Edition, March 6, 2002, Page 1
SUBS FOR WS ON LEAD PAINT PR
The Dilenschneider Group has been "asked to substitute"
for Weber Shandwick, Matthew Swetonic, principal at TDG,
told this NL, as counsel for the paint industry which could
face billions in legal liability suits regarding exposure
to lead in paints. Lead was used in paints until it was
banned in 1978.
The New York firm picked up the account after the Feb. 15
Rhode Island Law Tribune published a memo from Jody
Powell, CEO of WS's Powell Tate unit, outlining PR strategy
for the paint companies. That story carried the "Reporter
Spin: PR Firm Bares Lead Strategy" headline.
Mark Day, group VP at PT, confirmed that Powell wrote the
e-mail memo, and that WS has lost the account. That e-mail
was "inadvertently" sent to somebody who wasn't
supposed to be on the address list. PT, he noted, was given
the addresses by somebody else working on the legal case.
Swetonic, former director, Asbestos Textile Institute, would
neither say how TDG got the lead account, nor discuss strategy
for the paint companies, which include Sherwin-Williams,
Glidden, NL Industries and DuPont.
JAPAN HIRES H&K FOR MEDIA WORK
The Embassy of Japan has hired WPP Group's Hill and Knowlton
unit for media counseling and outreach, according to Ed
Belkin, senior managing director in the firm's Washington,
Belkin is a former NBC Radio Network managing editor and
Westinghouse Broadcasting news director. He reports to Satoru
Satoh, the Embassy's Minister of Public Affairs.
JEFFREY GROUP DROPS MASTERCARD
The Jeffrey Group, Miami, has told MasterCard International
it plans to resign the account after a five-year run, according
to CEO Jeffrey Sharlach.
Sharlach said that MasterCard was a "significant six-figure
account" for his firm.
Marcus Molina, MasterCard's VP-PR for Latin America, said
MasterCard got the news from Sharlach and the company is
weighing its options.
Joele Frank, Wilkinson
Brimmer Katcher is advising TRW Inc. on how to respond
to the hostile $6 billion takeover bid launched by Northrop
Grumman. NG has hired proxy solicitation firm D.F. King,
and says the TRW deal would create a $27 billion company.
INDEPENDENT FIRMS HIT BY RECESSION
Only 32 of the 119 independent PR firms ranked by the O'Dwyer
Co. had gains of 10% or more in 2001.
Sixty-three had losses or just kept pace with the previous
Edelman PR Worldwide, the largest independent by a wide
margin, had a 5% decline in fees to $220.7 million, as shown
on the table on page 7. Ruder Finn, No. 2, had a 4.5% decline
Ten of the top 25 had double-digit losses and only two had
double-digit gains. The Hoffman Agency was up 15.4% to $13.5M
and Alan Taylor Communications was up 10% to $8.1M.
Among those with declines were high-tech specialists Schwartz
Communications, off 8.5% to $30.3M; Sterling Hager, off
17.3% to $11.2M, and Neale-May & Partners, off 41.9%
KCSA PR Worldwide declined 10.7% to $9.5M; Padilla Speer
Beardsley, 11.7% to $8.9M, and PepperCom, 20.9% to $7.3M.
More than a half dozen major high-techs decided to skip
the rankings. Niehaus Ryan Wong, a high-tech firm that did
not take part in the rankings, recently went out of business.
It once had more than 100 employees.
The list of 118 independents is off from the 146 that documented
their numbers last year.
High-Tech Firms Drop from Rankings
Top 25 firms last year that did not report this year included
FitzGerald Communications, high-tech firm that had $21M
in fees; Applied Communications, high-tech firm with $11M
in fees in 2000; Stoorza Communs., $10M, and Wilson McHenry,
another high-tech firm with $9.8M in fees last year.
Two firms in last year's top 25 sold to ad/PR conglomerates.
De Vries PR went to Interpublic, and Noonan/Russo to Havas.
