Two agency heavyweights outside the U.S. reported skyrocketing profits. Dentsu, Tokyo, said net income more than doubled to about $177.6 million for the year ended March 31. Non-consolidated billings totaled $12.6 billion, growing in every category except radio and sales promotion. Billings rose by 5.3% for newspapers, 4.2% for TV and 3.1% for magazines. In Europe, Havas Advertising Group, Levallois, France, reported earnings before interest and taxes increased 50.9% to $135.7 million in fiscal 1999. Gross income rose 38.2% to $1.1 billion. Excluding contributions from acquisitions and currency exchange rate fluctuations, gross income increased 12.7%. For first quarter 2000, "We are off to a strong start . . . when our billings grew by an industry-leading 39.5%" to $1.98 billion, said Alain de Pouzilhac, chairman-CEO of Havas, whose holdings include Euro RSCG Worldwide.
Fast-feeders KFC, A&W plan co-branded units
KFC Corp. and A&W Restaurants will test 300 co-branded units within the next five years. Yorkshire Global Restaurants-owned A&W will provide a way for KFC parent Tricon Global Restaurants to compete directly with hamburger fast-feeders, a segment not covered by any other Tricon brand. A Tricon spokesman characterized the move as an expansion test, saying that no existing units would be converted. He added that consistent with company history, there would be no mass marketing dollars put against promoting the co-branded units.
Intel taps Pollace to head global marketing efforts
Pamela L. Pollace was named director of worldwide marketing operations at Intel Corp. Ms. Pollace, 47, comes to the chip giant's top marketing position from VP of its Sales & Marketing Group, a post she has held since 1996. Ms. Pollace succeeds Jami Dover, a 20-year Intel veteran who's leaving the company. Starting July 1, Ms. Pollace will oversee the estimated $800 million global budget for the "Intel Inside" ad co-op program, as well as the rest of the company's global marketing activities. She will report to President-CEO Craig Barrett. Ms. Pollace joined Intel in 1987 as a corporate press relations manager and eventually became director of worldwide press relations in 1995.
Interpublic ties with IBM and revamps Allied unit
Interpublic Group of Cos., New York, is busy on the online and marketing services fronts as it links with IBM Corp. and revamps its Allied Communications Group. IBM is joining forces with Interpublic's FutureBrand and Coleman Group units to create a global e-branding consultancy that will service Fortune 1,000 and Internet companies. The alliance marks the latest in a series of initiatives over the past few months designed to position Big Blue as a full-service partner to emerging dot-coms. FutureBrand and Coleman will offer integrated corporate and consumer online branding expertise across all industries through IBM Centers for E-business Innovation. The new partnership extends a relationship begun last fall between IBM and Coleman's HyperMedia digital branding arm. "As e-business matures in both the business-to-business and business-to-consumer markets, success will become increasingly defined by the nature and quality of interactions brands establish with their customers across multiple channels. This is driving client demand for e-branding solutions that create a consistent brand experience in both physical and virtual environments," said Neil Isford, VP for e-business, IBM Global Services. A New York-based team of e-branding specialists will service the U.S. A London office will open later this year. Separately, Interpublic realigned its marketing services units into an expanded Allied Communications Group headed by Chairman-CEO Larry Weber, who formerly held the same title at Weber Public Relations Worldwide. The expanded group will combine public relations, consulting, research, and event and entertainment marketing units with $1.3 billion in revenue. Allied will add Weber PR Worldwide, formerly housed under McCann-Erickson Worldwide, and newly acquired researcher NFO Worldwide to its existing units, which include PR agencies Shandwick International and Golin Harris International, and event shops Jack Morton Co. and Kaleidoscope Sports & Entertainment. Mr. Weber will retain his duties at Weber PR until a new management team is appointed in a few weeks. At Allied, he succeeds Barry Linsky, who remains Interpublic senior VP-planning and business development.
Alaska Airlines pulls ads over `deaths' headline
Alaska Air Group pulled all ads from The Seattle Times after the headline "deaths and funerals" mysteriously appeared directly above a retail ad for Alaska Airlines on May 21. The newspaper on the next day issued a formal apology, which is printed in the May 23 edition. The Times said it was investigating the incident and didn't know how the headline ended up over the ad. But an airline spokesman said: "I don't think you could draw any conclusion but that it was purposefully put there." The headline ran after an Alaska Airlines baggage handler was killed over the weekend when he was pinned between a baggage cart and a plane; it also followed the January Alaska Airlines crash that killed 88 people off the California coast. When the newspaper realized the error during the May 21 printing, it stopped the presses but was unable to prevent the distribution of 30,000 issues with the mistake. Alaska Airlines, which spends an estimated $500,000 a year with the Times, said it was pulling out until "satisfied that they've got quality assurances and safeguards in place to preclude that happening to our copy." The ad was from Alaska Airlines agency WongDoody, Seattle. The airline spokesman said the Times has recently run stories about the carrier that were "unbalanced and inaccurate," yet only the ad tampering prompted the airline to yank its advertising. The Times "is a great marketing vehicle," he said.
Best Buy is first retailer to offer XM Satellite Radio
Best Buy Co. is the first retailer to announce an agreement with XM Satellite Radio to market and distribute the subscription radio service and its satellite-capable radios. The sales effort, which will include joint marketing by the two companies, will begin early next year as the 100-channel radio service prepares to launch. XM, one of two companies licensed to offer satellite radio, has established manufacturing agreements with companies such as Alpine, Audiovox, Motorola, Pioneer and Sony to develop aftermarket XM-equipped radios. XM expects to sign several more sales and marketing agreements with retailers. Meanwhile, the satellite radio company is in a final review of agencies for its estimated $100 million marketing business.