WASHINGTON MUTUAL LOOKING

Washington Mutual, Seattle, the largest residential mortgage lender which entered the New York market last year by buying Dime Savings, is shopping for a New York firm for ongoing PR.

Sources said that the bank has visited Burson-Marsteller, Edelman PR Worldwide, Fleishman-Hillard and perhaps other firms.

Since acquiring the 125 offices of Dime, Wamu has added another 25 offices in the New York area.
Derek Aney is VP of Northeast PR. Overall PR is headed by Bill Ehrlich, executive VP.

Wamu in March named Jasculca/Terman and Associates, Chicago, for PR in that market.

A Fortune magazine article March 17 said the bank aims at "working class, people of color, and immigrant communities." It has 55,000 employees.

WSJ'S GOLDSTEIN JOINS TIAA-CREF

Steven Goldstein, the former Wall Street Journal spokesperson and Tucson high school teacher, has joined TIAA-CREF as executive VP-PA, a new post.

He's in charge of marketing strategy, corporate PR and advertising for the financial services company which manages assets of more than $260 billion.

Goldstein joins after consulting McKinsey & Co. on the restructuring of its PR group, and evaluating the global reputation of the management consultant.

He was a VP at Dow Jones & Co., parent of the WSJ, and prior to that a senior VP at the Insurance Information Institute for eight years.

TIMBERLAND PICKS PNI

Timberland, which has used Edelman PR Worldwide and Cone, has given Porter Novelli International its PR account.

Frank DiFulco, chief marketing officer at the Stratham, N.H.-based footwear and apparel company, said PNI was hired to help Timberland achieve the "commerce and justice outcomes we seek as a brand and as a company."

The company enjoyed record first-quarter results as net income rose 39 percent to $19.3 million on a 10 percent rise in revenues to $137 million.

The January 20 Fortune rated Timberland as "one of the best 100 companies to work for."

PNI's CauseWorks social responsibility unit will promote Timberland's "Path of Service" program, in which employees get paid to do community service.

RF QUITS COUNCIL OF PR FIRMS

Ruder Finn, the second largest independent PR firm with $81 million in 2002 fees, has quit the Council of PR Firms over the issue of the Council's decision on publishing a ranking of PR firms this year.

The CPRF elected not to publish any rankings after seven ad/PR holding companies said it would be too risky for their hundreds of subsidiaries to reveal any non-GAAP (generally accepted accounting principles) financial figures.

Peter Finn, co-CEO of RF, said he had discussed the issue at length with Kathy Cripps, president of the Council, to no avail. "It is clear the Council is not going to change," he said.

The firm will no longer pay its $40,000 in yearly dues to the group. This has also been an issue, Finn said, since PR firms reporting three and four times as much fees as RF have their CPRF dues capped at $50K. However, he said RF would not have quit the Council over this issue.

Rich Jernstedt, CEO of Golin/Harris International and chair of the Council, said the group was "very sorry" to lose RF as a member. "We hope they will return," he said. Jernstedt said there have been no other member loses over the ranking issue.

Dues are .065% of U.S. revenues to a maximum of $50K. Minimum dues are $2,500. The Council had 126 firms at its peak and now has about 103.

IPG POSTS $8.6M LOSS FOR Q1

Interpublic posted an $8.6 million net loss for the first quarter on revenue of $1.43 billion, citing weak demand for services and rising costs like severance payments and professional fees. IPG earned $59.8M for the same quarter last year.

Chairman and CEO David Bell said IPG is a "work in progress" and the company's balance sheet "has been strengthened considerably."

Revenues were up one percent from a year earlier due to higher foreign exchange rates. The company saw revenue fall by 3.6% on a constant currency basis.

The company said its has pruned 1,400 staffers in the last quarter and 3,600 since March 2002.

Marketing and communications services, which includes PR, declined two percent to $338M, while advertising and media fell 1.9 percent.

IPG also named pharmaceutical executive Christopher Coughlin its first COO since January 2001. He takes the reins June 16. CFO Sean Orr will report to Coughlin, who had been an EVP/CFO at Pharmacia.

LAT RAPS F-H FOR POLITICAL CASH

Fleishman-Hillard has landed $20 million worth of contracts from the City of Los Angeles in recent years as top executives donated $137,000 to city candidates and committees since 1998, according to a front-page expose in the May 9 Los Angeles Times.

Doug Dowie, GM of F-H's Los Angeles office who alone gave $7,000, told this NL there is no "pay for play" involved and that all contracts were put out to bid. "I'm fine with the story," he said, noting the Times reporter, Patrick McGreevy, worked for him when Dowie was an editor at the Daily News of Los Angeles.