Not supplying any ranking information were the PR operations
owned by Interpublic, WPP, Omnicom, Bcom3, Publicis, Havas
and Grey Global. The CFOs of these PR units attest to their
own figures and report them only to the Council of PR Firms
which is scheduled to distribute them in April or May. The
O'Dwyer rankings are based on W-3 forms showing total payroll;
top pages of income tax returns; CPA statements; lists of
current accounts and executives and staffers, and other
Edition, March 6, 2002, Page 2
AMERICA DOESN'T TRUST BIG
BIZ, SAYS G/HI POLL
Nearly 70 percent of
Americans say they do not trust Corporate America, according
to a survey conducted for Interpublic's Golin/Harris International.
Respondents to the so-called
"Trust Survey" say "recent economic events
have created a crisis of confidence and trust in the way
we do business in America," and as a result, they're
"going to hold business to a higher standard in their
behavior and communications."
"When more than
two-thirds of American express this level of skepticism
and cynicism, American business has a serious problem that
goes beyond the `Enron factor,'" said Richard Jernstedt,
current wave of scandals has a direct impact on specific
industries, but when you look at trust levels across the
entire spectrum of American business, almost every category
is affected. The malaise of trust is becoming epidemic,
and no business can escape by saying 'it's not my problem,'"
To measure attitudes
regarding trust, the Chicago-based PR firm created the survey
to identify and compare both the degree and direction of
trust across more than 25 different business sectors and
express it in a single number.
A positive score indicates
a strong trust profile, while a negative index number signals
trust challenges that should be addressed immediately.
The survey indicates which industries Americans trust the
most and trust the least.
The survey uncovered
at least 14 business sectors that have scores of -25 or
less--indicating they have severed trust problems, including:
oil & gas (-63), insurance (-59), brokerage/Wall Street
(-58), utilities (-52), airlines/travel (-52), telecom (-42),
advertising (-41), media companies (-39), journalism (-38),
PR (-31), accounting (-48),
chemical (-43), pharmaceuticals (-30) and management consulting
In contrast, at least
10 businesses have a positive or only moderately negative
scores: supermarkets (+40), retail chains (+36), drug stores
(+9), computer hardware/software (+8), health and beauty
(+8), fast food restaurants (-1), food products manufacturers
(-1), entertainment/sports (-3), banks/savings and loans
(-6) and automotive (-10).
"The outcome of the G/H Trust survey indicates businesses
should mount a trust offensive," said Ellen Mardiks,
worldwide director of marketing and brand strategy, G/H.
must begin with the CEO," said Jernstedt. "But,
if it ends there, you will have a charismatic leader, but
not a trusted brand with value that can be sustained over
time. Building trust has to be everyone's responsibility."
The survey was conducted
during the first week of February 2002 by Interpublic's
NFO Worldwide unit. More than 700 Americans were surveyed
in the national study, yielding a confidence factor of 95
IPG NET DOWN IN Q4. PR HARD
Interpublic had the worst
fourth quarter among the top three ad conglomerates but
its stock rose on statements that new business activity
improved in the first quarter and the consensus among analysts
that the worst is over for IPG. PR was hit with a "disproportionate
decline," the company said.
Revenues were down 16%
in the quarter vs. a decline of 9% for the WPP Group and
a gain of 4.7% for Omnicom. IPG supplied no balance sheet
with its earnings report (unlike WPP).
Q4 net was $111.2M, or
30 cents a share, vs. $113M, or 30 cents, in the same 2000
quarter. Revenues were $1.7B vs. $2.0B. Loss for 2001 was
$505M, or $1.37 a share, vs. a profit of $420M, or $1.14.
Revenues fell 6.3% to $6.7B from $7.1B.
Bear Stearns said evidence
of "excellent cost controls" and reports of increased
new business caused it to upgrade IPG from neutral to "attractive."
IABC HAD LOSS OF $718K
The International Assn.
of Business Communicators had a loss of $718,069 for the
year ended Sept. 30, 2001, bringing losses for the past
three years to $2,188,756. Accounts payable ballooned to
$1,005,483 as of 9/30 from $425,208 a year earlier. IABC's
accumulated deficit was $1,284,669. Liabilities totaled
$2.4M and assets, $1.1M. Revenues declined 9% to $5.1M.
IABC has suspended publication of its printed directory.
