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Jack O'Dwyer's Newsletter
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Internet Edition, April 20, 2005, Page 1

Ketchum is helping Wendy’s handle its “finger in the chili bowl” crisis, Sean Fitzgerald, managing director of the Omnicom unit, told O’Dwyer’s.

Wendy’s President Tom Mueller on April 15 doubled the award to $100K to anybody who can identify how a finger found itself in a bowl of chili on March 25 in a Wendy’s restaurant in San Jose. He conceded that the “negative publicity” has hit Wendy’s San Francisco Bay area operations especially hard. “They’ve done nothing wrong, yet they are paying a severe price with sales down significantly in the area. Our franchisees have had to lay off some employees and reduce workers’ hours,” he said.

Mueller said there is no “credible evidence that Wendy’s is the source of the foreign object.” He said police have interviewed Wendy’s workers in the San Jose unit, and none of them has a hand injury.” Employees also passed lie detector tests.

Mueller said the incident has battered Wendy’s overall image. “Our brand reputation has been affected nationally,” he said.

Wal-Mart has hired a New York PR firm as it looks to infiltrate the five boroughs with its superstores and Sam’s Club discount outposts.

The Marino Organization, a firm focused on the real estate and land development sector, confirmed it is representing the nation’s largest retailer but declined to comment on the scope of its efforts.

Wal-Mart was rebuffed in February, when it was dropped from a development push in Queens.

The Home Depot, Hudson Yards Coalition – a group which supports a controversial stadium on Manhattan’s West Side – and Brooklyn Bridge Development Corp. are among clients of the Marino firm. Hill & Knowlton and Fleishman-Hillard are working for Wal-Mart nationally.

Christina Martin has joined the Securities Industry Association as senior VP-corporate communications. She was executive VP at Powell Tate/Weber Shandwick, and senior VP-PA for the Cellular Telecommunications & Internet Association. Korn/Ferry International handled the search.

Ogilvy PR Worldwide, following a pitch, has retained command of the three-year $4.9 million National Heart, Lung and Blood Institute account, promoting heart disease awareness to women.

The Federal Communications Commission, responding to a “large number of requests” about the compliance of VNRs with sponsorship rules, issued a public notice on April 14 to warn broadcasters and VNR firms to “clearly disclose” the “nature, source and sponsorship” of material.

The Commission is also seeking public comments for a report or a formal proceeding to better monitor the sector.

“We will take appropriate enforcement action against entities that do not comply with these rules,” the FCC said in the seven-page notice.
The Commission noted that sponsorship rules put a greater obligation on political material or programming dealing with controversial issues. The FCC said an audience is “entitled to know when the program ends and the advertisement begins.”

Two Democrats on the seven-member panel issued their own statements regarding VNRs alongside the main FCC notice.

Commissioner Michael Copps, who noted that tens of thousands of citizens contacted the FCC demanding an investigation of government-generated VNRs, said the lines between legitimate information and propaganda have increasingly blurred.

“People in this country have a right to know where their news is coming from, but it’s getting almost impossible to know,” he said.


Powell Tate/Weber Shandwick is doing PR for American International Group’s ex-CEO Maurice “Hank” Greenberg, who invoked his Fifth Amendment right on April 12 in the accounting probe into the giant New York-based insurer.

AIG has admitted to a range of shoddy accounting practices, including a transaction with General Re that could reduce its net worth by $1.8 billion.

The 79-year-old Greenberg stepped down as CEO on March 14 after a 34-year stint. He retired as chairman on March 27.

Greenberg issued a statement to explain why he is invoking the Fifth. He is “willing to accept responsibility and to account for his actions,” but needs more time to “be advised of the issues to be investigated and to my alleged involvement therein.”

Howard Opinsky, who is based in PT/WS’ Washington, D.C., office, serves as Greenberg’s spokesperson. Sheila Tate, vice chairman, told O’Dwyer’s the firm does not comment on client work.

Internet Edition, April 20, 2005, Page 2


Hill & Knowlton, which has been housed within sister company JWT advertising since 1995 at 466 Lexington ave., is moving in May or June to 909 Third ave. (54th st.), taking over space being vacated by sister company Ogilvy PR Worldwide, which is moving to 825 8th ave. (49th st.) where Ogilvy Advertising is located.

H&K, Ogilvy PR and JWT are members of the WPP Group of companies.

H&K, previously at 633 Third ave., was purchased by the former J. Walter Thompson Co. (renamed JWT earlier this year) in 1980 and was relocated by JWT in 1981 to space at 420 Lexington ave (42nd st.) that JWT had vacated when it moved to 466 Lexington ave.

