Edition, Dec. 31, 2003, Page 1
B-M ADVISES BEEF GROUP AMID
is counseling the National Cattlemen s Beef Association
amid the discovery of Mad Cow disease in the U.S.
report of the disease, bovine spongiform encephalopathy,
or BSE, by the U.S. Dept. of Agriculture has sparked more
than 20 countries to halt imports of U.S. beef and companies
from Tyson Foods to Wendy s to issue crisis responses to
ease consumers and investors fears.
NCBA is the $27 billion beef industry s main trade group.
B-M has counseled the group in the past regarding several
issues, including BSE, a spokeswoman at the group s Denver
headquarters told O Dwyer s. Ketchum has also worked on
marketing issues for the group in the past.
VINES RETURNS TO CHRYSLER.
Chrysler has named Jason Vines VP-communications, succeeding
Ken Levy, who plans to start his own PR firm in New York.
joins from Strat@comm, where he served as managing director
of the Washington, D.C.-based firm s automotive office in
Detroit. The 43-year-old executive signed on at Chrysler
in 1983, and worked his way through the labor relations
and product PR ranks. He also was "executive on loan"
to the American Automobile Manufacturers Assn., reporting
to then-president Andrew Card, who is now White House Chief
left Chrysler in 1998 for a VP slot at Nissan North America.
He shifted to Ford Motor in 2000 before moving to Strat@comm
in early 2002. Vines reports to Dieter Zetsche, president
& CEO of The Chrysler Group.
has 20+ years of PR experience, serving in Europe for Ford
and General Motors. He joined Chrysler in 2000. Zetsche,
in a statement, praised Levy for "providing tireless
leadership of the communications team during our company's
JFWBK FENDS OFF
TAKEOVER OF ACA.
Joele Frank, Wilkinson Brimmer Katcher has been advising
Atlantic Coast Airways as it successfully defended against
a takeover bid from regional carrier rival Mesa Air Group.
The takeover collapsed last week when Mesa lost the backing
of United Airlines parent UAL and withdrew its efforts.
Brunswick Group was brought in by Mesa to handle communications
through the attempted takeover.
WEISS, OTHERS EXIT ROWLAND.
Mark Weiss has left his CEO slot at Rowland Communications
Worldwide to pursue other interests. Publicis Groupe "aligned"
RCW with Manning, Selvage and Lee in November, and had Weiss
reporting to MS&L CEO Lou Capozzi. The MS&L chief
told O Dwyer s at that time that he intended to "preserve
the brand integrity of Rowland and manage it as an independent
who could not be reached for comment, is succeeded by Anne
Moravick, who had left MS&L to set up her own consulting
firm. She spent 18 years at MS&L, managing its global
healthcare unit, and London office.
other top executives, SVPs Tony Katz and Laura Stortz, have
left the firm that counts Johnson & Johnson/Merck, and
Ortho Biotech as clients.
LOOKS FOR PR FIRM.
Invest Northern Ireland is looking for a PR firm to drum
up business for the U.K.-controlled section of Ireland.
INI wants a firm capable of creating targeted business-to-business
communications strategies including advertising campaign
development and placement. It prefers a firm with coverage
in NI s key U.S. marketing territories, which are Boston,
Chicago, Atlanta, Silicon Valley and Washington, D.C.
Buchsbaum (617/266-8839) wants to get proposals with a "value-for-money
orientation" from a firm that understands the factors
and processes involved in international location decisions.
The deadline is Jan. 9.
Ireland s political landscape received a jolt during the
Nov. 26 elections in which Ian Paisley's hard-right Democratic
Unionists scored a victory over David Trimble s Ulster Unionists
emerging as the top Protestant party for the first time
in 32 years. Paisley is against the 1998 Good Friday power-sharing
agreement ironed out with Ulster s Catholic parties.
CLARKE COUNSELS COMCAST.