PR CAMPAIGN BLAMES CLINTON
The Center for the Study of Popular Culture, in Los Angeles,
has begun a PR campaign to pin the blame of the Sept. 11
terrorist attacks on the Clinton Administration.
The Center has mailed copies of David Horowitz's new pamphlet
entitled "How the Left Undermined America's Security,"
to about 1,500 media outlets on Feb. 19. Horowitz is president
of the Center.
The 46-page pamphlet charges that the U.S. national security
interests were undermined by the left, leading to the terrorist
attacks on Sept. 11.
This will be the theme of the PR campaign that will take
Horowitz to more than 30 college campuses this spring, according
to Joe Hicks, a onetime PR consultant for Rogers & Assocs.
and Chevrolet's western region PR manager. He joined the
Center as executive director last fall.
Hicks said the pamphlet has gotten very little, if any
Horowitz, as editor of Ramparts during the `60s
was one of the leaders of the New Left. He chronicled his
dissatisfaction with that movement via two books, "Destructive
Generation: Second Thoughts about the Sixties" (1989)
and "Radical Son" (1997).
PR PROS PERFORM TEACHING FUNCTION
PR people should think of themselves as teachers rather
than salespeople, according to Kristin Zhivago, President
of Zhivago Marketing Partners.
She has worked on each of the three sides of PR-client,
agency, and media. "I've experienced the pressures
felt by people in each type of position. The PR process,
as it exists, is broken-very broken. That's the bad news.
The good news is, it can be fixed," said Zhivago, editor
of Marketing Technology, and a columnist for ADWEEK's
Technology Marketing magazine.
She feels the basic problem is that many (or even most)
agencies charge clients for "activity" and pretend
that it's "intelligent targeting and relationship?building,"
which is what clients think they're paying for. "Sending
out press releases to everyone who writes for any remotely
related publication or site, and then calling afterwards
to ask, in a high-pitched, breathless voice, "Did you
get my press release?" is not PR. It's an old form
of spam," said Zhivago.
To Zhivago, a good PR firm would educate the client, and
then proceed to do PR properly. If the client refused, the
PR house would quit, so they wouldn't become the kind of
agency that editors go out of their way to avoid.
As long as PR houses play the numbers game, charging clients
the biggest number they can get away with for making the
biggest number of calls and sending out the biggest number
of releases, PR, in Zhivago's view, will remain broken.
She said: "PR will only be fixed when PR houses stop
playing the numbers game and start playing the education
game. PR houses should be educating clients on how PR really
works, and should be teaching their own employees what editors
Edition, March 6, 2002, Page 3
PINPOINT 'HOT TOPICS'
and regional technology publications are looking for information
about biometrics, biotechnology, collaboration tools, hybrid
mobile devices, medical technology, nanotechnology, network
computing, robotics and storage.
areas were pinpointed as the "hot topics" by a
panel of high-tech editors at an "Understanding Today's
Technology Media" meeting, which was hosted by the
Publicity Club of New England on Feb. 20 in Cambridge, Mass.
were: Tommy Peterson, technology features editor, Computerworld;
Colin Haley, managing editor, Boston.internet.com;
Dyke Hendrickson, editor, Mass High Tech; Scott Krisner,
contributing editor, Wired Magazine, Fast Company,
Darwin Magazine, and a weekly columnist for The
Boston Globe; Michael Stern, publisher/editor of Massachusetts
Investor's Digest, and Phil Sweeney, reporter, Boston
said they get very few of their story ideas from PR people.
Krisner said one PR-pitched story in five years made it
into Fast Company.
welcome trend ideas that are not client specific. Peterson
said she works with several PR people for an ideas dialog,
not a feature story.
best PR people really understand their company, the trends
in the industry and our publication," Peterson said.
"The PR people I enjoy talking to are those who can
have a dialog about what they've noticed and what's going
on in the industry, not what's on our editorial calendar."
urged PR people to do their homework, to move away from
the editorial calendar, and keep every pitch newsworthy.
