The eight page weekly is the only PR newsletter on LEXIS/NEXIS.
Edition, March 9, 2005, Page 1
SOLID '04 RESULTS.
Independent PR firms
posted a strong comeback in `04 as 28 of the top 50 enjoyed
double-digit gains in fee income. There were seven decliners
in the group.
the largest of the 117 independents, reported an 11.9% spurt
in fees to $230.4M. That puts Edelman in range of the $233.4M
in fees that it earned in `00 before the recession rocked
the PR sector.
employed 1,749 at the end of last year, compared to 2,319
four years ago.
Finn, the No. 2 firm, posted a 13.4% growth in fees to $89.7M.
Peter Finn singled out development of the firms Asian
healthcare/pharma, financial services, auto and crisis PR
capabilities among `04 highlights.
Communications (No. 7) registered a 25.4% hike in fees to
$15.3M. CEO Michael Petruzzello said the Washington, D.C.-based
firm received boosts from new clients (Sugar Assn.), recovery
in the Northern Virginia high-tech market, and an additional
income stream from its new media center. Saudi Arabia, also,
continues to spend big at Qorvis.
Partners (No. 9) showed a 26.1% rise in growth to $11.7M.
President Bob Angus described `04 as a perfect storm
year. We were able to keep our team intact during
the tech downturn, so we were well-positioned to benefit
with the markets upswing, he said. Virgin Electronics
was a key addition to A&Rs `04 client list.
Corporate Relations showed the biggest gain among the top
50. It was up 58.1% to $8.5M driven by rebounds in the IPO
market and corporate finance area, said co-CEO Tom Ryan
from the firms Westport, Conn., headquarters. He is
bullish on `05 because the firm added a dozen new clients
Communications was the No. 2 percentage gainer (+49.5 percent
to $5.8M) among the top firms. Liz Kaplow attributed growth
to increased spending from existing clients, such as eBay,
Target and Avon mark. We are the little-engine-that-could
that really took off, she said. KC added LeapFrog,
Netflix, Constellation Brands and St. Ives.
big gainers were Davies, up 41.6% to $4.4M; Cerrell Assocs.,
up 41.2% to $4.3M, and EG&A, up 31.8% to $3.9M.
& Myers had the biggest decline in fees, falling 13.6%
to $4.3M. CEO Gary Myers said although the firm didnt
lose any clients, it was hurt by across-the-board spending
cuts from accounts like Altria Group.
story continues on page 7)
GRUBMAN SUED FOR $6M.
the longtime business associate for Lizzie Grubman PR, has
sued Grubman for $6 million saying the publicist reneged
on promised deals, including a partnership in the firm.
worked with Grubman for seven years before leaving in December.
Loughery claims Grubman promised to make her a partner while
Grubman was incarcerated for assault and Loughery helped
run the PR firm.
also says she was promised a producer role on Grubmans
MTV reality show PoweR Girls slated
for a March 10 debut along with an equal partnership
in a clothing company, among other claims.
has sued Grubman in Manhattan Supreme Court, seeking $1M
for each of her six claims against the publicist.
lawyer denied Lougherys allegations.
TAGLIARINO TO HEDGE
Scott Tagliarino, executive VP and head of the business/financial
practice at Rubenstein Assocs., has been named director
of communication at Elliott Assocs., a New York hedge fund
that was founded in 1977.
Tagliarino, who worked on the Elliott account at Rubenstein,
was previously at PanAmSat Corp., and was managing director
of Gavin Anderson & Co., GM of Hill & Knowlton/N.Y.,
and president, corporate and public affairs, Edelman PR
Previous posts were at Fleishman-Hillard and in the Los
Angeles offices of Burson-Marsteller and Ogilvy & Mather.
Elliott and sister fund, Elliott International, with additional
offices in London and Hong Kong, manage $4.3 billion+ in
Tagliarino said that hedge funds and private equity firms
are the new wave of investment opportunity for institutions
and wealthy individuals.
and Incepta Group, parent to the Citigate PR firms,
have agreed to merge, creating a $250 million marcom entity.
