Edition, March 5, 2003, Page 1
DOONER DEMOTED, BELL UPPED
Interpublic CEO John Dooner
was demoted to CEO of its McCann-Erickson ad unit, and former
True North head David Bell was named to head the struggling
ad/PR conglomerate on Feb. 26.
J.P. Morgan analyst Fred
Searby believes "additional management changes are
in the works" including the hiring of an executive
from a competitor to be COO. He said Dooner "inherited
a nearly impossible situation" from predecessor Phil
Geier. IPG has been forced to restate $181 million in earnings
due to shoddy accounting. Its stock hit a 10-year low on
Searby has put the equivalent
of a "sell" on both IPG and Omnicom.
NAB TAPS EDELMAN
The National Association of Broadcasters, faced with a
rising tide of criticism over alleged anti-competitive practices
in the U.S. radio market and a burgeoning challenge from
satellite radio services, has hired Edelman PR Worldwide's
Washington, D.C., office after a lengthy review.
Stacy Perrus, media relations manager for NAB, who confirmed
via e-mail that the group hired Edelman, has not yet been
reached for further comment.
NAB, the main trade group for the radio and TV industries,
completed the interview process for the estimated $250K
account toward the end of last year. At the time, it was
looking to provide "rapid response" to critics
and present a positive image of terrestrial radio.
who was CEO of Cohn & Wolfe, joins Hill & Knowlton
April 1 as senior counselor of PA. He will report to Marilyn
Castaldi, GM of H&K/New York. Aiello also was president
of the NYC Board of Education (1976-79), and ethnic/urban
affairs advisor to former President Jimmy Carter...Al
Tortorella has taken a managing director post at
Ogilvy PR Worldwide to head its global practice from New
York after 20 years at Burson-Marsteller. He replaces Rob
Shimmin, who has been given a broader role as managing director
for Europe, Africa and the Middle East, based in London....Marie
Kennedy has left her senior director, corporate affairs
post at Genentech for the VP-corporate communications post
at Amgen, Thousand Oaks, Calif. Heyman Assocs. did the placement.
PR INDEPENDENTS HAD DIFFICULT
Fifty of 108 independent PR firms providing proofs of their
net fees and payrolls in 2002 had declines while only 32
were able to report gains.
(Table on page 7)
About 35 firms from the O'Dwyer ranking of 124 last year
declined to take part in this year's rankings.
Six were in the top 50 last year with only two from the
lower 25. Most of the defections were in the lower part
of the list ($2M or less in fees).
This year's list of 108 independents includes firms new
to the list as well as returnees.
Skipping the rankings this year were: Dan Klores Communications
(No. 6 last year); Sterling Hager (No. 10); Neale-May &
Partners (No. 15); Phase Two Strategies (No. 21), and Zimmerman
Agency (No. 50).
Sterling Hager, Neale-May and Phase Two are high-tech or
Donovan Neale-May, head of the firm in his name, said it
is focusing on building relationships for its IT clients
and also on its "Global Fluency" network of 40
similar firms in 27 countries.
Edelman PR Worldwide again topped the list
by a wide margin, reporting fees down 6.8% to $205.7M. Consumer
was strong but financial services and high-tech aimed at
industry were off.
The firm's investment in 21 overseas offices
is paying off with international fees gaining 1.8% to $69.5M.
Ruder Finn had a flat year as fees held to
the $80Mmark. The two big independents felt they did well
considering the recession, 9/11 and threats of war.
Waggener Edstrom, which does much work for
Microsoft, was flat at $59M. High-tech specialist Schwartz
Communications was off 35% to $19M.
Hunter PR (food specialist) and Cooney/Waters
Group (health), both based in New York, had gains of 30%
and 38%, respectively, the biggest gains among the top 25.
Fourteen firms had declines of 20% and more
while only seven had gains of 20% and more.
The major ad agency-owned PR operations have
said they are withholding their 2002 totals until late April
when all will report at the same time.
