B-M GETS $800K ABU DHABI PACT, COO.

Burson-Marsteller has inked an $800K six-month contract with the Abu Dhabi Investment Authority to build and support a corporate communications unit at the $500B investment unit of that Arab emirate.

The WPP Group arm is to position ADIA as a leading global investor among targeted audiences and an “employer of choice” for financial movers and shakers.

B-M is to devise a crisis program and assemble a team of top communicators to advise the client on global trends and developments. The work also includes a “research and perception mapping” component.

Jim Lake, chairman/managing director of B-M’s U.S. public affairs practice, signed the contract with ADIA.

Powell Returns as COO

Rick Powell, the former chief knowledge officer at B-M, has returned to the firm as COO.

Since ’01, Powell served as managing director of Quinn, Gillespie & Assocs. in Washington, D.C., counseling clients such as Hewlett Packard, Bank of America and Zurich Financial Services. Powell, 40, was at B-M from ’92 to ’99.

B-M upped Bill Rylance, currently CEO of Asia Pacific, to vice chairman/global development and Asia chairman. He will handle the transition to a new A-P CEO, expected to be in place by the end of the year.

Powell and Rylance report to CEO Mark Penn.

MORAVICK EXITS PUBLICIS FOR KETCHUM.

Ann Moravick, who was U.S. CEO of Publicis Consultants, has taken the top healthcare job at Ketchum.

The 25-year PR veteran spent 18 years at Manning, Selvage & Lee, holding key healthcare posts plus the managing director London slot. She has provided advice to clients such as Johnson & Johnson, Procter & Gamble and Eli Lilly & Co.

As Ketchum’s executive VP and director of global healthcare and brand advocacy, Moravick reports to Dale Bornstein, director of global practices and Barri Rafferty, director of New York.

Michael Deaver, Edelman vice chairman in Washington and the man responsible for the powerful imagery of the Reagan Administration, died Aug. 18 from pancreatic cancer at his home in Bethesda. He was 69. Nancy Reagan issued a statement to say that Deaver was "like a son to Ronnie."

Deaver joined Edelman in `92 and was upped to vice chairman in `95.

BRUSHFIRE DRIVES SUBARU’S PR.

Subaru of America has selected Brushfire as its PR firm, Michael McHale, director of corporate communications of the Japanese car importer, told O’Dwyers.

“We haven’t had a PR firm for some time,” said McHale, who joined Subaru from BMW North America in January. Ruder Finn had the account in `03.

McHale considered a number of shops before selecting Brushfire, which is based in Cedar Knolls, N.J.—an hour away from SoA headquarters in Cherry Hill. He declined to name the other firms.

Brushfire will focus its PR efforts on consumer and lifestyle media. McHale is eager to raise the visibility of the Subaru brand as the`08 models arrive in showrooms.

SoA, which has more than 600 dealers, is part of Fuji Heavy Industries.

LAT’S BATES TO SITRICK.

Jim Bates, a 22-year veteran of the Los Angeles Times business section, is moving to Sitrick & Co.

He was deputy editor of the entertainment/tech desk, and has more bylines than anyone else on staff, according to a memo from Davan Maharaj, editor of the section.

Bates plans to move in a few weeks to allow the LAT some time to replace him. Maharaj told staffers that Bates will always be welcome at the biz section, but advised them to “not fall for his spin,” and “give him a hard time when he calls on behalf of clients.”

Bates’ move to S&C follows the decision of another LAT long-timer, Mark Saylor to exit the crisis firm. The former senior editor at the paper has established his own shop, Saylor Co.

H&K REPS RIO TINTO’S $38B DEAL.

Hill & Knowlton is handling North American PR for Rio Tinto, the London-based mining giant that is in the midst of a $38B friendly takeover of Canada’s Alcan.

Rio Tinto’s acquisition ranks as the largest mining deal ever.

The offer represents a 32 percent premium to what Alcan’s long-time rival, Alcoa, offered in a hostile takeover effort.

Paul Taaffe, CEO of H&K, says his firm is to bolster Rio Tinto’s “visibility and profile” in the U.S. and Canada.

