Edition, October 4, 2000, Page 1
PROBES O&M's BILLING
Florida Rep. John Mica slates hearings Wednesday on whether
Ogilvy & Mather overbilled the White House on its anti-drug
A consultant has charged O&M with nearly $14 million
The ad agency, which does not have an internal PR person,
uses H&K CEO Howard Paster, as its spokesperson.
He noted the O&M is willing to adjust its charges, but
does not expect a significant reduction in its $187 million
Gen. Barry McCaffrey, who heads the White House drug office,
defends O&M, and believes Mica's hearings on an effort
to discredit the White House before the election.
BOOTS PR BUSINESS TO F-H
Reebok International has hired Fleishman-Hillard following
a "multi-agency" pitch for the "mid six-figure"
PR account, according to Eric Blinderman, senior VP at F-H.
Ruder-Finn had the Reebok business.
F-H is to handle brand, product marketing and entertainment
support, plus counsel the firm on its role in promoting
Reebok sponsors an annual human rights award. Its footwear
plants are in China, Indonesia, Thailand and Vietnam.
Morgen, 53, one of the founders in 1982 of Morgen-Walke
Assocs., which grew to be one of the largest financial PR
firms, is leaving at the end of the year to work full time
for a client and to devote more time to her husband and
two sons... Abbott Laboratories, Abbott Park, Ill.,
reportedly is searching for a VP-communications. Catherine
Babington is VP of IR and PA...James M. Simon, a
partner and executive director of communications at KPMG,
to Cardinal Health, Dublin, Ohio, as SVP and chief communications
officer. Cardinal employs 40,000 and has revenues of $25B+...Steven
A. Rautenberg, formerly VP of CC at Reliance Group and
previously with Chase Manhattan Bank 19 years, rising to
VP and director of PA, to Canon U.S.A. as VP and general
manager, CC division. Michael Virgintino is press contact
at the company...Judith Phair, VP/institutional advancement
at the University of Maryland Biotechnology Institute, joined
Council on Competitiveness, Washington, D.C., as VP-PA.
PICKS C&W FOR ITS SHOWBIZ ACCOUNT
Cohn & Wolfe beat Fleishman-Hillard and Edelman PR Worldwide
for the $500,000 corporate communications account of SFX
Entertainment, the New York company that bills itself as
the No. 1 promoter of live events.
Howard Schacter, VP-PR at SFX, said at least 15 PR firms
responded to his company's RFP that went out in June.
Schacter said C&W is in charge of SFX's corporate branding,
media and community relations programs.
SFX handles shows such as Riverdance and Seussical the Musical,
and concerts by artists such as Dixie Chicks, Tina Turner,
is doing media relations work for the RU--486 abortion
pill that was approved by the Food and Drug Administration
on Sept. 28.
It's been pretty busy, says Tom Phillips, Managing Partner
at the firm, which is an Omnicom unit.
The prescription drug, known as mifepristone, will "allow
women to have abortions in the privacy of their homes,"
according to the Sept. 29 New York Times.
Abortion rights groups hailed the FDA decision as the biggest
breakthrough in reproductive healthcare since the birth
control pill. Opponents blasted mifepristone as "baby
PRSA BLAMES iMIS COMPUTER SYSTEM
The iMIS computer software under installation at PRSA for
about two years came in for criticism during two teleconference
calls conducted last week by chair Steve Pisinski, treasurer;
Joann Killeen, chair-elect; Kathy Lewton, and other leaders.
The criticism was directed not so much at the software but
at the local implementer-Development Technologies of Farmingdale,
Pisinki said PRSA may not pay the last bill to DT and is
thinking of hiring another installer. Talks are being held
with Taylor Technologies, New York.
Computer costs have soared at PRSA. The audit shows spending
of $430,313 on "computer equipment" in 1999 alone
with the total in recent years having reached $999,437.
Some of this has been depreciated. The iMIS software has
cost about $200,000. Also added were new computers for all
staffers, two new servers, new printers, three network hubs,
and new wiring.
Robert Alves, president of Advanced Solutions International,
Alexandria, Va., distributor of iMIS, said installation
of the software in a group the size of PRSA "normally"
takes six to nine months.
