True North Communications-backed Modem Media, Norwalk, Conn., on June 12 laid off 76 employees-about 10% of its work force-across its Norwalk, Paris, Toronto, London and Hong Kong offices.
Holland Mark, Boston, laid off 13 people. The independent shop said cuts were made across the agency and were a result of the economic downturn. The agency said it has 75 people left between its traditional business and its e-marketing shop, BeNow.
Interpublic Group of Cos.' Deutsch closed its Boston office June 12, citing softness in the ad and dot-com markets. The office is resigning its only client, grocery-delivery service Homeruns.com. Deutsch said it will try to find employment for the office's nine people elsewhere within Interpublic.
In a filing June 13 with the Securities and Exchange Commission, i-shop Rare Medium, New York, said it laid off 43 people as part of a "continued alignment of Rare Medium's cost structure." The company is planning to merge with Motient Corp.
Halo Industries' Upshot, Chicago, laid off 23 workers, or 13.5% of that staff, leaving it with 147 staffers. A spokeswoman said the cuts were "in response to what everyone in our business is going through."
Women.com Networks said about 70 employees, or 30% of its work force, will be laid off at the end of June as part of iVillage's pending purchase of the company. The cuts will be made across the board.
Kraft Foods raises $8.7 billion with IPO
Kraft Foods went public with a yawn June 13. The food company's IPO, which was priced up days before the first trade to $31 from $30, closed at $31.25. Philip Morris Cos. filed papers in April to offer 280 million shares of Class A stock, slightly less than 20% of Kraft. The IPO raised $8.7 billion, which goes to Philip Morris to repay part of an $11 billion note related to the December 2000 acquisition of Nabisco.
FTC chairman praises industry self-regulation
In his first speech as chairman of the Federal Trade Commission, Tim Muris June 12 praised former Chairman Robert Pitofsky and the advertising industry's self-regulatory efforts under the National Advertising Division of the Council of Better Business Bureaus. At a Washington antitrust forum, Mr. Muris suggested he and Mr. Pitofsky agree on a number of advertising issues, and called the work of the NAD "a model of self-regulation."
Cordiant stock declines after revenue warning
Bates Worldwide parent Cordiant Communications Group's stock dropped sharply after its chairman warned shareholders of slower growth ahead. At the company's annual meeting June 12 in London, Chairman Charles Scott warned 2001 revenue growth will slow and profits will be affected by economic conditions. Revenues grew 47% during the first four months of 2001, but organic growth was only 3.2%. Cordiant's American Depository Receipts fell to $15.80 June 12, from $17 June 11. Shares dropped June 13 to $15, way off their 52-week high of $29 and near their low of $14.04. Late week, Cordiant traded just above $14.
Digitas lowers revenue expectations for Q2
Interactive agency Digitas, Boston, said financial results for the quarter ending June 30 will be below expectations due to a slowdown in spending from its financial services clients, which include American Express, FleetBoston and Charles Schwab. Digitas said it now expects revenue for the second quarter to be between $60 million to $63 million, compared with $70 million for the second quarter of 2000, and less than management's earlier expectation that second-quarter revenue growth would be between 0% and 6%. In an analysts' call, Digitas did not mention takeover talks it's believed to have had recently with Interpublic (AA, June 4).
TiVo executive sounds warning to ad industry
Speaking at the National Cable & Telecommunications Association convention in Chicago, a top TiVo executive said users of the personal TV recorders are opting to zap half the commercials they could watch. "Easily over 50% are skipped," said Morgan Guenther, senior VP-business development and revenue operations for TiVo. A saving grace for the TV and marketing industries so far has been the relatively limited distribution of the devices. Mr. Guenther said he still doesn't believe wide distribution of TiVo will suffocate the 30-second spot. "We don't think that the $60 billion spent on TV advertising today is going away," he said. "But we think bad advertising, irrelevant advertising that's not interesting to me, is dead." Separately, cable operator AT&T Broadband said it plans to launch a pilot program in 30,000 Denver-area homes this fall, allowing marketers to target ads by household. Marketers will be able to buy 30-second blocks during programming, then run different creative in different homes simultaneously based on a home's demographics.
Barclays Global Investors, San Francisco, is seeking an agency to replace Publicis Groupe's Saatchi & Saatchi, San Francisco, after the office announced it will close in August. Saatchi had handled the money manager's $10 million to $20 million account for I-Shares mutual funds. ... New teen-age smokers don't fully understand the health risks even if they understand tobacco can kill, said a study blaming tobacco makers' imagery and lack of adequate spending on anti-smoking ads. The study by the Annenberg Public Policy Center of the University of Pennsylvania also suggests some "quit smoking" messages aimed at adults may leave youths thinking it's easy to quit. ... AOL Time Warner's America Online and General Motors Corp. expanded their partnership in what the companies are calling a multimillion-dollar pact. It calls for all GM brands to be promoted across all of AOL's services.