WPP Group last week said PR income was down
8% for the year and Omnicom said PR was off 6.2%. Interpublic,
which said PR was down 18% in Q3 of 2001, is to report 2002's
results this week.
Edition, March 5, 2003, Page 2
AKER BOOSTS EPHEDRA MAKERS'
The trade group representing
major producers of products containing the herb ephedra
was created by Washington, D.C., PR firm The Aker Partners,
which finds itself handling crisis PR to counter a media
firestorm following the Feb. 17 death of Baltimore Orioles
pitcher Steve Bechler.
The controversial herb,
a staple of some dietary supplements used by athletes and
people looking to shed a few pounds, has been banned by
the U.S. military and several professional athletic leagues,
including the National Football League.
The FDA does not regulate
nor approve dietary supplements, but does have the authority
to ban products that bring "unreasonable" risk
or harm to users.
Colburn Aker, managing
partner at The Aker Partners, told this NL the current ephedra
backlash is one of the most frustrating and worse examples
of a negative campaign he's ever seen. He lashed out at
critics using "junk science" to indict the product.
The Ephedra Education
Council, created by Aker three years ago, held a press conference
and issued a strongly worded statement about Bechler's death,
expressing sympathy but calling links to ephedra premature,
"sensationalist and speculative."
EEC's general counsel,
Wes Siegner, contends that 55 scientific studies say ephedra
supplements are "safe and effective when used as directed."
Siegner says misuse of
ephedra can result in harm.
He points out that 16,000
deaths a year are attributed to aspirin, "but that
does not mean aspirin should be banned, any more than the
misuse of dietary supplements justifies a ban on ephedra."
COSSETTE HAS MONEY TO BURN
Montreal-based Cossette Communication Group, which owns
Optimum PR, expects to make another ad/PR agency acquisition
in the U.S. within a few months, the company's CEO said
Feb. 26. Claude Lessard, CEO, said the publicly owned company
has $50 million in cash and almost no debt. The company
has not made a sizable takeover in the U.S. since August
2001, when it bought Post & Ptrs., a New York ad agency,
for $7.5 million.
Major clients in Canada include McDonald's, Bell Canada,
Home Depot, Petro-Canada, Molson and Dairy Farmers of Canada.
LEVINE URGES FRENCH WINE
Hollywood publicist Michael Levine, who has represented
Charlton Heston and Michael Jackson, wants Americans to
boycott French wine because of what he sees as France's
lack of support for the U.S.A.
The boycott will last until France recovers from its "political
amnesia," said Levine, while noting that 200,000 Americans
died to help liberate France in WWII.
Levine said he has been "frustrated with France'simmeasurable
ingratitude" for decades. France's opposition to President
Bush's war with Iraq along with its "continued flirtation
with anti-Semitism is the straw that broke the camel's back,"
and spurred Levine to the boycott idea.
France, with 37 percent of the market, ranks as the biggest
exporter of wine to the U.S. Americans drink more than $820M
worth of French wine per-year.
Levine is the author of Guerrilla PR.
C+M OUSTS G/HI ON $250K OLIVE
Colle+McVoy has ousted Golin/Harris International in a
six-firm pitch for the North American Olive Oil Association's
$250K PR account.
C+M will pitch olive oil as a "pantry essential"
for cooking with many health benefits, said Riff Yeager,
director of PR for the Minneapolis-based firm.
He said C+M's pitch was a change from olive oil's traditional
campaigns, which catered somewhat to the food "elitist"
or more of a niche audience. Yeager said the work will focus
on three tenets - taste, versatility and health - and will
involve a nationally known celebrity spokesperson, who he
declined to identify.
A G/HI staffer told this NL the account and its two primary
contacts are no longer with the firm.
U.S. IS NOT GETTING PR MESSAGE
The U.S. Government's "message" is not getting
through to foreign audiences, Stuart Holliday, who is State
Dept. Coordinator of International Information Programs,
told a meeting of the U.S. Advisory Commission on Public
Diplomacy on Feb. 26.
