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Internet Edition, July 11, 2001, Page 1


Pioneer Electronics named GCI Group as "agency of record" in a pitch that came down to Edelman PR Worldwide, Magnet Communications and Wilson McHenry Co., according to Jake Drake, senior VP/general manager at GCI/Los Angeles. The account bills in the $1M range.

Amy Friend, director of PR for Pioneer USA, said GCI was selected because the firm understands how video and audio products are converging in both the home and mobile entertainment markets.

Drake said Pioneer will be the cornerstone of GCI's new digital lifestyles practice. He will handle the account with Melissa Schumer, who was recently recruited from News Corp.'s digital media unit.


Rep. Gary Condit has hired veteran Washington, D.C., PR counselor Marina Ein to deal with the Chandra Levy connection.

"We were hired last week at the recommendation of his lawyers," Ein told this newsletter. "It's been very busy," she added.

Condit has been criticized by the media for his failure to discuss his relationship with intern Levy, who has been missing since May 1.

His lawyer, Abbe Lowell, defended that silence during talk shows yesterday. "It's not important that you know the nature of the relationship," Lowe said on CBS' "Face the Nation."

Condit has given the police every shred of information, Lowell told CNN.

Ein Communications counts the Milken Institute for Job & Capital Formation, CapCure, National Journal, Legal Sea Foods, and A.T. Kearney Executive Search among clients.


Lou Hammond & Assocs. has picked up a six-figure, three-year PR contract from the Palm Beach County Convention and Visitors Bureau, according to Warren McLaughlin of the CVB.

Five firms pitched the bureau for its international and U.S. account, which Hill and Knowlton had for six years. Those firms made hour-long presentations before the CVB's board of directors June 12, McLaughlin said. The contract begins in October.

Palm Beach County covers 2,578 square miles of Florida, including part of the Everglades. A $74 million convention center is slated to open in 2003.


The 2001 edition of O'Dwyer's Directory of Public Relations Firms, the biggest-ever published by J.R. O'Dwyer Co., is now available. The 600-page directory features more than 2,900 PR firms and PR departments of advertising agencies and their branches. It ranks firms by fees, and identifies firms active in specialized areas such as investor relations, healthcare, high-tech, beauty, travel and sports.

Publisher Jack O'Dwyer has updated his article "How to Hire and Get the Most from Outside PR Counsel" for the directory, which also has an article by PR Counselor Fraser Seitel on hiring a firm from the client's point of view.

The directory is $175 from the O'Dwyer Co.


David Walke will step down Sept. 1 as senior managing director of Morgen-Walke Assocs., the firm he co-founded 19 years ago with Lynn Morgen, who left last year.

Robert Jones, 45, managing director, will succeed Walke and has been named CEO. He also will join the operating board of Business Communications International, an arm of Cordiant Comms. Group.

Terry Rooney, who had been with M-WA since 1983, left the firm July 9 for a director of marketing and communications post at M&R Capital Management, New York.


Howard Rubenstein says client Lizzie Grubman, the 30-year-old celeb publicist, was involved in a "horrible accident" when her SUV crashed into a crowd of nightclub goers at the Conscience Point Inn in Southampton, N.Y., on July 7, injuring 16 people.

Grubman, who left the scene, was arrested and has been charged with seven counts of assaults and reckless endangerment. She could face up to 151 years in jail.

Grubman, the daughter of high-powered entertainment lawyer Allen Grubman, was allowed to go free after posting $25,000 bail. She is scheduled to return to court on Sept. 5.

Grubman's ex-boyfriend, Andrew Sasson, is a part owner of Conscience Point and the owner of another Hamptons nightclub, Jet East. Both nightclubs are clients of Grubman.

Rubenstein told reporters there was no evidence that Grubman had been drinking.

Internet Edition, July 11, 2001, Page 2


Investor relations people should stop complaining about Regulation FD because it provides them an "unprecedented opportunity" to take over the entire communications function, according to Korn/ Ferry International's Bob Woodrum.

Reg FD gives IR pros the "charter to manage all of a company's communications," he told the National Investor Relations Institute's conference last month.