He was mystified at the two years (and counting) needed
for installation at PRSA. He said DT is "one of the
best providers we have" and said that
on page 7)
Edition, October 4, 2000, Page 2
CITY CONSOLIDATES PR AT KWE
The Mexico City Tourism Authority has given KWE Assocs.
its $1 million PR account, according to Karen Weiner Escalera.
KWE had been doing media relations work for Mexico City
in a partnership with Fleishman-Hillard that was terminated
It now handles crisis PR, special events, press trips, consumer
promotions and video work, which triples KWE's fees from
Escalera said her firm will deliver a "Take a Fresh
Look at Mexico City" pitch for the client.
ASKS SEC FOR DELAY OF REG FD
National Investor Relations Institute president Lou Thompson
has asked the Securities and Exchange Commission to push
back implementation of Regulation FD from Oct. 23 to Dec.
29 to give IR units more time to prepare for the rule.
Many NIRI members "have voiced a number of questions
about the steps that issuers should take to comply with
Reg FD," wrote Thompson to Jonathan Katz, Secretary
of the SEC.
They also are concerned with the timing of the effective
Thompson noted that Reg FD will "take effect in the
middle of the earnings announcement cycle for most public
That, to Thompson, will make it difficult for companies
to "draft appropriate earnings releases and prepare
for analyst calls that are in compliance" with Reg
Thompson is doing "road shows" to educate members
about Reg FD.
The SEC is reviewing Thompson's request.
The Wall Street Journal on Sept. 25 predicted Reg FD will
result in more stock price volatility because companies
are prohibited from providing "guidance" to favored
Reg FD, said the WSJ, will require analysts to do more legwork
to get inside scoops on companies they cover, rather than
issuing reports that are "rewritten and repackaged"
FIRMS BATTLE FOR TOP TALENT
PR firms are fighting to either recruit or retain the 40,000
skilled communicators, said Darryl Salerno, Magnet Communications
CEO, in explaining the cutthroat competition for talent
in this flush time for PR.
"The firm that keeps its brains, wins the war,"
he told a breakfast seminar on PR firm profitability.
The session, which was moderated by Lee Levitt, was sponsored
by financial consultant Holly Lundberg and Corpro Diversified
Programs in New York.
Salerno and Tom Hoog, CEO of Hill & Knowlton/ USA, both
cited employee retention as a top priority.
Hoog, in noting that H&K "can't pay the highest
dollar" for execs, said his goal is to make sure that
each staffer knows the opportunities for advancement.
Each H&K staffer receives extensive training and mentoring.
It's "up or out" in two years, he said.
H&K also is trying to appeal to the "new generation
of employees" that have lives outside the office.
The firm, said Hoog, went "business casual" a
while ago, and has a "Take Five" program in which
workers are entitled to five Fridays off in addition to
Salerno has dropped clients that "were abusive"
to staffers because unhappy workers are more likely to look
for other jobs.
He also has a business rationale in getting rid of deadwood
Salerno said 125 percent of a firm's profit comes from 80
percent of its client base, so it makes sense to cut clients
that you are losing money on.
Bruce Bishop, CFO of Incepta's U.S. operation, said if a
firm has a reputation for retaining talent, clients will
soon be knocking on its door.
Incepta, a public company, makes sure executives have an
ownership stake in the company, he said.
The executives talked about how PR firms should educate
clients on the merits of "value billing."
Salerno labeled PR's hourly billing system as "grossly
For instance, he wanted to know if it is fair for a firm
to bill a client for the four hours it took to develop an
idea that could generate $1 billion in revenues.
He told of a top executive who billed a client $200,000
for work that was worth $2,400 at his billing rate. The
client was aghast upon receiving the bill, said Salerno.
It claimed the work was only worth $120,000, so the PR exec
revised the tab downward.
H&K, said Hoog, doesn't look to make much money on its
"They are not about billing," he explained, "they
are about building a business."
ANDERSON ACQUIRES CLS&A FIRM
Gavin Anderson & Co. has acquired Chlopak, Leonard,
Schechter & Assocs., a Washington, D.C.-based PA firm
with 40 employees.
Robert Mead, president of GA&C, says the deal enables
his Omnicom unit to expand its "political influence."