Grayling and Global Consulting Group are among PR properties
of Huntsworth, which is headed by Peter Gummer, a founder
of Shandwick who would become chairman of the combined entity.
Hill & Knowltons
Charlotte Dent has joined Al-Jazeera to handle PR
for the launch of the English-language version of the Arab
satellite TV operation.
The station will staff 300 and go live by the end of 05,
targetting the worlds one billion English speakers.
Edition, March 9, 2005, Page 2
F/W/V ALLEGES 'PAY
French/West/Vaughan says it has literally put Raleigh, N.C.,
on the PR map but is considering a move out of the city
because of what it sees as pay for play practices
at work with city contracts, said firm president Rick French.
The accusation against competitor Capstrat, which recently
won a lucrative contract review over F/W/V, were dismissed
by Capstrat president Ken Eudy as baseless and without any
The charge was investigated and the city manager said the
proposal process was fair, although French contends the
review was not thorough enough.
French, in an interview with this NL, charged that political
donations and favoritism have arisen with regard to some
public contracts. He singled out Capstrat for emerging as
the winner of the seven-figure advertising and PR contract
for the new Raleigh Convention Center as the source for
I am as disgusted with this as anything I have ever
seen in this business, he said of the alleged unfair
French is livid over the award of the contract to Capstrat,
which French says does not have the experience of F/W/V
for such an assignment, a charge Eudy brushed aside.
Eudy told ODwyers that the selection committee
for the convention center account touted Capstrats
proposal and presentation as more researched upfront and
also said that Capstrats team had better ideas. They
said we presented them with more energy, passion and commitment
than the other firms, he said.
Eudy noted F/W/V partnered with a media buying firm for
the convention pitch as Capstrat has its own media buying
French said they teamed up with an outside shop because
it handles the Greater Raleigh Convention & Visitors
Bureau media buying assignment and he saw that as an advantage.
French said he received scores of support e-mails and calls
after a city official leaked a scathing e-mail from him
to the Raleigh News-Observer, which ran an item last week
about his verbal protest of the convention center contract.
Capstrat is the incumbent on a $7.4M social marketing account
under review for North Carolina, a pact which French is
not pitching. But Eudy said the new account is the firms
only pact with the City of Raleigh.
City officials have reached out to F/W/V, French said,
in an effort to mediate his grievances. The
firm currently holds one city contract, he acknowledged,
without providing details.
He said he plans to take the next 120 days to look at building
a new headquarters outside of the city and to further discuss
the issue with officials. French also said he has forwarded
his detailed concerns to the city manager to get a more
thorough probe of the contract award.
Eudy pointed out that his firm built its reputation on
a strong public affairs element, which he saw as crucial
to winning the convention center pitch.
CLS&A PROMOTES |
REFORM AT ARAB BANK.
Chlopak, Leonard, Schechter and Assocs. is promoting Arab
Banks commitment to become a beacon of transparency
and sophisticated finance in the Middle East and around
the world, according to a statement the PR firm is
distributing from Shukry Bishara, ABs chief banking
Bob Chlopak, CEO of CLS&A, would not comment on its
work for AB, which has been tainted by alleged terror ties.
AB ironed out a deal with the U.S. Office of the Comptroller
of the Currency on Feb. 25. That pact shut down ABs
banking activity, while allowing it to do to trade and corporate
In December, the bank was sued in Brooklyn federal court
for allegedly bankrolling terror organizations.
The suit branded AB the paymaster to Hamas,
Palestinian Islamic Jihad, al-Aqsa Martyrs Brigade
and the Popular Front for the Liberation of Palestine.
The Dilenschneider Group fended off those charges for the
Jordan-based financial institution with more than $32 billion
TDG Reid Gearhart, at that time, handled media relations.
He has not yet been reached.
The Columbia Graduate School of Journalism announced March
2 that Daniel Edelman will receive its first Deans
Medal for Public Service on April 16.
