Edition, June 2, 2004, Page 1
FOUR SEASONS CHECKS
IN AT PRCO.
The Four Seasons
Hotels and Resorts chain has awarded its $500,000-plus PR
account to London-based PRCo, a firm that specializes in
Ruder-Finn resigned the account with the April 30 expiration
of its contract. It had worked on the business for six years,
but decided it was time to call it quits because the account
had "become more tactical and less strategic,"
Richard Funess, president RF/Americas, told O'Dwyer's.
recorded nearly $280K in fees/expenses during its final
six months of work for the Toronto-based hotel chain.
will service the North American market for Four Seasons
from its Conran PRCo unit in New York. Gayle Conran, who
merged her firm into PRCo, leads the Four Seasons business.
She is assisted by Jenny Matrosovs, who joined the firm
from National PR in Toronto.
SUTPHEN JOINS VIACOM.
David Sutphen, who was senior VP at the Recording Industry
Assn. of America, has joined Viacom as VP-government affairs
in its Washington, D.C., office. He reports to senior VP
Sutphen had handled copyright and technology issues at
the RIAA, and advised music industry execs on regulatory
issues. Previously, he served on the staffs of Sen. Ten
Kennedy and Rep. Harold Ford.
Viacom made news last week with plans for its MTV unit
to launch LOGO, the first cable TV network aimed at the
gay and lesbian market.
FD ADDS McCALL TO N.Y.
Financial Dynamics has added Mark McCall, who worked for
a dozen years at Burson-Marsteller and Edelman, to its executive
roster. He joins as senior VP, responsible for new business,
and clients in the consumer finance and insurance sectors.
McCall has advised companies on overall corporate positioning,
and has been involved in transaction work in the areas of
mergers & acquisitions, restructurings, corporate governance
and crisis situations.
Declan Kelly, president of FD/U.S., singled out McCall's
"corporate experience in operations and finance,"
in announcing the new hire.
FD says it has more than 300 professionals handling 400-plus
clients. The firm calls its London and New York units its
IPG CONSOLIDATES IN
Interpublic Group of Cos. will move seven of its far-flung
Los Angeles units into the Pacific Design Center in West
Hollywood this August.
Hitting the road are Weber Shandwick, Rogers & Cowan,
celebrity firm PMK/HBH, entertainment specialist Bragman
Nyman Cafarelli, event planner Momentum Worldwide, marketing
agency Jack Morton Worldwide, media programmer MAGNA Global
and direct response unit ID Media.
Besides cost savings, the centralized location may help
Interpublic CEO David Bell attain another of his goals:
more cross-selling of services.
KEKST TALKS OPENNESS
Scandal-tainted DPL Inc. has retained Kekst & Co. to
spread word of a new corporate openness in the wake of allegations
that its top management looted the company and enforced
a code of secrecy.
CEO Stephen Koziar, chairman Peter Forster and interim
CFO Caroline Muhlenkamp resigned from the board of the utility
May 17, the day that it met to discuss an internal probe
that alleged top executives hid compensation from shareholders,
billed the company for undocumented travel and enforced
secrecy from their homes in Florida. DPL is the parent of
Dayton Power & Light. The Securities & Exchange
Commission launched its own probe May 18.
Fred Spar of Kekst told O Dwyer's that DPL is now committed
to greater disclosure, more communication and an improved
OMC BOOSTS DIRECTOR
Omnicom Group has increased the pay of its ten directors
because the time they spend on governance matters has increased,
CEO John Wren told the annual meeting in Atlanta May 25.
The board has been "well underpaid for a long time
and we adjusted it to a reasonable basis," he told
the 24 people who attended the meeting of the world's biggest
ad conglomerate in a room at OMC's BBDO unit.
Wren has said that the meeting has been moved from New
York to other locations in the U.S. to give local stockholders
a chance to attend and ask questions.
Two stockholders and one person acting as a proxy for stockholder
Jack O Dwyer of this newsletter asked questions at the 25-minute
BOOSTS DIRECTOR PAY (cont'd)
Edition, June 2, 2004, Page 2
KEATING AIMS TO CLEAR
Keating & Co. has been hired by Saudi Prince Faisal
bin Salman to refute charges in two best-selling books that
his deceased brother was a liaison between Al-Qaeda and
the Saudi government.
