So it's not "Father Knows Best"-it's really Mother Knows Best, but Sharon, Ozzy, Jack and Kelly Osbourne ascended new heights in 2002, for themselves and the far-flung "reality" TV genre in general. "The Osbournes" became the top-rated show in the history of Viacom's MTV and grabbed up to $100,000 per :30, a record for a non-sports show on cable. Sharon ran hot and cold about the future of her family's program. The Osbourne matriarch plans to start hosting her own syndicated talk show next fall. Other potential hurdles for the reality series in its sophomore run range from the very serious (Sharon's recovery from colon cancer) to the imponderable (the family's possible overexposure due to their success ).
Maurice Levy's Publicis Groupe joined the select club of the top four giant advertising holding companies-the top tier, as he likes to call it-after completing the acquisition of Bcom3 Group in September. After seeing too many uneasy agency mergers, Publicis' chairman-CEO made the unprecedented decision to dismantle the weakest of his four networks, D'Arcy Worldwide, dividing clients and essential staff among Saatchi & Saatchi, Leo Burnett Worldwide and Publicis Worldwide with the ambitious goal of "zero losses." His other model for the future is a fondness for "one agency, two doors" in which multiple agency brands share quarters and back office functions.
The year started out badly for the Martha Stewart empire and proceeded downhill. It began with Kmart Corp. filing for bankruptcy and Ms. Stewart expressing support for the retailer that carries her line of home products. Then the focus turned to the hearth-and-home maven herself, with suspicions of insider trading of stock. Government investigators spent the year in hot pursuit, though by the end of 2002 their efforts seemed to be bogging down. Martha Stewart Living Omnimedia admitted the controversy had taken its toll. Martha Stewart Living, however, posted a 3.98% increase in ad pages through November, according to Publishers Information Bureau. And King World Productions said Ms. Stewart's TV show will return for its 11th season.
It seemed like a masterstroke of magazine publishing: Take a venerable but flagging title (McCall's); apply the name of a hot, family-friendly personality (Rosie O'Donnell); and rejuvenate the franchise. The good news: Through November, the renamed Rosie was up 73.22% in ad pages, according to PIB. The bad news: The December issue will be its last, killed by conflict between Ms. O'Donnell and Gruner & Jahr USA Publishing. It was all so promising when Rosie debuted in 2001, but by last September, she had quit over disagreements about editorial control. Rosie O'Donnell the brand had undergone somewhat of a makeover in 2002: She had gone very public about her lesbianism and had retired from her talk show. Stories about Ms. O'Donnell's abusive treatment of Rosie staffers transformed her image from "Queen of Nice" to a person with " 'Exorcist' qualities."
Tech industry pundits were more than a little skeptical when Hewlett-Packard Co. CEO Carly Fiorina announced plans to acquire Compaq Computer Corp. in 2001. Many saw a train wreck in the making, a steep integration and cost-cutting challenge. Yet undaunted by the chorus of naysayers, Ms. Fiorina forged ahead with her campaign to win support for the merger with Compaq, going so far as to spark a high-profile shareholder war that pitted her against HP board member Walter Hewlett, the son of one of HP's founders. Ms. Fiorina eventually prevailed, and the $21 billion merger closed last May. Now, less than a year after the deal, Ms. Fiorina is starting to prove the move will work. She told analysts Dec. 4 that by yearend 2003, she will have completed $3 billion in cost cutting. And there was more good news for skittish analysts: HP's net income rose in the fourth quarter to $309 million from a loss of $505 million a year earlier, beating analysts' expectations by 9%.
How did Jann Wenner top his 2001, in which he sweet-talked Walt Disney Co. out of a reported $35 million to prop up then-teetering Us Weekly? By replacing every top editor at Wenner Media's three titles. The new positioning: Rolling Stone with a sharpened young-male focus courtesy of Ed Needham, ex of FHM; Us Weekly as sugar-buzz celeb/style title-winning it new bang on the newsstand, on-air references from the likes of "The West Wing" and "Will & Grace," and Advertising Age's Editor of the Year award for Bonnie Fuller; and Men's Journal, the blurrily defined active-male title, which looks set to become the prestige book in the Wenner stable via the appointment of industry heavy and former Rolling Stone Editor Bob Wallace.
If the expected war with Iraq has a pitchman, other than President Bush himself, it would be Donald Rumsfeld. The stern visage of the Secretary of Defense has been a regular on TV since the 9/11-induced "war on terror." The Washington Post says Mr. Rumsfeld and his staff made a conscious decision that he would play a key role in presenting the war to the American public. The 69-year-old Mr. Rumsfeld, who also served as Secretary of Defense during the Ford administration, is a man who should have some sympathy for the potential effect of government policy on corporate America. Between stints in Washington, he was CEO of G.D. Searle & Co., engineering a turnaround at that company and sweetening the regulatory process for sugar substitute aspartame.
It looked like such a great job a couple years ago, when John Dooner took the helm at Interpublic Group of Cos. But 2002 brought headache after headache for the chairman-CEO. Intepublic said it would restate financials-first by $68.5 million, then by $120 million , then by $181 million. The Securities & Exchange Commission is now conducting an informal inquiry. Observers wondered which Interpublic executives would be sacrificed over the accounting problems, but the consensus seemed to be that Mr. Dooner-a veteran adman, not a bean counter-would survive. As Donny Deutsch, who sold his shop to Interpublic in 2000, proclaimed: "Dooner's a stud. When the book on Dooner is written, it will be one of a huge success story at IPG."
With the passing Jan. 8 of R. David Thomas, 69, the affable founder/pitchman of Wendy's International, an era also ended for the burger chain. Consumers tired of the come-ons of other leading fast-feeders stayed loyal to Wendy's, even if they made fewer visits in these hard times. But despite attempts to reassure the public with in-store signs memorializing "Dave's Way" and new spots set in corporate hometown Dublin, Ohio, Wendy's has harder times to come, say industry experts. The chain showed early resolve to rise above burger boredom with new salads and fast-casual acquisitions, and has led the segment even during sluggish months. Cordiant Communications Group's Bates Worldwide, New York, in August lost its 15-year hold on Wendy's account as it moved to Interpublic Group of Cos.' McCann-Erickson Worldwide.
C.J. Fraleigh in 2002 faced the ad challenge of balancing price and brand messages for the U.S.' largest advertiser. General Motors Corp. again turned to 0% financing deals, but aggressive advertising also helped the carmaker hold steady with a 28.5% market share. Mr. Fraleigh, not a longtime veteran of the auto wars, took the post of executive director-corporate advertising and marketing at GM last year from VP-colas at Pepsi-Cola North America. As he explained of GM: "Our core strategy in going to market is to offer simple, compelling offers consumers understand. We're out there trying to sell as many vehicles as possible." The process of creating GM advertising has been streamlined, and among Mr. Fraleigh's weapons in 2002 was nearly $100 million in corporate advertising (up tenfold from two years ago) created by Interpublic Group of Cos.' McCann-Erickson Worldwide, Troy, Mich. Mr. Fraleigh predicted "a moderate increase" in 2003 ad spending for GM.