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Internet Edition, January 24, 2001, Page 1


BSMG Worldwide edged out Edelman PR Worldwide and Porter Novelli for the Wine Market Council account, according to John Gillespie, WMC's president.

He said the initial budget is "in the neighborhood of $500,000'' a year, but will be hiked as the PR campaign gathers momentum.

Gillespie selected BSMG because of its commodity goods expertise, such as the "milk mustache" drive for the dairy industry and the "other white meat" effort for the pork producers.

BSMG/Chicago president Cathy Calhoun said her firm will "demystify" wine to encourage people to drink more of it.

The WMC uses BSMG sister firms Bozell Advertising for ads, and Bozell/Kamstra for web design. Gillespie said those relationships had nothing to do with picking BSMG for PR.


Porter Novelli is trying to wrest California's PR effort to discourage pregnant women from smoking from incumbent Rogers & Assocs.

Those are the only two firms to respond to the RFP put out in November by the California Children & Families Commission, according to Kristina Parham, CC&FC's deputy director of communications. Presentations are set for March 13-15.

The budget, which is funded by California's 50 cents-a-pack tax on cigarettes, is worth $36 million over the next three years.

The PR effort, however, is a complicated affair, according to the RFP. The statewide PR contractor must provide support to 58 county commissions, some of which may have their own PR agencies.

R&A started work on the account in Oct. 1999. That contract terminates at the end of March. Its budget was $4.6 million in fees/expenses.

John Aycoth, EAW Group CEO, told the world's media of last week's assassination of Congo President Laurent Kabila from Aycoth's North Carolina hospital bed where he is recovering from colon surgery...David Mortazavi joined Raytheon as PR director from Arnold PR in Boston. He has done PR work at Ocean Spray, BASF Corp. and Baxter Healthcare...Peter Delbeke, a Burson-Marsteller veteran, is now Rockwell's director of European communications in Brussels.


New York PR pro John Scanlon is counseling Rev. Jesse Jackson on how to deal with news that he fathered a child with a woman who worked at his Rainbow-Push Coalition office in Washington, D.C.

"I got involved with Jesse through a friend of a friend," Scanlon told this NL. Jackson retained Scanlon to deal with the National Enquirer scoop that received major play throughout the country. He distributed Jackson's statement-in which he asked for "forgiveness, understanding and prayers"-to reporters worldwide.

Scanlon is affiliated with WestHill Media Strategies in New York. Most recently, Scanlon helped tobacco giant Brown and Williamson dig up dirt on whistle-blower Jeff Wigand.


Leo Burnett PR, which has 132 staffers, is being merged into sister company Manning, Selvage & Lee in a consolidation move by Bcom3 Group.

Bcom3 says LBPR has $15 million in annual fees from clients such as Maytag, Coca-Cola and Oldsmobile.

Mike Grossman, SVP at LBPR, will oversee the merger into MS&L. His new title is chief integration officer worldwide for MS&L.


Sciens Worldwide PR CEO Kathy Cripps is joining Hill and Knowlton Feb. 5 as executive managing director of its healthcare group.

The 25-year PR veteran was previously at Burson-Marsteller and Creamer Dickson Basford before founding Sciens in 1991.

Cripps is leaving Sciens following the acquisition of its parent company, Nelson Communications Worldwide, by Publicis Groupe.


The expanded 2001 O'Dwyer's Directory of Corporate Communications, listing more than 11,000 PR contacts at nearly 7,000 companies, associations and government offices, is being published this week.

Hundreds of companies and associations are newly listed in the directory, which was last published in October 1999. It will now be published in January.

The 450-page directory lists companies geographically and by 36 types of industries. It is $130 from the J.R. O'Dwyer Co.

Internet Edition, January 24, 2001, Page 2


Mitchell Schrage, a New York-based attorney, has turned millions of dollars lost in uncollected fees into unexpected income for PR and ad agencies.

In 2000, his firm recovered more than $10 million, including more than $3 million in "found" fees for PR agencies.

Schrage's PR firm clients have included Edelman PR Worldwide, Cohn & Wolfe, Burson-Marsteller, and PR21. On the ad side, he has handled collections for Young & Rubicam, Wunderman Cato Johnson, ORB and DoubleClick.