Rick Keating, president of the Florham Park, N.J.-based
firm, told O Dwyer's K&C was recommended for the assignment
based on past work in the global sector; reviewed the background
of Prince Ahmed bin Salman, and accepted the work. He said
his firm has coordinated with the Saudi Embassy's PR firm,
Qorvis Comms., but stressed the work on behalf of the deceased
Ahmed was outside the Beltway and "unequivocally"
Ahmed, a well-known thoroughbred owner whose stable included
War Emblem, the 2002 Kentucky Derby and Preakness winner,
died of a heart attack in 2002.
Two books, "House of Bush, House of Saud" by
Craig Unger, and "Why America Slept: The Failure to
Prevent 9/11" by Gerald Posner suggest Ahmed was named
by an Al-Qaeda operative captured in Pakistan as an intermediary
between the Saudis and bin Laden's terror group. Posner's
tome suggests Ahmed may have known about the Sept. 11 attacks
Keating said he interviewed a CIA counter-terrorism official
who said the suggestions were false.
War Emblem's former trainer and Prince Faisal have both
told news outlets that Ahmed was more interested in horses
than politics. Faisal has said linking his brother to Al-Qaeda
was like calling Ronald Reagan a closet communist.
In a statement put out by Keating, Faisal said: "Not
a single, solitary government official or media source has
ever come forward with any evidence linking Prince Ahmed
to any criminal activity. But that fact has not stopped
Unger, Posner and the media from accepting the outrageous
claims at face value."
Keating kicked off his PR push to restore the reputation
following the running of this year's Derby.
LAW FIRMS STEP UP PR.
A new study commissioned by Robert Half Legal found the
use of PR firms by law offices is on the rise in the U.S.
Increasingly, law firms are implementing integrated marketing
and sales campaigns to generate new business opportunities,
the company's just-released white paper titled "New
Perspectives on the Business of Law" shows.
"Law offices are hiring senior marketing executives
and placing PR agencies on retainer to build a strong brand
image, better market their services and raise awareness
with target client groups," said Sheron Hindley-Smith,
who is executive director of the legal staffing service,
which periodically commissions surveys of attorneys and
legal administrators, interviews experts and conducts research
to determine how law offices will operate in the future.
The results are available at futurelawoffice.com.
PR NEEDS OTHER DISCIPLINES,
PR can t work by itself, David Finn, one of the founders
of Ruder Finn, told the Westchester/Fairfield (Conn.) chapter
of PRSA this month. He recalled a client who had invented
a plastic zipper and wanted coverage in Life magazine
because someone told him that would make the product a success.
"It took us a year and a lot of imagination to make
a story of it and get the attention of the magazine,"
said Finn. But the client was upset because sales didn t
boom, he recalled.
"He had no marketing plan, no sales team, and no promotional
material," said Finn. "He thought one article
in Life would mean success."
PR's job is to "present the client's case to the public,"
PR pros are not like lawyers who can argue any case and
expect the judge or jury to make the final decision, said
"We shouldn t try to communicate something that we
don t believe in ourselves...it's especially gratifying
when we work on worthy projects that are in the public interest,"
in Six-Day War
One of the highlights of Finn's career was helping Israel
in the 1967 "Six-Day War."
"When the Six-Day War threatened to crush Israel,
we turned our whole office over for a crisis campaign,"
he said. "Almost overnight we won massive support.
The sympathy for Israel was enormous."
Prime Minister Eshkol thanked him personally for what RF
Another high point of Finn's career was helping \ President
Kennedy to win Senate approval of the Nuclear Arms Treaty
with the former Soviet Union.
JACKO IS ALIVE.
Michael Jackson is alive and kicking, says his publicist
Raymone Bain, who is fielding media calls from throughout
the world asking whether the King of Pop is a goner.