H&K remained there until 1995 when it moved to 466 Lexington.

An announcement April 27, 1994 said H&K would move its 158 New York employees from 420 Lexington to temporary offices at 800 Third ave. while offices at 466 Lexington were being prepared.

JWT signed a new 15-year lease at 420 Lexington in 1980 to house a number of subsidiaries including Brouillard Communications, Soskin/Thompson Assocs. (direct marketing) and its Entertainment unit.

H&K, which had 800 employees worldwide in 1980 including more than 400 in New York, occupied floors 22, 29, 30, 31, 32 and 35-36 at 633 Third ave.

JWT noted that H&K staffers would be on “contiguous floors” at 420 Lexington and that economies would be realized because all accounting and computer operations would be in one place and available to all H&K units.

Ogilvy is moving to what is known as the WorldWide Plaza on Eighth ave., a 50-story building that is called “one of New York’s skyline icons” by the website for this building.

The number of people involved in the moves is not known.


Another indictment is expected in the federal probe of Fleishman-Hillard’s billing for the Los Angeles Department of Water and Power.

Assistant U.S. Atty. Adam Kamenstein said he expects a grand jury indictment against an additional defendant - former F-H SVP John Stodder was hit with 11 counts of wire fraud in February - this month or next, according to The Los Angeles Times.

Stodder was one of three execs – also including former L.A. partner and office head Doug Dowie, who has sued F-H, and seven-year staffer Steve Getzug – to split with F-H in January. Getzug told O’Dwyer’s he resigned from F-H on Jan. 4 to take a SVP post with Hill & Knowlton.

Political opponents of Mayor James Hahn have tried to leverage the F-H allegations against Hahn as he faces a May 17 runoff against a city councilman and a broader federal probe of corruption of L.A. contracts.

F-H has said it can’t account for $652K in DWP billings following an internal review but has challenged the L.A. Controller’s assertion that the firm overbilled the city by $4.2 million since 1998.

PR is one of the most powerful forces on earth, and a weapon that should be used to fight global terrorism, according to Bob Dilenschneider.

That was one of four “must-dos” that The Dilenschneider Group CEO presented April 15 during the keynote address at Worldcom PR Group’s annual meeting in Paris.

“Effective PR,” he said, “would go a long ways toward reducing the wave of fear that is spreading around the world, creating cross-cultural frictions and animosities among the people of earth, and tension and suspicion among their governments.”

Despite cultural differences, Dilenschneider said people throughout the world share a burning universal desire for peace, prosperity and freedom.

“These are powerful things that can bring us together—our mutual love of art and music, our respect for our neighbors, our religious and human values, our yearning for a better world for our children,” he said.

Terrorists, on the other hand, operate outside that system of shared beliefs and values. “The agenda for terrorists are death and destruction, not the preservation of art, culture, and religious values,” said Dilenschneider.

Working with clients, PR pros can confront terrorists on the “battlefield of ideas and ideals, where they are extraordinarily vulnerable.” PR people can “begin to marginalize and isolate terrorists and terrorist organizations by casting them in their true light—the barbarians of the 21st Century.”

Dilenschneider told the audience: By using the “power of ideas and ideals to fight fear and promote a peaceful, prosperous world—we can make our profession an even more powerful force in the 21st Century.”

The former Hill & Knowlton CEO’s other “must-dos” are: serving as think tanks for clients, improving cross-cultural communications, and policing ourselves in thoughtful and productive ways.


GoodWorks International, which is chaired by former United Nations Ambassador Andrew Young, has a $180K contract to promote U.S. investment in Rwanda.

According to GWI’s contract, the firm is to devise a strategy to “focus greater public attention on the tremendous improvements on the economic, political and social aspects since 1994, when the genocide unfolded.”

That genocide left more the 500,000 Tutsis dead, murdered upon orders from the extremist Hutu government. Tutsi rebels, under the command of Paul Kagame, ousted the Hutu government.

Kagame, who is now president of the African state, visited the White House on April 15. The Bush Administration, on April 12, praised the decision of a Hutu militia group, which has been raiding Rwanda from the Congo, to disarm.

The U.S. State Dept. maintains a cultural center in Rwanda’s capital, Kigali, but American private sector investment in the country has been limited to its tea industry.

GWI is based in Atlanta, and has offices in New York and Washington, D.C.

Internet Edition, April 20, 2005, Page 3


The content of the new BabyCenter magazine, which will debut as a quarterly in Sept. 2005, will be “personalized” for pregnant women and new moms.