Torie Clarke, who left the Pentagon in June after serving
as its top spokesperson through the invasions of Afghanistan
and Iraq, is slated to take an advisory communications role
at Philadelphia-based cable giant Comcast. As senior advisor
for comms. and government affairs, Clarke is charged with
coordinating PR and gov t relations efforts for Comcast,
as well as with other members of the cable industry.
continued on page 2
Edition, Dec. 31, 2003, Page 2
HONEST ABE' HIRSCHFELD
SPLITS WITH TSSG.
Parking lot magnate Abe Hirschfeld has cut ties with The
Steven Style Group, the firm he used to announce his candidacy
Nov. 4 to replace New York Senator Chuck Schumer.
Brian Barry of TSSG, who handled the 85-year-old s campaign
kickoff, told this NL the firm is no longer working for
the colorful Hirschfeld.
New York counselor Harry Zlokower handled Hirschfeld s
Dec. 19 appearance at Blessed Sacrament School in Manhattan,
where he discussed his just-published autobiography, "Crazy
and in Charge." "We ve been doing PR on and off
for Abe for a number of years," Zlokower told O Dwyer's.
Zlokower & Co. s press advisory says Hirschfeld is
known for his "pithy, witty statements," and was
confidant to Robert Kennedy, Donald Trump and Tony Blair.
Hirschfeld is known for his stormy 16-day ownership of
the New York Post in 1983 (The Post, under Hirschfeld's
control, ran a special section about him that was headlined
"Who Is This Nut?" The paper's cover featured
Alexander Hamilton, founder of the Post, with a tear in
Hirschfeld is being sued by Paula Jones for allegedly reneging
on his 1998 $1M offer to her to drop her sexual harassment
suit against former President Bill Clinton. A federal judge
on Dec. 11 rejected Hirschfeld's request to depose Clinton
before the case went to trial.
The originator of the open-air garage ("because cars
never catch cold") also served two years in prison
for hiring a hit man to kill a business partner.
Prison reform is a central plank of Hirschfeld's campaign
because of his "own experience" says one of his
recent campaign ads.
OGILVY HANDLES CHILDREN'S
Ogilvy PR Worldwide is handling PR for Hoffmann-La Roche
s weight-loss prescription, Xenical, which the Food and
Drug Administration recently approved for use by adolescents.
That nod makes the drug, also called orlistat, the first
prescription diet drug okayed for kids.
The FDA cleared Xenical for 12 to 16-year-olds after two
studies were completed.
Terence Hurley, director of product PR for Roche, said
the company has no plans to market the drug to kids.
Obesity has become a major PR issue in the last year, as
fast food restaurants, and beverage and snack food marketers
have begun to respond to criticism that too many children
Fifteen percent of adolescents are considered "obese,"
while 30 percent are said to be overweight.
Xenical, which works in the gut to stop about 1/3 of dietary
fat from being absorbed, was first marketed in 1998, and
is sold in 140 countries. Ogilvy has handled work in the
past for Xenical, which had sales of about $600 million
last year but has been regarded by Forbes as a disappointment
CSV REPS WASSERSTEIN
Citigate Sard Verbinnen is handling media relations and
advising financial executive Bruce Wasserstein s New York
Media Holdings through its $55 million purchase of New
Wasserstein, who heads New York-based investment bank Lazard
and equity firm Wasserstein & Co., also owns the weekly
financial newspaper The Deal, American Lawyer Media
and Real Estate Media. The latter two properties put out
various publications like the New York Law Journal
George Sard, chairman and CEO of Incepta-owned CSV, and
VPs Stephanie Pillersdorf and Rich Coyle are handling media
for the deal.
The 35-year-old New York magazine has a circulation of
about 1.8 million. Tabloid publisher America Media and a
high-profile group including Mortimer Zuckerman, ad exec
Donny Deutsch and Miramax s Harvey Weinstein, among others,
bid for the publication, which turned a profit under $2
million on revenue of $43 million last year for Primedia.