Taaffe called Rio Tinto a global leader that is “widely respected for its environmentally responsible and community-minded approach to mining.”

H&K’s sister firm, Finsbury, works with Rio Tinto in Europe.

POLARIS STARS IN ‘BIG DIG’ DEFENSE.

Powers Fasteners, the Brewster, N.Y.-based company that was indicted this month for “involuntary manslaughter” connected with the death of a woman who died in Boston’s “Big Dig” tunnel ceiling collapse, is using Polaris PR as its PR firm.

Polaris is headed by Karen Schwartzman, a former senior VP at Fleishman-Hillard and BankBoston media relations director who is well-connected in Massachusetts power circles. She spent 13 years working for the Commonwealth, including a two-year stint as assistant press secretary to ex-Governor Mike Dukakis.

Powers is “stunned beyond belief” about the indictment. It supplied $1,288 worth of epoxy to a distributor for use in the tunnel ceiling. It claims the epoxy used was not the one intended for the tunnel.

The involuntary manslaughter penalty carries a maximum $1,000 fine, an amount that Massachusetts Attorney General Martha Cookery told the Aug. 10 Associated Press “does not seem to be even close to an appropriate punishment.”

Powers, however, could be liable to tens of millions of dollars in civil charges that are being considered against it.

Attorneys for Powers moved Aug. 8 to “disqualify” Cookery and her team from the case because of an “irreconcilable conflict of interest.”

That point is based on Cookery’s role in spearheading the Bay State’s effort to collect as much from Powers and other contractors to cover the cost overruns connected with the Big Dig. The highway project, which opened its final ramp last year, was projected to cost $2.8B in `85.

Nearly $15B has been spent on the network that re-routed traffic from the streets to tunnels under Boston.

WPP'S SORRELL LIKES HILLARY’S CHANCES.

WPP Group CEO Martin Sorrell expects a good year in `08, buoyed by the Hill & Knowlton/Beijing Olympics, and heavy U.S. political spending in advance of the U.S. Presidential election.

The British ad/PR combine, according to its first-half earnings release, is especially upbeat about political outlays because the U.S. "may see Hillary Clinton nominated and elected."

A second Clinton Administration may face slower growth in `09 as it "wrestles with the country's fiscal and trade imbalances."

Sorrell warns that though corporate profitability remains strong on both sides of the Atlantic, there is a concern about stagflation as the U.S. and others wrestle with increasing oil prices, twin fiscal and trade deficits and potential impact of change in interest rate policies.

He fears that any cut in consumer spending could mean trouble for marketing services companies because companies have not traditionally picked up the slack.

One reason: "Company boards remain cautious; perhaps cowed by regulatory measures and fear of failure."

WPP notes the average life of a CEO remains around four years, while a chief marketing officer can expect to be around for two.

Sorrell has headed WPP for 21 years.

RF SIGNS UP WITH ASLS.

Ruder Finn is working for American Student Loan Services, a leading Phoenix-based loan consolidator and lender to college students.

Neil Dhillon, who heads RF’s Washington, D.C., office is spearheading the work. He is assisted by Angelo Terrana, VP-media affairs and a former aide to two Republican Representatives from Pennsylvania—Melissa Hart and Bill Shuster.

RF is tackling higher education legislative issues amid calls to tighten federal rules regarding the $85B student loan market.

New York Attorney General Andrew Cuomo, who led a crackdown in the Empire State, branded the Dept. of Education “asleep at the switch” when it comes to probing ties between universities and lenders.

Secretary of Education Margaret Spellings promised Aug. 1 to accept a General Accountability Office recommendation to “update oversight mechanisms to proactively identify possible instances of improper inducements and limitations on borrower choice.”

STATE SEEKS $$$ FOR DIPLOMACY CENTER.

The State Dept. is looking to hire a firm to plan and run a $25M fund-raising drive to create a permanent exhibition hall for the U.S. Diplomacy Center at the Harry S. Truman Building.

The effort is a joint venture between State and retired members of the Foreign Service who have established the Foreign Affairs Museum Council.

That partnership has so far raised $1.25M from private donors.

The Diplomacy Center is an office within the Bureau of Public Affairs.