Takes Strong Approach

"Because of weak collection efforts and fear of legal costs, PR and ad agencies do not take a strong enough approach on the collection of receivables and are walking away from write-offs to the tune of millions of dollars a year," says Schrage.

"Don't be so fast to put your old receivable in a drawer" should be a New Year's resolutioin for PR/ad firms, Schrage told this NL.

"PR and ad firms write off more and more money with the rationale, that it's not worth their while to pursue for various reasons. That is, until it is called to their attention that there is `found' money that can be readily accessed," he said.

In representing firms, Schrage's average time for collection is months rather than years.

"The key is to analyze each file, no matter how small the amount in controversy, as a breach of contract litigation, take immediate and decisive action and let the debtor know that you mean business," Schrage said.

"Debtors are accustomed to demand telephone calls from collection agency clerks, but when they get a draft summons and complaint with a demand for a response in 7-10 days in order to avoid litigation, in most instances, they stand up and pay attention," he said.

To avoid delinquent accounts, Schrage said agencies should require up-front retainers from start-ups; obtain details in writing confirming what's expected before work is rendered for a client, and include language in the contract that work performed is not contingent on guaranteed results.


New federal medical privacy regulations will, for the first time, permit doctors, hospitals and other healthservices and some of their business associates to use personal health records for marketing and fundraising.

The rules were included in the new federal regulations, which the Clinton Administration had touted as a landmark of patient protection.

Under the exemptions, doctors, clinics, hospitals and others that normally have access to medical records-along with business associates working under contract with them-will be allowed to send out individualized health information and product promotions, according to The Washington Post.

A pregnant women, for instance, could receive pitches about vitamins or infant healthcare products, said the Post, which pointed out the exemptions also give foundations affiliated with hospitals continued access to patient names, ages, addresses, and telephone numbers for fundraising initiatives.

Among other things, the regulations will permit pharmacies to share patients' prescription records with business associates to target patients with letters reminding them to take medicine, or to send them "educational materials" sponsored by drugmakers.

The Post said the Association for Healthcare Philanthropy was among the "most aggressive groups" to lobby for the exemptions.

William McGintly, who is president of the Falls Church, Va.-based AHP, said Mike Volpe, an independent PR consultant, handled media relations work.


The U.S. Department of Agriculture decided Jan. 11 to eliminate the pork "checkoff" program.

Bozell Chicago, which handles the National Pork Producers Council's consumer ad/PR program under the "other white meat" campaign, could lose nearly $35 million in billings.

The NPPC and a group of producers and state associations plan to seek an injunction to sustain the program, under which pork producers pay to fund marketing and educational efforts.BSMG Worldwide handles PR for the NPPC.


Kevin McKenna, 45, who has been technology editor of The New York Times, was named editor of "Circuits," the Thursday technology section.

McKenna replaces James Gorman, 51, who will move to the "Weekend" section on Feb. 1 to begin a column about the natural world and outdoor recreation. Gorman will also help to create a Times radio program based on Circuits.

Richard Meislin, 47, succeeds McKenna as technology editor. Meislin will oversee the coverage of the field for "Business Day" and other daily sections.

Meislin had been editor-in-chief of New York Times Digital, the Internet division.


Ellyn Gallagher, 40, who has owned and operated Communications Strategies, Washington, D.C., since the early 1990s, died Jan. 6. Her firm helped large companies address environmental cleanups from a PR perspective...Eugene Friedmann, 72, a former senior associate for Development Assocs. and PA officer with the U.S. Information Agency, died Jan. 11. During his term with USIA from 1955-89, Friedmann was counselor for PA at the U.S. Embassy in South Africa, and served in PA posts in Chile, Argentina and El Salvador. After retiring from the Agency, he joined Arlington, Va.-based Development Assocs.

Internet Edition, January 24, 2001, Page 3


CNN, which is eliminating some 400 jobs, is creating a new "super desk" to coordinate coverage for its various news outlets.

The "super desk," which will be located in CNN's Atlanta headquarters, will make assignments spanning all 34 TV, radio and Internet news outlets run by CNN.

Previously, each operation-like CNNfn and CNN/Sports Illustrated-decided independently on stories to pursue.

"We'll speak with one editorial voice on TV and on the Web," said Philip Kent, who is president/COO of the CNN news group.

The all-news network is also cancelling several programs in the biggest shakeup since being founded 21 years ago.

