishonesty that is not there. You can put your best foot forward but you also have to talk about the rest of the story."

Jackson, who edits the PR Reporter newsletter and who was president of PRSA in 1980, has just been put on the nominating committee of PRSA as a representative of the College of Fellows.

He said that salespeople are trained to deal with negatives because "every issue becomes an opportunity to tell more about your story."

Companies should not run from "bad facts" because "now you have the person’s attention" and that’s what’s important, he added.

Companies pay lots of advertising dollars to get the attention of potential customers but with PR the attention is already there, he noted.

Fraser Seitel, author of the textbook, "The Practice of PR," whose eighth edition is to be published in the fall, offered a section from the forth coming book which denounces "spin" as a term for PR.

The section is headlined "The Curse of ‘Spin’" and attacks the trend to make ‘spinning’ the facts synonymous with PR practice."

"Spin--outright lying to hide what really happened--is antithetical to the proper practice of PR," he writes.

"In PR, if you lie once, you will never be trusted again--particularly by the media.

"Nonetheless, PR spin has come to mean the twisting of messages to create the appearance of performance, which may or may not be true. Distortion, obfuscation, even downright lying is fair game as far as spin is concerned."

Seitel, who is editor of "PR Strategist" of PRSA, provides some examples of spin including President Clinton denying he had "sex" with Monica Lewinsky; George W. Bush complaining about the lack of candor in politics while refusing to say if he used cocaine in college; Newsweek journalist Joe Klein, who lied about writing the best-seller "Primary Colors"; Boston Globe columnist Mike Barnicle, who did not reveal the sources of some of his writings, and Clinton strategist Dick Morris, who revealed secrets in a "tell-all" book.

The New York Times, noted Seitel, reviewed a book on PR and gave the review the headline: "How PR Tries to Keep the World Spinning."

New York counselor Andrew Edson said PR pros must speak out against the equating of PR with "spin." It’s "name-calling," said Edson. PR pros themselves are using "spin" as book titles because they think it will help to sell the book, he noted. Such people, he said, "are selling out their own industry for personal gain."

The appointment of Pat Jackson to the nominating committee of PRSA puts him on a collision course with Mary Cusick, the nominating chair by virtue of being PRSA president in 1998.  Jackson expressed his views to last year’s enlarged committee.  The committee decided that the foursome of Lee Duffey, Joann Killeen, Jody Aud and Cusick were wielding too much power and had to be broken up.  The committee tried to kick Duffey and Killeen off the board and stop Aud from being elected secretary, which would have kept her on the board.  Killeen was the only survivor of this putsch, gaining office by a one-vote margin. This illustrated the power of the new faction.

With all the lobbying that went on directed at last year’s nominating committee and which was one reason for the historic attempted axing of two officers, insiders were astounded at the 1999 Assembly when Judith Bogart, a member of the committee representing the past presidents, got up to say that rumors of "undue influence" on the committee were false.  "We were not influenced by outsiders of any kind," said Bogart. The committee members asked each other when they got to the meeting "if we had been lobbied, and no one had been lobbied," she told the Assembly.

The board and nominating committees are cauldrons of boiling emotions, as evidenced by Frank Stansberry’s walking out of last year’s board meeting in Vancouver and all of the incoming 2000 board members being kicked out of the last meeting of the 1999 board after being invited to that meeting. The weapon of choice of many of the wounded warriors is the silent treatment.  Not only does the combatant swear a lifelong snubbing of the "enemy," but also wants all his or her friends to do the same.

Jack Felton, president of the Institute for PR, has been named chair of a task force to review the nominating process by midyear--a referee for what has become a free-for-all as opposing factions battle for control of PRSA.  Steve Pisinski, 2000 chair, is promising a more open nominating process this year.  Traditionally, only a few insiders know who is on the nominating committee or who the nominees are. Only the insiders are thus able to influence the committee.