He calls the 11-year-old CLS&A "the firm of choice
in Washington for some of the most sophisticated corporations
and organizations in the world."
CLS&A clients include General Electric, World Bank,
World Health Organization, Pew Center for Global Climate
Change, Oracle, Verizon and Amtrak.
Founding partners Bob Chlopak, Charles Leonard and Peter
Schechter are to join GA&C's management team.They had
worked with Mead at Sawyer Miller.
Chlopak is to become executive VP, and a member of the firm's
worldwide executive committee.
Leonard and Schechter are to develop GA&C's corporate
and international issues management practices, respectively
Edition, October 4, 2000, Page 3
NEW MAG WILL TARGET BOOMERS
AARP, which changed its name from American Assn. of Retired
Persons, will publish a new magazine called My Generation.
The bimonthly magazine will be aimed at people between the
ages of 50 and 55 with a median household income of about
$56,000. AARP will publish two editions of Modern Maturity,
one targeted at 56 to 65-year-old people, and another for
readers 66 and older.
My Generation will have a 3.1 million rate base at launch.
The first issue is due out in March.
The magazine, which will address the concerns of aging Boomers,
will have articles about healthcare, tending elderly parents,
travel and political issues.
Betsy Carter, 55, who was editor of the now-defunct New
Woman magazine, is editor-in-chief of My Generation.
TRIBUNE NAMES AD COLUMNIST
Jim Kirk has succeeded the late George Lazarus as marketing
columnist for The Chicago Tribune.
Kirk, previously with The Chicago Sun-Times, had been writing
the Sunday Tribune's "Media Talk" column, covering
local broadcasting news.
His marketing column will appear Tuesdays, Wednesdays and
Monica Lewinsky, the former White House intern, has
become a TV reporter for Britain's Channel 5. She will host
six four-minute segments called "Postcards from Monica."
The segments will air in November.
Bernstein, who covered the Watergate scandal with Bob
Woodward for The Washington Post, said the news business
"is becoming a freak show." In a speech at Maine's
Bowdoin College, Bernstein, now executive editor of Voter.com,
said: "We're increasingly losing our way. [Journalism]
has less and less to do with truth and reality and totally
lacks context. Media bears little resemblance to the community
Assn. of America, Vienna, Va., sponsored the first national
Newspaper Career Day on Oct. 3. Debra Hernandez, who is
NAA's director of PR, said the event is designed to educate
people about the myriad career opportunities the industry
has to offer. NAA provided newspapers a package of materials
they can use when hosting events in their markets.
Media said the first issue of dads magazine sold more than
70,000 copies at newsstands around the country when it was
launched in June. A bimonthly, dads is a lifestyle magazine
for the active, involved father. Eric Garland is editor.
(Media news continued on next page)
Edition, October 4, 2000, Page 4
MAGAZINE TARGETS INTERNET CEOs
dotCEO magazine will make its debut in January.
The New York-based Chief Executive Group, which publishes
Chief Executive magazine, will publish the new bimonthly
dotCEO will be written expressly for CEOs of Internet companies,
according to Carol Evans, COO of the CEG, which is headquartered
at 733 Third ave.
The magazine will be edited by Christine Larson from Redding,
Calif., at 530/229-9099; fax: 941-9418.
Each edition will have an array of feature stories covering
issues and trends in management, finance, marketing and
The magazine will also produce a website (www.
dotCEO.com) as well as conferences and roundtable events.
dotCEO will have an initial controlled circulation of 25,000.
will include the titles of CEO, founder, president, chairman,
vice chairman, and COO.
It will also include leaders of Internet-related technology
firms, venture capital and investment banking firms.
"From IPOs to growth managers, dotCEO will cover the
subjects of greatest interest to these chief executives-from
their unique perspective and in their own voice," said
LAUNCHES `STYLE WATCH.'
has launched "Style Watch," an online style column
with contributions from Steven Cojocaru, who is People magazine's
West Coast style editor and author of Behind the Seams.
The site was launched Sept. 29 in conjunction with Lancome.com,
which is sponsoring a contest with entry information avaliable
through the site.