Woodrum urged IR people to broaden their skills to include "media relations, crisis communications, brand management, employee communications and all other aspects of corporate communications."

That will give them the background needed to operate in the new transparent world brought on by Reg FD, he said.

He warned against complacency. If IR people don't add new skills, there's a danger that a corporate PR person or a lawyer could emerge as the "senior executive responsible for all communications."

Transparency is trend

Reg FD, to Woodrum, is just the "latest step in forcing companies to act in a more transparent way."

He noted how Progressive Corp. recently became the first company to announce it was going to provide detailed financial information on a monthly rather than quarterly basis.

"It doesn't take much to image the day in the not-too-distant future when even a company's daily reports on inventory, cash on hand, sales, receivables -in effect all of a company's transactions-will be available online in the new world of the Internet and instant worldwide communications," said Woodrum.

Though Woodrum conceded the current economic lull has taken its toll, the future of IR is golden, he said.

There's a war going on in corporate America for executive talent, said Woodrum. That's going to intensify due to demographic trends. "The supply of 35 to 44-year-olds in the U.S. will decline by 15 percent during the next decade," he noted.


Bobby Zarem, who has been a PR pro for nearly 40 years, is writing his memoirs.

He is having a tough time remembering every anecdote, feud and fiasco during his colorful career, according to Jared Paul Stern, who is editing "Page Six" in The New York Post while Richard Johnson is traveling.

Zarem, who takes credit for creating the "I Love New York" campaign, is poring over a mountain of press clippings and pitch letters he pulled out to jog his memory.

Many of today's top publicists got their start working for Zarem's New York-based firm.

Maggie Williams, who joined Fenton Communications as president last September, has left the Washington, D.C.-based firm. She was former chief of staff to former First Lady Hillary Clinton. Kristen Wolf is FC's COO, while David Fenton remains chmn.


The Government of Chile has selected Fleishman-Hillard to guide its effort to win a Free Trade Agreement with the U.S., according to Rory Davenport, F-H's senior VP in Washington, D.C.

Chile considered a number of top-flight PR firms to handle its overall campaign, and smaller shops for specific categories such as media relations and grassroots PR, Davenport told this NL.

Chile has one of South America's most vibrant economies. It enjoyed an eight percent average growth clip during the '90s, but slipped into a recession in 1999-the first time in 15 years that Chile's economy stalled.

The country has been under civilian rule since 1990 following an election that replaced the dictatorial military regime of Augusto Pinochet.

Davenport expects the White House and Chile will iron out negotiations for an FTA by the end of the year. "The Congressional focus will be next year," he said.

Davenport, who manages F-H/D.C.'s international and political affairs, will be assisted by Jim Mulhern, senior VP who specializes in agricultural trade policy, and Jon Huenemann, VP and former assistant trade representative.

Huenemann was on the U.S. negotiating team dealing with Chile joining NAFTA.


Avanir Pharmaceuticals has hired the Financial Relations Board/BSMG Worldwide to bolster its image on Wall Street.

CEO Gerald Yakatan called FRB/BSMG a "well-established leader in the investor relations practice."

He hired the IR firm to "help relay our achievements and prospects to the investment community."

A recent achievement of the San Diego-based firm was cutting a distribution deal with Glaxo-SmithKline to market its Abreva product in the U.S. and Canada.

The Food and Drug Administration recently okayed Abreva, a cold sore remedy, for over-the-counter sale.

Avanir is looking to sign other Abreva distribution deals with drug companies in Japan, Korea, Israel and Western Europe.

The company recorded a $418K profit for the six-month period ended March on $7M in revenues. That compares to a $6.5M loss for the year earlier period.

Avanir's stock trades on the American Stock Exchange at $6.12. Its range is $9.50, $2.25.


Nike has named Hauser/Bragg, a Chicago-based PR firm, to handle PR for Goddess, a new chain of retail stores that will begin opening in 2001 and 2002.

Five PR agencies from around the country made presentations in the heated review.

H/B had worked on the relaunch of the Nike Town store in Chicago.

Internet Edition, July 11, 2001, Page 3


The National Safety Council, a Washington, D.C.-based nongovernmental, nonprofit group, is conducting a PR campaign to ease the public's fear of radiation by asking the news media to run more stories that focus on safe uses of radiation.