The Times points out that the city's Harbor Commission awarded F-H a $400K deal a day after the firm paid $10,000 for its executives to dine with Mayor James Hahn. A week later, the L.A. Airport Dept. approved another contract with the firm for $500K.

The paper also notes Dowie's close relationship with Hahn and that F-H has given jobs to top City Hall aides and provided hundreds of thousands of dollars' worth of image-building help to the mayor.

"We have a good relationship with the city and the mayor," Dowie told O'Dwyer's.

Dowie said he could donate twice as much but wouldn't get any contracts if the office didn't have the talent. Dowie also said he spoke with Hahn May 9 and the mayor expressed support.

The GM, who bills out at $425 an hour, said he wished the Times played up the firm's actual work for the city in keeping it together. He said F-H had no plans to curtail or curb political contributions to the city or mayor.

ANCHOR DOWN IN ANCHORAGE, SAYS DCI

The Anchorage Economic Development Council has awarded its $450,000 three-year contract to Development Counsellors International, according to Kevin Pearson, a VP at AEDC. "We reviewed the credentials of eight firms including Hill & Knowlton, PRx and Fleishman-Hillard," he said, but the decision to go with DCI was a "no-brainer." "DCI is the only firm that specializes in economic development, and I like its track record," explained Pearson, who has been in the investment promotion business for 17 years.

Pearson also is familiar with DCI'S April Mason, who will head the AEDC account. He worked with her when she was at the Kansas City Area Development Council. Pearson met three hours with DCI executive VP Rob DeRocker and Mason.

DeRocker told this NL DCI will reposition Anchorage as being in "the middle of nowhere" to "the middle of everywhere." He said Anchorage is a good place for companies in the "global logistics" game.

Anchorage, which has 270,000 people, is perfect for companies marketing their wares in Europe, Asia and North America, according to DeRocker, noting that Federal Express and United Parcel Service have distribution hubs there.

JWI WINS $700K KUWAIT PACT

Jefferson Waterman International has a $700K contract to buff the image of Kuwait in the U.S.
President/COO Sam Wyman, who was a Central Intelligence Agency operations officer for more than 30 years, is to arrange meetings of various Kuwaiti officials with news organizations, think tanks and public affairs groups.

He also will keep Congress posted on developments in Kuwait.

JWI's contract is funded by the Kuwait Foundation for the Advancement of Science and Fouad Alghanim & Sons Group.

KFAS, which is led by the Emir of Kuwait, was formed in 1976 to modernize the country and promote scientific development. FASG is a leading engineering and real estate development company.
Wyman has worked and lived in Kuwait, Iraq, Saudi Arabia, Egypt, Lebanon and Syria during his CIA career.

JWI CEO Charles Waterman also has an extensive CIA background. He was National Intelligence Officer for the Middle East, and vice chairman of the National Intelligence Council.

BOSTON ARCHDIOCESE SEEKS PR PRO

Donna Morrissey has left her job as spokeswoman for the Archdiocese of Boston.

The Rev. Christopher Coyne said the archdiocese is looking for a senior person to take over communications and PR. Coyne, a seminary professor who has been helping out as a sometime spokesman for the archdiocese for the last 15 months, will serve until the archdiocese replaces Morrissey.

Morrissey, 34, who was hired by Bernard Cardinal Law as part of the church's effort to improve its coverage by the news media, left the archdiocese on April 28, a spokesman told The Boston Globe.

S.H. SHUTS, SHIFT STARTS

Sterling Hager shut down after a 19-year run because CEO Sterling Hager has decided to pursue interests outside the PR arena, said Jim Joyal, who was president of the Watertown, Mass.-based high-tech firm that had 60+ staffers at the end of 2002.

Joyal is starting Shift Comms. with SH veterans Ed Weiler (COO) and Todd Defren (managing director) along with nearly 37 other SH staffers.

The goal is to "re-invent" PR, and avoid playing the "same old notes" associated with high-tech communications. Said Joyal: "It's more than getting your client's picture in a magazine. It's about getting a placement in a publication that is read by a client's potential customers."

SC, he said, will develop an array of e-marketing, newsletter, sales generation, channel building, and white paper syndication programming for clients.

SC is headquartered in Boston and uses SH offices in Washington, D.C., and San Francisco.
It begins life with 40 former SH clients, including Tandberg, mGen and Upshot.

AUTHOR SAYS EMBARGOES HYPE BOOKS

Sara Nelson, author of the forthcoming "So Many Books, So Little Time," said embargoes are used more and more by book publicists because they can create hype for books that would have gone unnoticed.