New York Daily News gossip columnist Lloyd Grove
profiled Bain May 24 in an item called "Jacko rep's
He considers her "Michael Jackson is not dead"
press release an "instant classic among PR professionals,
who today look forward to Bain's literary efforts with the
lip-licking eagerness of connoisseurs."
One rival publicist regards Bain's "prolific output
with shock and awe," wrote Grove.
The publicist told Grove: "When you have a client
who is clearly three sandwiches short of a picnic, you need
to protect him with grace and dignity. And a press release
that announces to the world that your client is not dead
certainly reinforces the notion that he's a total nutbar."
Bain is principal at Davis, Bain and Assocs. in Washington,
D.C. She has represented Serena Williams and former D.C.
Mayor Marion Barry.
Jackson's website praises her as "one of the finest
and most knowledgeable publicists in the industry."
Edition, June 2, 2004, Page 3
HOW LETTERS AND OBITS
Letters are received at the rate of roughly a thousand a
day at The New York Times, according to Thomas Feyer,
letters editor for the past five years.
"My small staff and I try to read them all, but we
can publish only about 15 letters a day," said Feyer,
who offered these pointers:
Write concisely and engagingly. "We re in an
age of fast-moving news and virtually instant reaction;
letters about an especially timely topic often appear within
a day or two.
When writing about a particularly contenious issue,
bear in mind that many others do so as well. "We can
try to capture a sense of what's on readers minds, but we
can t be comprehensive."
The suggested length for letters is 150 words.
In selecting letters to use, Feyer said he tries to present
a fair sampling of reader opinion, as well as a balance
of views, pro and con. "Writers to The Timesby
no means all, certainly, but a clear majoritytend
to be liberal, often vociferously so.
"Among our letter writers, critics of the Bush Administration,
especially over the war in Iraq, outnumber its defenders
by a substantial margin," he said.
"On same-sex marriage, proponents far outnumber opponents
among letter writers. But there is more of a divide on other
national issues, like abortion, affirmative action and immigration."
He said the paper welcomes opinions from all sides.
"If your letter is selected, we will try to reach
you and ask a few questions: Did you write the letter? Is
it exclusive to the Times? (It should be.) Do you have a
connection to the subject you re writing about?"
Feyer said facts are verified, either by his staff or asking
writers for sources of information.
The letters "come in many flavors: an official's response
to criticism; a statement of policy, printed for the record
or for its news value; a view that we feel adds an interesting
perspective or expertise to the debate," said Feyer,
who pointed out publication should not be taken as an endorsement
of the letter's view by the Times.
Does 'Advance Obits'
Chuck Strum, who is the obituary editor of the Times, gets
some of his advance obituary writing assignment ideas by
watching famous people on TV and going to public events.
"I look at people and think, `That guy's over 70.
We ought to look into that," Strum told an interviewer
for Time Out New York magazine.
Strum, 56, who took over as obit editor three years ago,
said the Times has about 1,200 advance obituaries on file.
He said the Times has a discretionary policy about interviewing
important figures in advance of their obituary. "There
are people with egos large enough that they want to revisit
their life story. It's my view that kind of interview can
be counterproductive. If you sent someone to the office
of a well-known politician, he might easily tell you that
he was misinterpreted for many years, and it's all spin,"
Strum said people who talk about wanting a Times obit when
they die are "the same people who try to influence
the obituary that might be written."
REDMOND MAG HIRES
A staff of veteran IT journalists, led by Doug Barney, will
run Microsoft Certified Professional Magazine, which
is being renamed Redmond Magazine.
Barney, who was recently editor-in-chief of Network Computing,
a biweekly publication, was named editor-in-chief of the
Chatsworth, Calif.-based magazine, which has a BPA-audited
circulation in excess of 114,000 readers.
Joining Barney as editor is Paul Desmond, who has been
working as an IT reporter and editor since 1988.
Scott Bekker, previously editor-in-chief at ENT
magazine, was named news editor, and Keith Ward, who had
been a senior editor of Microsoft Certified Professional,
was promoted to managing editor.
Barney can be reached at 978/582-0066.
Willie Neuman, previously a reporter for The New York
Post, has joined The New York Times to write
a new real estate news column called "Big Deal"
for the Sunday edition, starting June 6.
