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Internet Edition, April 16, 2003, Page 1


Weber Shandwick has picked up a $5 million campaign from the Egyptian Ministry of Foreign Trade to promote the quality of the country's cotton as second to none, James Meszaros, executive VP at the Interpublic unit, told this NL.

Meszaros said the firm will target consumers, retailers and fashion stylesetters. WS will do media/ government relations, trade promotion and special events in the U.S., U.K., Germany, France and Italy. There also will be an ad component featuring the Egyptian Cotton logo, according to Meszaros.

This is the first time that Egypt has promoted its cotton, an important part of its economy that has been hammered by the collapse of the tourism market.

Meszaros said WS got the account because its Cairo unit is the biggest PR firm in the country. "We were recommended to Youssef Boutras-Ghali, the Ministry of Foreign Trade," said Meszaros. He is the nephew of former United Nations Secretary General Boutras Boutras-Ghali.


Former NATO Commander General Wesley Clark has registered as lobbyist for Acxiom Corp., the Little Rock, Ark.-based company that creates databases to enable clients to better manage customer relationships. His mission is to drum up homeland security contracts for Acxiom.

Clark, who led the Kosovo campaign, has been a frequent on-air commentator for CNN, discussing the Iraq invasion.

He joined Acxiom's board in 2001 following his retirement from the Army. The potential U.S. Presidential candidate has done work for venture capital firm The Stephens Group.

Acxiom is the initial lobbying client for Wesley K. Clark & Assocs.

Jeep Bryant, senior VP and director of corporate communications for PNC Financial Services Group, has left for a newly created top PR post at Bank of New York.

Senior VP Robert Grieves told this NL that Bryant takes on the new role of managing director and global head of corporate communications. Prior to four years at PNC, Bryant held a series of management positions in First Union's corporate communications department.


The World Chiropractic Alliance is using Golin/ Harris International's Arlington, Va., office to expand coverage of chiropractic services under Medicare, and to promote it as an important part of an overall wellness program.

The WCA, which promotes drug-free treatments, has been locked in a battle with medical doctors and physical therapists who are moving onto their turf. It recently formed the Chiropractic Coalition, with the Int'l Chiropractors Assn., to launch a public education campaign to "promote chiropractic worldwide as a clearly defined, separate and distinct profession."

The Chandler, Ariz.-based WCA scored a victory in February when the U.S. Dept. of Health and Human Services ruled that Medicare+ Choice organizations must use chiropractors-not physical therapists-for certain spine treatments. Terry Rondberg, WCA president, said of that decision: "While physical therapists play a vital role in the American healthcare system, they do not-and cannot-duplicate the services of doctors of chiropractic."

G/HI's Kurt Markva and Michael Fulton are heading the account.


The National IR Institute, although it suffered a 15% decline in conference/seminar income and a 6% decline in dues, cut expenses and was able to add $109,828 to its net assets as of Dec. 31, 2002.

It now has $4,731,234 in cash/investments, up $108,646 from the previous year. Revenues declined 13% to $5,244,793 from $6,060,287.

NIRI put its audited financial report, including 22 categories of spending, on the public area of its website,

Salaries, consultant fees and employee benefits totaled $1,918,066.

Dues were down 6% to $1,975,813; conference and seminar fees down 15% to $2,665,208, and interest and investment income down 13% to $134,001.

Conference/seminar expenses were cut 18% to $1,172,784, and publication and member services cut 9% to $1,054,962. Administrative and operating expenses rose from $2.63M to $2.9M.

Annual conference income dipped slightly to $1.96M from $2.19M while income from NIRI's "Introduction to IR" seminars, declined 52% to $369,718. Profit was $209K vs. profit of $365K in 2001.

Internet Edition, April 16, 2003, Page 2


The PR businesses of Interpublic, Omnicom and WPP Group were the object of concern at an analyst teleconference April 2 sponsored by Fitch Ratings.

Poor performance by the PR segment is hurting the organic growth rate of all three, said one analyst, while others noted that purchase of PR firms added to the debt load of the three.

Although their PR firms have suffered declines in billings recently, the three have yet to make any write-downs of their value, it was also noted.
Fitch analysts said that even if there were write-downs it would not affect the credit ratings of the three since the write-downs would be "non-cash" items (the cash or stock involved had already been transferred).

