ILL. REVIEWS LARGE TOURISM PR ACCOUNT

Illinois has begun an RFP process to review its seven-figure tourism PR account.

The Prairie State’s Bureau of Tourism, under the Dept. of Commerce and Economic Opportunity, is under contract with Edelman through January 31, 2008 as the firm winds down a three-year contract worth $9M.

Edelman, with strong Chicago roots, has worked on tourism assignments for the state for the last two decades.

The new RFP, issued on Oct. 19, calls for domestic and international tourism PR, along with a focus on more specialized segments like agricultural and heritage tourism. Media relations and annual communications plans are a large part of the work.

The DCEO said it will only consider proposals from firms with more than 25 full-time staffers in a Chicago office. The firm must also have international offices in the U.K. and Germany, either agency-owned or through partnerships. The selection committee also wants a four-minute video or DVD of a firm’s proposed team members.

The anticipated PR contract will run through June 30, 2011 with two option years. Sara Barnett (sara.barnett [at] illinois.gov) is point of contact for the RFP, which can be downloaded from the state’s procurement site, www.purchase.state.il.us.

Proposals are due Nov. 9.

CASSIDY INKS $1.2M PAKISTAN PACT

Cassidy & Associates has signed a $1.2M contract with Pakistan’s U.S. Embassy, a pact designed to address “various high-priority issues” faced by the Islamic state.

Newsweek’s Oct. 29 cover story branded Pakistan “the most dangerous nation in the world.”

The Interpublic unit, working closely with sister company Weber Shandwick, is to “clarify” Pakistan’s role as a key partner in this country’s effort to “enhance security and stability in a region of broad strategic importance.”

C&A is to promote a “more accurate and balanced message” regarding the effort of Pakistan President Pervez Musharraf’s effort to deal with the “important changes taking place in Pakistan in the political, economic and social spheres.” The firm will work with the Embassy to sharpen its public diplomacy efforts.

WPP Group’s Burson-Marsteller, BKSH & Assocs. and Penn, Schoen & Berland Assocs. earlier this year inked a contract with the Pakistan People’s Party, which paved the way for the return of former Prime Minister Benazir Bhutto to her country.

B-M RIDES TO RESCUE ‘THOMAS’

RC2 Corp., which launched a massive recall of 1.5M “Thomas the Tank Engine” wooden train toys and accessory pieces in June, has reached out to Burson-Marsteller to recover from its lingering PR crisis.

The Oak Brook, Ill.-based marketer of the Chinese-made toys containing lead initially relied on its shop Salmon Boore Group to handle media inquiries.

RC2 had a second recall of toys in September, including its “Toad” train that it had been sending as a “gift” to parents returning toys from the first product recall.

RC2’s strategy apparently is to keep Curtis Stoelting, RC2’s chief executive, and Peter Henseler, its president, under wraps.

That’s what New York Times columnist David Leonhardt wrote Oct. 24 after trying to reach them about the Thomas the Tank saga.

B-M’s Joanne Tremulis, who is based in Chicago, has a written response for calls about the product recall policy. She refers people to RC2’s website.

Tremulis says she cannot comment about the lead situation because the issue is in litigation.

She encourages parents to scour their home for Thomas toys that are subject to the recall, and assures them that RC2 is working day and night to replace the recalled items so children can continue to “enjoy playing with all the parts of the Thomas and Friends Wooden Railway Line.”

ANSWER ‘TOUGH’ QUESTIONS-RUSSERT

PR pros should encourage their clients to "answer tough questions," newscaster Tim Russert told the annual conference of the PR Society Oct. 22 in Philadelphia.

"Spinning may work in the short term but it's an absolute disaster in the long term," he told an audience of more than 2,000. "You pay a price for spinning," he said.

Total attendance, including day and event-only registrations, was 3,400. Record for a conference is 4,000 set in New York in 2004.

Russert said the presidential candidates are hiding behind their websites, commercials and brochures rather than answering "tough questions" of the press.

Citing the lessons of "history," he said, "If you're president of the U.S., you cannot make tough decisions unless you are willing to answer tough questions."