The entity’s goal is to increase public awareness of diplomacy via exhibits and innovative programs to inspire future leaders of the diplomatic corps.

The fund-raising contract, which has a base and two option years, also requires the ability to organize high-profile special events.

H. Leo Powell is contract administrator at 703/875-6071 and [email protected].

THAILAND TAPS GC FOR AWARENESS.

Thailand, which has trade and political issues with the U.S., has hired Global Communicators for a three-month public awareness program.

Jim Harff, GC CEO, says the Thais want to emphasize their role as a “close friend and ally of the U.S. for nearly 175 years.”

GC’s program is aimed at congressional leaders, executive branch and department people, industry groups, think tanks and reporters.

The goal is to strengthen the overall bilateral relationship between the two countries.

Michiko Morales, senior VP at Global Communicators, heads the work.

Thailand has been involved in a messy fight over intellectual property issues with Abbott Laboratories that centers on licensing issues for Abbott’s AIDS drug.

Thailand’s military junta also is seeking the extradition of ousted Prime Minister Thaksin and held a vote on Aug. 19 that cemented its power.

CBS, IMUS SETTLE DISPUTE.

CBS has settled its termination squabble with its former shock jock Don Imus, a dispute that was triggered by the D.J.’s “nappy-headed hos” reference to the Rutgers University women’s basketball team.

“Don Imus and CBS Radio have mutually agreed to settle claims that each had against the other regarding the Imus radio program on CBS. The terms of the settlement are confidential and will not be disclosed,” said a statement from the broadcasting giant.

Imus, prior to his dismissal, had signed a $40M five-year deal with CBS that called for him to be “controversial.”

The settlement deal precludes 66-year-old Imus from making disparaging remarks against CBS, and paves the way for his return to the air. WABC, which features conservatives Sean Hannity and Rush Limbaugh, is among potential employers of Imus.

WFAN, the New York flagship station of CBS that was home to Imus, announced that former NFL quarterback Boomer Esiason and Craig Carton, a New Jersey radio personality, will replace the I-Man.

“Boomer and Carton in the Morning” debuts on the sports radio station on Sept. 4.

TIME’S CIRC PLUNGES, AS PLANNED.

Time’s circulation plummeted 17 percent to 3.4M this year compared to the first-half of ’06, according to figures from the Audit Bureau of Circulations.

John Squires, executive VP of Time-Warner’s Time Inc. group, says the poor showing was part of the planned retrenchment and cut in promotional sales.

Newsweek and U.S. News & World Report posted flat circ figures. They had 3.1M and 2M readers, respectively.

The Big Three business mags also turned in flat results. Forbes surpassed BusinessWeek, taking the No. 1 spot with a circulation of 925K. BW, which had 930K readers last year, has 919K in ’07. Fortune has 865K readers.

The North American edition of The Economist continued its hot streak. The British mag enjoyed a 16% rise in readership to 694K

INKY NAMES EDITORS.

The Philadelphia Inquirer has assigned Mike Leary and Sandra Long as managing editors.

Leary rejoins the paper from the Baltimore Sun, where he was assistant managing editor. He will oversee news gathering operations.

Leary was an investigative reporter for the Philadelphia paper during the ’80s and partnered then with the paper’s now-editor William Marimow. They exited the Inquirer for the Sun.

Long, a 24-year veteran of the Inquirer is upped from deputy managing editor. She takes over production and serves as newspaper liaison with business operations.

Long is a founding member of the National Assn. of Black Journalists.

Both replace Ann Gordon who left the Inky on April 30.

NYT’s GREENHOUSE TURNS OFF C-SPAN.

Linda Greenhouse, the longtime New York Times Supreme Court reporter, told organizers of a “Covering the Court(s): Reporters on the Supreme Court Beat” panel to get rid of C-Span’s cameras or else she wasn’t going to appear as planned.

Greenhouse, according to a posting by the Columbia Journalism Review, felt she couldn’t speak candidly if the TV cameras were there.

She was prepared to speak to a “room of academics” so she “didn’t want to modulate her comments for a national audience.”

The organizer, fearing the loss of a “marquee attraction,” had C-Span turn off its cameras. Greenhouse did not demand that the proceeding be “off-the-record.”