The magazine, which is breaking new ground it its category, will focus on moms-to-be and new moms during specific phases of pregnancy and motherhood.

Jim Scott is editor-in-chief of BabyCenter and Nina Martin is executive editor.

The publisher, which has operated the website since 1997, plans to deliver the new print magazine to a controlled circulation of two million annually, with a rate base of 500,000 subscribers for each of the four editions.

Each issue will be stage-based, with all the editorial targeted to women in a particular trimester of pregnancy or phase of new motherhood.

The first issue, customized around “pregnancy 4-6 months,” will be published in Sept. Second issue: “Pregnancy 7-9 months,” to be published in Nov.

Each edition will be updated throughout the year to reflect the latest pregnancy and parenting news, research, and trends, said Scott.

Departments and features will touch on everything from health and nutrition to relationships, beauty, nesting, and style.

PR submissions should be sent to: [email protected].


The New York Daily News will put more emphasis on covering news that readers can use in its business section, and less hard news coverage of companies.

The changes come as Daniel Dunaief, former deputy business editor, takes over as business editor, replacing David Andelman, who resigned.

Jean Chatzky’s personal finance column will remain, but Paul Colford will eventually give up his media column to become an investigative reporter under the direction of Rick Pienciak, who was named assistant managing editor for the investigations group. Phyllis Furman, who covers media and entertainment, and Lore Croghan, who writes about real estate, are staying, but they will change the focus of their columns.

A spokeswoman for the News said the major business stories of the day will still be covered.

PLACEMENT TIPS________________
WebMD Corp., the parent company of, is starting a bimonthly consumer health publication called WebMD the Magazine.

The magazine will feature health and wellness information from the website.

Each issue will connect readers with celebrities who share their health-related stories and how these issues may affect others. The first issue features an interview with actress Brooke Shields, who shares her experiences of depression following the birth of her daughter.

The magazine will have a circulation of one million copies that is distributed free to patients in 85% of doctor waiting rooms across the country.

Marjorie Martin is executive editor of the magazine, based in Atlanta, Ga. Editorial submissions can be e-mailed to her at [email protected].

The Journal of Integrated Marketing Communications in Evanston, Ill., is accepting articles about IMC trends, international perspectives on IMC, agency and client point/counterpoint, and IMC’s role in crisis management, acquisitions and mergers, for publication in the 2006 edition.

Abstracts, which are due by April 20, can be submitted via e-mail to Kathryn Pratt, editor-in-chief, at [email protected] with “2006 Abstract” in the subject line.

“Hispanics Today,” created by the U.S. Hispanic Chamber of Commerce, is a syndicated English-language program that reaches more than 26 million potential viewers on major market TV stations, or about 86% of Hispanic households.

Only positive stories about Hispanic people are presented on the half-hour weekly programs, which are hosted by Ramon Rodriquez, former PR director of City Univ. of New York, who is COO of the USHCofC.

Lourdes Santiago, who is executive producer of Hispanics Today, can be reached at 202/842-1212 in Washington, D.C.

Sydney Schanberg has joined The Village Voice as the New York paper’s media critic and “Press Clips” columnist, replacing Jarett Murphy, now a features writer for the paper.

Paul O’Donnell was promoted to business editor of The Cleveland Plain Dealer.

Kimberly Osorio, the first female editor-in-chief of The Source, a music magazine, and Michelle Joyce, VP/marketing, have filed charges of discrimination with the EEOC accusing the co-owners of committing sexual harassment and unlawful retaliation against women at the company.

James Gibbons was promoted to editor of the opinion pages at The Houston Chronicle.

Jill Dougherty, previously CNN Moscow bureau chief, was appointed CNN international managing editor for the Asia Pacific region, based in the network’s regional headquarters in Hong Kong.

Madelyn Ross, 55, was dismissed as managing editor of The Pittsburgh Post-Gazette.

Raymond Simon, who established one of the country’s first undergraduate PR programs in 1949 at Utica College, was honored on his 90th birthday on April 9 in New York by his former students, which include David D’Alessandro, chairman of John Hancock Financial Services, and Gary Grates, VP/corporate comms., North America, for General Motors Corp.

(Media news continued on next page)

Internet Edition, April 20, 2005, Page 4


General Motors Corp. has stopped advertising in The Los Angeles Times, at least temporarily.

The cancellation, which came a few days after Richard Wagoner took over as chairman/CEO of GM’s North American division, was apparently in reaction to an April 6 column by Times auto columnist Dan Neil, who called for top management to be “impeached.”