Russert rapped the "partisan divide" in D.C. that results in the two parties not wanting to "sit down and reason with each other"…there's very little room for

(continued on page 7)

KUWAITI CONTRACTOR TAPS SAYLOR

The Middle East contractor leading construction of the troubled U.S. Embassy compound in Baghdad has hired Saylor Company, the PR firm of former Sitrick & Co. executive Mark Saylor.

The Kuwait-based construction company, First Kuwaiti General Trading and Contracting, has a hundred-million-dollar contract with the State Dept. as the lead in a two-company team with Maryland-based Grunley Walsh to build part of the overall $600M complex. But the opening of the project has twice been delayed and the State Dept. and Congressional investigators are looking at the safety of the rising structure after a mortar shell damaged part of a wall last May.

The Washington Post raised eyebrows in D.C. earlier this month in reporting that the cost of the embassy rose by $144M from its initial $592M price tag. McClatchy Newspapers reported last week that at least one criminal investigation is under way and that First Kuwaiti received a sole source contract—meaning no competitive bids were solicited—apparently to rush the project.

McClatchy, which got a “no comment” from Saylor, also noted that First Kuwaiti has recently partnered with Grunley Walsh LLC to win contracts for work on State Dept. properties in Gabon, Indonesia, and Saudi Arabia, noting FK appears to be the major financial player in the partnership and that foreign firms can’t lead embassy contracts.

Saylor, a former senior editor for the Los Angeles Times, left Sitrick earlier this year to start his Los Angeles area crisis firm.

The opening of the embassy in Baghdad, the largest U.S. diplomatic outpost in the world, has been delayed indefinitely after initial openings set for June and September of this year.

DEA CHIEF JOINS MOTOROLA

Karen Tandy, administrator of the Drug Enforcement Administration, has joined Motorola as senior VP in its global government relations and public policy unit.

She is to serve as Motorola’s top public policy spokesperson regarding telecom policy, trade, regulation, and spectrum allocation, according to the Motorola website.

Tandy also will seek to increase Motorola’s global defense unit’s share of government and public safety contracts. She succeeds Michael Kennedy, who retires after 22 years at the electronics/telecom giant.

Motorola is among corporate sponsors of the DEA’s traveling “Target America: Opening Eyes to the Damage Drugs Cause” exhibit that recently wrapped up a schedule at Chicago’s Navy Pier.

Tandy, says her DEA bio, “deployed the first teams of DEA agents to conduct counter-narcotics operations in Afghanistan, leading to the first U.S. extradition from Afghanistan and a more than 700 percent increase in the seizure of opium, heroin and clandestine labs.”

The United Nations has reported that Afghanistan will set an all-time record for opium production this year.

OMC’S STOCK GETS HIT; IPG ENJOYS BOOST

Deutsche Bank has sliced its rating on Omnicom’s stock from “buy to hold,” and cut its price target from $60 to $53.

The investment banker told clients that it is concerned that a slowing economy could impact the ad/PR combine. Though DB has not seen any cuts in client spending, it notes that ad agencies are “lagging indicators.” The banker did not “want to fight the economic tape any longer.”

OMC CFO Randy Weisenburger alluded to some “economic noise” in his presentation to shareholders Oct. 23 following the release of earnings that were up 14.2 percent for the third-quarter to $202M. Revenues jumped 11.8 percent to $3.1B.

PR growth (Fleishman-Hillard, Ketchum, Porter Novelli, Brodeur) jumped 9.7 percent, but lagged CRM (+14.2 percent) and advertising (+12.1 percent).

CEO John Wren spent $329M for acquisitions during the quarter. Earn-outs accounted for $132M of that amount, while $154M was spent for new firms.

Bear Stearns, meanwhile, upgraded Interpublic from “peer perform to outperform” because the stock has “significantly underperformed its peers.”

It believes IPG’s shares carry a risk-reward ratio that makes them attractive. Bear has a $13 price target for IPG in `08. Shares now trade at $10.