The medal honors extraordinary lifetime achievement by
Colombia J-School grads for their contributions to society
through professional accomplishments and civic involvement.
There could be no better initial recipient than Daniel
Edelman, who is both a world leader in this field and an
outstandingly generous and public-spirited man, said
Nicholas Lemann, dean of the school.
Edelman, founder of the No. 1 independent PR firm, also
was cited for his work with charities such as Chicago Cares
and Greater Chicago Food Depository.
He also serves on the board of the Chicago Project for
Violence Prevention and the Committee for Economic Growth
GAMING TRADE GROUP.
Holly Thomsen joined the American Gaming Assn., the trade
group for the $27 billion casino gambling market, on March
7 as director of comms. She replaces Naomi Greer, who held
the spot for the past seven years.
Thomsen was at The WadeGroup, Washington, D.C., where she
was responsible for the AGA's issues management, media relations
and executive communications activities. She also handled
communications for the Global Gaming Expo, the industry's
biggest annual conference.
Thomsen did stints at Cohn & Wolfe, which had handled
the AGA business, and Goddard Claussen Porter Novelli, where
she concentrated on international trade, environmental and
tort reform matters.
Frank Fahrenkopf is CEO of the AGA. He chaired the RNC
during Ronald Reagan's Administration.
Edition, March 9, 2005, Page 3
The Publicity Club of New Yorks March 2 panel on weblogs
and their impact on the PR profession featured presentations
by four bloggersJay Rosen, associate professor of
journalism at New York University; Lockhart Steele, managing
editor of Gawker.com; Elizabeth Spiers, editor-in-chief
of MediaBistro.com and founding editor of Gawker.com, and
Jennifer Chung, co-founder of The Gothamist.
Here are excerpts from the discussion, which was moderated
by Peter Himler, president of PCNY and media director of
turned upside down
The media world is being turned, to some degree, upside
down by changes in media and in communication generally
that are driving change all over the world.
In the world of journalism, the world of the press, it
simply means the press isnt owned by a few anymore.
It is still owned by The New York Times, its still
owned by Newsday, its still owned by major media.
But it also has new owners, individuals; people who were
formally part of the audience are now part of the press
because weblogs, because of citizens media, generally.
Blogging is going to change the world and is in fact changing
the world right now. And that is the evolution of all the
tools of mass media, from professional hands and corporate
hands into public hands.
The digitization of media also has been the democratization
of media tools. You can edit digital video on a home computer,
you now have a TV studio in your living room and its
that effect where the rapidly falling cost and difficulty
of communications is turning the audience, which
is what I call the public, into producers and media themselves.
One thing that is different about blogs versus other
media is blogs exist in large part because people have boring
jobs and they want something to look at when theyre
sitting at their desks.
As a result, the way media is presented in blogs is necessarily
different from a magazine article. The idea on a blog is
to be quick and fast and just to give someone a link to
more information. So rather than write 500 words, a really
good blog post on Gawker would be maybe two sentences, and
then underneath that ... you have a hyperlink.
People come to Gawker to see what Gawker is saying about
things that are going on in the media world.
I think one of the problems that publicists have had in
the past when they have tried to pitch to blogs or interact
with blogs is they might send a blogger, for instance, a
Now, to a blogger, that is almost a singularly useless
piece of information because its going to be written
in a way that is unappealing to their audience. Its
probably not going to have anything that they can link to
and so a blogger gets a press release and basically says,
Well, what am I gonna do with this?
I write about real estate and I interact routinely with
the publicists at all the major N.Y. real estate firms.
The ones that are smart will send me a link to a property
on their website and say, Hey, heres an interesting
property that went on the market today, why dont you
link to it?
Its an example of someone looking at what we do and
tailoring what they are talking about to our medium versus
a publicist who sends me a press release announcing a property
If you really want to get inside bloggers heads,
realize that every time theyre thinking about what
to write about they are also thinking about what to link
The way publicists tend to look at blogs is that they
are not as important as print and so the willingness to
tolerate bad coverage on a blog seems to be higher even
though in my experience from writing for print and blogging
its much more difficult to place items on blogs because
they do tend to be written by people who have a point of
view and they are essentially opinion columns.
