The Week

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Price war blamed for lower earnings

Kimberly-clark corp. will miss its fourth-quarter earnings guidance by 11% as it expects both sales and earnings to drop amid fierce competition in diapers from rival Procter & Gamble Co. President-CEO Thomas J. Falk attributed the earnings shortfall to lower sales in diapers and training pants. Kimberly-Clark, the maker of Huggies diapers and Pull-Ups training pants, in October rolled back a 5% price hike to be taken through a package count reduction in diapers and pants after P&G didn't follow suit. P&G in February also reduced package counts, but cut prices accordingly. P&G increased promotion spending in anticipation of Kimberly-Clark's package count reduction so that Pampers wouldn't be undercut by Kimberly-Clark on the shelf.

CNN hits 'pause' on ABC News deal

Although cnn and abcNews spent the fall exploring a merger of their operations, AOL Time Warner CEO Richard D. Parsons said last week the company has "hit the pause button" until some issues could be resolved. While such a link of news operations made excellent conceptual sense, implementing it would be "very, very complicated," he said. Of particular concern were issues of how one partner's content would be branded when used by the other's newscast, as well as the feeling of "once you go down that road, can you go back" he said. AOL Time Warner held talks with ABC, a division of Walt Disney Co., as well Viacom's CBS News, but Mr. Parsons said ABC was currently a more exciting potential partner.

AMA denounces alcohol ads on TV

The american medical Association unveiled plans for a new campaign to pressure broadcast and cable TV to voluntarily halt TV advertising of all alcoholic beverages before 10 p.m. It also said the industry should bar from any daypart TV ads for alcoholic beverages featuring mascots, celebrities or sports figures. The AMA, which claimed credit for convincing General Electric Co.'s NBC network last year to reverse plans to accept liquor commercials, released a compilation of alcohol research that highlighted negative affects of alcohol on the brains of underage drinkers. At an AMA event, a Georgetown University researcher said the school's Center on Alcohol Marketing to Youth is asking the Federal Trade Commission to open a new investigation of alcoholic beverage advertising.

ANA names 'acting' CEO

Robert d. liodice was named acting president-CEO of the Association of National Advertisers effective Jan. 3, the group's board announced last week. He replaces John J. Sarsen Jr., who retired last month. An ANA executive said there would be no search for a president during Mr. Liodice's interim status. The board decided to promote from within and will evaluate Mr. Liodice during the first few months of 2003 and decide whether to lift his temporary status or begin a search for a new president. Mr. Liodice joined the ANA in 1995 and was most recently an exec VP. Prior to that, he held senior positions at Kraft Foods and Grupo Televisa.

IAB pushes beyond banners

De-emphasizing the online banner ad, the Interactive Advertising Bureau last week recommended that marketers begin using four large-size ad formats which have been found to be more effective. The interactive industry trade association called for the use of four eye-catching ad formats: the "leader board," which runs across the top of a page like a giant banner; the "skyscraper" that runs vertically on the side of a page; and two other larger rectangular formats. The IAB refers to the formats as the "Universal Ad Package" which does not include banner ads, an icon of Web-page advertising since the mid-1990s. "Although research has proven the banner works, we are tired of it being referred to as the 'much-maligned' banner," said Greg Stuart, IAB executive director. "We know that larger ad sizes work better." IAB acknowledged some Web publishers might have to overhaul their sites to accommodate the larger ad sizes.


America online laid off 300 workers last week. More cuts are expected as AOL Chairman-CEO Jonathan Miller pledged to cut $100 million in costs at the division. QwikFIND aao27o. ... Univision Communications' deal to acquire leading Spanish-language radio company Hispanic Broadcasting Corp. will not close this year. McHenry Tichenor, chairman-CEO of HBC, said the U.S. government's review of the deal has moved more slowly than expected, and the companies now expect to close in the first quarter. QwikFIND aao27d. ... Fitch Ratings downgraded credit ratings one notch on ailing Interpublic Group of Cos., cutting convertible subordinated notes to junk status with a rating of BB+ ("speculative") and other long-term debt to BBB- ("good credit quality"). Fitch's rating outlook remains negative, which could lead to a further downgrade. The move follows a downgrade by Standard & Poor's (AA, Dec. 9). ... The Food and Drug Administration's new commissioner, Mark McClellan, pledged last week to act faster to stop misleading drug ads and target companies that run them. He promised "more aggressive action" toward diet ads especially.... Steven Sturm, Toyota Motor Sales USA VP-marketing since April 1999, moves to VP-general manager of Logistics Services, a step up the ladder. He succeeds Jim Byers, who is retiring at the end of the year. His successor is Jim Lentz, currently VP-Scion, a new car set to launch in California next summer.

On Hold: Aaron Brown (top) and Ted Koppel

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