GEORGIA RE-BIDS TOURISM PR WORK

Georgia has re-issued an RFP for its tourism and economic development PR account after tentatively awarding the contract to New York-based The Pont Group in late September.

Alison Tyrer, senior communications specialist for the Georgia Dept. of Economic Development, told O’Dwyer’s that a document was published by the state in September indicating that it intended to award the contract to Pont, but a contract was never signed. She cited “administrative reasons” for the reversal.

The new RFP is calling for pitches through Nov. 9. It covers PR related to tourism, international trade, film, music and video gaming industries, as well as the technology and bioscience sectors, among other work.

Manning Selvage & Lee worked with the DED for the last seven years through the end of its fiscal year in June. The Pont Group beat out Cookerly, GolinHarris, Ogilvy, Creaxion, Fleishman-Hillard, Hope-Beckham and Diversified Media Design in the summer shoot-out.

5W NAMES NOBS

David Nobs, a PR vet with more than 25 years of experience, is assuming command of five-year old 5W Public Relations’ Los Angeles office as executive VP and GM. He replaces Cindy Rakowitz, a Playboy Enterprises alum.

Nobs’ credentials include managing director of Ruder Finn and GM of Weber Shandwick/Rogers and Cowan’s L.A. operations. He also worked at Cone Communications (executive VP), Earle Palmer Brown (senior VP) and Cohn & Wolfe (VP). 5W CEO Ronn Torossian told O’Dwyer’s 5W needed to “add more process” in order to land “huge RFPs.”

SORRELL: SOCIAL NETWORKING DRIVES PR

WPP Group CEO Martin Sorrell, according to the Guardian, believes growth in social networking sites is great news for the PR business. "Social networking seems to underline the importance of editorial publicity," he said.

Sorrell said social networking is "really recommendation between people about the things that they are interested in and they like." To Sorrell, "that has stimulated people's attention in terms of the importance of PR."

The WPP chief said companies are eager to get into news stories. Web users, in turn, are hungry for "ideas and knowledge" from "independent sources."

PR is a way to earn press coverage and help brands get around social networkers' typical aversion to advertising, said Sorrell.

The last thing social networkers want is to be "monetized" or "advertised to." That's why Sorrell believes editorial communications is so powerful.

The WPP head also noted the cost-effectiveness of PR vis-à-vis other forms of marketing. PR "looks cheaper in terms of absolute levels of spending so it makes people happier."

MICROSOFT LOCKS UP FACEBOOK STAKE

Microsoft has taken a $240M equity stake in the social networking portal Facebook.

The deal expands an existing advertising relationship that makes Microsoft the exclusive third-party ad platform for Facebook.

Google had also reportedly been pursuing a deal with FB.

Microsoft’s investment put Facebook’s valuation at a whopping $15B, nearly 30 times what News Corp. paid for MySpace.

PENSIERO RETURNS TO WSJ FRONT LINES

Jim Pensiero is taking the VP-news projects post at the Wall Street Journal on Nov. 1. He will unveil the new technology platform to unite the print and online WSJ news staffs, and assume responsibility for the launch of WSJ's glossy magazine.

Pensiero has worked in the publisher's office of the WSJ since Nov. `05 on special projects. He managed the Journal 3.0 re-design.

He joined the WSJ as copy editor in `84, and rose to VP-news operations in '02 before being kicked upstairs.

Prior to the WSJ, Pensiero worked at the Philadelphia Bulletin and Time Inc.

His wife, Karen, is an assistant managing editor of the WSJ.

COLVIN JOINS CNET

Stephen Colvin, former president/CEO of Dennis Publishing, joins CNET Networks as executive VP on Oct. 29. He was publisher of Maxim, Stuff, Blender and This Week magazines until DP was acquired by Quadrangle Partners in August.

At CNET, Colvin will be in charge of the San Francisco-based interactive media company's entertainment and lifestyle brands. Those include GameSpot, TV.com, MP3.com, FilmSpot, Chow and UrbanBaby.