PR was off 6.2% for 2002 at Omnicom and 8% at WPP Group. PR was the worst performing segment of both firms.

Interpublic has stopped reporting PR as a separate segment. The last such report it made was for Q3 of 2002 when it said PR had declined 18% from the year earlier quarter.

Making comments about the debt situation of the three companies were Albert Turner, the chief advertising industry analyst for Fitch; Thomas Razukas, consumer retail services analyst, and Susan Hunter, ad industry analyst based in London.
The Big Three were "largely created through acquisitions" and the process of consolidation in the industry continues, said Turner.

Despite the "most sustained recession in advertising since World War II," the major players continue to pursue the policies that they did during the economic expansion of the late 1990s, Turner added.

The effects of such policies on their balance sheets have lingered and have resulted in the "current weakened credit metrics," said Turner.

The outlook for advertising volume continues to be unsettled, he noted. A bright spot is the new business wins of the three conglomerates.


Rubenstein Assocs. is coordinating a PR campaign for a group representing New York State's Supreme Court Justices to play up the benefits of letting voters decide who serves on the high court.

The New York Daily News and The New York Times have editorialized about the need for reform. They contend that political bosses control the process because they select at political conventions who gets on the ballot. Voters, the papers surmised, are pretty much unaware of the candidates until they see the names on Election Day. The DN recommends putting a merit system in place in which candidates would be selected by an independent screening panel.

The Association of Justices of the Supreme Court of the State of New York contends the current system represents democracy at its best. Its PR effort will center around op-ed pieces, editorial board meetings throughout the state and public forums in support of the current judicial selection process.


The April 8 Financial Times, London, analyzed the problems of Interpublic and its biggest unit, the ad agency McCann-Erickson.

Staffers of the London office of McCann have been "hit with a blizzard of e-mails" from IPG and McCann in New York banning employees from "talking to journalists on pain of summary dismissal."

The e-mails have "compounded the growing siege mentality at McCann," says an article by Alex Benady, who describes the investigation of accounting irregularities at the agency.

IPG had to restate its results four times last year largely because of improper accounting discovered at the European offices of McCann.

IPG, which started out with an initial restatement of $68.5 million, wound up with a final figure of $364 million which included charges from its Octagon Motorsports division.

The Securities & Exchange Commission upgraded an informal investigation to a formal inquiry. IPG's PR units include Weber Shandwick and Golin/Harris International.

Benady's article is headlined, "Inside Track: What Went Wrong at McCann-Erickson?"

A former senior executive of McCann is quoted as saying employees were "heavily incentivised to do well."

A second former executive is quoted as saying: "It was a horrible culture of bullying, greed and fear driven by the desire for short-term profit growth and little else. They didn't bully you into dishonesty, they bullied you into your numbers."

According to the McCann sources, employees were told how even senior people would be sworn at and shouted at when they failed to perform.


Ogilvy PR Worldwide/Ogilvy & Mather bested Young & Rubicam/Burson-Marsteller and Euro RSCG/Middleberg in the "integrated communications" review for the American Chemistry Council's $50 million budget, Dan Pearlman, managing director at Bob Wolfe Partners/TPG, told this NL.

The ACC account had been inactive, though Ogilvy had handled PR projects for the group that represents companies with a combined $450 billion in revenues.

ACC CEO Greg Lebedev plans to upgrade his organization's profile. He called for "aggressive advocacy efforts across international borders to stave off attempts to curtail the responsible use of essential chemical products," during an April 2 speech at the Global Chemicals Regulations Conference in Baltimore. On April 1, he testified before the House Resources Committee urging support for President Bush's energy program. He urged the Congressmen to muster the "political courage" and "take down the off limits signs" against natural gas drilling in the Rockies and the coastal waters of the U.S. Hundreds of chemical company jobs are at stake, he said.

Internet Edition, April 16, 2003, Page 3


The Wall Street Journal Online is starting a new edition to target professionals in advertising, PR, media and entertainment.

The new Media & Marketing Edition, which will start in mid-May, will be published daily with intraday updates.