Neil also said GM “utterly missed the boat on hybrid gas-electric technology” while speeding up production of SUVs.

The ban covers corporate ads, not individual dealer ads in the classified section.

GM spokespeople declined to place a value on its advertising account or disclose how much it has spent on advertising in the paper, which is Calif.’s largest newspaper with a daily circulation of about 900,000.

David Garcia, a Times spokesman, said the company “will look into any complaints GM has about inaccruacy or misrepresentation and will make any appropriate corrections.”

Lutz raps media

Bob Lutz, vice chairman of GM, criticized the media for promoting “the myth of foreign supremacy” at the expense of domestic brands and unfairly suggesting that GM was in trouble at the start of the New York Auto Show.

Although times are tough at GM, Lutz insisted the challenges ahead for the company were far less serious than the import-biased press believes.

Lutz, who has been given new duties at GM, said his four-month-old blog, FastLane, will continue.

“What began as an experiment has become an important means of communicating for GM,” said Lutz.

Hass MS&L has consulted with GM on its blog endeavors.


Michael Days, the new editor of The Philadelphia Daily News, was “warmly” received at a meeting of the African-American Chamber of Commerce, which has been boycotting the paper for the past two years.

A. Bruce Crawley, who is chairman of the group, which has members in Pennsylvania, New Jersey and Delaware, told Days that he should not expect a “free ride” because he is African-American.

Crawley, who is president/CEO of Crawley Haskins Sloan PR & Adv., helped organize the boycott to protest the paper’s coverage of Philadelphia’s black community.

Crawley had also demanded that Knight-Ridder, which owns the paper, replace the two top editors of the PDN.

Days was named in Feb. to replace longtime editor Zack Stalberg, who retired. Earlier, the paper’s managing editor left to join a paper in Madison, Wisc.

Days urged the attendees to call or e-mail him “about the tough issues we need to explore and the people we need to uplift in the paper.”

Crawley said the black boycott of the paper had wound down but the concern over the paper’s coverage of the black community had not gone away.


Sirius Satellite Radio is starting a weekly talk show called “American Voices,” created and hosted by former U.S. Sen. Bill Bradley (D.-N.J.), who played 10 years with the New York Knickerbockers.

Bradley, who is a managing director at Allen & Co., said the show, which begins in May on Sirius Talk Central, channel 148, will feature varied stories, personalities and opinions on “American Voices.”
He plans to have guests on his show as varied as the ones he has met on the road – from athletes and writers to entrepreneurs and community leaders.

“American Voices will focus on the common humanity of our citizens and will recognize those extraordinary individuals who make a difference in their communities,” he said.

Devorah Klahr, who is handling bookings for the show, can be reached at 212/901-6720.


BET, the leading cable channel for black viewers, is canceling “BET Nightly News” at the end of this summer.

BET will offer news briefs throughout the day, specials about newsworthy events and an urban affairs show, “The Cousin of Jeff Chronicles” that will run four times a year.

Debra Lee, president/COO of BET, said their audience does not want to wait until 11 p.m. to find out what the news is.

BET, which is targeting black viewers aged 18-to-34 with music programming as its primary focus, has also canceled other public affairs programming in recent years including “Lead Story” (now replicated by host Ed Gordon on National Public Radio) and “Teen Summit.”

BET also dropped “BET Tonight” host Tavis Smiley in 2001 following a dispute about Smiley offering a newsworthy interview to ABC instead of BET.

MEDIA BRIEFS___________________
Disney Magazine, a quarterly published by Walt Disney Co., has ceased publication due to declining subscriptions.

Tracks magazine, a music industry title, which was started in Jan. 2004, is shutting down, temporarily, until more funding is found.

Derek Jeter and Alex Rodriquez of the N.Y. Yankees ranked first and second, respectively, on a Sports Business Day survey of the most marketable players in Major League Baseball.

The publication surveyed 81 marketing, advertising and PR executives, consultants and journalists.

The New York Times has dropped columns by Maureen Dowd and Thomas Friedman from the Sunday edition. The columns will now appear just on weekdays.

Bob Woodward of The Washington Post will receive the President's Award from the Overseas Press Club at its annual awards gala on April 27.

Internet Edition, April 20, 2005, Page 7

O'Dwyer's Ranking of PR Firms by Specialty
Entertainment/ Cultural
Financial PR/IR
High Tech
Home Furnishings

Internet Edition, April 20, 2005 Page 8




Two “the sky is falling” articles about advertising and its problem with fragmented media appeared in recent weeks. One conclusion is that the fragmentation is presenting more opportunities for PR and promotion.