New York Media Holdings is controlled by the Wasserstein
VIVENDI SETTLES SEC
Vivendi Universal has been hit with a $50 million civil
penalty by the Securities and Exchange Commission to settle
charges the company misled investors in news releases and
The SEC s complaint alleged the company's senior executives
held back accurate financial information by authorizing
misleading news releases.
Executives, in releases and other statements, gave ambiguous
earnings targets and, in one example, depicted cash flow
as "excellent" when it did not have access to
cash flow at two major units.
The company's former CEO Jean-Marie Messier has agreed
to pay a $1M fine and give up claims to a $26M severance
package ironed out before his 2002 departure. He is barred
from serving as an officer of a public company for 10 years,
but can serve as a director in five years. Former CFO Guillaume
Hannezo has agreed to pay a smaller penalty and is similarly
barred from serving as an officer or director.
Vivendi said in a statement the deal comes "without
admitting or denying any liability" and noted it is
not being required to restate any past financial reports.
The $50M will be put in a Sarbanes-Oxley "Fair Fund"
to be distributed by a federal court to shareholders.
Brandy Anderson, senior
manager at Washington, D.C., PR firm Blakey & Agnew,
has joined the Century Council, the liquor industry-backed
effort against drunk driving, as VP of government relations.
Prior to B&A, where she ran the National Hardcore Drunk
Driver Project, Anderson rose through the PR ranks at Mothers
Against Drunk Driving.
B&A was founded by Marion Blakey, currently administrator
of the Federal Aviation Administration.
Edition, Dec. 31, 2003, Page 3
AD WRITERS GIVE
PITCH TIPS TO PR PROS.
The Publicity Club of New York packed 150 PR people and
guests into its Dec. 16 luncheon meeting to hear four New
York-based reporters outline their criteria for covering
advertising and marketing news.
The panel consisted of Jonah Bloom, executive editor of
Advertising Age; Brian Steinberg, ad columnist for
The Wall Street Journal; Stuart Elliott, ad columnist
for The New York Times, and Theresa Howard, ad/marketing
reporter for USA Today.
Peter Himler, president of PCNY, was moderator of the panel.
Howard, who has kept a low profile since taking over the
beat three years ago, said her paper's policy is to cover
only campaigns aimed at consumers and running nationally
"The ads and commercials have to be out there and
visible to people," said Howard, who added she also
helps cover media news. She is especially interested in
getting pitched trend-setting promotions for stories like
the one she wrote in USA Today's Dec. 15 edition, which
was headlined "Marketers mine humor from serious topics."
The article dwelled on three new campaigns by John Hancock,
H&R Block and Citibank that Howard said are "making
some headway in trying to put a more human touch in the
promotion of their brands."
Howard also laid down some other rules for publicists to
1. "Know whom you pitch." Howard said she recently
got an e-mail from one publicist to another with updates
on how to pitch her.
2. "Know when to pitch." She does not want to
get pitched at 3 p.m. on Friday for a Monday story.
3. "Also, when not to pitch." The day after you
see a story on a particular topic and your client is not
mentioned is not the time to pitch her, she said.
4. "Know what we cover." Howard said she covers
advertising and consumer marketing. "We don t really
cover advertising from the business side of things unless
there is some scandal," she said.
Her final advice was for publicists not to "overload
lunch meetings." If it is someone that wants to talk
about how great their company or client roster, she does
not want to take the time, but she will go to lunch with
someone who makes ad decisions.
Steinberg, another relative newcomer to the ad beat, said
the Journal s ad coverage is trend-driven.
In the case of campaigns, he pointed out there is heavy
emphasis on reporting how much the companies are paying
for the ads.
He said the Journal wants to do stories about new ad campaigns
before they run.
Bloom said Ad Age's news coverage focuses on marketing
communication issues instead of people changes and account
He said AA's reporters have been instructed to cover stories
by "following the money and where the money is going
to go." Bloom also puts a high priority on "getting
ahead of trends" stories.