CNET CEO Neil Ashe reported a $26M net loss on nine-month revenues of $289M.

The firm, which attracts 140M unique visitors to its site each month, expects to generate full-year revenues in the $400M range.

REILLY EXITS SI FOR ESPN

Rick Reilly, writer and columnist for Sports Illustrated is moving to EPSN when his contract expires on Nov. 30.

His “Life of Reilly” piece appears on the final page of SI. He also posts “Riffs of Reilly,” a humorous commentary.

Reilly wrote novels, “Shanks for Nothing” and “Missing Links,” and the nonfiction “Who’s Your Caddy.”

SI, in turn, has hired Dan Patrick, former ESPN “SportsCenter” anchor, to do a column and handles a radio simulcast on SI.com.

FCC FINES SONSHINE, SINCLAIR

The Federal Communications Commission has proposed a fine of $40K on Sonshine Family Television and $36K on Sinclair Broadcast Group for airing the infamous “The Right Side with Armstrong Williams” in which the commentator plugged the “No Child Left Behind” education law.

The stations were fined $100 for each broadcast. The commentator was paid by Ketchum for the plugs that were made two years ago and set off a firestorm of controversy over government PR and “pay-to-play.”

The FCC also issued a citation against Williams' Graham Williams Group for producing the commentaries but not disclosing the payments received.

SV GOES DOWN WITH DOLANS

Sard Verbinnen represented the Dolan family in its failed $10.6B offer to take Cablevision private. It is the biggest rejection of a buyout offer, according to the New York Times, and towers over the $2.6B aborted deal for Lear by Carl Icahn.

Cablevision shareholders nixed the Dolan deal on Oct. 24.

Chuck and Jim Dolan, the father and son team that leads Cablevision, put an interesting twist on their loss.

Though disappointed, they see "nothing negative about today's outcome." The rejection, in fact, is a "positive event," one that "is a vote of confidence in the prospects of Cablevision, its management team, its 20K employees and the industry's future."

George Sard and Paul Caminiti are listed as Dolan Family Group contacts on that release.

Cablevision owns extensive CATV operations, as well as the New York Knicks, New York Rangers, Madison Square Garden and Radio City Music Hall.

Jim Dolan has been in the news of late following an $11.6M sexual harassment verdict won by a former employee of MSG.

Media news continued on next page)

PENTAGON PROBES NEWSPAPER PR PACT

The Dept. of Defense has widened an investigation of the Pentagon's "America Supports You" campaign to include Stars and Stripes, an independent newspaper covering the military, S&S has disclosed.

The Pentagon's inspector general's office is looking at a $500K PR contract with Susan Davis International to support the America Supports You campaign awarded by S&S in July 2006.

"This causes extreme concern among the editorial staff, and could cause readers to question our objectivity as an editorially independent newspaper -- an unacceptable situation," executive editor Robb Grindstaff and managing editor Doug Clawson said in a joint statement on Oct. 19.

S&S reported that its editorial staffers were not involved with the America Supports You PR effort, and that the editors will conduct a review of all the paper's stories written about the campaign.

"We were aware of some interaction between S&S marketing department and ASY, but were appalled to learn the degree of involvement and the use of Stripes finances to fund the Pentagon's public relations campaign," the statement said.

The Pentagon is looking into the American Forces Information Service, which administers the ASY campaign, and the Office of the Assistant Secretary of Defense for Public Affairs, Allison Barber, who oversees AFIS. S&S is being probed for its expenditures related to ASY.

Barber is a former PR director for the American Red Cross who later served as president of Sodenta, her own D.C. PR firm. She was also president of the Washington D.C., office of PlowShare, a Connecticut advertising agency focused on PSAs.

DISNEY WELCOMES U.S. VISITORS

Disney's Parks and Resorts unit is working with the U.S. Depts. of State and Homeland Security on a public diplomacy effort to welcome international visitors to the U.S.

The film can be viewed at discoveramerica.com.

The multi-media campaign, called "Welcome: Portraits of America," is part of the Rice-Chertoff Initiative, a three-part plan unveiled last year intended to make visitors feel welcome while maintaining U.S. security.