Greenhouse’s move led Terence Murphy, VP–programming at C-Span, to fire off a letter to the Assn of Education in Journalism and Mass Communications, which put on the event. His concern: “If professors of journalism and working journalists taking part in a journalism education conference don’t stand up for open media access to public policy discussions, who will.”

He also noted that Greenhouse has been covered by C-Span more than 50 times. CJR referred to Greenhouse as “Hurricane Linda.”

HEARST PICKS UP KABOODLE.

Hearst Corp. has acquired Kaboodle, which is the MySpace of the social shopping place, according to Kenneth Bronfin, president of Hearst Interactive Media.

Kaboodle, which has more than two million unique visitors a-month, connects people with similar tastes and takes them on a shopping adventure.

Hearst sees synergies between Kaboodle and brands in its fashion, beauty and consumer technology categories. Cathy Black, head of Hearst Magazines, believes readers will be able to “find the products featured in our magazines, shop electronically with friends and get their feedback.”

The deal is another means to make sure “readers stay engaged in today’s saturated media landscape,” she said in a statement.

SAN JOSE MERC NAMES PUBLISHER.

The San Jose Mercury News has upped its VP-advertising Jeff Kiel to the publisher slot. He succeeds George Riggs, who served double-duty as CEO of the California Newspaper Partnership, the unit that is responsible for MediaNews’ Golden State holdings.

Kiel was CFO of the Miami Herald before heading west.

ORGANIZE DOUBLES CIRC.

Organize, the magazine to put your house and mind in order, is out with its second issue on Aug. 29. Its 98 pages are 36 more than the debut issue. The circ has doubled to 80K.

Editor-in-chief Joyce Dorny says the next number with have a 150K circ, bolstered by a distribution deal with CVS Pharmacies. Borders and Barnes & Noble also carry the mag.

(Media news continued on next page)

IRAQ COSTS SAP NETWORKS.

TV networks have spent millions to cover the war in Iraq, but are getting scant return for their dollars, according to a report in Broadcasting & Cable.

While Iraq remains the biggest news story, the constant drumbeat of suicide attacks and daily pictures of carnage is turning off viewers.

Andrew Tyndall of the Tyndall Report believes Iraq is no longer a headline news story. “There are no new things happening there; it’s just more of the same,” he said. He believes media face a period of “prolonged news doldrums.”

B&C reports that news organizations spend up to $10M a year to cover Iraq; a large portion of that amount goes for security. The Committee to Protect Journalists reports that at least 112 reporters, cameramen and engineers have been killed in Iraq since the war invasion was launched in `03.

Jeremy Hillman, editor of the BBC, says his organization has relatively few reporters in Iraq.

There is however a “massive investment” for security. That investment is a “significant percentage” of what the BBC spends on foreign news. “It’s completely out of proportion with what we spend to send foreign correspondents to other places,” Hillman told the weekly mag. A security worker receives about $1,000 a-day.

It’s a game of “diminishing returns,” wrote B&C’s Marisa Guthrie. As Iraq becomes more dangerous, more cash must be spent for security and the harder it becomes for reporters to move around the country.

Since Iraq has more than 160K U.S. soldiers, abandoning coverage is not an option.

Lara Logan, CBS News’ chief foreign correspondent, had a bomb explode on the floor below her hotel room. She said the networks can’t pull out just “because people back home are tired of hearing about the war.” Her job is to come up with more compelling stories.

BLUM TAKES MANHATTAN MEDIA POST.

David Blum, a former editor of the Village Voice, has been named editor-in-chief of Manhattan Media’s community newspaper group. That puts him in position to compete with the VV.

MM purchased the New York Press from Denver-based Avalon Equity Fund earlier this month. It was launched in `89 to compete with the Voice as the alternative paper of NYC. MM also publishes free newspapers such as Our Town, West Side Spirit, Chelsea Clinton News and Westsider.

Blum takes his new post on Sept. 5. Village Voice Media is based in Phoenix.

YAHOO GOES LOCAL.