The edition will draw on the full news reporting resources of Dow Jones, including The Wall Street Journal and Dow Jones Newswires.

Subscribers to the edition also will get the full contents of the Wall Street Journal Online. The edition will be priced the same as an Online Journal subscription: $79 per year or $39 per year for print Journal or Barron's subscribers.

Wendy Pollack has been named editor of the new edition. She will be based in New York.


Rick Frishman, president of Planned TV Arts, New York, held up The New York Times that featured his client, attorney William Shernoff, on the front page of the business section.
Frishman used it to make a point at a publicity seminar for incentive and promotion industry executives at The Incentive Show on April 8.

"This is worth at least $100,000," Frishman told the group as he compared the value of the story to the cost of placing an ad.

Prepare Questions

Frishman also described some of the different tactics he uses to get publicity. When creating a press kit, for example, he includes a list of suggested interview questions.

"Media people are lazy," he said. When promoting his new book, "Guerilla Publicity," Frishman said he did about 150 interviews, and was asked exactly what he wanted to be asked as a result of the questions he had prepared.

It takes seven phone calls or e-mails to get through to a member of the media, he said.

Rachel Peters, a VP at G.S. Schwartz & Co., gave examples of five recent integrated promotion/ PR campaigns that got results at a seminar she gave April 7 at The Incentive Show.
Peters based her presentation on information contained in case history reports that had been prepared by Georgia-Pacific, BMW Films, Ninetendo Game Cube, X-Box Odyssey, and Dunkin' Donuts.

All five companies were winners of the Promotion Marketing Assn.'s "Reggie Awards" in 2003 and '02.

A full report of Peters' presentation was published on

Worth, a business/financial magazine that published 10 issues last year, is cutting its frequency to eight issues. The New York-based magazine has begun to rehire many staffers after laying off the entire staff on March 27.


Coca-Cola has bought a stake in College Sports TV, a cable channel, which started for the first time on April 14.

Coke, which paid $10 million for a stake in the cable channel, also plans to pay $5 million to sponsor the channel, which will televise live college sports events, highlights, and original programming featuring advice from college coaches.

Coke and College Sports would not reveal the size of Coke's equity stake in the cable channel. John Sicher, editor of Beverage Digest, believes it's small.

Under the terms of the deal, Chuck Fruit, senior VP of worldwide media and alliances at Coke, will sit on the channel's board of directors.

Coke recently signed an 11-year, $500 million sponsorship deal with the NCAA. The company also has a deal with Nascar racing league.

Fruit said Coke's sports drink, Powerade, will be heavily promoted on the College Sports channel, which initially will be broadcast only to subscribers of DirecTV's premium sports package.


PR Newswire has created a free website to provide all of its broadcast-related content.

The "Video" page features VNR, B-roll and SMT advisories with sattelite coordinates and a Pathfire Digital Media Gateway identification number.

The "Radio" page has audio news releases and other audio clips that can be accessed and previewed plus an "All Releases" page where video, audio and web events are listed and archived.

GMR, a San Francisco-based magazine for video and PC gamers, which debuted in January, will raise its circulation rate base from 225,000 to 425,000 paid readers as of the Sept. 2003 issue. A four-color monthly ad in the magazine will cost $10,655.

Simon Cox is editor-in-chief of GMR, whose readers want to know what games to buy.

Architectural Digest was ranked as the number one shelter magazine in ad pages in 2002, according to information provided by Publishers Information Bureau to Home Furnishings Now (HFN), a new publication published by Fairchild.

HFN said the Conde Nast publication, which had 1,716 total ad pages, "leads the field with its luxurious spreads featuring movie star mansions, European villas and the lifestyles of the uber-wealthy."

Country Living, published by Hearst, was runner-up with 1,121 ad pages; House Beautiful was third (1,039 ad pages); Elle Decor, fourth place (1,021), and House & Garden was fifth (1,003).

The next 10 magazines on HFN's list were: This Old House, Country Home, Traditional Home, Southern Accents, Home, Coastal Living, Veranda, Metropolitan Home, Victoria, and Renovation Style.

(Media news continued on next page)

Internet Edition, April 16, 2003, Page 4


John Byrne, previously a senior writer at Business Week, was named editor-in-chief of Fast Company.