The former editor of PR Week said an assignment in the
works is an article about how "word-of-mouth"
is used for marketing campaigns.
He told one questioner he has seen a definite shift away
from traditional ad use to non-traditional methods, such
"We want to be in the forefront of how something
will change the ad agency business," Bloom said.
Covers Nuts & Bolts
Elliott said his column, which runs Mondays-Fridays, continues
to run "nuts and bolts stuff" as well as information
about broader topics such as ad business-side trends, globalization
and non-traditional marketing moves.
After the meeting, Elliott told this NL he gets most of
his information from publicists at the ad agencies.
"Exclusives are more important than ever before,"
said Elliott, who pointed out the Internet is loaded with
With the exception of Steinberg, who still prefers to get
a phone call, the reporters prefer e-mail pitches. Elliott
said the Times has eliminated the fax clerks, and Howard
no longer checks to see if she got a fax.
MARGINALIZED ON TV.
Latinos continued to be marginalized on the evening newscasts
of ABC, CBS, CNN and NBC in 2002, according to the National
Assn. of Hispanic Journalists 8th annual Network Brownout
Report released Dec. 11.
The report found that out of approximately 16,000 stories
that aired in 2002, only 120less than 1%were
about Latinos. In 2001, only 99 stories were about Latinos.
Hispanics now make up more than 13% of the nation s population.
This year s study found several significant improvements.
The use of Latinos as interview subjects increased and the
average length of Latino-related stories increased from
two minutes and 25 seconds in 2001 to two minutes and 51
seconds in 2002, with the length of CNN stories far surpassing
the other networks.
Diane Alverio, co-owner of Baldwin/Alverio Media Marketing,
a media research, marketing and PR firm, helped prepare
the report. Alverio is also a past president of NAHJ.
CATALOG FOUNDER WRITES
Lillian Vernon, who founded the 52-year-old national catalog
company, Lillian Vernon Corp. in Rye, N.Y., will write a
national column for Scripps Howard News Service.
The column, "Lillian s Business," will explore
a range of business topics that relate to entrepreneurs
and business leaders alike.
Vernon is at [email protected].
news continued on next page)
Edition, Dec. 31, 2003, Page 4
EDITOR: LAYOFFS HURT
William Holstein, editor-in-chief of Chief Executive
magazine, said news coverage, especially foreign news, has
deteriorated because of layoffs.
Holstein said a "top media maven who shall forever
remain nameless" told him that somewhere in the neighborhood
of 12,000 to 15,000 journalists have been fired over the
past two or three years.
The vast majority of these reporters and editors were seasoned
reporters in their 40 s and 50's.
Holstein, a former foreign correspondent for United Press
International and a past president of the Overseas Press
Club, said it has become obvious to him that media organizations
are missing the experience of these journalists.
"The coverage of the potential hazards of invading
Iraq, which were so obvious to anyone with Mideast experience,
was one example," he said in an article that appears
in the December issue of the OPC Bulletin.
Coverage of China, Japan, and Korea, a region he spent
time in as a correspondent, also has been poor, he said.
"News organizations keep rediscovering the same lessons
about Asia and recycling the same myths, such as the old
canard that Japan s Liberal Democratic Party is about to
undergo sweeping change and then lead a major `reform of
the Japanese system," said Holstein, who was based
in Hong Kong and Beijing for UPI.
Other regions, such as Russia and Latin America, seem to
have "simply fallen off the map," he said.
The owners of journalistic organizations understand entertainment
and marketing, but he wonders if they understand that part
of the charter of being in journalism is "a commitment
to speaking the truth as best you can."
TWO SHOPPING MAGS
TO DEBUT IN 2004.
Shopping Etc. is the title of Hearst s new women
s shopping magazine that will debut in September as a competitor
to Conde Nast's Lucky.