"No one will take you seriously if you can't produce
a referenceable client or if you don't know your own client
inside and out," said Peterson. "We see you in
our e-mailbox, but, if we see you there every week with
nothing new to say, it gets to be too much."
editors prefer to get e-mail pitches. Here is the contact
information for each panelist:
Hendrickson: 617/241-4330; fax: 617/242-9373; [email protected].
Krisner: 617/742-0476; [email protected].
Peterson: 508/620-7729; fax: 875-8931; Tommy
Stern: 781/777-1314; [email protected].
Sweeney: 617/330-1000; fax: 617/330-1016; [email protected].
PEOPLE EN ESPANOL NAMES SECTIONS
People En Espanol has named Lourdes Centeno as sections
editor, and Teresa Aranguez has joined as staff writer.
Centeno, who was previously PR manager for the magazine,
will coordinate and edit the following monthly sections:
"Salud" (Health); "Inolvidales" (Unfogettable);
"Dinero" (Money); "En Familia" (Family);
"Musica" (Music); "Horoscopo" (Horoscope);
"Picadillo" (Bits & Pieces) and "Sucesos"
She will also generate section ideas and handle fact-checking
Aranguez will write articles for the entertainment, fashion
and beauty coverage, and society articles.
Also joining the staff as a fashion and beauty writer
is Cecilia Dominguez, who had been beauty assistant for
She will conduct interviews on similar topics, generate
story ideas and evaluate new products/trends.
FREELANCER USES E-MAIL SPARINGLY
John Scalzi, a fulltime freelance writers in the U.S.,
said e-mail is not always the best way to pitch a story
to an editor.
"I query many editors by e-mail, but only when I
know they accept them," he told Bob Levey, who hosts
"Levey Live," a weekly program on Washingtonpost.com.
Levey had asked his guest: "Can you query any editor
these days via e-mail? Or is a phone call or a letter still
"It's best to check," said Scalzi. "The
smart thing to do is give the editor a query in the format
he or she prefers. No sense irritating them right off the
Scalzi recommends a directory, called "The Writer's
Market," to find out whether an editor prefers his
or her queries by phone, fax, mail or e-mail. The directory
will also provide information on which magazines and newspapers
have a need for the story, said Scalzi, who has written
dozens of articles on an array of topics, ranging from personal
finance to humor and entertainment and parenting for publications.
"There are probably four or five hundred `rules'
for how to talk to a reporter," says Dan Burkee of
the LePoidevin Rickinger Group, a Waukesha, Wisc.-based
"One rule upon which almost all spokespeople and
reporters agree: know the difference between `on the record,'
'on background,' and `off the record,'" says Burkee,
who defined each in a column for the agency's current newsletter.
-On the Record: "This means that quotation marks
can be put around what you say and it can be attributed
-On Background: "This is a useful tool. It enables
the reporter to gather information-and allows the spokesperson
to give it-without attributing it to the spokesperson."
-Off the Record: "It is supposed to mean that the
reporter puts his/her pencil down, and agrees not to use
the information you give them in any way."
"Unless you are an experienced media spokesperson,
assume that everything you say is on the record. And be
careful what you say," said Burkee.
(Media news continued
on next page)
Edition, March 6, 2002, Page 4
ENRON SCANDAL BROADENS BIZ
Bill Barnhart, who is president of the Society of American
Business Editors and Writers, said the Enron scandal "finally
put to rest the notion that business is a specialty beat."
Barnhart, who is markets columnist for The Chicago
Tribune, said the scandal shows business news can no
longer be aimed at the few active investors.
He said SABEW's goal is to help train a new generation
of journalists who can tell business stories effectively
to a wide audience.
"Aggressive business journalism has never been more
difficult and the demand for it has never been greater,
as Americans try to make sense of the recent shocks,"
Barnhart said SABEW's 39th annual conference in Phoenix,
April 28-30, will feature talks by Martin Baron, editor
of The Boston Globe, and Larry Kramer, CEO of CBS
MarketWatch, who will weigh how business journalism has
changed in the wake of recent events.
Addressing the issue of Enron will be Floyd Norris, senior
financial correspondent for The New York Times, who,
along with a team of business journalists, will dissect
Enron coverage by the financial press.