Gruner+Jahr USA, which acquired the Boston-based magazine in 2000, is moving it to New York. The move is expected to be completed by the end of the year.

Byrne, who has been with BW since 1985, where he created the magazine's ranking of the best U.S. business schools and the best and worst boards of directors, has also written or co-authored eight books.

His most recent book, published Sept. 11, 2001, is "Jack: Straight from the Gut," which he co-authored with former General Electric chairman/CEO Jack Welch.


Business 2.0 has hired technology writers Michael Copeland and Om Malik, most recently of Red Herring. Both will be senior writers for the publication, covering venture capital and telecommunications, respectively.

The magazine also has hired new photo editor Ilene Hoffman, formerly of Time Inc.'s FSB: Fortune Small Business.

All three new hires will be based in the magazine's San Francisco headquarters.

Josh Quittner is editor of Business 2.0.


Robin Eisner, who was director of science communications at Columbia University, has joined as senior health editor.

Eisner, who is based in MSNBC's Secaucus, N.J., office, had formerly directed health coverage at

Molly Masland was named health editor in MSNBC's Redmond, Wash., office. Before joining MSNBC in 1998, she worked for Bloomberg News.


Jim Wilson, 51, a veteran photographer and editor at The New York Times, was named the paper's picture editor, replacing Margaret O'Connor.

Maralyn Matlick, who was dismissed in Feb. 2002 as Sunday editor of The New York Post, has filed an $8 million discrimination lawsuit against the publisher, claiming she was forced out of the job because management wanted to install an all-male, entirely Australian and British team to run the paper.

Vindu Goel, 34, was promoted to business editor of The San Jose Mercury News, succeeding David Satterfield, who was named assistant managing editor for business.

Goel plans more coverage of the valley's role in innovation as well as stories assessing the impact of the economic downturn in the region.

Sanjay Gupta, CNN medical correspondent, became part of the story when asked to perform emergency brain surgery on a 20-year-old Iraqi boy, who did not survive. Gupta, a practicing neurosurgeon at Emory University in Atlanta, has been traveling with the Navy's "devil docs" unit.


The Google search engine will no longer include corporate and government press releases on its Google News website.

Press releases from PR Newswire and Business Wire have been clearly labled, but not those originating from many other sources such as Yahoo News, individual companies and government agencies.

Including corporate and government releases on a site called Google News has the potential to mislead visitors, said search engine watch editor Danny Sullivan, who also told Cnet that "I don't think a press release is legitimate news." was relaunched on April 2 with less headline clutter and new sections focusing on market data, news and commentary, charts and analysis and Bloomberg Media. is expanding the scope of its business, financial and international news reporting by forming an alliance with The Financial Times, which will provide up to 15 top news stories per day.

Reuters and VNU Business Media, which publishes The Hollywood Reporter, Billboard and Back Stage, have launched Reuters/VNU Entertainment News Service. The service includes real-time daily entertainment stories, film and TV coverage, and industry reports plus access to Billboard's sales charts.

Getty Images and Agence France-Presse have formed a news photography service. The agreement gives Getty Images exclusive rights for the marketing of AFP photos in North America and the U.K. AFP will market Getty Images' photos covering North America to its daily newspaper subscribers in the rest of the world.


The American Jewish Press Assn. is offering sponsorship opportunities for its annual conference in Los Angeles, June 24-27, 2003.

According to Amlev Dershowitz Communications, Los Angeles, this is the largest annual gathering of American and Canadian editors, publishers, business managers and individual writers for Jewish publications anywhere.

AJPA's members represent more than 2.5 million readers in North America, said Amlev.

AJPA is also accepting promotional items for journalists' packets. Natasha Rosentock is handling inquiries at [email protected], or at 202/785-2294.

Internet Edition, April 16, 2003, Page 7

O'Dwyer's Ranking of PR Firms By Specialty

Internet Edition, April 16, 2003, Page 8



Analyst reports on ad holding companies have been depressing lately what with credit downgrades, the war s effect on ad spending, IRS and SEC probes, high debt, price declines, and stockholder lawsuits charging insider trading abuse.