So when you are pitching a blogger, youre asking
for their unvarnished opinion. They dont need news
items in the same way that print people do.
To me, the website gets probably an equal amount of traffic
as the magazine, traffic in terms of unique users versus
subscriptions readers for the magazine, so at least in terms
of volume youre talking about a similar audience.
Although I would wager the web audience is probably a little
Mediabistro is essentially a trade publication online,
with a gossip component which we only recently added because
we are trying to figure out how to expand into the news
without significantly escalating our cost basis. We thought
blogs would be the best way to do that.
Gothamist is very different from what these people
do. I am not an academic. This is not a professional job,
I work in advertising, I have a background in brand consulting
and Gothamist just became a hobby that I do before and after
work with another friend.
And now its become just this sort of free-wheeling
discussion between other people who are very excited about
New York and want to talk about current events, music events,
interview people, sports, anything thats interesting
happening in New York.
Now we have sites in Chicago, D.C., San Francisco, Los
Angeles, Boston, Seattle, Toronto and London and we are
going to be launching a couple more sites this year.
Its sort of hard for me to figure out how to approach
publicists because Im a curious person. Im interested
in everything but not everything is right for Gothamist.
As Elizabeth said, we are opinion writers and sometimes
the best press releases we get from publicists are ones
who seem to be people who actually read our site and have
a sense of what our readers would be interested in.
We have over 20 people who work on our site on different
(Media news continued
on next page)
Edition, March 9, 2005, Page 4
NAMES NEW EDITORS.
Jeffrey Kutler has joined Securities Industry News
as editor-in-chief, and Marion Asnes was named editor of
Financial Planning magazine.
Both publications are published in New York by SourceMedia,
which was formerly called Thomson Media.
Kutler was with Institutional Investor, which he joined
in Jan. 2000 to oversee banking and technology coverage.
He was also executive editor of American Banker, where he
spent 20 years before joining II.
Asnes was previously an editor and writer at Money magazine,
where she helped shape the magazines coverage of personal
finance, retirement, estate planning and health.
John Tierney was appointed an op-ed columnist at The
New York Times.
Tierney, whose columns will appear twice a week, starting
in April, will replace Bill Safire, who has retired.
Tierney, who joined the Times in May 1990, has been a general
assignment reporter, a staff writer for the Sunday magazine
and a columnist.
He wrote the weekly Political Points column
during the 2004 presidential campaign, and the Big
City column about New York, which ran for eight years,
first in The Times Magazine and then twice a week
in the Metro section.
He is the author of The Best-Case Scenario Handbook
(Workman Publishing, 2003), a work of humor, and is also
co-author, with Christopher Buckley, of God is My
Broker: A Monk Tycoon Reveals the 7 1/2 Laws of Spiritual
and Financial Growth (HarperPerennial, 1998).
KANDEL IS RETIRING FROM
Myron Kandel, whose commentaries became a mainstay on CNNs
Moneyline, will retire as financial editor of
the cable network on March 11.
Kandel, who turns 75 on March 14, was the first person
hired in New York on Jan. 28, 1980 by Ted Turners
new network, which went on the air on June 1.
Kandel helped start Moneyline, a daily business
newscast that was recently replaced by Lou Dobbs Tonight,
a general news program.
Kandel is a past president of the N.Y. Financial Writers
Assn. and the Society of American Business Editors and Writers.
FROM CRAIN'S BUSINESS.
Jeff Bailey has resigned as editor of Crains Chicago
CCBs associate publisher David Snyder will oversee
the papers editorial department until a replacement
Snyder, 43, was editor of CCB from Aug. 1993 until Jan.
Bailey, 46, joined CCB in Nov. 2003 after a 20-year career
with The Wall Street Journal.
the Washington, D.C., bureau chief and editor of Newhouse
News Service, is joining The Washington Post as ombudsman,
replacing Michael Getler.
a former associate publisher of The Sun, a London
tabloid, was named editor-in-chief of The National Enquirer,
which is relocating its editorial office to New York from
Boca Raton, Fla. by the end of March.