About one-third of the 400 layoffs, which represent about 10% of CNN's work force, will affect employees in Internet-related jobs. Another third will affect programming and the rest will be spread throughout the company.

The cancelled programs include four business shows ("Movers," "Your Money," "Entrepreneurs Only" and "Street Sweep"), "NewsStand" (a news-magazine show which was started after CNN parent Turner Broadcasting was absorbed by Time Warner), and Elsa Klensch's daily fashion news report.

The network will open two new foreign news bureaus, and create an investigative reporting team, and news beats for religion and education.

The shakeup also included naming new chiefs for CNN's three offshoot cable networks: CNNfn, CNN Headline News and CNN/Sports Illustrated. CNNfn's website will be fully integrated into the TV network.

Ken Jautz, former head of a German business network half owned by Time Warner, is replacing Shelby Coffey as the head of CNNfn; Teya Ryan will run Headline News, replacing Bob Furnad, who retired, and Steve Robinson was named to head CNN/Sports Illustrated.


American Prospect, which was started in 1990 as a quarterly magazine, has begun publishing 22 times a year, with special double issues every three months.

The magazine, which is based in Boston and Washington, D.C., is continuing on the same mission path, which is to "advance a liberal philosophy, politics and public life."


The redesigned Across the Board, a business magazine published 10 times a year by The Conference Board, has a new question-and-answer department, featuring opinions from top executives.

The first session of "Questioning Authority" leads off with Anita Roddick, who is the founder and co-chair of The Body Shop.
Matthew Budman, managing editor, is handling the new department.

A.J. Vogl is editor of ATB, which is based in New York.


Linda Chavez, who blamed the media for upsetting her nomination to be Labor Secretary, has resumed writing her syndicated newspaper column for Creators Syndicate.

The Los Angeles-based syndicate expects the number of newspapers carrying Chavez's column to climb to about 400, which is nearly eight times the number that now publish it.

While editorial page editors at several newspapers said they look forward to her return, a few indicated they may not run Chavez's column, due in part to her undisclosed role as an advisor to the Bush campaign while her column was in syndication.

MEDIA BRIEFS ___________________

House Beautiful's new logo-housebeautiful- gives the 105-year-old Hearst magazine a webbish-look. The new logo, which is unveiled in the February issue, is one of many changes made by new editor Marian McEvoy, who left the editorial helm of Elle Decor to take over last July as editor-in-chief of the oldest continously published shelter magazine in the U.S.

McEvoy, who is known for her daring sense of style, has also jazzed up the pages with more eye-popping color and glamorous photos. said at least 210 Internet companies folded in 2000, and nearly 60% of the shutdowns occurred in the fourth quarter of the year.

The San Francisco-based company's report said 75% of the shuttered dot-coms were aimed at a consumer audience; 55% involved e-commerce, and 30% involved content companies.

Circulation for O, The Oprah Magazine tops more than 2.5 million every month. Hearst's self-help magazine for women, which started publishing eight months ago, has 1.6 million subscribers and 1.2 million newsstand sales. Some 300,000 subscriptions were given as holiday gifts.

Slick Times, an every-other-month political satire magazine that was started in 1993, has ceased publication.

Michael Johnson, the magazine's San Diego-based founder and publisher, said the magazine's circulation had peaked at 100,000. He also made money by selling commemorative $3 bills, featuring the faces of President Clinton and Hillary Clinton, Ross Perot, Bob Dole and John McCain.

(Media news continued on next page)

Internet Edition, January 24, 2001, Page 4


Chile Pepper, a Fort Worth-based monthly magazine, has teamed with Johnson & Johnson and Merck Consumer Pharmaceuticals to promote a new heartburn remedy called Pepcid Complete.

Rowland Communications Worldwide, which handles PR for Pepcid Complete, created the alliance with the magazine, which features articles about hot peppers.

To kick off the promotion, the PR firm held a "Sizzlin' On The Street with Pepcid Complete" event on Jan. 17 in front of the New York Stock Exchange. Invitations and press information were mailed to reporters in a red plastic fire plug. The fire plug also contained a copy of the February issue of the magazine and several products made with hot peppers.

Rowland has outsourced national media relations to Kevin Bart Communications, a firm based in Lawrenceburg, Tenn., near Nashville.

