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Vol. xxx No. 39 EASTERN EDITION September 25, 1989 • $2.50 New Perk: Working Half a Continent Rochester Beachhead: Helping From the Office Cable Enter Spot-Buying Game By Betsy Sharkey By John McManus and the potential opportunities for advertisers are substantial," said J. LOS ANGELES-Money. Title. Re NEW YORK-Rochester, N.Y., last W Iter Reed, senior vice president! sponsibility. Soon that may not be week became a must-watch test co porate director (See page 5) enough of a bargaining chip for market-not for a new product, but agencies interested in recruiting top for a media innovation that could talent. Now, big agencies are finding threaten the current balance in spot their ace in the hole may be lifestyle, TV buying. Noxell Biz in Limbo flex-time schedules and flexibility in The switch that flipped last Thurs By Ron Gales location-not money or prestige. day turned a local cable channel into Flexible work patterns are still a a full-fledged TV station clone when NEW YORK-For Lintas:New York, rarity with most (See page 6) the programming format was Hurricane Hugo came a day early. changed from local access to the full The agency's$45-million Nox WHAT'S INSIDE fare of a broadcast station. ell Corp. account was tossed Fri "It's really the first new develop day into uncertainty following a ment in television for quite some merger (See "Hotlines, " page 3) time. The concept is very exciting No More Room on Oat Bran Bandwagon Are Consumers Weary of Anti-Cholesterol Claims? By Ron Gales breads and cereal-not to mention the not-so-obvious (See page 59) NEW YORK-With so many advertis ers shouting about the health bene fits of products such as oat bran that fight cholesterol, or are low- or no cholesterol products, just how long will consumers keep on listening? "Consumers are concerned about A seemingly endless round of interviews cholesterol and conscious of it, but I'm not sure it has the shock value it Diary of an Unemployed Adman used to," warns FCB/Leber Katz Unemployment in the industry is high: Partners executive vp Ted Littleford. more than 14%. In the first of a two-part series, an out-of-work senior copywriter According to research firm Mar tells his story Forof the more emotional information roller contactketing the IntelligenceArchives Center Service, at [email protected] there are or 202-633-3270 coaster of looking for a job. (See page 34) 314 products now that tout their (INDEX CONTINUED ON PAGE 2) benefits in the fight against choles- Lorillard Drops BBDO; Kent Review Begins NE,! HOTLINE NEW YORK-Lorillard Inc., seeing its older ~ P&G/Noxell Merger Imperils Account at Lintas skewing Kent brand losing ground to gener (Continued from page 1) ic cigarettes, has dropped BBDO/N.Y. and agreement between Noxell and Procter & Gamble. thrown its ad account into review. Measured "Do I feel like a man riding in calm water right now?" asked Lintas:Worldwide media billings for Kent, Kent III and Kent chairman William Weith as. "No, I'm in the eye of the storm here." Golden Lights are $10-12 million, but a The problem for Lintas is that the $1.3-billion deal placed it squarely in the middle BBDO source said billings are closer to $8 of P&G's worldwide rivalry with major Lintas client Unilever. At the same time, it million. Kent is the 13th leading cigarette put Leo Burnett Co./Chicago, Noxell's other major agency and also a P&G shop, at the brand with a 2.4 share in 1988. heart of a major opportunity. Lotas Minard Patton McIver, N.Y., also handles Noxell. Lorillard has asked for pitches from Ally Weith as said he will try to steer Lintas through a middle course between the two & Gargano/N.Y., and Saatchi & Saatchi Ad packaged-goods giants. He pointed out that while his agency may handle over half of vertising/N.Y., both already Lorillard shops. Unilever's worldwide advertising business, Lintas does not handle a Unilever cosmetic "A few other agencies will be invited to pitch account. "We've had a wonderful, unbelievably productive relationship with Noxell for the business," said vp/pr Sara Ridgway. 40 years," Weith as said. "The Cover Girl campaign is the most successful cosmetics "Kent's share had been slipping over a pe campaign ever and we're the architects of that ... [but] it's between what Noxell riod of some years," Ridgway said. "We've thinks, what Unilever thinks, and what P&G thinks." seen a dramatic increase in generic brands, Unilever officials could not be reached for comment. A P&G spokesperson said it and we think that Kent, with its older demo was "too early for us to comment on potential conflicts." graphic, has been losing ground to these cheaper brands. We believed we needed to ~ Judge Rules LGFE Can Take Y&R Depositions take a new creative look at the changing NEW YORK-WPP Group's Lord, Geller, Federico, Einstein has been given marketplace." Ridgway also said that annu the go-ahead by New York State Supreme Court Justice Herman Cahn to take deposi al brand evaluations took place Aug. 30-31, tions from two financial officers at Young & Rubicam in preparation of its $40- two days after Andrew Tisch took office as million damages claim against breakaway Lord Einstein O'Neill & Partners alld the new ceo. "It was a marketing recom its financial backer, Young & Rubicam. Cahn's decision, released last week, denies mendation made to Mr. Tisch, which he Y&R's request to bar all depositions until the judge rules on the preliminary-injunction agreed with," she said. -John McManus decision. The long-awaited decision is in rough draft, according to sources, and is sev eral weeks away from final form. ~ C/D/M Installs New London Team Alter Named ADWEEK NEW YORK-Chiat/Day jMojo, in a major effort to build its London operation, has installed a new management team there. M.T. Rainey, corporate director of business Managing Editor development for C/D/M in New York, will move to London as chief executive; Paul Collis will leave Collett Dickenson Pearce/London to join as creative director; and Ju NEW YORK-Stewart Alter has been pro lian Martin, who headed Mojo's N.Y. office, will become director of account manage moted to managing editor of ADWEEK, ment. including the magazine'S six regional edi tions and its daily report, Ad Day. ~ Circuit City Picks JWT For the past two years Alter, 40, has NEW YORK-Circuit City, the Richmond, Va.