MORE THAN 1,000
NEW MAGS in '04.
Samir Husnis soon-to-be-released Guide to New Magazines
will show 1,006 new magazines were started in 2004.
Husni, chairman of the journalism department at the Univ.
of Mississippi, told Keith Kelly of The New York Post
that the top categories are: Crafts, 125; food, 104; metro/regional,
83; home, 59; sports, 57; auto, 41.
He said sex, once the top new category, has dropped out
of the 10 list, with only 20 new entries this year.
Cookie, an upscale
parenting magazine, will start publishing this fall.
Fairchild Publications said the magazine will be about
childrens products, with articles that talk to 25-
to 45-year-old parents about topics like where to travel
and how to incorporate their child into a sophisticated
The first issue is expected to hit newsstands in October.
The magazine will be published six times a year with a circulation
rate base of 300,000.
Pilar Guzman, a former senior editor at Real Simple,
is editor of Cookie.
New West magazine
was started Feb. 21 at www.newwest.net by Jonathan Weber,
who was editor in chief of The Industry Standard, which
folded in Aug. 2001.
Stack is a newly launched magazine dedicated to helping
high school athletes safely and effectively improve their
Starting next month, it will be distributed for free to
more than 300,000 high school athletes in 52 major cities
including New York, Boston, Philadelphia, Chicago, Houston,
Los Angeles and San Francisco.
Stack will offer step-by-step training programs by nationally
renowned coaches and trainers, nutrition advice and sports
The magazine, planned for eight times annually to coincide
with the months of the school year, was conceived by former
athletes Nick Palazzo (Harvard football, 1999-2002), who
is publisher, and Chad Zimmerman (Carnegie Mellon football,
2000-2003), who is editor-in-chief.
Zimmerman and Palazzo are based in Cleveland, Oh. Zimmerman
can be pitched at 440/442-8319 ext. 102, or by e-mail: chad.Zimmerman@
Edition, March 9, 2005, Page 7
POST SOLID RESULTS
(Continued from page
no catastrophes. We even picked up a number of clients,
said Myers, who is optimistic about 05 prospects.
Booth & Assocs. ($6.1M) and Stanton Crenshaw ($5.4M)
followed M&M. Each dropped 6.1%.
The ranked firms provided proofs of the fees and employees
in the form of top pages of income tax returns, W-3 forms
showing total payroll, account lists and other documents.
Public Relations showed the biggest gain outside the top
group, up 311.7% to $2.7M. Ronn Torossian, who heads the
two-year-old firm, was praised as the consummate scrappy
publicist by the Feb. 20 New York Times.
Grimmers Articulate Communications was next as the
New York-headquartered high-tech firm posted a 107.8% rise
in fees to $1.7M.
strong performers were Coyne PR (+95.1% to $3.6M), Lotus
PR (+91.9% to $580K), Maloney & Fox (+90.8% to $3.2M),
CTA PR (+77.5% to $1.1M) and Walek & Assocs. (+61.4%
biggest decliners were Hayslett Group (-37.4% to $1M), Valencia,
Perez & Echeveste (-23.1% to $1.5M), Ward Creative (-23%
to $600K), Solem & Assocs. (-19.5% to $1.5M) and Winning
Strategies PR (-19.3% to $3.2M).
Internet Edition, March
9, 2005 Page 8
The 117 independent
PR firms on page 7 that proved their numbers with
free and readily available documents including the top page
of their income tax returns and W-3s showing payroll totals
are a credit to the PR counseling industry.
They show how honest and transparent a large part of the
industry is. We hope more will join the list and will continue
to collect proofs of agency size throughout the year, starting
a separate list.
Agencies that go through this process will be able to display
a certificate attesting to the fact that they have had their
Only three of the top 50 firms from the previous years
list skipped this years. We lost 18 from the list
of 112 but added 23 new or returned firms.
that 21 of the 25 biggest PR operations from the 2000 ranking
(units owned by ad conglomerates Omnicom, WPP, Interpublic,
Havas and Publicis) are not in the rankings.