Style Watch will offer complete fashion coverage, including:
a celebrity photo gallery to be updated daily; audio commentary
from Cojocaru on celebrity fashion; fashion coverage from
all major Hollywood award shows and galas, and celebrity
fashion trends and news from the pages of People magazine.
A 100-station survey in the top 50 markets by News Generation
found 93% of stations use the Intenet as an information
source, with nearly two-thirds of them using the web 10+
times per week.
This is a 40% increase in Internet usage in a year's time,
said News Generation spokesman Curt Gill, who is in the
company's Atlanta office.
In 1999, 63% of stations preferred receiving pitches by
fax, 15% by E-mail and 15% by phone, Gill said. This year
E-mail pitches were still second to fax pitches, which are
preferred by 59% of res-pondents, but the preference for
pitching via E-mail has almost doubled since last year (now
26%). Telephone pitching is still the preferred pitching
method for 17% of respondents.
The survey found the most desirable factors in a news piece
or interview opportunity are still timeliness (34%) and
newsworthiness (28%) and the ability to localize a story
for a paper's particular market (15%).
Stations were asked in which format they prefer to receive
audio, and 48% answered RealAudio. Wav was the second most
popular format with 20% and 18% preferred MP3.
Based on this research, News Generation is launching a fully
interactive website in October.
New York Daily News has expanded its coverage of Sunday
NFL action by adding a "Super Monday" insert to
its sports section.
The 20-page section offers increased coverage of the Giants
and Jets and additional analysis from columnists. Leon Carter
is sports editor.
Huey, managing editor of Fortune, has made several promotions
and additions to the editorial department of the magazine.
Editorial promotions from writer/reporter to writer include
Julie Creswell, Jeremy Kahn and Amy Kovar.
Creswell will write for the "First" section of
the magazine and will also cover the telecom industry; Kahn
will continue to write middle-of-the-book features, and
Kovar will write for "First" and produce features.
Five reporters were promoted to writer/reporter: Maggie
Boitano, Christine Chen, Cora Daniels, Suzanne Koudsi and
Nicholas Stein. Boitano will continue to write for "Fortune
Investor" and produce features. Chen will report on
the telecom industry and will contribute to the "Web
Page," which is in the "eCompany" section.
Daniels will continue as a writer in the "On the Job"
section; Koudsi will contribute to "First," and
Stein will continue to write leads for both the "On
the Job" and "eCompany" sections, as well
as write features for the middle of the book.
The new staffers include Matthew Boyle and Brian O'Keefe.
Boyle was previously at PR Week and O'Keefe had been a reporter-researcher
at SmartMoney. Both will be covering general assignments
ECONOMY GETS EDITOR
Owen Ullmann, Washington, D.C., editor of USA Today, is
now also editor of The International Economy magazine, a
bimonthly which covers international financial policy, economic
trends and international trade.
OFFERS A PRAYER FOR SPOKESMEN
Larry Speakes, who was President Ronald Reagan's spokesperson
from 1982 to 1987, wrote this prayer for press secretaries:
"On Lord, teach me to utter words that are gentle and
sweet. For tomorrow, it's those very words I may have to
Edition, October 4, 2000, Page 7
BLAMES COMPUTERS (cont'd)
and coordination" by users of iMIS plays a big role
in the installation procedure.
calls itself "the No. 1 ranked software of its kind
with over 18,000 customers worldwide."
were made to DT but no one had responded as of press time.
Dorothy McGuinness, head of membership development at PRSA,
complained of "bugs" in the system and could not
give any firm date when it might be in operation. She is
hoping for a trial run with 10 chapters starting in January.
She said there has been "tremendous turnover in the
management" at the service company and that "we
encountered difficulties with them." She said there
are "problems with the actual programs that operate
Pisinski said. "The system has not performed as we
were told it would" and that PRSA may have to "pay
a new consulting firm to make it finally work."
Cynthia Sharpe, PR director of the AAA Auto Club in Tampa,
who raised the issue of iMIS, said that installation "has
been going on for three years." PRSA officers, however,
said the actual time period is two years. Sharpe said, "It
seemed like there were problems from the beginning."
Pisinski said, "The original provider did not recommend
the proper software for us, particularly with regard to
servicing chapters...there were arguments over what PRSA
asked for...they had changes in personnel."