"It's looking like a pretty good strategy right now," Nelson writes in The New York Observer.

She points out embargoes were used on two current best-sellers: Queen Noor's "Leap of Faith" and Trisha Meili's "I Am the Central Park Jogger."

"It's the reason no one has yet seen former Clinton staffer Sidney Blumenthal's "The Clinton Wars," which is embargoed until May 20 by Farrar, Straus & Giroux but currently ranks first for nonfiction on Amazon.com, thanks to pre-orders," said Nelson.

With embargoes, publicists get to demand that journalists sign confidentiality agreements, and by picking and choosing who to offer that option to, they can pretty much predict the type of coverage they'll get, according to Nelson.

"Anyone who refuses to sign gets 'punished': their articles and reviews will arrive late," she said.

ENQUIRER TO EXCERPT FLANAGAN'S BOOK

The National Enquirer is running excerpts from Bill Flanagan's new book, entitled "Dirty Rotten CEOs," in its May 14 issue.

Flanagan, who was a senior editor at Forbes for 17 years, has also cut a paperback deal.

His list of rascals includes Gerard Levin of AOL Time Warner, Bernie Ebbers of WorldCom, Sandy Weill of Citigroup, Tyco's Dennis Kozlowski, Ken Lay of Enron, Adelphia's Rigas family, and Gary Winnick of Global Crossing.

EGGE NAMED SENIOR HOME EDITOR

Sarah Egge was named senior home editor of Country Home magazine, replacing Carol Schalla, who has moved to Midwest Living magazine.

Egge, who has been with Country Home's publisher Meredith Corp. since 1996, was previously senior editor of interior design at Better Homes & Gardens.

She was the recipient of the 2001 American Furniture Manufacturer's Assn. Home Award for her coverage of furniture and the furniture industry.

Country Home, which was started in 1979, is published ten times per year. It has a ratebase of 1.2 million and a readership of more than nine million, according to the publisher.

PEOPLE

Mike Hammer has replaced Greg Gutfeld as editor-in-chief of Stuff magazine.

Greg Williams, previously editor of Arena in London, was named to succeed Hammer as executive editor of Maxim.

David Bass, deputy publisher of The Weekly Standard, a political magazine, is joining Qorvis Communications, in Washington, D.C.

Elizabeth Crow is stepping down as editorial director of Primedia after about 17 months.

Henry Norr, who covered technology and wrote a weekly column for The San Francisco Chronicle, has been dismissed.

Myron Kandel, CNN's financial editor, was honored by his alma mater Brooklyn College during the annual Best of Brooklyn Dinner and Awards Gala on May 13 at the Regent Wall Street. Kandel is a 1952 graduate of the school.

NEWSCASTERS SOUGHT AS DRUG PITCHMEN

Well-known broadcast news people, including Aaron Brown of CNN and Walter Cronkite, have been approached by drug makers and other healthcare companies about appearing as hosts in videos.

The news-style segments, which profile healthcare companies or their products, are shown on local public TV stations between regular programs.

CNN's Brown has backed out of anchoring an infomercial because he did not have "editorial oversight" on the project.

Brown and Cronkite, the former CBS News anchor, were approached to replace Morey Safer of CBS as host of a new series of video "news breaks," which are produced by a Boca Raton-based company called WJMK Inc.

According to WJMK documents obtained by The New York Times, the drug companies pay WJMK about $15,000 in connection with the segments and other services and are allowed to edit and approve the videos, which are two to five-minutes long.

The Times also disclosed that Healthology, a drug marketing company, has been hiring journalists from local TV and radio stations to appear in video webcasts.

The programs are available through the websites of many newspapers, including The Los Angeles Times, The Philadelphia Inquirer and The Miami Herald.

Drug makers pay for the webcasts, which feature the journalists interviewing doctors and patients about their products.

For years, local news stations, as part of their newscasts, have broadcast videos created by drug companies' PR firms-"a practice that critics equate to publishing unedited press releases," the Times said.

"Now, production companies are expanding that marketing tactic to public TV and the web and using celebrity journalists to add to the videos' credibility," the Times said.

(Media news continued on next page)

WHERE HAVE ALL THE JOURNALISTS GONE?

Publicist Greg Jarboe said the reason it has become even harder to pitch stories is because there are far fewer journalists to pitch them to.

I Want Media.com, which keeps track of U.S. media layoffs, recently reported that some 70,000 jobs at media companies have been lost since June 2000.

Lettie Teague, who is the Food & Wine Magazine's wine writer, won the MFK Fisher Distinguished Writing Award in a contest sponsored by The James Beard Foundation.