Three issues of Shopping Etc. will be published in 2004
and 10 in 2005. Mandi Norwood is editor. Sarah Ruffin, previously
with Living Room magazine, has joined as home editor.
Fairchild Publications will start up a quarterly men s
shopping magazine called Vitals.
The first issue is scheduled to come out in September after
the spring debut of Cargo, a male-oriented spinoff
OBESITY IS TOP
FOOD NEWS IN 2003.
The obesity story easily tipped the scale as the No. 1 food
story of the year in Hunter PR s annual survey of newspaper
and magazine food editors.
Obesity also was named as the top health story by the Harvard
Medical School's Harvard Health Letter (NL, Dec. 10).
The firm said virtually every editor participating in the
survey ranked obesity within the top three.
Editors voted the Atkins Diet as the year s No. 2 food story,
followed by trans fatty acidthe FDA s new public enemy
The other top ranked stories were: "Freedom"
fries; South Beach Diet; Mediterranean Diet; a bill requiring
nutritional information on menus; the "semi homemade"
movement; airline food fees, and a reality TV show called
is giving up the "Boldface Names" column in The
New York Times for about a month to work on stories
for the paper's "Style" section.
who held various news editing positions at The New York
Times, where he has worked for 20 years, is joining The
Philadelphia Inquirer on Feb. 2 as deputy managing editor
He will oversee the metro, national/foreign, and business
Mary Gail Pezzimenti,
former managing editor at Details magazine, has replaced
Bob Sabat as managing editor of GQ.
Also named to the staff were veteran British profiler Chris
Heath; Jo Sullivan, previously a feature writer at Harper
s; Jeanne Marie Laskas from Esquire , and Joel Lovell
from The New York Times Magazine.
was promoted to Washington, D.C., bureau chief for Media
General News Service.
85, former chairman/CEO of Doyle Dane Bernbach, died Dec.
6 at his home in Jupiter, Fla.
Daly, a fighter pilot in World War II, who survived the
battle of Guadalcanal when his Grumman F4F was shot down,
went to work for DDB as an A/E after the war.
is leaving CNN, where he has been for 20 years, to join
the business news staff of the Fox News Channel.
John Raess, 53, previously West Coast bureau chief
for TheStreet.com, was named Associated
Press assistant chief of bureau for Northern California
and Northern Nevada, replacing Anthony
Marquez, who was recently promoted to chief of bureau
in Los Angeles. Raess is based in San Francisco.
The Associated Press
is collaborating with Paris-based Ipsos-Public Affairs on
development and distribution of twice-a-month national polls,
occasional state polls and quarterly international polls.
The polling partnership began Dec. 5 with a national poll
that showed growing optimism the economy is improving President
Bush's public standing.
ZIFF DAVIS TO HOLD
CONSUMER TECH SHOW.
Ziff Davis Media's event marketing group is launching a
four-day consumer technology event next Oct. at the Jacob
Javits Convention Center in New York.
DigitalLife, which will kick off on Oct. 13, is expected
to attract more than 25,000 consumers and technology enthusiasts.
A major media relations program is planned for DigitalLife.
In addition to industry insiders, press and channel partners
will be able to attend an industry and media preview prior
to the public opening.
Over four days, more than 150 companies will showcase the
newest in digital products, including digital home entertainment,
digital music, gaming, digital photography and moviews,
home networking, mobile technology, Internet access, small
office/ home office, digital commerce and digital culture.
The new event will coincide with Ziff Davis Media's new
consumer lifestyle magazine, which is under development
and scheduled to debut in early part of 2004.
The new magazine will highlight ways in which consumer
electronics are changing and enhancing people s lives.
The American Assn. of Ad Agencies will hold a series of
events next September to mark "Advertising Week."
They will include the presentation of a new award to recognize
outstanding achievements in advertising, the creation of
a "walk of fame" and exhibitions at Grand Central
The Cincinnati Enquirer is redesigning it pages to
emphasize coverage of local and regional news.
