The Federal Trade Commission for the first time has fined marketers for violating the Children's Online Privacy Protection Act, while a new report suggests that though marketers may have made changes to their services because of the law, they still may not be doing enough. The FTC on April 19 announced it had fined Bigmailbox.com; Monarch Services and Girls' Life; and LookSmart Ltd. a total of $100,000 for violating the online privacy law, and it is requiring the Web sites to dump their existing data files on children and start over. The three sites, which all settled the cases voluntarily, were accused of collecting personally identifiable information from children without taking steps required by the law.
Bozell Group to cut 6%
of staff, citing economy
True North Communications' Bozell Group, New York, is laying off 28 employees, or 6% of its work force, with the reductions coming from across the agency, according to a statement released April 19 by the shop. Bozell said it is trimming staffing levels in response to the softening economic environment. Staff members were informed last week. Separately, Cohn & Wolfe, a public-relations unit of WPP Group's Young & Rubicam, laid off 30 workers of its more than 350 work force.
Former Warner Bros. exec picked as new Yahoo! CEO
Beleaguered online media giant Yahoo! named former Warner Bros. executive Terry Semel as its chairman-CEO, ending a months-long search. Semel had been the chairman and co-CEO of Warner Bros., the movie and music division of what was Time Warner. His appointment hastens the transition of current chairman-CEO Tim Koogle to a more minor role within the company. Koogle, who had been expected to retain the chairman's role, will now become vice chairman, the company said in a statement. In August, he will relinquish that responsibility but maintain his position on the Yahoo! board. President-CEO Jeff Mallett and Chief Financial Officer Susan Decker will now report to Mr. Semel. It was believed that Yahoo!, which recently stumbled due to the overall advertising slump and increased pressure from media companies with a broader revenue base, would appoint someone who had wider experience in the media and entertainment industries to the role. Mr. Semel, who left Warner Bros. in 1999, certainly fits that bill. Yahoo! played up in its statement that Semel had built up Warner Bros. from a company focused on a single revenue source to one with "revenues from multiple, diverse businesses."
AOL Time Warner meets 1st-quarter net forecast
AOL Time Warner amply made its first-quarter earnings expectations, despite an environment that has seen many media companies miss estimates and downgrade forecasts. Excluding charges and adjustments pertaining to its merger, which was completed in January, earnings per share were 23 cents, up from 19 cents last year and in the upper range of analysts' forecasts. Wall Street's consensus estimate on the company was 20 cents per share. EBITDA-earnings before interest, taxes, depreciation and amortization-rose 20% to $2.1 billion, on revenues of $9.1 billion, up 9.1%. CEO Gerald Levin, calling AOL "the jewel of the crown" in a conference call, said that ad revenues at that unit went up 37%. Absent the company's film division, Mr. Levin said, EBITDA was up 26%.
Initiative Media grabs Gateway's $250 mil acc't
Gateway's estimated $250 million media buying and planning account has landed at Interpublic's Initiative Media North America, Los Angeles. A Gateway spokesman on April 19 confirmed the decision reported on AdAge.com on April 17. Initiative will handle media buying and planning for Gateway in North America. The San Diego, Calif.-based computer company recently moved the creative portion of its advertising account in-house. Contenders in the media review included incumbent Interpublic Group of Cos.' Universal McCann, and Havas Advertising's Media Planning, both New York.
Coca-Cola unveils global `Life Tastes Good' push
Coca-Cola Co. unveiled its "Life Tastes Good" global advertising campaign April 22 in a push to show the small-but significant-part its flagship plays in people's lives, as expected (AA, April 2). The first phase of the campaign includes 31, 30-second ads that will be shown around the world, although only a handful of spots will run in each market. Six will run in the first U.S. flight, with five to eight appearing in different global markets. The ads will run in more than 200 countries. About half of the spots are variations on a handful of story lines: a teen-ager on the way home from a concert with friends; baby sitters; and rock stars being revived for an encore. They were produced in 14 hubs for their specific markets and are part of CEO Doug Daft's "think local, act local" philosophy intended to make the world's No. 1 soft drink more pertinent locally. Coca-Cola said Interpublic's McCann-Erickson Worldwide, New York, produced the U.S. ads but that other Interpublic shops-including New York's Amster Yard-handled some work. The U.S. flight will include a heavy initial rotation that will build. They will run on TV shows such as "Ally McBeal," "Dawson's Creek," "The Practice" and "Friends" as well as on Spanish cable Telemundo and Univision. A spokesman for the company said the initial push could reach more people than the previous "Enjoy" or "Always" campaigns. See video on on AdAge.com and AdReview, P. 41.
Court orders Trans Union to end sale of mailing lists
The U.S. Court of Appeals in the District of Columbia on April 16 told credit bureau Trans Union Corp. it has 10 days to halt the sale of its mailing lists that are derived from information in credit reports. The unanimous three-judge decision ruled the sale violates a credit privacy law. The ruling is a major victory for the FTC, which has had a long-running dispute with Trans Union. The ruling could have a major impact on direct marketers. The Fair Credit Reporting Act limits the disclosure of personal information gathered by credit bureaus, but there has been some dispute as to whether the limits apply to the sale of information that doesn't include any details of specific transactions, so-called targeted marketing products. Trans Union, like other credit bureaus, for years used information from credit reports to create various mailing lists-for instance, lists of people with auto loans-that could be sold to direct marketers. While rivals dropped the practice when the FTC contended that such information is private under the law, Trans Union said the curbs only applied to information that revealed details of personal transactions. The credit bureau challenged the FTC, arguing that the agency's definition of the mailing lists as consumer credit reports was "arbitrary and capricious" and an attempt to limit its First Amendment rights.
The stock markets rallied back into bull territory April 18. The rally of tech-heavy Nasdaq recharged hopes for battered online agencies. On April 19, Razorfish moved up 34.62%, Agency.com rose 20.41%, and Organic and Modem Media both climbed 15.38%. Razorfish stock closed up 18 cents at 70 cents; Agency.com rose 30 cents to close at $1.77; Organic closed up 6 cents at 45 cents; and Modem Media closed up 40 cents at $3. ... Microsoft Corp. reported revenue grew 14% in the first quarter, to $6.46 billion from $5.66 billion for the same period last year, and projected that revenue will be flat, at $6.3 billion to $6.5 billion for the next quarter. ... Sonesta International Hotels Corp. tapped Peter A. Mayer Advertising, New Orleans, for its company-wide account. Boston-based Sonesta, with 22 properties, is expected to launch a branding initiative next year. Mayer has handled Sonesta's two New Orleans properties since last year. Spending was not released. Taylor Nelson Sofres' MCMR shows Sonesta spent just under $1 million last year. ... Marketing-services agency Harte-Hanks, San Antonio, reported only a 1% increase in its direct marketing business for the first quarter, due to slowdowns in its primary vertical markets including retail, financial services and high tech/telecommunications.