That puts a big and unjustified hole in industry statistics.
Blaming Sarbanes-Oxley for this is specious. Staff and payroll
totals are compilations and have nothing to do with GAAP
(Generally Accepted Accounting Practices). More often, its
GAWI (Get Away With It accounting).
Ten big firms owned by the ad groups reported 14,890 employees
for 2001, the last year they gave out statistics.
The only clue we have about their employment is the PRSA
members in the firms. These totaled 492 in 2001 and 268
in 2004, a decline of 45%. Did the firms fire PRSA members
at a greater rate than non-PRSA members? What is the staff
total of the ten now? Only the firms know and we hope they
will provide this total and set the record straight.
Law firms are ranked
by the number of lawyers on staff. Martindale.com
lists thousands of law firms that provide this statistic.
This is the minimum that all firms should provide prospective
In a way, were glad the ad group PR units are not
in a combined independent/ad-owned ranking.
The skyrocketing fees of the ad group PR firms, totaling
in the hundreds of millions, were the result of frenetic
acquisition activity by their parents using cash and a lot
of stock. The Council of PR Firms, which assumed control
of the rankings of its members, helped boost the numbers
by allowing ad commissions and all sorts of other activities
to be counted as PR. The CPRF required no proofs
whatever of fees and staff totals, accepting the word of
the CFO. Account lists also were not required.
The rankings got thoroughly
distorted through such practices. A casualty of the
numbers ban is the marketing programs of the ad PR units
since they cant claim geographical or special skills
We mistakenly said here on 2/23 that members of the Council
of PR Firms had spent $379,000 on a 20-page ad/editorial
supplement in the Jan. 24 Advertising Age. We calculated
the 51-time page rate for the section and came up with $379K.
But the CPRF said its members only paid for seven full pages
of ads at about $20K each and three more pages of half and
The total cost for space was $160,000. Ad Age itself
paid for the ten pages of copy that were written by Paul
Holmes, said the CPRF, adding that other costs were minor
since the ads were already created.
Bob Bell, the printing
broker who was sued by Editorial Media & Marketing Intl
in 1998, half-owned by Paul Holmes, for not returning ad
mechanicals and other materials, is now publisher of Sport
Z Magazine (Nissan/Datsun Z cars). He said he went broke
fighting the suit but has regained financial health and
owns a 5,000-sq. ft. house in Larkspur, Colo.
The EMMI suit ended in 2001 when EMMI was dissolved. Kara
Ingraham, 50% owner of EMMI, filed suit in New York Supreme
Court saying the new Sabre Awards of Holmes was damaging
the CIPRA Awards of EMMI. Debt of EMMI was put at $200K
by Holmes and another $120K was owed in payroll taxes.
Bell said he never collected the $56K he felt was owed
for two issues of the former Reputation Management
magazine, but he never paid anything to EMMI either.
$1M award from Merrill Lynch ran a headline
in the March 1 New York Post. A panel of the National
Assn. of Securities Dealers found ML guilty of using a rating
system that overvalued many companies. Gary and Lisa Friedman
of Boca Raton said ML used its analysts and ratings to bolster
its investment banking business.
The verdict, which ML disputed, puts more attention on
analysts conflicted by their personal holdings and their
allegiance to the investment houses that employ them.
NIRI and the CFA Institute
find no fault with analysts personally owning stock
they write about but independent analysts (who
dont work for investment houses) say this is a bald
conflict of interest that shouldnt be allowed. The
ML decision can be used by other investors, says Securities
Unethical PRSA, which is conducting a membership drive
in February and March that saves new members the $65 initiation
fee, is lying by failing to tell prospects that they will
be second-class citizens, ineligible for the national board
or national office until they pass a $275 accreditation
The voluminous promotional materials, touting all sorts
of benefits, should disclose this information under the
section called leadership opportunities.