The Gannett-owned paper said readers have said they want
more news about their neighborhoods, more local business
news and broader coverage of sports and entertainment in
Edition, Dec. 31, 2003, Page 7
Quotes from PR-related
stories in 2004:
capable, honorable people sit around a boardroom table,
their I.Q.'s drop 50% and their courage disappears entirely."
Nell Minow of thecorporatelibrary.com.
"The best analysts
know when they're being lied to. I've got a guy who sniffs
it out within 30 seconds."
--Jeff Knight of Putnam
Investments to NIRI. He insists on personal interviews with
CEOs and CFOs.
"Short of an
actual conviction or revocation of a license, none of that
information gets shared."
--A doctor explaining
how nurse Charles Cullen was able to murder an estimated
69 people because hospitals feared saying anything negative
about previous employees.
bullying techniques, don't try to get directors of research
fired, don't play into the conflicts of interest in the
business" (e.g., by asking CFOs to cancel banking relationships).
--Analyst Lisa Shalett
to members of NIRI at their annual conference.
employee headcounts are simply accumulations of historical
data and don't fall under GAAP (generally accepted accounting
--CPA czar Doug Carmichael
on decision of ad/PR conglomerates to stop releasing any
statistics for their ad/PR firms on the ground that GAAP
might be violated.
are but temporary and puny obstructions. In Germany too
in a little while Hitler would have disappeared. What matters
if it were a day or a year?"
--Carl Byoir in 1934
to House Committee on Nazi Propaganda. He argued in an 18-page
statement against the boycott of German goods demanded by
many Americans. The Byoir firm worked for the Hitler government
via the German Tourist Bureau.
(is) mastery of the facts, and reasoning that makes common
sense to common people."
--George Hammond in
giving the PRSA Foundation Lecture in 1978. Hammond, who
died Dec. 4 at 96, headed Byoir 25 years.
ends an embarrassing chapter in PRSA's history in which
it backed the spurious free speech claims of a company that
now chooses to pay $1.5 million rather than defend the truthfulness
of its past statements."
--PRSA board member
Jeff Seideman after Nike pulled out of the Nike vs. Kasky
lawsuit. The Assembly voted Seideman off the board although
he tried to get re-elected.
to a lot of advice (from Omnicom's PR units) and decided
no PR strategy was going to overcome it" (the June
12, 2002 Wall Street
Journal expose of OMC's accounting practices that dropped
the stock price from the $80's to the mid-30's).
--OMC's John Wren to
CBS MarketWatch in ending 15-month press boycott. He accused
the WSJ of "inaccuracies" but never named any.
--Interpublic CEO David
Bell in abruptly walking out on an interview with the Financial
Times of the U.K. when the reporter brought up the subject
of IPG's $2.7 billion debt.
are forbidden from talking to journalists on pain of immediate
--E-mails from Interpublic
in New York to London staffers of McCann-Erickson, as reported
by the Financial Times.
"It was a horrible
culture of bullying, greed and fear driven by the desire
for short-term profit growth and little else."
of McCann-Erickson to the Financial Times. M-E was
the unit of Interpublic that booked $181M in non-existent
revenues, resulting in an SEC investigation and lawsuits
that IPG settled for $115M in cash and stock.
Weber Group will become the quality and volume leader in
all practices (of PR) in all the major regions of the world."
--Statement in 1996
by M-E after it acquired Weber with IPG stock.
"PR is getting
more like telemarketing every day, with PR pros wearing
headsets and dialing editors all day long. When business
is slack, they do actual telemarketing"
--Anonymous. [A telemarketing
firm, meanwhile, also
does press placements].
board pledged to operate in a transparent financial environment,
with a commitment to rigorous ethical standards."
Judith Phair to the 2003 Assembly, which was not told about
an $86,250 hike in section dues; not told until the day
of the Assembly about the planned $6 million, 15-year lease
of a downtown office, nor provided with a nine-month balance
issue that faces our institutions today is a crisis of governance."