The Disney unit has donated a seven-minute film and hundreds of photos of Americans to illustrate the "diversity, friendliness and optimism" of U.S. citizens.

"Our global reputation … depends on making visitors feel every bit as welcome as they feel secure," said Homeland Security assistant secretary Stewart Baker in a statement.

The film, produced by Federico Tio, a marketer for Disney's "Lion King" and "Finding Nemo," is to be shown in federal inspection areas of U.S. airports (Washington Dulles and Bush Intercontinental in Houston are the first to host the display), embassies and consulates overseas.

Disney has an obvious stake in the consistent flow of tourists to the U.S. from abroad. Jay Rasulo, who is chairman of Disney's Parks and Resorts division, also chairs the Travel Industry Association, a key trade group for the travel industry.

No commercial content is included in the campaign, although Karen Hughes, who is Under Secretary of Public Diplomacy and PA for the State Dept., praised Disney's involvement in a news release.

MSNBC MOVES IN WITH NBC

Staffers of WNBC have moved from Secaucus, N.J., to NBC's headquarters at New York City's Rockefeller Center in a move to integrate operations.

The multimillion dollar renovation of the insides of 30 Rock began in February.

A key feature is a sliding door that allows "Nightly News with Brian Williams" anchor to walk from the adjacent cable and broadcast studios.

Briefs ________________________

NYTimes.com has launched a blog/online forum that has expert panelists discussing classic books with New York Times Book Review editors. The new feature is called Reading Room: Conversations About Great Books and is online at readingroom.blogs.nytimes.com. The first conversation included Book Review editor Sam Tanenhaus and two translators of a new edition of Tolstoy's "War and Peace," which kicked off a four-week discussion of the book on Oct. 26. Readers' comments will also be posted.

National Geographic has created a new global media group composed of its flagship magazine, book publishing, TV, film, music, radio, digital media and maps units. Tim Kelly, 51, president and CEO of National Geographic Ventures and a 25-year vet of the company, has been named president of the division.

National Geographic said it wants to enhance and broaden coordination among its editorial units and refine its digital strategy.

The Virginian-Pilot, Virginia's largest-circulation paper, has launched a campaign developed by marcom firm BCF titled "It's In Your Hands" to boost its brand in the state.

The effort aims to play up the paper's benefits to non-readers, tap the 20-something market, and have readers between 30 and 50 years old "reevaluate and deepen their relationship with the paper."

BCF said the effort took two years to develop and takes elements typically found in a national campaign and implements them at a local level.

Print, TV spots, billboards, and micro-website, and people acting out the ads are elements of the effort, which runs through the end of the year.

MySpace has partnered with gaming company Oberon Media to create a new gaming channel on the social networking portal.

The channel, expected to launch in early 2008, will be called MySpace Games and let users to choose from hundreds of online games to play solo or with friends.

Tim Russert told the PR Society that the job of journalists is to ask "tough questions" and get "hard answers" (page 1). The lesson of history, he said, is that "If you're president of the U.S., you cannot make tough decisions unless you are willing to answer tough questions." This applies equally to the chair of PRS and its board. We hope the new board will take control and answer the tough questions we've been asking for years. This year's board candidates refused to answer any of our questions, tough or easy. Chair Rhoda Weiss ducked not only our questions but the five biggest chapters.

The Assembly passed, by a 93% vote, a resolution by 50 PRS leaders including eight past presidents that demands "openness, complete transparency" in the "whole continuum" involved in developing leaders.

Few candidates show up because at least 95% of members are ineligible (non-APR or didn't head a chapter, district, section or national committee or vote in an Assembly).

Undemocratic policies and the resignation last year of two directors (Gary McCormick of Scripps and Ron Owens of Kaiser Permanente) discourage candidates.

In a similar message to the board, the 2006 Assembly backed the Global Alliance resolution calling for PR to "support the promotion of democratic values based on free expression, free will and free flow of information."