The NSC's Environmental Health Center division is offering journalists suggestions for story ideas, contacts and resources, and samples of media coverage of radiation issues.

"We hope the guidebook will help journalists understand a range of radiation issues including types of radiation, potential health effects, nuclear waste repositories and roles of federal, state and local agencies," said Bud Ward, executive director of EHC.

The guidebook urges reporters to balance the benefits and risks of radiation and to keep the risks of radiation in perspective with other risks.

"Nuclear energy and radioactive waste are newsworthy because the potential environmental and health risks of radiation are a concern to many readers and viewers," the press guide states.

"If news stories focus only on dangers, they may miss opportunities to inform audiences about ways in which they can impact government and corporate decisions to reduce radiation hazards," says EHC, which offers 12 story ideas.

It suggests a story about a local electric utility that is drawing power from a nuclear generating plant. "Go to the NRC and state regulators to check out its safety record. What, if any, releases of radiation have occurred over the years and what level of risk did they present? Has the company addressed the problems?", the guidebook asks.


Fox News Channel wraps itself in slogans like "Fair and balanced" and "We report, you decide," but a new study by Fairness & Accuracy In Reporting found a Republican tilt in the network's news.

In a study of interviewees on the network's political news show, "Special Report with Brit Hume," FAIR found that of 56 partisan guests in a five-month period, 50 were Republicans and six were Democrats.

During the course of the study, 65 of the show's total of 92 guests (71%) were avowed conservatives. Conservatives outnumbered all other points of view, including non-political guests, by a factor of more than 2 to 1, FAIR said.

As a comparison to Special Report, FAIR studied interviewees on CNN's "Wolf Blitzer Reports" over the same period, and found of 67 partisan guests, 38 were Republicans and 29 Democrats- (57% to 43%), with 35 conservatives to 74 non-conservatives (32% to 68%).

Special Report also featured only eight female guests and six people of color, making for a guest list that was 91% male and 93% white.

FAIR is headquartered in New York.


Popular online news sites are using more "unadulterated" press releases for content to keep costs down, according to Business 2.0 magazine.

"That's good news if you are a company or PR firm trying to plug a product or service," says Joanne Helperin, a Los Angeles-based contributor.

Her article in the May issue said the exact number of news destination sites and sites featuring news "areas" is almost inestimable. She cites figures provided by Media Metrix that shows almost 42 million users visit the top 10 general news sites.

"Given such competition, even sites with professional editorial staffs need such frequent refreshing that PR tends to slip into places that, in the print world, might be verboten," said Helperin who lists these 15 websites as the biggest users:; America Online; CNET; E*Trade; Excite; Lycos; Motley Fool;;;;;;; Yahoo!, and

PLACEMENT TIPS ___________________

David Grant, president of LVM Group, recently arranged a meeting for a client with reporters and editors of The New York Times. Just as the session was ending, he said he turned to his hosts and asked a question long on his mind: "Why does Donald Trump get quoted so much in the press?"

The immediate response from no fewer than three reporters was: "He calls us back right away, no matter where he is."

Luce Press Clippings says many publicists mail news releases to a list of 200 (or more) daily newspapers that includes:

-All newspapers with a daily or Sunday circulation of over 100,000.

-The top newspaper in states that do not have newspapers over 100,000-circ. (AK, ID, KS, MT, NH, ND, VT, WV and WY).

-Newspapers in the top 100 metro areas or markets of special interest, such as cities in which the company is located.

A chart of the "Top 100 Dailies" can be obtained free from Luce Press Clippings ([email protected]), 42 S. Center, Mesa, AZ. 85219; 800/528-8226 or Dick Wiener at 212/687-2945.


The National Assn. of Securities Dealers has proposed a rule requiring that security analysts who give investment advice on TV or radio programs disclose their personal holdings and investment bank relationships.

Under the rule, an analyst making a recommendation would have to reveal any financial interest he or she holds in the security or whether an account managed by the analyst includes any such holding.

(Media news continued on next page)

Internet Edition, July 11, 2001, Page 4


U.S. News & World Report is killing its most successful section, "News You Can Use," and dropping its separate "World Report" section.