The government has failed to convey the idea that America
stands for strong family values, peace and economic stability,
in Holliday's view.
Holliday, an advisor to VP Dick Cheney's campaign, said
the State Dept. needs to devise a more "focused and
effective manner" to get its message across.
One plan is to step up use of the Internet, which Holliday
called "an offensive tool." He said the Internet
is used to get information to American embassies throughout
the world, and as a medium for sending content to the foreign
press. The State Dept. also uses the `Net to rebut the various
anti-American conspiracy theories that are floating in cyberspace.
Holliday said his unit works closely with the recently
set up White House Office of Global Communications and the
State Dept.'s Office of Counterterrorism.
The IIP unit monitors the global press, challenges inaccuracies
and provides updates on the global war on terror.
Holliday called President Bush a "clear and focused
communicator" who "needs feedback from our allies
around the world." Said Holliday: "Public opinion
is a national security issue."
Harold Pachios, chairman of the Commission, said: "We
haven't got the [foreign] press focused on the good America
Holliday said public diplomacy is a really hard business.
Edition, March 5, 2003, Page 3
WANT E-MAIL PITCHES
new survey of automotive consumer and trade media
found 90% of respondents would like to get a pitch from
automotive supplier PR pros via e-mail.
is part of the 2003 Automotive Media Survey conducted by
the Automotive PR Council, headquartered in Research Triangle
also shows 94% of responding media prefer to get news releases
via e-mail as well, according to APRC director Neal Zipser.
e-mail rules when it comes to communicating with the media,"
Zipser said. "These findings reiterate the importance
for PR departments to compile an accurate and comprehensive
database of media members which includes e-mail addresses."
revealed several media pet peeves of supplier PR departments
and the agencies that serve them. The most popular responses
included: Slow to respond, don't know their product/services
well enough and don't know the target audience and mission
of the publication.
general, media is asking PR pros to respect their time,"
Zipser said. "People are expected today to do more
with less, and the media is no different. Know your pitch,
know your product, know the publication and be sensitive
to the reporter's time before picking up the phone-or sending
innovations and breakthroughs were the greatest topics of
interest for the reporters who cover the automotive original
equipment, aftermarket and heavy duty market segments of
the auto industry. Supplier relations, systems integration
and maintenance/ repair issues also were high on the list
of hot topics.
results will be reviewed at APRC's Spring Conference to
be held April 10, at Crowne Plaza Detroit Metro Airport,
midday anchor Jessica (nee Ettinger) Gottesman, is producing
a weekly "market minute," which airs several times
on Saturdays on WBBR-AM, New York.
She can be reached at 499 Park ave., New York, NY 10022. 212/318-2338;
She is looking for new information, releases, "quick"
CEO/CFO interview possibilities, magazines on general business
topics, and news about topics such as personal finance,
and business travel.
CNET Networks started
a new ZDNet series on Feb. 24, called "Wireless
who handles PR for CNET, said publicists might be interested
in the series because there is a call for case study submissions
that will be highlighted throughout the series.
The first webcast in the series, "The Landscape Now,
the Territory Ahead," sets the scene by providing an
overview of the wireless devices, architectures, platforms,
and applications that currently exist.
Four webcasts will follow-a new one will be posted approximately
every five weeks.
The next webcast, "Where Wireless Makes Sense,"
will be followed by "Best Strategies," "Security
and Privacy in the Wireless World," and finally, "Wireless
Wins 2003," which will focus on products that are helping
businesses go wireless, as well as the products and services
that will help them in the future.
Businesses that are using wireless technologies in innovative
ways are invited to submit their case studies to ZDNet's
editorial team at [email protected].
Dana Farber is editor-in-chief of ZDNet, which is based
in San Francisco.
a bimonthly magazine for members of the International
Assn. of Business Communicators, which has been given a
makeover, has added these new departments:
-"Global Perspectives" will cover issues affecting
global and regional communicators and their organizations.