Bart's firm is handling Dr. Stephen Piekin, a Philadelphia-based specialist in gastroenterology, who is a paid spokesman for Pepcid Complete.

Piekin has appeared on a syndicated TV program and will be featured in an article that will appear in the "Heartburn" section of Women's World magazine next month.

Joel Gregory, who is publisher of Chile Pepper, said the Rosen Group, a New York-based PR firm run by Lori Rosen, has been retained to promote "both the magazine and the movement."


Ken Kurson, 32, who specializes in writing about personal finance and investing, has joined Money Magazine as editor-at-large.

Kurson, who was profiled by The Industry Standard as "the Martha Stewart of personal finance," will write a wide variety of stories for the magazine as well as the website.

He wrote the cover story for the Forbes 400 issue this past fall.

He also does a monthly commentary for National Public Radio's "Marketplace" and is a weekly guest on both AOL's Odeon chat and on Yahoo Finance, broadcasting live from the Nasdaq in Times Square, New York.

MEDIA BRIEFS _____________________

JD Jungle, a new magazine targeted at law students and young law firm associates, will begin publication in April.

About 80,000 copies will be distributed free to law schools and selected law firms by New York-based Jungle Interactive Media, the company that recently started MBA Jungle.

Style Ideas will be relaunched by Home Depot as a decorating resource for interior design and home renovation projects.

Redwood Custom Communications, Toronto-based publisher, was recently given a contract by the Atlanta-based retailer to create the new magazine, which had been produced by Meredith Corp. SI will be published on a quarterly basis.

Redwood is also relaunching Sears' Mature Outlook this spring.

The quarterly magazine, with a circulation of 410,000 copies, targets men and women over 50 who like to travel.

The GrandParent Poll has released a report that shows two out of every three people in the U.S., who are over 40, are grandparents. The Princeton, N.J.-based pollster said these 80 million grandmoms and granddads are spending more than $75 billion every year on their grandchildren.

The report, entitled "80 Million Eager Consumers: The Grandparent Market and How to Connect with It," is $95. The GrandParent Poll, P.O. Box 7231, Princeton, NJ 08543.

The Senior Media Directory 2001, which rolls off the press in March, will list newspapers, magazines, newsletters, syndicates, daily newspaper sections, columnists and radio and TV shows in the U.S., Canada and Mexico that target people 50 and over.

According to the directory's Eagan, Minn.-based publisher, there are 68 million people over age 50 who have a combined after-tax annual income of $900 billion.

The directory sells for $110. 952/894-6720.

PEOPLE ______________________

Jon Gluck, who was editor-in-chief of MBA Jungle, has joined Men's Journal as senior deputy editor.

Harry Jessell, editor of Broadcasting & Cable since 1997, was named editor-in-chief of the magazine, succeeding Don West, who will become editor-at-large. P.J. Bednarski remains the magazine's executive editor and Marianne Paskowski moves up to editorial director for the Cahner Television Group, which includes B&C, Cablevision and Multichannel News, where she remains editor-in-chief.

Ken Kerchbaumer, who was B&C's associate editor covering Internet and interactive issues, was named assistant managing editor, responsible for B&C's special reports.

Kristen DelGuzzi, 31, was named editor of The Cleveland Plain Dealer's "Personal Finance" and "Personal Tech" sections, replacing John Kroll, who is now the PD's deputy business editor. DelGuzzi is at 216/999-4152 or [email protected].

Patricia Panchak, previously executive editor, was promoted to editor-in-chief of Industry Week. She joined the Cleveland-based publication in 1995 as managing editor.

Internet Edition, January 24, 2001, Page 7


A PR account for Kids in a Drug-Free Society will be put up for bidding sometime later this year, said Ron Sconyers, president and CEO of KIDS.

The Robert Wood Johnson Foundation gave $2.6M for KIDS in 1999, of which $592,000 has already been spent.

The remaining $1.8M is expected to be received and spent by June 2001, said the 1999 audit of the PRSA Foundation.

Jackson, Jackson & Wagner, Exeter, N.H., headed by former PRSA president Patrick Jackson, won the initial $200,000 pilot program for KIDS in competition with several other unnamed firms.

The pilot program, consisting of a 10-hour training course conducted in the workplace on the employers' time, is being tested in Indianapolis, Atlanta, Cleveland, Dallas, and Portland, Ore.