The changes were made by Brian Duffy, who replaced Stephen Smith as editor last month.

The back-of-the-book "News You Can Use" section will be repackaged into a series of more targeted sections, such as "Health and Medicine" and "Culture and Ideas."

International news, which was covered in the "World Report" section, will be covered in an all purpose news section.

The current "Business and Technology" section will be repackaged as "Money and Business," and "Science and Ideas" will become "Science and Technology."


C-Town and Bravo supermarkets, which are operated by Krasdale Foods, are running ads again in The New York Daily News.

The decision to resume the ads comes a week after the News published the last in a series of ad supplements that contained complimentary articles about the supermarket industry.

The two supermarkets had cancelled their ads more than a month ago after the Daily News pub-lished a series of articles, entitled "Dirty Rotten Shame," that said their stores were too dirty to meet state standards.

Other supermarket executives who attacked the report, saying it was based on outdated records, also pulled their ads, leaving Key Food as the only major supermarket to continue weekly ads in the News.

John Catsimatidis, the chairman of Gristede's supermarket, which pulled its advertising and stopped selling the News in stores on May 3, said the advertorials had not changed his mind about not advertising in the paper. He wants an apology from the editors and reporters involved in the original story.

Associated Supermarkets officials also said they did not have immediate plans to start advertising in the paper again.

The New York Post has picked up advertising from Associated and Met Foods.

PEOPLE ________________________

Martin Baron, 46, executive editor of The Miami (Fla.) Herald, will become editor of The Boston Globe on July 30.

Tom Fiedler, 55, was named to succeed Baron as executive editor of The Herald. Fiedler was the Herald's editorial page editor.

Baron will replace the retiring Matthew Storin, who has been editor since March 1993.

Lesley Jane Seymour, 44, was named editor-in-chief of Marie Claire's U.S. edition. Seymour, who was editor-in-chief of Redbook, is replacing Glenda Bailey, who recently left to become editor-in-chief of Harper's Bazaar. Bailey replaces Kate Betts.

John Montorio, associate managing editor of The New York Times, is joining The Los Angeles Times as editor of the paper's many feature sections.

John Macdonald, who was named travel editor of The Seattle Times in 1982, has retired.

Ken Kurson, 32, a Money magazine editor-at-large, is writing a book with New York Mayor Rudy Giuliani. The book, which is tentatively titled "Rudy Rules," is about rules Giuliani has used to run the city and could be used to turn around a business.

David Andelman was promoted to business editor of The New York Daily News, succeeding Scott Wenger, who was named deputy metropolitan editor.

Tangie Newborn is the new executive director of the National Assn. of Black Journalists, headquartered in Adelphi, Md.


U.S. Postal rates, which went up on Jan. 7, went up again on July 1.

Media Distribution Services, a PR media, printing, mailing, fax and e-mail service firm, provided this summary of key postal rate increases:

First-class mail-The single piece, first-ounce letter rate remains at 34 cents. The additional ounce increased from 21 cents to 23 cents. All card rates increased by one cent each.

Business reply mail-For basic and high-volume business reply mail, the card rate increased to 21 cents. For qualified business reply mail, the card rate increased from 17 cents to 18 cents. The extra ounce for all BRM went from 21 to 23 cents.

Priority mail-Rates for packages over two pounds increased by varying amounts.

Express mail-Express mail rates increased 1.5% accross the board with increases ranging from 15 cents to $1.80 per piece. The Express Mail Post Office to Addresses service half-pound rate increased by 20 cents to $12.45, and the two-pound flat rate went up 25 cents to $16.25.

Periodicals-Overall, periodical mail rates increased by an average of 2.6%. The 5% differential for nonprofit remains the same.

Package services-Parcel Post retail rates increased 0 to 88 cents depending on zone and weight. Parcel Select increased by 0 to 66 cents depending on destination and weight. Bound Printed Matter rates increased 5-41 cents depending on zone and sort. Media Mail first pound rates increased by three cents across the board.

Special services-The fee for Certified Mail went up to $2.10. Domestic Money Orders went up 15 cents. They now cost 90 cents.