-"Case in Point" will feature articles about
Gold Quill winners' projects.
-"Personality" will feature personal and candid
views of communication professionals.
Natasha Spring is executive editor of CW and Naomi Mandelstein
is senior editor. They are based at IABC's headquarters
in San Francisco.
HAVE QUESTIONS READY FOR REPORTER
"When a reporter
calls, start with a few questions of your own,"
readers of The Atlanta Journal-Constitution were
advised recently by Mike King, who is the paper's ombudsman.
Here are his questions:
1. Who are you?
2. What is the story about?
3. What's prompting the reporter's interest?
4. Is this a general survey of parents?"
5. How did you get my name?
6. Who else are you speaking with?
7. Are you going to use my comments in your story? ("Ask
the reporter if you can go over your comments at the end
of the interview.")
8. When is the story going to run? ("This question
is an important one because you may have second thoughts
about something and want to call the reporter back later.")
"Lastly, if you don't want to answer something, don't,"
said King. "It might be a good idea to explain why
you choose not to comment, but it isn't always necessary."
WTVD-TV in Raleigh-Durham
will become the 100th TV station to offer a customized
daily financial news report from Bloomberg TV.
Report," a 90-second report from the floor of
the New York Stock Exchange, is now broadcast by 39 of the
top 50 stations.
MSNBC has cancelled
Phil Donahue's talk show after six months of poor
news continued on next page)
Edition, March 5, 2003, Page 4
JEWISH GROUP RAPS NPR's COVERAGE
National Public Radio's
CEO/president Kevin Klose defended his network's
coverage of the Israeli-Palestinian conflict against charges
of bias against Israel at the annual meeting of the The
Jewish Council of Public Affairs that was held Feb. 25 in
The JCPA is a coalition of advocacy groups committed to
promoting Israel and issues important to American Jews.
David Folkenflik, who coverered the meeting for The
Sun, said "waves of skepticism toward the media
in general, and especially NPR, buffeted Klose during the
Folkenflik said the copies of the group's "sharply
worded single-spaced, 22-page critique of an NPR series
about the history of the conflict" was put within easy
reach of participants.
One audience member called for NPR to submit its coverage
to a review by an outside panel. A second audience member
asked about giving credence to Palestinian accusations of
atrocities by Israeli forces. A third discussion participant
claimed NPR reporters failed to reflect the anti-Semitic
tones of a UN conference in South Africa last year.
Klose attempted to engage his questioners, acknowledging
occasional lapses and promising to consider critiques, wrote
Folkenflik. But he praised the work of NPR's staff, saying
any failings were those of human fraility, not intentional
bias, said the report.
YOUTH MAG DOWNPLAYS BODY IMAGES
Abby Gardner, beauty
director of YM, hopes other mainstream women's
magazines will begin to shift the focus away from body image.
She praised YM's editor-in-chief Christine Taylor's
decision to eliminate dieting articles from YM.
Gardner, who spoke on a panel at Harvard University that
was the kickoff to a series of campus activities marking
National Eating Disorders Awareness Week, said YM's editors
have tried to incorporate images of women of more realistic
sizes and shapes throughout the magazine, not only in select
features, but integrated throughout the magazine.
She hopes other editors will move away from the "you're
pear-shaped, this is the page for you" idea common
in women's magazines. She said editors run into problems
casting more full-figured models because they tend to be
under-represented by modeling agencies.
COLUMNIST CITES FLAWS IN BIZ
New York Times
business columnist Gretchen Morgenson told law professors
at Nova Southeastern University that the news media's failure
to help deflate the stock market bubble of the late 1990s
was "one of the tragedies in the history of the press."
Morgenson, who won a Pulitzer Prize last year for her beat
coverage of Wall Street, said "My media colleagues
were right alongside the corporate spokesmen and conflicted
Wall Street analysts in accepting these mind-numbingly stupid
ways of valuing stock, such as page views on websites and
`share of customer mind.'"