Jane Pauley wants to start a women-oriented magazine after she leaves NBC next month. Pauley, who is 52, said the magazine would be aimed at women in her age group.

'SEARCH ENGINES' HELP WITH PLACEMENTS

Greg Jarboe and Jamie O'Donnell, co-founders of SEO-PR, believe major search engines, such as Google and Yahoo!, will revolutionize the way PR pros get publicity for their clients.

The "old view of marketing" assumes communication is a one-way street, they said in an article appearing on Traffick.com.

With search engines, "many potential buyers are no longer waiting passively to receive messages- 98% of which are of little interest to them anyway," they said. "Instead, they're using search engines to find the 2% that they're already interested in. If they find your site during that search, they're already pre-disposed to take action. It's revolutionary."

They point out that journalists are among the 99 million adults in the U.S. who use search engines to find information.

Jarboe and O'Donnell, who have 40 years of combined experience handling PR for tech companies and web companies, said the best way for publicists to get search engines to include their site is to follow Google's placement guidelines:

1. Think about the words users would type to find your pages, and make sure your site actually includes those words within it.

2. Create a useful, information-rich site and write pages that clearly and accurately describe your content.

3. Try to use text instead of images to display important names, content or links. The Google crawler does not recognize text contained in images.

4. Make sure all the sites that should know about your pages are aware your site is online.

5. Make pages for users, not for search engines. Don't deceive your users, or present different content to search engines than you display to users.

6. Don't participate in link schemes designed to increase your site's ranking or PageRank.

DREZDON MEDIA STARTS NEWS/PR SERVICE

Drezdon Media, the New York-based publisher of Rhythm and News Magazine, and producer of "On Stage with George Fletcher," a radio program, will offer a new syndicated news service for music publications' editors and writers.

Syndimusic.com will provide a clearinghouse for articles, photos and press releases.

Media can tap into the site for stories and photos for use in their publications, as well as post editorial opportunities and calls for interviews with specific artists.

PR firms will be able to distribute press releases, post a showcase page featuring their artists/record label clients, music, electronic press kits and contact information.

Beginning with its next issue, Rhythm and News will be offered solely as a digital magazine, available as a free subscription at www.rhythmandnews.com for monthly download.

MEDIA BRIEFS

BizBash Event Style Reporter's special Republican Convention planning issue is currently being distributed. The tabloid-size publication, called "Welcome to New York," features a listing of more than 1,000 hotels, restaurants and lounges and a directory of 237 caterers.

Wal-Mart Stores has stopped selling Maxim, Stuff and FHM magazines after customers said their covers were too racy.

While Wal-Mart can account for up to 15% of all single copy magazine sales, Stephen Colvin, president of Dennis Publishing, which owns Maxim and Stuff, said Wal-Mart accounts for less than 3% of newsstand sales for both magazines.

NEWSPAPER READERSHIP HOLDS STEADY

The Spring 2003 Competitive Media Index from the Newspaper Assn. of America shows daily newspapers in the top 50 markets continue to reach nearly eight out of 10 adults (79.9%) over the course of a week (5 weekdays plus a Sunday).

The CMI is an NAA analysis of market data from Scarborough Research of New York for the period ending Sept. 2002.

An NAA analysis of the latest Audit Bureau of Circulations data for the six-month period ending March 31, 2003 shows roughly half the daily papers gained circulation. The average daily circulation for the 814 papers reporting for comparable periods was 49,966,190, a drop of 0.1% (from 50,022,875) over the same period a year ago.

On Sunday, the trend for the 640 newspapers reporting for comparable periods was the same, falling 0.1% to 54,318,384 from 54,393,420.

USA Today's circulation rose 1.8% while circulation for The New York Times fell 5.3%.

BABY BOOMERS GET NEWS FROM OLD MEDIA

New research by Knowledge Networks, Menlo Park, Calif., reveals that Baby Boomers (39 to 57-year-olds) rely on traditional media-primarly TV and newspapers-for financial news.

On a weekly basis, 41% turn to newspapers to learn about money matters; 41% turn to TV; 28%, radio, and 27%, the Internet.

By contrast, 29% say they consult with family or friends about money at least once a week.

Among those who get financial information from TV at least once a week, roughly equal portions say they turn to all-news channels (62%) and to broadcast network newscasts (60%). In addition, as income and/or expected inheritance increase, consumers are much more likely to get money news from all-business TV networks.

On the Internet, Boomers are as likely to rely on ISP sites (33%)-such as Yahoo.com or AOL.com- for financial news as all-news sites (35%).

The decision of Ruder Finn to quit the Council of PR Firms is a major one for the PR counseling industry.

