For the Record

Published on .

Slowing economy prompts staff cuts, shop closings

Agency layoffs and closings continue as the economy cools.

Interpublic Group of Cos.' Lowe Lintas & Partners, New York, laid off 45 employees July 17, citing a slow economy. This is the agency's second round of layoffs this year.

WPP Group's Ogilvy & Mather, Chicago, and its OgilvyOne direct marketing unit cut as many as 40 jobs following a restructuring of the Ameritrade account, according to executives close to the agency.

Publicis Groupe's Publicis & Hal Riney, San Francisco, laid off fewer than 10 employees, according to an agency executive, following the shutdown of client Webvan. The agency earlier this year cut about a dozen jobs.

Eight-year-old boutique shop Favara & Raffle Advertising, New York, is closing, citing account losses and increased overhead.

Arnold Worldwide's Cipriani Kremer Design, Boston, is folding. The Havas Advertising unit said it would try to find jobs internally for about 15 employees.

GM says ad spending in `01 will be below `00 figures

General Motors Corp., the largest advertiser in the U.S., said its ad spending this year will fall slightly from 2000, when the auto giant spent $2.84 billion in U.S. measured media, according to Taylor Nelson Sofres' CMR. Merrill Lynch, citing GM's first-quarter ad cuts of 24% vs. a year ago, dubbed GM's full-year ad spending as flat and expects it to pick up in the second-half. Analysts said any second-half pickup may translate to a positive impact at Interpublic Group of Cos., which handles the bulk of the carmaker's account in the U.S. and globally, but also for WPP Group and Omnicom Group since their respective clients, Ford Motor Co. and DaimlerChrysler, will probably have to respond competitively to GM's ad spending. GM tallied $610 million in earnings on revenues of $46 billion in the second quarter.

AOL earnings up, but some divisions show weakness

AOL Time Warner, the world's largest media company, reported record second-quarter earnings. Total revenue rose 3% to $9.2 billion, from $8.9 billion a year ago, and profit rose 20% to $2.5 billion. Figures for 2000 have been restated to adjust for the January 2001 merger of America Online and Time Warner. Ad and commerce revenue rose a mere 1% to $2.3 billion. AOL Time Warner executives blamed the ad slowdown for the publishing division's weak first-half results. America Online and Time Warner Cable units produced strong results thanks to increased subscription revenue, while the music and filmed entertainment units continued to show weakness.

Publishers encouraged by meeting on Capitol Hill

Magazine publishers who met July 17 with the postmaster general and congressional leaders came away encouraged, Magazine Publishers of America President-CEO Nina Link said. Publishers have seen two rate hikes this year and are bracing for a third that would likely be effective in October 2002. Ms. Link said Postmaster General Jack Potter pledged to work to increase the efficiency of handling "magazine flats," thereby lessening the need for future hikes.

Audit Bureau to change how it counts circulation

The Audit Bureau of Circulations approved rules revamping how it will count magazine circulation. The rules eliminate the "50% rule," in which copies sold for less than 50% of what the publisher defines as a basic price could not be counted as paid circulation. Under the new rules, circulation statements will feature more detailed information on how much the magazine is charging for subscriptions.

Washington Post leader Katharine Graham dies

Katharine Graham, former chairman-CEO of the Washington Post Co. and former publisher of its flagship daily, died July 17 in Boise, Idaho, from head injuries sustained in a fall. She was 84.

Mrs. Graham brought in many of the top editors who defined the The Washington Post through the tumult of Watergate and the Pentagon Papers, most notably by hiring Newsweek's Washington Bureau Chief Ben Bradlee as deputy managing editor in 1965. In 1998, she was awarded a Pulitzer Prize for her memoir "Personal History."

FYI

Danone Group put its $55 million media buying and planning account for U.S. businesses into review. Among roster shops participating is WPP's Media Edge, New York, which handles the $34 million yogurt unit. ... USA Networks agreed to buy a controlling stake in Microsoft Corp.-controlled travel Web site Expedia. ... Relationship-marketing agency Marketing Services Group, New York, is selling direct-marketing unit Grizzard Communications Group, Atlanta, to Omnicom for $91.3 million. ... R.J. Reynolds Tobacco Co. won't renew its 27-year sponsorship of the National Hot Rod Association's drag-racing division, to comply with the settlement between tobacco companies and state attorneys general. ... Campbell Soup Co. will become a supplier for the 2002 Winter Olympic Games in Salt Lake City. ... Kirk Souder, a founder and partner at Ground Zero, Los Angeles, has left the agency to take time with his family. ... Senate Commerce Committee Chairman Ernest "Fritz" Hollings (D-S.C.) said he wants to push privacy legislation this year, increasing prospects for congressional action.

In this article:
Most Popular