--PRSA president Reed Byrum to 2003 Assembly, which voted
to continue to bar 80% of PRSA's members (the non-APRs)
from voting in or even speaking to the Assembly.
the 21st century comes from reading the public's mind, not
--Al Golin of Golin/Harris
International to Institute for PR.
"The job of
advertising is to convince consumers; the job of PR is to
convince the press."
--Statement by former
Advertising Age New York editor
find ways to go around the press, duck 'em and screw 'em."
--Philosophy of Patrick
Jackson, who was highly active in PRSA until his death in
is the best brand differentiator available to an organization."
--Tyson Heyn, organizer
of the new League of American Communications Professionals,
an online PR society with $119 annual dues (www.lacp.com).
33,000 visit free portion of its website.
labor--is about all that PR firms can afford now."
--Anonymous PR pro
in commenting on the $15,000-$18,000 rate for HMOs for a
married employee with children in New York (2003 rate).
Edition, Dec. 31, 2003, Page 8
Dave Drobis of Ketchum,
offloaded by Omnicom at 62, is the latest in a long string
of senior PR pros dumped by the youth-oriented ad culture
that is sitting on much of the PR counseling industry like
an elephant on a flower bed.
Omnicom-owned PR units such as Ketchum are particularly
prone to jettisoning established PR names.
Drobis is currently president of the Arthur Page Society
and president of ICCO (Europe-based group of PR firms).
He was the founding chair of the Council of PR Firms.
OMC previously dumped Drobis' partner of many years, Paul
Alvarez, at the ripe old age of 55 in 1997, less than a
year after OMC purchased Ketchum. Ketchum's Walt Lindenmann,
the No. 1 researcher in PR, was sent packing by OMC in 2000
at the age of 64.
Carnage of this type
is rampant in the world of the PR operations owned
by the congloms.
The No. 1 figure in financial PR, Ted Pincus, was expunged
by Interpublic within two years after he sold his firm in
1999. Pincus had told us he had a five-year contract and
intended to stay ten years.
The ad world obviously doesn't believe that PR pros, like
writers, grow more valuable with age because of the knowledge
and judgment they have accumulated and the personal relationships
they have built.
John Hill, co-founder
of Hill & Knowlton, was active in H&K into his 80's. Harold
Burson, 80+, is active at Burson-Marsteller. Daniel Edelman
and David Finn, both past 80, gave excellent speeches at
the Dec. 4-5 PRSA international seminar at the U.N. Edelman
PR Worldwide and Ruder Finn are the two biggest independent
It is ironic that Drobis, who embraced the insular, numbers-driven,
youth-oriented, press-avoiding OMC culture, is now a victim
of it. The contrast between Drobis' behavior before and
after the sellout to OMC is like day and night.
The sellout, for $68M in stock and cash in 1996, was forced
because Ketchum ad/PR was a wreck in a ditch. It was $13
million in debt and was told that its loans were being cancelled
because it wasn't living up to loan terms. It lost $7.5M
on $127M in revenues in 1995.
The PR side had suffered "significant losses" since 1992,
said a 98-page "S-4" document that was filed with the SEC.
Deloitte & Touche expressed "substantial doubt" about Ketchum's
"ability to continue as a going concern."
Departing execs in 1993-95 had drained the company of $11.4M
by having their stock bought back at $60 a share when book
value was -$1.42. In spite of the rising debt, staff continued
to get raises, bonuses, dividends, etc.
Money had been spent making 16 acquisitions that added
200+ staffers and millions in ad commissions and PR fees.
Some of these turned sour including the purchase of Group
PR in London in 1991.
Ketchum sued Group PR and its two founders in 1993, claiming
$240K was improperly removed from the treasury. It lost
the suit and not only had to pay its own legal costs but
$500K in bills of the defendants. A $4 million write-down
was taken in 1996 on this.
A $900,000 note from a partially owned agency in France
was written down in 1993 because of the firm's "poor financial
condition and negative cash flows in recent years."