Elaine Kramer has resigned as managing editor of The
Orlando (Fla.) Sentinel. Kramer, who has held the job
since May 2001, said, "I just want to be home with
Sara Nelson, previously a freelance writer and contributor
to The New York Observer and Glamour magazine, was
appointed book editor at The New York Post.
Nelson, who is author of "So Many Books, So Little
Time," will also write a column about book publishing
that will run in the Thursday edition.
Danielle Claro was named editor-in-chief of Breathe,
a health and lifestyle magazine, which is scheduled to start
Chris Lehmann, who was deputy editor of The Washington
Post's "Book World" section, is joining New
York Magazine as features editor.
Keith Girard has stepped down as editor of Billboard
magazine after less than a year.
Thom Weidlich, previously a freelance writer, was named
news editor of PR Week.
Elizabeth Ackerman was named features editor of American
Kennel Club Gazette and AKC Family Dog.
David Sloan is no longer managing editor of This Old
Jay Stowe, 36, previously executive editor of Outside
magazine, will assume the top editorial job at Cincinnati
magazine in mid-June from Kitty Morgan, who has been editor
of the 30,000-circulation monthly for the past six years.
(Media news continued
on next page)
Edition, June 2, 2004, Page 4
MEDIA INTEREST IN OBESITY
Coverage of the obesity trend has swelled by 294% in five
years, with global brands taking the brunt of the media
blame, according to a report published by Echo Research,
a London-based company that specializes in brand reputation
The firm analyzed some 9,000 news items, from Asia Pacific,
France, the U.K., and the U.S., supplied by Factiva, and
published between April 2003 and March 2004. Articles appeared
in daily newspapers, business and consumer magazines.
Echo's research found obesity is now ranked alongside diabetes
and cancer as a main life threatening issue in today's society
the world over.
The research report also said the causes and the solutions
put forward by leading commentators are either too one-sided
or not comprehensive enough to effectively combat the problem.
Media in all regions focused on the worrying increase and
impact of the disorder among children, with schools perceived
as playing a key role in changing nutritional habits and
Messages and opinion formers varied significantly according
to both political and social contexts, the report said.
In the U.S., education is regarded as key, but so too is
litigation, which is viewed as an essential tool to curb
the obesity trend.
By contrast, in France, medication is seen as a useful
solution, while in Britain, the debate has been politicized
by the government, which is pushing for regulation on advertising,
promotion, vending machines and food labeling.
Much blame is being apportioned by the media, with highly
visible global brand names being at the center of the problem
as well as offering potential solutions. Individuals responsibilities
seem to be a particularly difficult concept to get across,
the report said.
[Krispy Kreme blames its first loss as a public company
on the low-carb craze.]
Sandra Macleod, CEO of Echo Research, said educational
bodies, companies, health professionals and policy makers
will have to engage in a major concerted effort to better
inform the debate and press home messages on responsibilities
and prevention if the public is to be clear about how to
tackle a real, and growing problem.
A new Harris Poll found four out of five adults used the
Internet to read some kind of news in the previous seven
days, and 26% of the people said this use of the Internet
has not changed their use of other news media, while 13%
say that it had changed their use of media but does not
The largest number of people (60%) said they go online
to get weather news, followed by national news, international
news, local news, TV and movies news, sports and business
The study was conducted online within the U.S. among a
nationwide cross section of 2,415 adults.
A new survey of affluent women age 40 and over found the
old stereotypes of luxury are being redefined and reshaped.
The nationwide study, conducted for Traditional Home
magazine, found brand traits such as "quality"
and "performance" consistently outweigh attributes
such as "prestige" and "luxury" in influencing
buying decisions among women in households with incomes
Words such as "old-fashioned," "formal"
or "exclusive" are no longer relevant to this
segment of the marketplace, according to Brenda Darling,
publisher of TH.
The new traditionalists define their lives with words such
as "classic," "timeless," "elegant,"
"warm," "sophisticated" and "adaptable,"
said Darling, who also noted 86% of the women in the study
said they lived in a "comfortable" home versus
63% who said they lived in a "traditional" home.