Keynoting the SABEW conference is Southwest Airlines founder
Herb Kelleher, whose airline refused federal help in the
wake of the travel industry disaster caused by the terrorist
Other speakers include U.S. Trade Representative Robert
Zoellick, commenting on NAFTA and world economic crises;
and Jerry Colangelo, owner of the Phoenix Suns and Arizona
NEXTPERT NEWS NETWORK IS LAUNCHED
The Can do Woman Media Networks has started a new division,
called the Nextpert News Network, to cover new products
David Post, who is executive producer, said networks,
TV stations, and syndicated entertainment shows will be
offered a newsfeed about new products and ideas, with VNRs
and B-roll packages that are produced and distributed by
Among the events NNN will cover are new product launch parties,
fashion shows, charity events, and trade shows.
Katlean de Monchy, who reports on new products and trends
for "The View" and weekly for network affiliate
stations across the country, will host the segments.
Post said publicists are welcome to submit samples or
pre-release information. The NNN service is free to companies.
Post can be reached at 212/244-1444.
EDITOR OF LONDON TIMES
Peter Stothard has resigned as editor of The London
(England) Times after 10 years.
Stothard's resignation was unexpected.
Robert Thomson, who is managing editor of The Financial
Times in the U.S., will take over Stothard's job on
March 6. Thomson, who is a citizen of Australia, is the
first foreigner to edit the 200-year-old paper.
The Times is published by Rupert Murdoch's News Corp.,
and Pearson owns FT.
executive editor of USA Today, will retire in June.
was named editor-in-chief of Us magazine, succeeding
Terry McDonell, who recently was picked to edit Sports
Illustrated. Charlie Leerhsen has resigned as editor
the former host of CNN's "Talk Back Live" show,
is starting Atamira Communications. The Atlanta-based firm
will coach executives and politicians on how to navigate
the news media.
a former CNN VP of news planning; Natalie
Allen, former CNN anchor, and Wendy
Guarisco, who was a senior editorial producer of
"TalkBack Live," also have joined the company.
magazine will publish its first issue on March 18
to coincide with the Academy Awards, which are scheduled
for Sunday, March 24.
Jason Binn, who also publishes Hamptons, and Gotham
magazines in New York, is publisher of LAC. Roger Friedman
Binn is printing 50,000 copies of the first issue, which
will feature Nicole Kidman on the cover. It also contains
photos and gossip, which Binn's publications are known for.
The next issue of LAC is slated for September, and the
magazine will go monthly in 2003.
a technology and business news-weekly, will introduce
a full, electronic version of the newspaper on March 11.
the Aliso Viejo, Calif.-based Internet superstore, has published
the first edition of Buy.com Magazine.
The quarterly magazine offers an array of brands in computing,
wireless products, etc., and articles aimed at helping customers
understand the benefits of the latest technologies.
The MSG Network,
which lost the New York Yankees games, is expanding its
schedule to 24 hours starting April 1.
A new segment, called "SportsTalk in the Afternoon,"
featuring in-studio guests, will air from 3:00 to 6:00 Mondays
Conde Nast has
paid $52 million in cash to acquire Modern Bride
Edition, March 6, 2002, Page 7
Edition, March 6, 2002, Page 8
The Feb. 25 Wall Street
Journal lead article on the rise of oligopolies noted
that with college textbook publishing now dominated by three
companies that have 66% of revenues, prices to bookstores
have climbed 65% in the past ten years while producer prices
rose just 11.2%.
college texts are $100+. The WSJ is worried about consolidation
in the defense industry, computer chips, cable TV, local
TV, drug companies, wireless phones and online job sites.
Oddly, it skipped the consolidation in the ad business where
six firms control 60% of the U.S. and world ads (Interpublic,
Omnicom, WPP, Bcom3, Publicis and Havas)... the wave
of media mergers "is bad news for local news,"
said an op-ed piece in the New York Times Feb. 28
by Alex Jones, former media reporter for the NYT and now
at the Harvard School of Government.
common ownership of local newspaper and TV stations (where
court decisions are headed) is "inherently unhealthy,"
he said...Business Week (March 4) says investors
are revolting against the confusing earnings reports
put out by companies and want "more frequent and more
expansive information." The pressure is forcing "executives
to wrestle with exactly how much new information to reveal,"
it says in an article entitled, "Slammed." IBM
is hit for passing off gains on the sale of property as
income from "core operations." Tyco's shares are
down 50%, BW says, because of deterioration in fundamentals
and late reporting of "crucial financial information"
(PRSA and IABC take note)...