Yahoo! is adding more city specific information in a bid to better compete with Google for local advertisers. Brian Gill, senior product manager at Yahoo, said the effort is to “generate more active engagement from users,” according to Bloomberg.

Yahoo Local will have weekend pages to help users in cities like San Francisco and New York to make better use of their free time. There are neighborhood reviews that let Yahoo users comment on local stores and entertainment venues.

STUFF GETS STUFFED INTO MAXIM.

Stuff, a “lad” magazine launched in ’98, is no more following the publication of the October issue. It is being “stuffed” into its bigger brother, Maxim, as a special section.

Stuff has a circulation of more than 1.3M and revenues in the $65M. Its website will continue.

The end of the printed Stuff follows the completion of Quadrangle Capital Partners’ acquisition of Dennis Publishing, which now is called Alpha Media Group.

AMG CEO Kent Brownridge believes his company has among the best assets in the publishing industry.

AMG’s holdings are led by men’s lifestyle mag Maxim, which reaches more than 12.4M readers each month, and music mag Blender, which reaches another two million. Their combined websites reach 5.2M unique visitors monthly.

IMPOCO EXITS PORTFOLIO.

Jim Impoco, deputy editor at Portfolio, exited just before the Aug. 15 publication of the second issue of the Conde Nast business magazine.

The former editor of the Sunday New York Times business section was No. 2 to editor-in-chief Joanne Lipman.

TIME WARNER ROLLS FREE DVR.

Time Warner Cable will launch “Look Back” in October, a free digital recording service, to subscribers in South Carolina.

The service allows users to record programs for later viewing, but does not give them a way to zap commercials. LB’s “fast-forwarding function will be disabled. TWC’s competitors sell a DVR service to subscribers for about $10 a-month. DVRs are in 17 percent of U.S. households.

Charter Communications, the big St. Louis cable combine controlled by Microsoft co-founder Paul Allen, mulls a buyout or restructuring program. Charter has more than 5.6M subscribers, and may attract suitors like Time-Warner Cable, which has properties near Charter’s New York and California holdings….Ziff Davis Media is skipping an interest payment as CEO Jason Young explores options. He says ZDM has been hurt by a challenging print environment, though its digital and event operations are thriving….CNET reporters Stephen Shankland, Dawn Kawamoto and Tom Krazit are suing Hewlett-Packard for violating their privacy in the infamous “spying” case that led to the downfall of H-P chairwoman Patricia Dunn. H-P obtained phone records of the reporters in an effort to root out boardroom leaks. It is disappointed with the suit, according to spokesperson Ryan Donavon. The high-tech company has apologized and made a “substantial settlement offer” to the trio….Bruce Wolmer, long-time editor and publisher of Art and Auction magazine died at 59. He stepped down as editor-in-chief due to health reasons.

A startling statement about ad/PR agencies, the media and awards is in the WPP Group's 2006 annual report. It says: “If you drew a graph plotting creative awards as a proxy for creativity against [profit] margins for any group of agencies, there would be a very strong correlation. The more awards, the stronger the margins.”

In other words, awards = profits.

Awards to WPP units from the Wall Street Journal, AdWeek, PR Week, the “prestigious” Holmes Report and Gunn Report (compilation of ad winners), and various programs (Effies, Caples, One Show, Clios) are cited.

Instead of reporting revenues of its ad/PR units (which it stopped doing five years ago), WPP reports the number of awards won. For instance, the JWT group won 35 “Lions” at the Cannes Ad Festival in 2006, up from 17 in 2005 and five in 2004. OgilvyOne Worldwide “won 595 local and international awards, topping 2005’s stellar total by 20,” says WPP. JWT “rocketed up” the GunnReport from ninth place to fourth.

Advertising Age columnist Al Ries has noted that awards are so effective in pitches that the big ad agencies have given up running corporate ads in the ad media (PR media have such ads).

The ad industry, says Ries, "is the only industry that apparently doesn’t believe in advertising…what it believes in is PR." Most agencies "spend a lot of money promoting their awards to potential clients," he says.

One problem with ad industry awards, he adds, is that creatives are judges and the awards "are almost never based on results." Entry forms ignore this aspect.

"Nor are there any consumers on the judging panels-that's the real tragedy about the awards," he adds.