But a bright note was struck for PR in a 17-page report on Omnicom April 3 by Michael Russell of Morgan Stanley. "The future of PR is rosier than that of the (ad) has better long-term growth prospects," he wrote.

The zapping of TV commercials made possible by devices such as TiVo, which record programs for viewing when desired, could cut Interpublic s revenues by 17% over a period of "years" and Omnicom s by 12%, he says.

This zapping "will force the holding companies to focus on weaving a communications campaign into content, requiring a prowess in promotional ad placement and PR," he adds.

The congloms will need to find "a more direct method of contacting consumers with product information, through direct and digital means, such as the marketing services businesses," he says.

While PR declined 6-7% in 2002 vs. a 2% increase in advertising (being especially hard hit in high-tech and financial which accounted for about 40% of PR revenues in 2001), PR continues to be the "early-cycle choice for marketers, industry-wide," he feels.

TiVo, Replay and other PVRs (personal video recorders) are like VCRs but are digitized (requiring no tapes) and can be programmed many ways. Their slogan is "TV Your Way." The devices cost $300-$400. TiVo has a half-million subscribers.

Coincidentally, Magnet Communications of Havas published a paper on PVRs saying consumers are not only using them but digital cable channels, the web, and computer and video games in order to maximize entertainment and limit commercials.

Bill Daddi of Magnet tracks some of the big product mention deals that are being made with movies and TV. Coors products will be mentioned in at least five Miramax films yearly under a three-year pact. Universal Pictures will feature Toyota cars and trucks. Walt Disney (owner of Miramax) and Omnicom's OMD media agency have agreed to include sponsor products in shows on the ABC and ESPN Networks. Target and Reebok are promoted on the popular "Survivor" reality TV show. Such "advertainment" can "present products and brands in a relevant context," says Daddi. PR, because it customarily deals with editorial, can help companies with this "rapidly evolving" technique, he says.

The Morgan report described above is made available to reporters because the firm wants the press and public to understand the industry. Some other analysts also automatically send their reports to the press. The NIRI Standards and Guidance for Disclosure handbook is very negative on public companies sending out or even "referring to" analysts reports, fearing companies could somehow get sued. NIRI needs to flip this policy and start urging analysts to send their reports to interested press. This would avoid legal culpability and show that NIRI is truly interested in IR/PR "convergence," which it is touting...

PR pros, of whom about 20,000 are employed by the ad congloms, should study this financial report on their employers...investors have soured on serial acquirers, says the report. Author Michael Russell would "prefer to see no acquisitions" by the holding companies. He wants OMC to stop buying any businesses for a year so investors can get a "clean read" of its organic growth... Russell is worried that OMC will stop reporting "net new business wins" at the end of each quarter because of Sarbanes-Oxley. Such totals, usually $1 billion or more, are definitely not GAAP. They re often pure conjecture and bloated by a factor of about ten since ad agencies only get 10-12% of the claimed boxcar figures... McCann-Erickson, part of Interpublic, had a "horrible culture of bullying, greed and fear driven by the desire for short-term profit growth," said the Financial Times (click for O'Dwyer's story). There are now about 12,000 ex-IPG employees and some of them are venting to the press...

A 20-page profile of New York Attorney General Eliot Spitzer in the April 7 New Yorker recounts his battles with Merrill Lynch, Salomon Smith Barney and others. Analysts had become "appendages of the investment banking system," he told the mag. Analyst Jack Grubman told Business Week in 2000 that "what used to be a conflict is now a synergy."

An ML analyst called one stock a POS (piece of sh–) in an e-mail while urging his customers to buy it. Salomon in January 2001 had almost 1,200 recommendations out but only one "underperform" and no "sells." ML lawyers battled Spitzer, saying the POS remarks were taken "out of context." Spitzer asked what context allowed an analyst to describe a recommended stock as a POS? Spitzer refrained from launching criminal charges against ML because such charges had put Drexel Burnham Lambert and Arthur Andersen out of business. Instead he won an "agreement in principle" from ten institutions to give analysts independence.There was no admission of wrongdoing. His e-mail research is being used in stockholder lawsuits which the mag says will probably go on for "five years." Spitzer, who is expected to run for governor in 2006, is looking for new areas and has indicated non-profits will be one of them.

--Jack O'Dwyer


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