Killeen Letter Blamed iMIS
The Sept. 21 letter of Killeen to the Assembly delegates
announcing the postponement of publication of the Blue Book
of members until early 2001 had also cited problems with
She wrote the installation of iMIS was a "major undertaking
begun in 1999" but that it has not been "smooth
added: "The computer conversion and rollout of the
iMIS system in June 1999 has been more complicated than
anticipated. As a result, we found ourselves faced with
poor membership data and inadequate financial information."
Teleconferences Lightly Attended
Participation in the two teleconferences Sept. 27 was light.
Only 39 of the 282 Assembly delegates were on the delegates'
call (ten asking questions or making comments) while only
six asked questions during the "leaders" teleconference
later in the day. A "blast fax" had been sent
to 400 leaders and follow-up calls or e-mails were made
to 60 when the faxes failed to go through.
This NL, which was denied access to the two calls by Pisinski,
who said the were for leaders only, called a half dozen
leaders for the purpose of having them "patch"
us through to the calls. None of the half dozen leaders
we called knew of the conference calls. The calls were mentioned
in the last paragraph of a three-page letter from Killeen.
One of the leaders arranged for the NL to listen to the
two calls. Pisinski said PRSA did transcribe or record the
calls and that no reports would be made to members about
In starting out each call, Pisinski warned participants
that "media" might be listening in. Commenting
on this warning, Margaret Allender of Allenbrand PR, Jackson
Calif., an officer of the North Pacific district, said the
leaders are "PR people" and they should "deal
with" the press listening in.
Allender Asks if Funds "Mis-used"
Allender, the first speaker on the leaders' call, said she
had heard "rumors" about "mishandling"
of funds at PRSA h.q. and that staff people may be "culpable
for the mis-use of these monies."
Allender did not return phone calls or e-mails from this
NL seeking further information on her comment.
Killeen answered there has been "no hint of that from
Deloitte & Touch." She said D&T asked about
deferred dues, payables, receivables and other "issues."
Jeff Julin of MGA Communications Denver, who is running
for "open" director against Michael Jackson and
Carole Gorney, the nominating committee's choices, asked
what was the highest PRSA's "reserves" have been
in recent years.
The leaders did not know but Killeen said D&T has told
PRSA it should have about six months of total revenues or
$4 million, in PRSA's case.
PRSA had $26,768 in cash on June 30, 2000 and six-month
CDs and other investments totaling $971,123. CPAs say that
if deferred dues are put at $1.6 million (six months' dues),
PRSA's current liabilities exceed current assets and it
The largest amount of cash/investments PRSA had in the past
ten years was in 1991 when they totaled $2.1M. Revenues
were $5.2M and the group had 15,276 members. Joe Epley was
PRSA lost more than 4,000 members this spring when the attrition
rate, normally about 12-13%, soared to 25%. McGuinness told
the Assembly conference call that renewals and new member
applications "slowed down tremendously in the summer"
but applications are again coming in. PRSA hopes to replace
the 4,000+ through new members and renewals by year's end.
Members who have learned about postponement of the Blue
Book voiced loud complaints. Fraser Seitel, editor of the
Strategist of PRSA, said, "It's important for a group
to publish a members' directory and I trust my friends at
PRSA will do the right thing." New York counselor Ed
Orgon said the directory is the "cornerstone"
of PRSA's services and that it should not be cancelled to
balance PRSA's books.
counselor Herb Kraus was appalled" and New York counselor
Bob Stone said "the entire board should resign"
if the reports about PRSA's finances are true. Others calling
for publication included Chuck Werle and Phil Dunne of Chicago,
Bob Weintraub of New York, Frank Wylie of California, and
Joe Ledlie of Atlanta. An "instant poll" being
taken by the O'Dwyer website showed a four-to-one margin
in favor of publication this year.
Edition, October 4, 2000, Page 8
1997 poll of PRSA members conducted by an outside research
firm for president Debra Miller found that only 2% strongly
supported a $25-$50 dues increase and only 1% thought dues
were "too low for benefits received"; 41% thought
dues were "too high for services/benefits received"
while 55% said they were "about right."
