CMGI-controlled Engage announced Jan. 4 that it would lay off half of its staff, or 550 employees, as part of a plan to accelerate profitability, which the Internet ad-management company now says will be possible by the fourth quarter of 2001. The Andover, Mass.-based marketing company said the job cuts would take place over the next several months. Engage will take a cash charge of about $17 million to $20 million as part of the restructuring, and an additional charge of between $23 million and $25 million in non-cash charges. Engage told clients it intends to raise commission rates on ad sales; an email to one client said the commission would jump to 60% Feb. 1.
Primedia, Brill Media ventures swap stakes
Primedia announced it would consolidate 172 business-to-business media-related properties under its Media Central brand and make Steven Brill Media Central's chairman and CEO. The deal involves Brill Media Holdings, which owns Brill's Content magazine and the e-commerce site contentville.com, swapping a 49% stake in BMH for a smaller stake in Primedia's Media Central.
BBDO lands $24 million Stolichnaya account
Allied-Domecq Spirits and Wine announced Jan. 4 it awarded its $24 million Stolichnaya account to BBDO Worldwide, Chicago, the agency handling its Beefeater and Kahlua brands. Allied assumed distribution rights for the country's No. 2 imported vodka on Jan. 1. United Distillers & Vintners had been the previous U.S. distributor. Stoli's former agency, Margeotes/Fertitta & Partners, New York, resigned at the end of last year when it won Bacardi USA's Bombay Sapphire gin account. UDV had spent about $1 million annually to promote Stoli; Allied has said it plans to spend $24 million annually.
TN transitions, BBDO hires in wake of Chrysler shifts
True North Communications said it reached a transition agreement with DaimlerChrysler AG after the automaker shifted its Chrysler Group advertising account to Omnicom Group's PentaMark Worldwide. True North said it would terminate its existing client contract as of Jan. 1, 2001, and would post a restructuring charge of $17 million to $20 million (19 cents to 23 cents per share) in the fourth quarter despite receiving about $13 million in severance from its former client. The company said it was comfortable with consensus estimates for 2001.
Separately, BBDO Worldwide, Troy, Mich., reportedly hired more than 200 people from TN's FCB Worldwide, Southfield, Mich., over the holidays to work on the Chrysler Group's $1.8 billion global creative and media account. A BBDO spokeswoman confirmed only the hiring of Bill Morden, former group VP-chief creative officer of FCB on the Chrysler and Jeep accounts. BBDO, which had handled the auto maker's Dodge brand as well as media buying and planning for all former Chrysler Corp. makes, is still making offers to FCB staff, the spokeswoman said.
its young `Offspring'
The magazine industry expected a shakeout in 2001, and its first victim fell just three days into it. On Jan. 3, SmartMoney-the financial title jointly owned by Dow Jones and Hearst Magazines-shuttered its parenting title Offspring after just four issues.
SmartMoney CEO Chris Lambiase said ad response to the title "blew out the budget" each issue. Ad pages peaked at 84 with its back-to-school issue. But to date, Offspring had netted only 50,000 subscriptions. "In this economy, and with Hearst's focus on larger circulation magazines," said Mr. Lambiase, "the decision was made to fold it back into SmartMoney," where the magazine got its start.
The title's December-January issue, currently on newsstands, will be its last.
Informix hires Saatchi
for $20 mil account
Informix, Westborough, Mass., has hired Saatchi & Saatchi, San Francisco, as the new agency of record for its $20 million account. The marketer of database management software's previous agency was Y&R Advertising, San Francisco. The move is the latest loss for Y&R (see story, P. 1), which was hired to handle the Informix account just five months ago.
Interep to merge with
ad-sales firm Cybereps
Leading radio rep firm Interep, New York, acquired a 51% stake in online ad sales company Cybereps, Sausalito, Calif. Interep plans to merge the company with its streaming media division Interep Interactive to enhance its ability to offer cross-media packages to marketers. Terms were not disclosed. The new company, which will combine Cybereps' Web site ad sales, marketing and publishing capabilities with Interep Interactive's streaming audio and video expertise, will operate as a division of Interep but will retain the Cybereps name. Adam Guild, founder and president of Interep Interactive, will maintain his position there while also becoming president-corporate and business development at Cybereps. Cybereps co-founders Mike Warsinske, Ted Welch and Crystal Gurin will continue as CEO, president of sales, and exec VP, respectively.
Tyson will pay $3.2 bil
for meat marketer IPB
Tyson Foods agreed to acquire beef and pork marketer IBP Inc. for $3.2 billion in cash and stock. The acquisition will make Tyson, already the largest poultry producer, the leading producer of beef and pork as well, and will triple Tyson's annual sales to an estimated $24 billion a year, according to a company spokesman. Tyson has in recent years focused on building its eponymous brand through value-added prepared products that it has advertised extensively to consumers. Tyson spent $20 million on measured media in 1999, per Competitive Media Reporting. DDB Worldwide, Chicago, handles the Tyson account.
Ford will offer warranties on tires for 2001 models
Ford Motor Co. will offer warranties on all Ford, Lincoln and Mercury models as a way to alert itself to problems such as the failures of Firestone tires on Ford trucks linked to over 140 deaths, the Associated Press reported. Ford said its tire warranties would begin with 2001 models and cover repairs made on or after Jan. 1. The warranties provide that tires with defects in materials or construction will be replaced at no charge. Ford has been considering the move since the recall last August of 6.5 million Firestone ATX, ATX II and Wilderness AT tires. The warranties will come as part of the basic vehicle warranty, which runs for three years or 36,000 miles on Ford and Mercury vehicles, and four years or 50,000 miles on Lincolns.
Dial, Henkel scale back joint venture in Mexico
In the wake of Henkel's purchase of Colgate-Palmolive Co.'s Viva laundry detergent brand, Dial Corp. and Henkel on Jan. 3 announced they are scaling back their joint venture in Mexico. Henkel will no longer license Dial's Purex laundry detergent brand name in Mexico and will buy Dial's stake in the joint venture's Mexican operations for $18.9 million, Dial said in a statement. The sale will result in a $5 million loss as part of a previously announced restructuring.
Lockheed Martin puts
$15 mil account in review
After months of industry speculation, aerospace giant Lockheed Martin, Bethesda, Md., put its $15 million account in review. DDB Worldwide, New York, which has handled the account for the last five years, will not participate in the review because of irreconcilable creative differences with the company, according to a DDB spokeswoman. Talk of a review first surfaced in November 2000, at which time a Lockheed Martin spokesman denied the rumors.
Princess Cruises breaks new TV, print campaign
Princess Cruises launches a national TV and print brand effort Jan. 8 from new agency Suissa Miller, Los Angeles. The new theme line is "Princess ... where I belong."
Dietzel quits key post
in blow to DDB Berlin
Jorg Dietzel, the man parachuted in from China to build DDB Worldwide in Berlin and to manage its $180 million Volkswagen account in Germany, has resigned. In a major blow to DDB Germany, Mr. Dietzel, 39, handed in his notice as managing director of DDB Berlin on Jan. 4 and left Jan. 5 on six months full pay.
ESPN to debut lifestyle show about pro athletes
On Jan. 13, ESPN will debut a weekly show titled "The Life," based on the department of the same name in its every-other-weekly magazine. The show will focus on the off-the-field lifestyles of pro athletes. It will be hosted at ESPN Zone restaurant in New York, and its content will be overseen by Roxanne Jones, deputy editor of ESPN The Magazine.