Our question is how credible are these awards if some agencies deluge the contests with entries, paying considerable fees; if they buy full-page ads in some of the publications, and/or spend tens of thousands on award banquet tables and travel to such banquets? Subjective judgments determine winners rather than verifiable dollar and employment figures. Contests are subject to political and financial pressures especially with contestants like WPP putting so much emphasis on winning awards.

While WPP and the other conglomerates have turned their backs on objective measurements, others have not. The 140 independent firms in the O'Dwyer rankings have supplied top pages of income tax returns, W-3s, lists of staffers and other proofs and are reaping as much visibility and more credibility at a fraction of the cost of those proliferating awards programs. We don't think clients are being fooled by the "awards game." Ad Age this year named Omnicom's John Wren as "Agency Executive of the Year," noting OMC had reached $100 (although OMC was $107 in 1999). The New York Times has yet to explore OMC's beleaguered stock.

News item: Mary Barber, nominee for secretary of the PR Society, after seven years on her own, took a PR job at the Alaska Community Foundation, saying she wasn't looking for a change but the ACF was "the perfect combination of PR skills, giving back to the community, and providing my family some stability while my husband changes careers." Many other PRS leaders have recently made changes. Mike Cherenson, nominee for chair-elect, sold his father's PR firm in early 2006 to an ad agency; Rosanna Fiske, treasurer nominee, closed her firm to teach; Kathy Hubbell, N. Pacific nominee and owner of Adscripts, is moving from Montana to Oregon in search of a PR teaching job; Judith Phair, 2005 president, left her firm for the Graduate Mgmt. Admission Council; Cheryl Procter-Rogers, 2006 president, left HBO in mid-term for her own firm; the agency of 2004 president Del Galloway (Husk Jennings Galloway) was bought by On Ideas in 2005 and Galloway joined the Corp. for Public Broadcasting; Cathryn Harris, 2004 director who was dir. of comms., W. Va. American Water, went to her own firm after that job was eliminated (a "specialist" PR job remains open); Steve Lubetkin, 2004 director, left Fleet Bank for his own firm after the bank merged; 2006 director Dave Rickey went from AmSouth Bank, now part of one of the ten largest bank holding companies after acquisition by Regions Financial, to Alfa Corp., Montgomery, Ala., insurance company; Art Stevens, 2003 secretary, went from CEO of Publicis Dialog New York to Stevens/Gould/Pincus, and Reed Byrum, 2003 president, went from Trilogy to his own firm. Only two of the past 12 presidents had significant jobs and stayed in them through and after the presidency-Mary Cusick (1998) of Bob Evans Farms and Kathy Lewton (2001) of Fleishman-Hillard and H&K. Others were in small firms, academia or nonprofit.

The rejection of Ray Crockett of Coca-Cola as S.E. director of PRS is symptomatic of PRS's alienation from corporate PR. There are no corporate reps on the Ethics Board (seven counselors--Linda Cohen, Jim Lukaszewski, Bob Frause, Patrick McLaughlin, Keith Mabee, Emmanuel Tchividjian, Tom Duke) and four academics (Dean Kruckeberg, Patricia Whalen, Patti Grey, Francis MacDonald)…PRS's bulging payroll of $5.28M (46.3% of revenues of $11.4M) contrasts with the payroll of the Council on Foundations ($6.6M or 36% of income of $18M). The ACF, which Mary Barber has joined, follows the guidelines for "transparency" of the Council. This includes putting the full audit and IRS Form 990 on the website. PRS does neither. Does ACF want its name associated with such practices? Still being withheld are the names of the 250 chapter Assembly delegates…Debbie Girard, now on PR for PRS under VP-PR Janet Troy, as a freelancer for PRS in 2004 authored "Tale of a Turnaround" for the magazine of ASAE/D.C. It said PRS was beset with "money woes, eroded credibility with members, low employee morale and a less-than-desirable working relationship with the board" but this was reversed by COO Catherine Bolton with the help of 2001 pres. Kathy Lewton and 2003 pres. Reed Byrum (2002 pres. Joann Killeen was not mentioned).

--Jack O'Dwyer