Advertising Age columnist Bob Garfield on April 4 worried that the ad industry is “caroming toward chaos and disruption wrought by the digital media revolution.” Broadcast TV works less well each year and “the marketing industry is currently whistling past the graveyard,” according to an Ad Age summary. AA is polling readers on whether they agree with “Garfield’s “Chaos Scenario” theory.

Ken Auletta, writing in the March 28 New Yorker, noted the typical home can pick from 100+ TV channels and the six broadcast networks (up from three) only from 100+ pull 30% of viewers.

Also alarming adland is the fact that the 13-24 age group spends more time on the Internet than on TV, according to Mediamark Research.

Since the audience is so fragmented and so many people “zap” commercials or switch to another channel, marketers are now buying time within programs to push products.

But they don’t necessarily tell viewers that the time has been purchased (like Armstrong Williams pushing No Child Left Behind on the editorial part of his show under contract from Ketchum and the Dept. of Education).

Frank Zazza of iTVX, Westchester, N.Y., told Auletta that the cost of a 20-second product placement within “Desperate Housewives” would be up to $400,000, about the same as a 30-second commercial on the show.

Zazza predicted $1 billion would be spent on such placements this year, up from a $500M last year.
MindShare, the media-buying unit of WPP, and ABC are developing comedies and dramas for Sears and Unilever, Auletta notes.

The article was mostly about the Kaplan Thaler Group, New York, creator of the Aflac “duck.”
Linda Kaplan Thaler believes in PR. “Don’t worry about whether the news is good or bad. Just get covered...PR breeds PR,” she wrote in a 2003 book.

Her firm was sold to Publicis in 2000. Publicis has the biggest debt of the five conglomerates ($3.9 billion) and the lowest revenues ($4.99B).
Auletta’s sweeping article did not cover the finances of the five conglomerates.

Ethics does pay, according to a study by a professor at the Graduate School of Business, University of Chicago, who studied quality of audit committee members and stock prices.

Prof. Roman Weil found that the better the audit committee of a company, the higher its stock price.

Board members were rated on their ability to understand transactions, the accounting issues involved, and the implications of accounting choices.
Dow Chemical had a grade of 443, topping the list of companies whose stocks were studied from 2000-2003. Last was the CVS drug chain with 221.

The survey was described in the April 9 New York Times.

Continuing this theme, the NYT the next day wrote about a money manager who found bad news hurts stock prices.

Among stocks he studied were American Int’l Group, down 21% this year amid charges of financial improprieties; Marsh & McLennan, off 36% after being charged with rigging prices, and Citigroup, down 12% after its private banking operations were banned from Japan.

Citigroup’s attitude towards the press was evident at the “Financial Follies” of the New York Financial Writers’ Assn. last Nov. 19. The bank had two tables (18 of its own PA people) and no reporters as guests. At the same event, Bank of America hosted 15 reporters and Deutsche Bank, 13.

The research on stock prices was made by Great Companies, Clearwater, Fla., which manages $1.3 billion.

Also cited in the article was a study of corporate governance practices of 1,500 companies from 1990-99 that found a correlation between strong shareholder rights and higher profitability and sales growth. The study was by Prof. Andrew Metrick of the Wharton School, University of Pennsylvania, and Paul Gompers and Joy Ishii, of Harvard.

The National Investor Relations Institute, recognizing in 2002 that non-financial matters such as governance were having a big effect on stock prices, created a “Center for Integrated Communications” to help members build their knowledge of corporate communications. NIRI president Lou Thompson said both IR and CC should be under “one umbrella.”

The goal of a three-part effort was “convergence of corporate communications functions.” Thompson has been asked via e-mail what happened to this initiative but has not yet replied.

Heather Sieber recently joined NIRI as its first VP-communication but NIRI has yet to provide a photo of her... Int’l Assn. of Business Communicators also has a new PR contact, Kristina Jackson, who is an outside contractor. No picture is yet available.
Amanda Vaughn had been hired in February as PR/marketing manager at $50K but quit after several weeks.

Martin Sorrell of WPP was picked as one of the “100 Most Influential People” by Time mag April 18. The write-up was by Ken Auletta, who said Sorrell saw that clients wanted to cut costs and that adland was threatened by fragmentation of media and the “zapping” of TV ads.

Sorrell acquired “lucrative fee-based service businesses such as PR, event marketing, direct-mail and research firms,” wrote Auletta.

– Jack O'Dwyer


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