GET THEIR OWN MAG.
Jacqueline Salit, who is political director of the Committee
for a Unified Independent Party, has started a quarterly
magazine called Neo-Independent with about $100,000
in pledge money from more than 100 New York friends and
Salit, 50, a former journalist for ABC News and public
TV as well as a political activist, who has worked on more
than 100 campaigns including Mayor Michael Bloomberg's ,
is targeting her magazine at 35% of the American public
that now identifies itself as independent rather than Democrat
CMP TO PUBLISH MAG
Microsoft Corp. and CMP Media will publish TechNet Magazine,
in conjunction with MSDN Magazine's security-focused
issue, due this fall.
Joshua Trupin, executive editor of MSDN Magazine, said
TechNet will provide in-depth, hands-on information that
IT professionals can use in their daily work, from recognizing
and preventing hacking attempts to securing passwords and
fortifying networked systems.
The special edition will be published by CMP.
BusinessWeek SmallBiz will make its debut in June
as a quarterly, stand-alone title, targeting small business
The magazine, which will have an initial circulation of
500,000 copies, will be inserted as a supplement in Business
Week that is sent to subscribers.
Kimberly Weisul is editor of SmallBiz, which will cover
finance, economic trends, technology and business books.
Multicultural Marketing News, an online e-newsletter
published by Multicultural Marketing Resources, a New York-based
PR firm, will publish profiles of experts in marketing to
gays and lesbians in its June issue in conjunction with
Gay and Lesbian Pride Month.
The newsletter will be e-mailed to 10,000 subscribers during
the second week of June.
A 125-word mini-press release with contact information
The deadline to reserve space is June 4.
Melanie Eisenberg, editor of the issue, can be reached at
212/242-3351 or [email protected].
Julia Hyde, an independent PR writing consultant, said a
press release with a headline that summarizes a story in
10 words or less is one of the best ways for publicists
to impress reporters, and increase their chances of publication.
Her "15 ways to make a press release stand out from
the crowd" were recently published on webpronews.com.
Forbes.com will start offering online readers access to
AP Financial News in early June.
AP's new business news service goes beyond the top stories
of the day to include quarterly earnings announcements,
executive changes, regulatory actions, acquisitions and
new product developments for major companies in a full range
Automobile magazine has an opening in its Ann Arbor,
Mich., office for an assistant editor.
The position involves proofreading, news reporting, and
assembling the "In Gear" section.
is accepting resumes at feedback @automobilemag.com or 120
E. Liberty, Ann Arbor, MI 48104.
Gary Rivlin, previously a contributing editor at Wired,
has joined The New York Times as technology reporter
in the San Francisco bureau.
James Meigs, previoulsy executive editor of National
Geographic Adventure magazine, is joining Popular
Mechanics magazine as editor-in-chief, succeeding Joseph
Oldham, who retires in August.
Edition, June 2, 2004, Page 7
BOOSTS DIRECTOR PAY (cont
A stockholder who
gave his name as "Ed" and who said he was formerly
a media director at BBDO in New York, asked whether the
directors were working "twice as hard" and Wren
replied, "They worked very hard."
directors, instead of receiving 250 restricted shares a
year worth about $20,000 at the current price of $80, will
receive stock worth $70,000 yearly with no restrictions.
stock means the recipient must hold it for a period of years
before selling it.
addition, the directors get an annual retainer of $60,000
plus $2,000 for each attended meeting, $1,000 for attending
a meeting by telephone, and $2,000 for attending a special
meeting by telephone.
Reporter Asks Questions
freelance writer retained by this NL to cover the meeting
asked questions but was not allowed to take any pictures
at the meeting.
writer asked Wren whether a more than 50% decline in PRSA
members among three of its PR units (Fleishman-Hillard,
Ketchum and Porter Novelli) reflected a similar decline
in staff numbers.
responded that each agency's directors decide how many PRSA
members the agency will have.
was also asked how OMC's goodwill rose approximately $1
billion in 2003 to $5.8B when the company only spent $472
million on acquisitions.
financials state that there has been "no impairment"
in the value of any of its purchases.
replied that goodwill is based on a yearly analysis of the
value of its subsidiaries in the local currency of each
of OMC's 1,500 agencies.