Thus, there was considerable sentiment against a dues hike
among the rank and file although the leaders were anxious
to end 12 years without a hike.
a nearly year-long campaign aimed at raising dues was conducted
among Assembly delegates and members, leading to the $50
hike voted last year.
But many of PRSA's members remained opposed to the jump
and 4,000 of them decided not to renew this spring (the
non-renewal rate doubling to 25%).
After all the talk of PRSA having 20,000 members, it was
faced with putting out a directory of 16,000 members in
early summer. Attempts to build membership in the summer
Dorothy McGuinness told a teleconference last week that
renewals and new member applications "slowed down tremendously
in the summer."
faced with a disaster in renewals, PRSA opted to blame the
new iMIS computer system and put out no directory out
at all in 2000. It's waiting until early 2001 when it hopes
membership will have built up again to the 20,000 level.
iMIS is also blamed by the leaders as the reason they were
so uninformed about the Society's finances.
view, however, is that this is just another example of non-communication
and mis-communication involving the h.q. staff and elected
leadership. No computer was needed at h.q. to see that renewal
checks weren't coming in at the expected rate. This must
have been known all over h.q., from the people who sort
the mail and see the window envelopes, to those who open
them, deposit the checks, check off the renewals, prepare
names for the directory of members, etc.
all these staffers and h.q. leaders kept this a big secret
from the elected leaders. Both chair Steve Pisinski and
treasurer Joann Killeen said they did not know of the financial
problems until August.
example of non-communication is the two teleconference calls
conducted last week among Assembly delegates and chapter
leaders. Only 39 of the 282 delegates showed up for one
of the calls and PRSA made no tape or transcription of it.
PRSA has no intention of telling the missing delegates what
was said. The only way the delegates can find this out is
by reading this NL or the O'Dwyer website. Only six leaders
posed questions on the other call.
of the participants in the leaders' call asked, "Suppose
it (the next $15 installment in the dues hike) is not affirmed?"
Chair Steve Pisinski noted the Assembly has the power
to do just that. It could be that the Assembly will roll
back the $25 hike granted last year. After all, 20,000 members
are not getting their 800-page members' directory this year
(which PRSA sells separately for $100). In effect, each
member has been cheated out of $100.
chair Kathy Lewton has ended, at least for her term,
the practice of PRSA leaders meeting at resort and travel
destinations (Vancouver, Lake Tahoe, London, San Antonio,
Sundance, Carmel, Montreal, Sante Fe, San Juan, etc.). All
four board meetings next year will be in New York...There
will be no ill-disguised Christmas shopping expeditions
for the 115 presidents-elect this December in New York
(with $500 in spending money provided to each participant),
as was planned (9/15/99 NL). This boondoggle has been canceled
and a June meeting instead is planned...we don't think
either iMIS or service provider Development Technologies
is to blame for the mess PRSA has made of its new computers.
Chapter demands seem to be one cause. Also, although PRSA
has complained about executive turnover at DT, PRSA itself
has not had a chief staff officers since Ellen Gerber left
in June 1999...Paul Wetzel, Boston counselor, has been
recruited as board nominee for the Northeast district after
no one voluntarily ran for the post earlier this year. Counselor
Vivian Hamilton of Alaska has agreed to fill the vacancy
for North Pacific director...what disappointed us about
the two PRSA conference calls last week was the powder-puff
nature of most of the questions. Difficult subjects like
deferred dues, no Blue Book this year, sudden departure
of CFO Joe Cussick, etc., were not brought up. Penetrating
questions about the iMIS system were not posed. Trade press
reporters would have been much tougher on the leaders. PRSA's
last press conference was in 1993.
new e-business, which has cost it $1 million so far, is
to be called "TalkingBusinessNow" when it
goes onstream. IABC still needs a sponsor to fund it. The
site will "focus on business solutions that communication
strategy can provide." Content will be on business
issues such as reputation/brand management; mergers and
acquisitions; recruitment and retention of employees, and
technology and its effect on "how we communicate."
It will cover "current business news with a communication
twist, updated daily" and provide "commentary
on the news of the day from renowned experts who take a
communication angle." There will also be "articles,
research, benchmarking material, current best practices,
knowledge products" and other resources.