A reader commented to the O'Dwyer website: "The Council is the rankings and now that the larger firms cannot own up to seeing a minus next to their carefully 'branded' names, the Council is basically stalled and dead in the water until things get better (if they do and the firms return)."

We couldn't have said it better. The CPRF's aim was nothing less than control of the rankings and control of the definition of PR.

Its definition of PR included lots besides communication via editorial time and space. The boxcar numbers that the biggies put out dwarfed the numbers of the smaller firms, making them appear insignificant.

Supposedly the bigger firms had more "clout." This is true in advertising where media-buying giants can drive down prices via huge purchases. But it doesn't work in PR where important placements must be done on a custom basis.

Also, the ad agency sister companies never gave much business to their new PR siblings. PR has been the worst performing segment of WPP, OMC & IPG. Ad people regard PR people on the premises as a munitions factory would regard a smoker.

Interpublic's continuing problems include a threat by Moody's to cut IPG's long-term credit rating to junk status because of less revenue and more bills. Standard & Poor's has already cut IPG's rating to junk. IPG is having a hard time cutting costs because it still has to pay rent on much space after cutting 12,000 of its 62,000 employees. Layoffs in Europe are particularly onerous because of high social costs.

We heard IPG CEO David Bell deliver a 30-minute hard-sell talk to an analyst teleconference May 8 on how much better things will be in the future and how hard IPG is working on its problems. But this is the same IPG that refuses to identify more than 200 acquisitions.

Advertising hard sell that is short on facts is no longer going to cut it with the newly freed analysts and the increasingly tough credit rating services. IPG, which owns Weber Shandwick, once billed as the largest PR firm, is also taking a long time to sell its NFO unit.

Although former PRSA COO Ray Gaulke once reported annual expenses of $49,000 on PRSA's income tax return, staffers now tell us that expenses are no longer kept by individuals, whether staff members or elected officers.

The expenses are sprinkled among dozens of activities of PRSA such as conference, assembly, publications, etc.

However, CPAs say this practice shows a "lack of internal controls" because auditors don't get to double check whether the expenses are correctly allocated. Auditors as well as members should know whether anyone is running up big expenses, the CPAs said. Section 274 of the IRS code says the people involved and purpose of any expense must be recorded. This is "shoebox accounting," one CPA said, adding: "Petty cash must be tracked."

It's time for a thorough examination of PRSA's finances by outsiders.

PRSA has ignored the Sarbanes-Oxley edict to have outsiders on its board while the American Society of Assn. Execs. already has two such directors. The best "internal controls" would be senior members working at PRSA h.q. and observing.

Steven Lubetkin of FleetBoston, the ranking financial person on the PRSA board, has refused to discuss any PRSA financial topics with us.

Sobel & Co., PRSA's new auditors, said in an e-mail to us that the American Assn. of Advertising Agencies should be checked for its policy on deferring dues. The 4As has a deferred payment plan in which about two-thirds of members pay their dues quarterly or semi-annually.

Some firms don't know what their billings are until 3-4 months after the start of the 4As fiscal year April 1 and can't calculate dues owed, further delaying payment. The 4As is a bad example for Sobel and PRSA to cite.

There are plenty of financial topics to investigate at PRSA including the $165,954 in travel, hotels and meals suddenly assigned to the Counselors' Academy in 1990 (vs. $19,175 the previous year). Whose bills were those? The Academy denied any unusual travel bills.

Why doesn't PRSA have a CPA on staff as it promised it always would after the departure of financial head Thomas Veeder in 1992 who had a degree in fine arts?

Maybe a CPA won't work for PRSA. Why are no PRSA contracts ever put out for bid via the PR trade press?

How could $1,072,435 be spent on computers in about six years?.

Instead of moving h.q. at huge cost, PRSA should invest in some mousetraps. If the space is so bad, why would anyone sublease it at $28 a sq. ft?.

PRSA leaders are against making the June 20-21 "leaders rally" in New York also serve as an Assembly. However, it will be called if enough non-APR rank-and-file members contact h.q. or Reed Byrum, president.

Should decoupling pass June 20-21, the Assembly Oct. 25 in New Orleans could be the first one in many years dominated by non-APRs.

Presidents of chapters (half of them non-APR) and VPs can appoint themselves as delegates under PRSA's bylaws.

Such individuals probably would not allow PRSA leaders to divide the Assembly into a dozen "focus" groups nor would they listen to seven hours of presentations by leaders.

They might actually assemble and talk to each other about major problems facing PR instead of obsessing over PRSA housekeeping details.

--Jack O'Dwyer