The columnist, a former assistant managing editor of Forbes
and press secretary for Steve Forbes during his unsuccessful
1996 presidential run, said reporters played along with
the game of "beating earnings" and reporting "pro
forma earnings," which did not take into account items
like payroll taxes or interest expenses.
The worst offender on all counts was CNBC, which turned
the serious business of investing into entertainment, said
After conducting national research that showed a strong
need for improvement in American business journalism, the
Donald Reynolds Foundation of Las Vegas, Nev., has awarded
$2,914,612 in grants to the American Press Institute for
a national program of business-journalism workshops and
for the development and implementation of a comprehensive
website for journalists covering business.
Both programs will be run out of the newly created Donald
Reynolds National Center for Business Journalism, which
is being established at API's headquarters in Reston, Va.
CNBC HIRES DOBRZYNSKI
AS MANAGING ED.
who is Sunday business editor of The New York
Times, is joining CNBC, the General Electric-owned cable
news network, as managing editor.
Dobrzynski, who will oversee business news coverage, will
report to David Friend, who is SVP.
Lynette Khalfani, who has been covering the Wall Street
beat for The Wall Street Journal, and appears daily
on CNBC, is leaving the paper to write a book, entitled
DOBBS TO WRITE NL FOR INVESTORS
Lou Dobbs, who anchors
"Moneyline" on CNN, will write a monthly
newsletter focusing on the stock market.
Lou Dobbs' Moneyletter will be published and sold for $199
a year by Phillips Investment Resources, a unit of Potomac.
Md.-based Phillips Publishing, which currently publishes
15 investment newsletters.
65, is retiring in June as editor of GQ, a position
he has held since 1983. Dave
Zinczenko, editor of Men's Health, and Dylan
Jones, the British editor of GQ, are being
considered as replacements.
38, was named assistant managing editor/metro of The
Boston Globe, replacing Peter
Canellos, who will take charge of the Washington,
and Alan Webber,
co-founding editors of Fast Company, are resigning
from G+J USA Publishing.
55, was appointed editor-in-chief of The South China
Morning Post, Hong Kong's leading English-language newspaper.
40, has joined The New York Sun as an associate editor.
Louis, a former reporter for the now-defunct City Sun,
ran unsuccessfully for City Council seat as a Democrat and
Green Party candidate in 1997.
CBS newsman Bob Schieffer's
new book, "This Just In: What I Couldn't Tell
You on TV," rose to No. 3 on the New York Times Bestseller
List. Schieffer, 66, has been chief Washington, D.C., correspondent
for CBS News since 1991.
The publishers of
The Examiner, in San Francisco, began distributing
a free newspaper on Feb. 24 after firing most of the staff.
Edition, March 5, 2003, Page 7
Edition, March 5, 2003, Page 8
week was a bad one for the big three ad/ PR conglomerates,
which employed 17,778 people in their PR subsidiaries in
senior unsecured debts were downgraded by Moody's,
which scolded OMC for its acquisition spree that boosts
quarterly revenues and profits but sends it deeper into
ousted CEO John Dooner as IPG's free-spending ways also
caught up with it. IPG stock at $9 is one-sixth of its price
of $57 two years ago.
stock hit a 52-week low of $29 after it reported revenues
down nearly 3% to 3.9 billion pounds ($6.13B at the current
exchange rate of $1.57). Net fell 67% to 88 million pounds.
The three ad/PR roll-ups
(as Wall Street refers to serial acquirers) have debt totaling
nearly $9 billion.
was especially strict with OMC, saying it now regards
OMC's deferred acquisition costs (that the Wall Street
Journal "outed" last June) as debt since the
earnout payments are "a near certainty."
The earn-out obligations
to 2006 and beyond total $471M and OMC can also be forced
to pay another $234M to complete partial buyouts.