Target audience is parents of "tweenagers" (11-13 age group). It is felt that children in this age bracket can be influenced by their parents.

Sconyers said a further RFP for enlarging the program to the entire country will be sent out and the program is to start in early 2002. He said the RFP will be publicly announced.

The last one was sent to several dozen firms but no public announcement of it was made. At that time, KIDS was being operated as part of the PRSA Foundation. Counselor Joseph Curley was president of the Foundation in 1999. Jean Farinelli was Foundation president in 2000 and David Grossman is 2001 president. KIDS is now operated separately from the PRSA Foundation. Ray Gaulke, former president and COO of PRSA, is working full time now on fundraising for the PRSA Foundation and KIDS.


Three-quarters of the members of Women Executives in PR who responded to a year-end poll believe there is still a "glass ceiling" in their industry that limits pay and career advancement for women.

Some male PR pros, meanwhile, said there is bias against men in the industry.

WEPR members said it will take stronger financial skills and more mentoring by women to break throught the ceiling.

Others saw more hope for the 20-something generation because younger men are used to accepting women as equals.

One responent said: "The glass ceiling will break when pigs fly" and another said: "The CEO has to die."

Betsy Nichol, WEPR president, called the results of the survey "significant" because the group's members are "thought leaders of the women's professional community, operating in the communications capital of the world."

She agrees with recent statements by Harold Burson, Daniel Edelman and Al Golin (11/1/00 NL) that more men need to be recruited for PR. They said their staffs are upwards of 70% female.

The "glass ceiling" for women seems to be more evident in corporations, said Nichol. She agreed there cannot be a glass ceiling in PR firms that are either 100% women or close to that.

See Bias Against Men

However, some PR pros said there is evidence that men face discrimination in PR.

PR Seminar, the annual gathering of more than 150 blue chip corporate PR executives and a dozen heads of big counseling firms, inducted 13 new women members and 14 men in 2000. In the previous year, 22 men and 16 women were recruited. Attendance in 2000 included 43 and 90 men. Women members are less likely to attend PRS and less likely to bring their spouses. In one recent year, 65 men took their wives; 56 came without wives; 11 women came with their husbands, and 23 came without their husbands.

In 1970, the 125 attendees at PRS only included three women, Leone Baxter of Whitaker & Baxter; Caroline Hood, Rockefeller Center, and Denny Griswold, founder of PR News.

The senior roundtable of the National Investor Relations Institute (100 IR pros in senior jobs) reported that women members of the Roundtable in 2000 averaged $210,000 in pay while men only averaged $200,000.

Business Week Wrote of 'Velvet Ghetto'

Business Week (May 8, 1978) wrote of `Velvet Ghetto' Business Week (May 8, 1978) wrote that because of affirmative action, some companies were "loading their PR departments with women to compensate for their scarcity" in jobs that led to top management. Some companies were overpaying these "affirmative-action exhibits" to compensate for their dead-end career jobs, BW added.

An unnamed PR woman at a Texas company told BW that a "velvet ghetto" was being created for women in corporate PR units. A quote from another woman PR executive was that "PR is a very safe, ladylike position because you are not in competition for upper-management jobs." New York recruiter Bill Cantor was quoted as saying that within 20 years half of PR pros could be women.

In 1984, six years after the BW story, IABC commissioned "The Velvet Ghetto," a study of the impact of women on PR. Carolyn Cline, Ph.D., of the University of Texas at Austin, was research director. Among those assisting were Hank Smith, Elizabeth Toth, Judy Turk and Lynne Walters.

Conclusions were that men appeared to be "more serious" about their careers than women; other callings such as nursing and teaching had lower status when they became dominated by women, and PR women were paid less than men.

This last point was disputed by Jim Hutton, journalism professor at the University of St. Thomas in St. Paul. He said that women tended to avoid manufacturing and industrial jobs, where the pay was the best. He said no evidence had ever been presented to show women were paid less when all variables were included.