OMC's PR firms had revenues of $955M in 2003, a gain of
3.7% over 2002. PR accounted for 11.1% of OMC's total revenues
of PR Growth Is a Question
much of this gain came from previously owned PR firms or
PR firms that were acquired in whole or in part in 2003
is not known.
stockholder noted that OMC is 80% owned by institutions
and that he would like a "more diversified" ownership
because "institutions tend to be like sheep."
said there was nothing new to report on the class action
suits that resulted when the OMC stock price dipped from
about $80 to the mid-30's after a Wall Street Journal
article on OMC June 12, 2002.
OMC's highest stock price was $107 in December of 2001.
list of questions was e-mailed to Wren by this NL May 21
covering such issues as goodwill and employment at OMC's
question was: "What does OMC get out of the Council
of PR Firms that it allows Fleishman-Hillard, Ketchum and
Porter Novelli each to spend $50,000 yearly on dues to the
has as yet been no response.
New York Times, which devoted 15 column inches to coverage
of the Interpublic annual meeting May 18 in New York, under
the headline, "Shareholders voice anger toward Interpublic,"
did not cover the OMC meeting.
Atlanta Journal-Constitution and the Atlanta Business
Chronicle were not present.
'FIG LEAF, SAYS BRIT.
Nick Keable, managing director of the PPS Group, London,
ranked 20th in size by PR Week/U.K. with fees of
3.6 million pounds or nearly $7 million, says the ad conglomerates
are using the Sarbanes-Oxley Act as a "convenient fig
leaf"to hide bad results.
PR firms owned by Omnicom,
WPP, Interpublic, Havas, Publicis and Grey have not been
allowed to report their figures to PRW, the publication
noted in its April 23 ranking issue.
Keable, whose letter appeared
May 7, said the 20 missing PR agencies "detract from
the complete PR industry picture."
He feels that if SOX had
been in effect in 1998-2000, when the firms were doing well,
"imagine how cleverly the relevant CFOs in the U.S.
would have found imaginative ways around it."
Don t try to "spin
your way out of bad news," he advised the firms. "Tell
it how it is. We all know."
Nearly 50 PR units owned
by the conglomerates have not been allowed to report either
employee totals or fee totals for 2002 and 2003.
Participating in the 2003
O'Dwyer rankings in the U.S. by providing top pages of income
tax returns, W-3s showing total payroll, account lists and
other documents were 108 independent PR firms and 20 PR
firms owned by ad agencies but not the large conglomerates.
PR Week displayed a picture
of Keable with the article using the caption "big groups
TO TAKE BLAIR
CABINET PR POST.
Howell James, a former top aide to British Prime Minister
John Major and a partner at Brown Lloyd James, is "disentangling"
himself from the New York and London-based firm for a new
PR post in current U.K. PM Tony Blair's cabinet.
In the wake of strong
antipathy toward Blair over the Iraq war and the departure
of his longtime press aide Alastair Campbell late last year,
The (U.K.) Independent reports that James this summer
will take the reins on a new entity designed to address
a "breakdown of trust between public, media and government."
His post is permanent secretary in charge of government
communications. The paper
opined "trust won t easily be regained while Iraq remains
such a dominant issue."
James was previously director
of corporate and government affairs for Cable & Wireless
and earlier was director of CA at the BBC.
BLJ helped Vancouver top
Edelman and its client South Korea for the 2010 Winter Olympics,
and has recently worked for the governments of Dubai and
Edition, June 2, 2004 Page 8
John Wren and Omnicom
made spectacles of themselves by holding the OMC
annual stockholders meeting in a room in its BBDO unit in
The attendance of 24 was far below the 160 that smaller
ad conglomerate Interpublic faced the week before at a public
auditorium in New York.
A half dozen irate stockholders raked IPG execs over the
coals and the New York Times devoted 15 inches of
type to this shellacking.