Another $700K was written down for the same operation based
on past results and future projections.
The Ketchum ad side had its problems. Its biggest account,
Acura of American Honda, with billings of $125M out of the
Los Angeles office, was under review. Ketchum soon lost
Ketchum's New York
ad office was so weak that Alvarez, in an interview
with Stuart Elliott of the New York Times on April
18, 1994, referred to the office's poor reputation as "the
Ketchum/New York linked with Jerry Della Femina, who was
described by Elliott as "a rambunctious adman whose self-promotion
skills almost equal his creative capacities."
Some members of the previous generation of Ketchum owners
claimed they were shafted because they got far less than
the $125 per share the current owners received. They were
warned that if they didn't take less, attempts to sell out
Ketchum might collapse and they wouldn't get anything.
It's possible the Ketchum owners ran up the debt with a
view towards selling out since the congloms often took on
debt in buying companies.
Both Interpublic and OMC sought Ketchum, IPG making the
first bid in March 1995.
Before the sale to the conglomerates, heads of the big
PR firms worked hard at building relationships with reporters.
None worked harder than Alvarez and Drobis.
Typical activities were lunches with editors; nights on
the town in which both editors and their wives participated;
golf and other outings for editors; dinner parties at ad
agencies and PR firms to showcase what such agencies do;
numerous occasions when the activity was couples' tennis,
sailing, skiing, etc.; many home-and-home visits between
editor/PR couples, etc.
We once counted 30 homes of PR people that we visited including
those of Drobis and Alvarez; Herb Rowland of The Rowland
Co.; Ed Stanton of Manning, Selvage & Lee, and Mitch Kozikowski,
Creamer Dickson Basford, to name a few. We reciprocated
by inviting them to our home.
Efforts were made by the heads of all the top PR firms
to build trust with reporters by spending "quality time"
One Ketchum expedition was a weekend at a lodge outside
of Pittsburgh at which we spoke at night to about 20 Ketchum
PR pros and played golf during the day at Oglebay Park in
Drobis was the numbers-oriented
manager who shopped for agencies to buy and services
to add to help Ketchum grow, while Alvarez was the creative
spark plug, excellent at personal relationships, making
pitches and motivating staff. Alvarez, who no doubt had
the bigger salary (he got $3.4M in OMC stock vs. $2.2M for
Drobis), and who was press-oriented, had no future in the
Executives at Ketchum and most of the ad agency-owned units
stopped socializing or even meeting with reporters. They
became "executive managers" like Drobis.
This is not true of the heads of independent PR firms.
They do not duck press calls nor avoid meeting with reporters.
The "new" post-Alvarez Ketchum emphasized award-winning
(PRSA Silver Anvils now total 84 including 57 won in the
last ten years), and heavy advertising including the inside
cover and first page ads for seven years in the former Reputation
Management magazine and frequent full-page ads in PR
Acquisitions helped improve its position among the "Top
Ten" PR firms. However, the "Top Ten" list no longer exists.
There is only the list of the top independents.
The ad congloms have
barred their 50 or so PR units from providing any
statistics to such rankings, citing Sarbanes-Oxley. While
exact numbers are missing for the PR units, the financial
statements of OMC, IPG and WPP Group show that PR is their
How much of the slide is caused by the dot-com bust and
recession, and how much is caused by adland's drive to depersonalize
the PR business, is anyone's guess.
However, it's widely acknowledged that trust between the
public and institutions such as OMC, IPG and WPP is at an
Nineteen PR groups met in Madison, N.J., last January in
an historic move to find ways to restore trust.
Doug Pinkham, president of the Public Affairs Council,
a participant in the meeting, says PR and PA pros "need
to remember that no amount of technology or management expertise
will take the place of the ability to sustain strong personal
relationships. PR is not the direct mail business."
Reporters and others, he said, "trust those whom they respect
on a personal level."