Internet Edition, July 11, 2001, Page 7


Business communicators must think of themselves as businesspeople first and communicators second if they are to survive in an era of severe competitive forces, author Roger D'Aprix told the International Assn. of Business Communicators June 25.

D'Aprix told the IABC that communicators need to be connected to the "business of business."

More than 1,500 IABCers were in New York for the June 24-27 meeting at the New York Hilton.

The bottom-line oriented economy has resulted in 33 million Americans now working in their own businesses, D'Aprix said.

Downsizing became a standard corporate policy with 41 million Americans losing their jobs between 1981 and 1995, he noted. Most switched to lower-paying posts. Companies now tend to keep a lean internal force and farm out work to vendors and outside contractors, he said.

About one-in-four of those in the workforce are now working as "free agents," he noted.

Communicators need to be "intimately connected to the business of business" if they are to succeed in the current climate, he added.

Work Environment Is Different

He contrasted the forces evident in today's marketplace with the work environment of the 1950's when he started out as a writer at General Electric.

He described a less competitive, slower-moving business world where workers had a "social contract" with their employers and expected jobs that lasted decades.

Internal communicators acted more like "reporters," covering internal events. Companies had a top-down, "paternalistic" style, he said. The emphasis in communications was on "need-to-know," he added.

Competition from abroad, the oil crisis of the '70s and the emphasis on profitability of all elements of a company were among many forces changing that world forever, he said. "Companies had to make sure they did not disappoint the analysts," he said.

IABC on Track Financially

Leaders of IABC told this NL that the association, which has more than 13,000 members, is "on track" financially after several months of reorganization.

Louis Williams, acting president, said the group has about a half million in reserves and has set a goal of $3 million in reserves (which would be half of its $6 million revenues).

The 2001 annual conference in New York will clear more than $300,000 he said, with about $200,000 of the profit coming from sponsors. The meeting had about 30 exhibitors.

Charles Pizzo, outgoing chairman, said the group has pursued a policy of being "open" with its members about its financial problems while also pursuing a policy of "fiscal prudence." As a result, he said, the membership renewal rate has increased.

The TalkingBusinessNow web initiative is being incorporated into IABC's regular website.


Abercrombie & Fitch is the target of a boycott organized by Illinois Lieutenant Gov. Corinne Wood for "peddling soft porn in the guise of a clothing catalog."

On her website, Wood charges that A&F's racy catalog is "glamorizing indiscriminate sexual behavior among unsophisticated teenagers that are not possibly equipped to weigh against the dangers of date rape, unplanned pregnancies and sexually transmitted disease."

A&F's publication "not only flaunts page after page of fully and partially nude young people, it also features them in sexually explicit positions, in groups more often than not," says Wood on the site.

She's upset especially because "young teen and pre-teens" are key markets for A&F.

"Visit a middle school and you willl see the A&F logo on plenty of T-shirts and sweatshirts.

"Most parents would not let their young children wear the Playboy bunny logo or tuck a Hustler magazine into their backpack," says Wood.

The politician launched the campaign after her daughter brought home an A&F catalog.

An A&F spokesperson could not be reached for comment. The company contends that it requires identification before shoppers can purchase its catalog, which also features articles.

Edelman PR Worldwide has picked up the Mutual of Omaha account in a competition that included "five of the top 10 PR firms," said Kathy Olson, VP-comms. at the insurer. Edelman/Chicago will handle PR, consumer outreach and issues management...Saab Automobile AB has consolidated its 25-member PR firm team to one firm, GCI Group. Bob Feldman, GCI CEO, told this NL Saab, a unit of General Motors, represents a "significant piece of new business."...Wm. Wrigley Jr. Co. is close to signing an outside PR firm for the first time in its history. At least four Chicago-based firms are in the running to handle the $2B+ food processor.


Nathan's annual hot dog eating contest at Coney Island, N.Y., has become an international publicity event. The July 4th event, which was started about 25 years ago by Max Rosey, a Coney Island press agent, was handled for the fifth year in a row by Shea Communications.

The New York-based PR firm got Mayor Rudy Giuliani to introduce the contestants on July 3. Several news people were on hand to cover the intro-ductions of the contestants who donned t-shirts emblazoned with the Nathan's Famous logo.