Omnicom, by fleeing to Atlanta, escaped any notice by the
Times, Advertising Age, AdWeek or even the
local Atlanta Journal-Constitution.
The sole reporter at the OMC meeting was a free-lancer
hired by this NL. The freelancer walked into the meeting
room without any requests for identification, which says
a lot about the security at BBDO.
Only when the freelancer asked some questions was identity
demanded. A BBDO staffer asked to see the driver's license
of the freelancer. The writer held an OMC proxy supplied
by The O'Dwyer Co.
When the freelancer tried to ask additional questions,
having received only minimal replies, the free-lancer was
told that the meeting was over and was escorted out of the
room to the elevators.
This openly hostile treatment of the press, including the
refusal to discuss complicated financial matters, stands
on its head every known principle of PR, starting with "face
the bad news and get over it."
IPG, whose stock has plummeted from a high of $57 in late
2001 to around $14, where it has been for many months, has
more negative issues than OMC. These include reporting $181M
in non-existing revenues; paying $41M in bonuses to nearly
4,000 employees in 2003; the potential $32M retirement package
for former CEO John Dooner, and its refusal to identify
more than 200 acquisitions. It added six new ones in Q4
OMC has plenty of negative issues itself. Its stock is
still 27 points below its high of late 2001 and it is continuing
on its acquisition rampage in spite of pleas by analysts
to stop this.
It spent $472M on acquisitions in 2003, off from its usual
pace of $800M+. Its debt is $2.59B.
OMC reported a 3.7% gain in PR revenues to $955M in 2003
but no one knows where it gets this figure. A lot of the
gain could be PR firms purchased as part of the $472M spent
The main complaint of the Wall Street Journal article
that knocked the stock in half in June 2002 was that OMC
makes so many acquisitions that it's impossible to track
its organic growth. Its $5.88 billion in "goodwill,"
up $1B in a single year, begs an explanation. Class action
stockholder suits continue against OMC because of insider
stock sales that preceded the huge stock decline two years
Wren was asked about employment at the OMC PR units including
Fleishman-Hillard, Ketchum, Porter Novelli and Brodeur.
He said he had no knowledge of this and that decisions
to employ or not to employ are made by each unit. His attitude
has been that the agencies in the 1,500-member family of
OMC companies are independent and basically go their own
way as long as they meet certain goals.
This is not true at all. When push comes to shove it's
the parent who does the shoving. Evidence is the refusal
of OMC to let its PR units announce their fee incomes and
This is a potentially ruinous decision for the PR firms
by the ad conglomerates. Advertising Age and AdWeek
can track billings of ad agencies by counting ad linage
and commercial time. But there is no such way to measure
the output of PR firms.
PR Week/U.K. is so mad at this situation that it called
the conglomerates "cowards"<D> in its May
7 issue (page 7).
It used this phrase under a picture of U.K. counselor Nick
Keable, who had sent in a letter-to-the-editor criticizing
the congloms for withholding data.
In running its table of 150 PR firms, PRW noted that "Once
again," the PR firms owned by OMC, IPG, Havas, Grey
and Publicis "have not been allowed to report any figures."
This makes it hard for PRW to report who is doing well
and who is not, something clients want to know. Even writing
about the PR firms is hard because key statistics are lacking.
Trying to profile the leading firms in specialties such
as finance, technology or beauty/fashion becomes impossible.
This is bound to cut into PRW's ad revenues.
The ad conglomerates motives in buying PR firms have never
been clearer. IPG is now combining seven Los Angeles units
into 145,000 sq. ft. in one building. Tenants will be Weber
Shandwick, Rogers & Cowan, PMK/HBH, Bragman Nyman Cafarelli
and event, marketing and direct response units.
The holding companies want PR and other units to push each
other's services. IPG this year named a "chief collaboration
officer" to help ensure this.
The ad owners of the PR firms have no idea how hurtful
it is for the PR firms to be unable to release any of their
vital statistics. The ad people don t understand that honesty
and openness are what defines PR to the press, public and
prospective clients. Under the whip of their new owners,
many of the big firms only publish a small portion of their
clients. Who can trust a PR firm that is a house of secrets?