Internet Edition, January 24, 2001, Page 8



"Sell" recommendations for stocks are so rare at Wall Street houses that one brokerage, Gerard Klauer Mattison of New York, is offering a cash bonus to his analysts for giving such advice. The winner among his 23 analysts will be the one whose selection drops the most in 2001. Sean McGowan, head of research at the firm, told New York Times columnist Gretchen Morgenson that advising the sale of certain stocks helped his career even though it made companies mad at him...the Securities Industry Assn., which represents brokerage firms, has notified its members that "confidence in their advice has fallen significantly." It e-mailed them the Dec. 31 New York Times expose by Morgenson on the lack of negative stock reports...the National Investor Relations Institute, although it has a strong anti-blackballing rule, blackballed this NL. It sent us the 1999 directory of members but didn't send us the 2000 directory and cut us off its mailing list for its monthly NL and quarterly magazine. We must have said or asked the Wrong Thing. When we asked for the 2001 directory, we were told by NIRI president Lou Thompson that the board had voted not to give it to us, sell it to us, nor allow us to join NIRI and obtain it that way. How can a reporter cover NIRI without the directory of members, we asked? NIRI's answer is that no reporters are allowed to have the directory. We hope a member will send us one or sell us one...the question remains: what useful purpose do IR pros serve when 99% of analyst advisories to the public are "buy" or at least neutral. Were there no IR pros, this percentage would be the same because of two powerful forces at work on analysts-fear of being blackballed by companies and fear of losing investment banking business. The brokers desperately need the banking business because deregulation cut commissions from 10 cents a share to below a penny...blackballing comes in numerous forms and only rarely is the victim ever given something concrete to complain about. It's the opposite of being stroked (which may include dinners, lunches, shows, and other entertainment by executives and their spouses; calls immediately answered; packages delivered by messenger; inside studies leaked to the favored person; all employees being primed to jump when the favored person calls, etc.). Victims of blackballing and "greyballing" find that obtaining any information is like pulling teeth; calls are returned days and weeks later, if at all; secretaries turn on their coldest, most officious voices when dealing with the target; sought-after executives are almost never available; the stream of reports from the company or association is cut to a trickle, etc...Women Executives in PR (page 7) says there is a "glass ceiling" for PR women but we don't find much evidence of it. About half of newcomers to PR Seminar are now women and the top IR women make more than men. Harold Burson, Dan Edelman and Al Golin, who head three of the biggest PR firms, said women predominate at their firms and have at least equivalent titles and pay with men. The staffs of PRSA, IABC and NIRI are largely female. PRSA has 32 women and six men; IABC, 18 women and ten men, and NIRI, 14 women and one man (Lou Thompson)...former PRSA president and COO Ray Gaulke, in joining the PRSA Foundation in a fundraising capacity, has his work cut out for him. Contributions were $110,715 in 1999; $93,066 in 1998; $77,380 in 1997; $97,453 in 1996 and $52,605 in 1995. Only three firms gave as much as $5,000 in 1999: Prudential Insurance, Magellen Behavioral Health, and Green Spring Health Services. Gaulke's salary at PRSA was $230K in 2000. He also received $27,936 in pension benefits plus health insurance...we would ask this question of both the male and female executives who are members of PR Seminar: what books, papers, speeches or public statements have you ever made to justify your lofty titles and salaries? Mitchell Schrage (page 2) helps PR firms to collect debts. His services are going to be in demand because many high-tech clients either don't have the money to pay their PR firms or feel few results were obtained...clients who feel they have gotten little or nothing from their PR firms and shouldn't have to pay have a precedent case in N.Y. Civil Court in 1998. Judge Martin Shulman ruled that defendant Michael Wolff only had to pay fees to Michael Kaminer PR for the months in which Kaminer obtained press placements (July 1998 O'Dwyer's PR Services Report)...while some firms condemned that decision, media-oriented PR firms hailed it and still do. "We do not take months to prepare elaborate and confusing so-called strategic programs and then crank in the media at the last stage," said one such firm. Small and medium-sized firms, which are in intense competition with the big firms, emphasize that principals at their firms work on accounts and not juniors. They also say that certain big PR firms that are highly protective of client interests have been so unresponsive to major media so often that their names are anathema in newsrooms. This is the real reason why such firms give media relations short shrift, they say. Clients should always talk to medium and small PR firms as well as the majors...the Jackson, Jackson & Wagner "PR" program for KIDS (1/17 NL) is typical of current offerings. Elements include "strategic audience targeting, research, communication, opinion leader networks, ambassadors, behavior training techniques and participative group activities." There was no mention of the media in this $200K pilot program.


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