The event was aired by several TV stations, including the networks and CNN, and covered by newspapers from Japan, London and Spain, according to Shea.

A 23-year-old Japanese business student Takeru "The Tsunami" Kobayashi won the contest, downing a record 50 hot dogs and buns in 12 minutes.

Internet Edition, July 11, 2001, Page 8


Rep. Gary Condit has finally hired PR help to deal with the worldwide media concerning his missing intern Chandra Levy. Upon recommendation of legal counsel, Condit has hired a Washington, D.C. PR veteran Marina Ein. It's about time. The Congressman committed the classic mistake of relying on lawyers, rather than PR pros to deal with the media. Their attempt to show Condit busy at work and fully cooperating with the legal investigation into Levy's disappearance badly backfired. PR people are in tune with the needs of today's all-consuming media. Condit's lawyer, Abbe Lowell, didn't even recognize the importance of feeding The New York Times, which sets this nation's news agenda. The Times, on July 9, sniffed that Lowell had not returned phone calls from its reporters for several days. A well-balanced Times piece would have provided Condit a platform to make his case one way or the other. The report would have been picked up in the U.S. and throughout the world. Instead, Lowell chose to appear on CBS' "Face the Nation" (and other TV talk shows) on July 8 to blast the media for speculation that Condit was having an affair with Levy. "It's not important that you know the nature of the relationship," said Lowell. Meanwhile, police sources have told CNN that Condit admitted having an affair with Levy, and her family is demanding that he take a lie detector test. Ein told this NL she was just hired by Condit, and things have been crazy. She can do no worse than Condit's legal spokesman.

Where are the good corporate citizens? A Hill and Knowlton survey finds that nearly 80 percent of American consumers take good corporate citizenship into account when making a purchase decision. The problem is that most Americans can't find any good companies. Less than two percent of the 2,594 respondents consider U.S. companies as "excellent" corporate citizens. Only a quarter of respondents rated American companies "above average," while 53 percent feel U.S. companies do a below average job when it comes to being a good corporate citizen. H&K also found a high degree of "cynicism" regarding the actions of companies and their executives. Three-quarters of respondents believe companies give to charity for PR purposes. The respondents also don't trust CEOs acting as corporate spokespeople. Harlan Teller, director of H&K's corporate practice, says the report shows that companies are facing "progressively sophisticated consumers." Harris Interactive conducted the survey for H&K, which is called "Corporate Citizen Watch." It makes a strong case for the need of Corporate America to burnish its image.

How the mighty have fallen. That's the take on Comcast's unsolicited $44.5 billion bid for AT&T's cable operations. The bid offers "fresh humiliation to AT&T and its CEO Michael Armstrong," said on July 9. If Comcast puts off the deal it will be a "humiliating turnabout" for Armstrong, said The New York Times. The Times claims Armstrong is open to the deal, but is concerned about "social issues." That means he worries that he won't be running the show if AT&T sells out. Armstrong had intended to run AT&T cable once the company completed its planned break-up into four separate businesses. The former IBM executive has brought nothing but grief to AT&T investors since he took over in 1997. Armstrong spent $90 billion for acquisitions to make AT&T the biggest cable company with 16 million customers. Since the end of 1997, AT&T's stock dropped 50 percent, while the S&P 500 index rose 26 percent, noted Forbes.

Cuts ad growth forecast. Publicis Groupe CEO Maurice Levy, last week, said the worldwide advertising market will grow one or two percent this year. That's down from a three to four percent rise that he predicted in June. Levy's announcement triggered heavy selling of shares in Publicis and its French cousin, Havas Advertising.

Take a grain of salt with the Wall Street report. The Securities and Exchange Commission warned investors not to rely solely on analyst reports when making investment decisions. Laura Unger, acting SEC commissioner, said the federal watchdog has been swamped with investor complaints about Wall Street reports. The SEC issued an alert because it feels that many investors are not aware of the inherent conflicts that exist at brokerage houses. Rep. Richard Baker, who has appointed a review board to probe the conflict problem, said he will release a report next month. The Congressman applauded the SEC for its move.



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