The firm, ignoring pleas
by credit raters to stop the acquisition binge, spent $680M
on this in 2002.
Counting OMC's $2.03B in longterm debt, that gives the firm
at least $2.7B in debt.
significantly" to OMC's "adjusted debt" are
lease obligations, says Moody's. OMC and other firms that
laid off staff are stuck with empty office space on which
rent must be paid.
As usual, OMC provided
no balance sheet with its earnings report at the Feb. 25
analyst conference call (ignoring this "standard"
set by NIRI) nor a list of its acquisitions, which it did
for one quarter in 2002. WPP, which is bigger than OMC,
provided a balance sheet with its annual financials distributed
on Feb. 24. OMC filed its balance sheet last year on March
31, the last possible day.
WPP's longterm debt is
$3.04B and IPG's, $2.9B.
material such as this hitting the fan, the question becomes
what happened to the 17,778 PR people employed by the three
congloms at 12/31/00?
They worked for such valued
PR brands as Fleishman-Hillard, Hill & Knowlton, Burson-Marsteller,
Ketchum, Porter Novelli, Golin/Harris, Ogilvy PR and Weber
IPG has admitted laying
off 10,000 of its 62,000 workers but won't say how many
were in PR.
Of all the types of firms
that the congloms purchased, PR has turned out to be the
WPP said PR had by far
the biggest decline of any activity in 2002, off 8%. The
next biggest decline was 0.2% in branding, healthcare and
specialty. Ads were up 2% and information and consultancy,
up 4%. PR dragged WPP down!
WPP said B-M, Ogilvy and
Robinson Lerer & Montgomery "performed well,"
pointedly leaving out H&K and Cohn &Wolfe.
PR also had the biggest
decline at OMC, off 6.2% for the year and 10.4% for Q4.
Ads were up 10% for the year, direct marketing, 8.7% and
specialty, 14.4%. PR also dragged down OMC!
Interpublic has yet to
report 2002's results. But for Q3, PR was down 18%, by far
the biggest decline in any category.
What happened to the promises
of "synergy" and "cross-fertilization"
that the congloms used (along with much $$) to talk these
famous PR brands out of their independence?
The PR units were told
they were joining giant families of agencies that would
recommend them to all their clients. It never happened.
last thing an ad A/E wants is some reporter poking his or
her nose into a client's affairs and writing who knows what?
The congloms themselves are virtually unavailable to press
questioning and their PR units are following this lead.
The big ad agency-owned PR units have created a new form
of "press-less PR," emphasizing everything but
doesn't even like talking to analysts. Its brief,
before-the-market sessions are riling the analysts, who
feel they are being shut out. The calls are set for 8:30
to 9:30 a.m. when the analysts supposedly have to leave
for the stock market opening (they don't). The Feb. 25 call
started at 8:35 a.m. and was halted 40 minutes later at
9:15 by CFO Randy Weisenberger who said, "We'll let
you go." Some analysts did not get on the call and
feel the whole thing is a set-up. Weisenberger and CEO John
Wren, being in New York where many analysts and financial
press are based, could easily meet them in person if they
Proof that PR operations
can have their fee income totals ready early in the year
is on page 7, where 125+ firms have provided documentation
such as W-3s and top pages of income tax returns.
(March) said the percentage increase in the cost
of a U.S. employee health plan has exceeded inflation by
seven times since 2001.
briefly the No. 1 movie, has ads that quote Scott
Bowles of USA Today saying it is "As great as
it is cool." However, Bowles covers entertainment and
is not the movie critic for the paper. The quote cannot
be found in the paper's archives. Mike Clark, USA Today's
movie reviewer, gave Daredevil 1 1/2 stars, saying it was
the "dullest live-action comic strip on record, lacking
even an interesting villain." Attention was focused
on movie ad blurbs in 2001 when Sony Pictures was found
to be quoting a fictitious reviewer. -
-- Jack O'Dwyer