One of the most wildly spinning
earnings reports we have seen is the one Feb. 21 from Nextel,
the wireless company. Because of a $1-$2 billion loss that
is coming from failed international operations, it was only
able to report domestic results. Net for the fourth quarter
was a loss of $127 million on sales of $1.8 billion vs.
a loss of $42M on sales of $1.5B. Its net loss for the nine
months was $1.53B. The stock is $4.80. The Nextel release,
which didn t want to talk about the quarter or the disaster
in international, headlined, "Record Domestic Results
were said to be up 30%; operating cash flow up 36%, and
subscriber additions up 1.99 million. "Positive free
cash flow" is being targeted for 2004.
trying to get some baseball game scores and all you hear
is "record number of ground balls fielded by team X,"
centerfielder catches seven pop-ups, five scoreless innings
pitched," etc. What was the score?! VP/internal communications
for Nextel is John Clemons, chair of IABC. IR head Steve
Virostek is a member of the National IR Institute...
NIRI has been impaled on
the earnings report scandal.
The reports of several of its national board members would
win prizes in an obfuscation contest. NIRI is therefore
speechless on the topic. NIRI was always analyst-oriented
and has done nothing to help the press to understand today
s convoluted finances. Former SEC top enforcer Stan Sporkin
(11/22/00 NL) said today's financial reporters don t understand
derivatives and many other complicated accounting techniques
and tricks... one publication, lacking knowledge
of financial reporting,
said Feb. 25 that WPP s "gross profits" rose 38%
to $5.5 billion on revenues of $5.8B (a $5B mistake). The
"profits" of WPP actually rose 10% to $390 million.
WPP, "gross profits" means revenues not counting
purchases of research and other items for clients that merely
pass through its books. The publication missed WPP s 20%
decline in per share net and the 45 times jump in debt to
$1.5 billion. AdWeek was surprised that Interpublic
s stock rose 22% the day after it announced its largest
quarterly loss ever$477M.Actually, IPG was taking
a "big bath" (lumping a lot of expenses in one
quarter), which analysts love. But it s an abuse that has
been condemned by the SEC... the advent of "free"
searches being available on the 22,000 publication database
of Lexis/ Nexis (2/27 NL),
plus the availability of the free Google and other databases,
will have a big impact on PR. A PR firm can now search the
Lexis/Nexis database for client mentions and get three-line
reports on each. Stories are permanently and easily accessible,
meaning editorial mentions are more important than ever...
"The Sweet Smell of
Success," a new musical,
portrays both columnists and press agents as mean-spirited,
unethical power brokers. Columnist J.J. Hunsecker gives
ink to press agents who give him gossip, preferably negative.
"Give him dirt, make it hurt," says one lyric.
Press agents have now gained the upper hand over columnists
by organizing into a mega-agency, PMK/HBH, said the March
3 New York Times magazine in an article on "Sweet Smell."
(owned by Interpublic) dictates which reporters get an interview,
how long it will last, topics that won t be covered, photographs
that will be used, and how the story will be played. Pat
Kingsley, its head, "in particular has a reputation
for high-handed ferocity in dealing with writers and editors,"
says writer Kurt Andersen, who admits PMK president Leslee
Dart promoted a novel he wrote and an online publication
PR pros should think of
themselves as teachers rather than as salespeople,
said Kristin Zhivago, who has worked in both the press and
PR . PR is currently "broken," she feels, because
PR is churning out too much fluff and not enough substance.
One thing that s needed is a code of ethics and etiquette
specifically for press/PR relations. Current PR codes cover
general behavior of PR people in relation to their clients.
The new PRSA code, mentioned in the Times article (above),
has one reference to media. -- Jack O'Dwyer