However, the 2007 Assembly was a pep rally run by Weiss rather than a serious legislative session. Leaders had the mike about 90% of the time. PRS lawyer Beth Caseman of Venable, serving as parliamentarian, slapped down any delegate who dared to tell the board to do anything. The resolution of the "50" had been altered in 19 places by Venable to remove words like "create," "empower" and "lead." Caseman said New York law and the Society's Articles of Incorporation "trump" PRS bylaws and Robert's Rules.

Will PRS's planned new bylaws be written to satisfy New York or Delaware laws? New York puts a lot of power in the board and won't let members of groups meet and pass laws electronically. Delaware does. The PRS board is against the Assembly meeting all year long or even more than once. It killed the Spring Assembly in 1986. PRS could drop its New York charter via the web for $60 and enroll "over the phone" in Delaware for $89 (paperwork to follow). Caseman said there's much more work including a "new set of books," transfer of assets, IRS recognition, payroll tax setup, etc.

Caseman did not know whether Central Michigan's bid last year to make the Assembly the "ultimate policy-making body" of PRS was legal in New York. That wording is from the American Bar Assn.'s bylaws. If it's O.K. for the ABA, it should be O.K. for PRS.

Coke's Ray Crockett had no business sitting on the dais with the 17 directors. He was not elected by the Assembly but appointed by chair Rhoda Weiss. There was also no "town hall" although one was on the agenda. After taking up 2.5 hours of delegate time on the new Strategic Plan, chair-elect Jeff Julin then monopolized the last 35 minutes (till 5 p.m.) by reading hundreds of ideas from nearly 50 slides. Reporters had been barred from the Assembly lunch for the first time. PRS uses other "control" devices such as loud, non-stop presentations and panels at luncheons so that delegates at tables cannot converse. Delegations were also seated alphabetically rather than by district and were further split up at lunch where they were given assigned seats and told what to talk about. Also impeding member interaction is lack of a printed directory. Several delegates told us the "party line" that online is just as easy to use as print is "absurd." At least 5,000 names are lost permanently each year due to non-renewals. Many types of research are impossible.

Ditching the print version saved about $130,000. Printing costs fell to $153,734 in 2006 from $251,219 in 2005 when the last One Source directory was published. Shipping/postage fell to $94,691 from $125, 679 (combined savings: $128,473. But the overall cost of publications only fell $56,660 to $1,109,936 from $1,166,596. Publication salaries/fringes rose 16% to $809,929 in 2006 from $699,585. Total salaries soared 23% ($987,877) from $4,296,671 in 2004 to $5,284,548 in 2006 (46% of revenues of $11.4M). Salaries for a group the size of PRS should be about 35% of income.

We were disappointed that the Philadelphia Inquirer, bought for $562M last year by former PR executive Brian Tierney and his "rich friends" (said an article in the Columbia Journalism Review), failed to provide any coverage of the PRS conference even though Tierney was a featured speaker. The only mention was a three-line item by Michael Klein Oct. 21 saying Mia Farrow, Tim Russert and Donna Brazile would address "3,000 flacks." We sent Tierney materials for weeks with the angle that PRS, rife with undemocratic and press-dodging policies, was meeting on its 60th anniversary in the city where America's democracy was created. Tierney brushed us off, saying he was busy with other things. Materials were also sent to Tony Gnoffo, business editor. CJR said Tierney had reneged on his written promise not to interfere in the editorial policies. Tierney hired Bill Marimow of National Public Radio as the new editor and a "noninterference committee" was disbanded. "I'm not here to be a potted plant," Tierney told CJR. Marimow was quoted as saying, "I want Brian to be a presence in the newsroom." We sent materials to the Philadelphia Bulletin and it sent reporter Brad Vasoli to the Assembly. He wrote 400 words, saying the "already powerful" PRS board had lost a bid to increase its power. He noted PRS had spent $410,551 on travel in the first nine months on income of $8 million.

No other PR trade press except us covered the Assembly. Julia Hood, editor of PRWeek, was present and we congratulated her on the impending birth of her son.

--Jack O'Dwyer