-based electronics retail chain, as been editor of ADWEEK/East and has signed its $25-million account to J. Walter Thompson/N.Y. The protracted account also provided the magazine with an over review pitted JWT against Young & Rubicam/N.Y. in unusual circumstances. view on European advertising. Rather than choosing a single winner, Circuit City last May told both shops to staff up Before that he was a reporter at Ad and treat the account as its own until it could decide on the winner. vertising Age. In his new post, Alter will supervise the ~ J.P. Morgan Picks BSBW development of the news reporting NEW YORK-J.P. Morgan & Co. has selected Backer Spielvogel Bates World throughout the AD WEEK network, accord wide to handle its $8-10-million account. BSBW won over the other finalist, Della r---==----, ing to Andrew Jaffe, Femina, McNamee WCRSjN.Y., based on speculative creative work. The ae editorial director. count, which includes the financial-service company's corporate and product advertis "We're intensify ing, had been at the now-defunct Doyle Graf Mabley/N.Y. ing our coverage of national and interna ~ TNN and DDB Needham Split tional news," Jaffe NEW YORK-The Nashville Network and DDB Needham Worldwide/N.Y. said. "Though our re have mutually decided to part ways. The Nashville Network account reportedly bills gional editions al just over $2 million. ready give us a good local and regional ~ Ayer Chicago Office Lays Off 50 in Wake of Business Loss view, there is more CHICAGO-N W Ayer here, which has faced the loss of Illinois Bell and John Dpere & Stewart Alter we can do to report Co. in the last several weeks, laid off 50 people late last week, leaving an estimated 30 and interpret global people to run the office, sources said. Dom Rossi, president of the Chicago office. developments and how they affect adver would only confirm that layoffs occurred, declining to say how many were let go. Rossi tising in the U.S.For In his more new information role, Stewart contactsaid the a Archivesfull-service Center operation at [email protected] in place and that or he 202-633-3270 would concentrate 011 rt' will supervise that effort." building the office. Sources said that late (See "Hotline 2" Oil P"91' 5) , ..,.~, I,
". /
Noxell Accepts Takeover By Procter & Gamble Analyst~ Say Deal Wzll Benefit' Both Firms
. By. Mark Potts THE MAKEUP OF THE .. : . " Y"ashington POll SWf Writer COSMETICS MARKET Noxell Corp'., the Hunt Valley, PERCENTAGE OF TOTAL SALES OF Md.-based maker.of Cover Girl cos- PR06'UCT FOR F~CES, EYES, LIPS . emetics and Noxzerrta skin cream, NAILS 1989 YEAR-TO-DATE agreed yesterday to a $1.3 billion takeover by consumer products gi ant Procter & Gamble Co. Industry analysts; who expressed surprise because the founding Bun ting family had spurned previous of fers for Noxen, said the affiliation with Cincinnati-based Procter & Gamble would give Noxen the mar- . keting muscle it needs to develop new products and expand, especially in foreign markets, while extending Procter & Gamble's interests in cos metics and other personal-care prod ucts . . "I think it's a great deal for both companies," said Andrew Shore, an analyst at Shearson Lehman Hutton in New York. . SOURCE: Noxell Noxell had sales last year of THE WASHINGTON POST $527.7 million, while Procter & Gamble had revenue of $21.4 billion growth rate was slowing down, and I in the fiscal year that ended June 30. think to keep growing at 15 percent. In Noxell, which was founded in the company would have had to take 1917, Procter & Gamble is getting more risks-going into new arens, some of the biggest names in the going into new markets," said Dee cosmetics industry. Noxzema skin pak Raj, an analyst for Merrill Lynch cream is the No. 1 facial cleanser, Co. "This sort of ownership by II and Cover Girl is the biggest-selling & brand in the $3 billion U.S. cosmet deep-pocketed partner will make it ics industry, with about 22 percent easier for them." of the market, while another 'Noxen . "They have reached a point ill . brand, the Clarion line, .has another their maturity where if they're going .... : '4 percent. Noxell also makes Lestoil to. make the broad-jump increase in household cleaner. to new products, such as hair colnr For more information contact the Archives .Center ~'After growing at [email protected] 15 or 20 percent ingsor 202-633-3270 and shampoo and other prod- n.cre!lm;made by Noxell Corp., is th~ top-selling facial cleanser. [a 'Year] for several years, [Noxell's] NOXELL, D13, CoL 1 ,:.:i !_.. . • "1,', ,. \,J , ~'I cate:--~"""'ft ~e~ " JQ " .. ;;r~~i~~~~~1;fi2:~~! . '''a'' ,t.·l ·{",r';e·"·'oit.' -;-lf~;"'_;':%'(", e'~~'-:'r4 ;".,.,". .'" ~~" I.sio'ri .... ')' 'of,G,D. ~1i,"t . .., ,Searle .j:" .... '••. ~.-_" & • Cb'.!';~'·~: ',".~> ',.' "~. ~, !; '11, t '!"'i-Tn¢:" acquisit!oq ,ofcN.oxell ~jJJi' .· man ' d ,,! ,'c.'",' ,.' '.':. ',};~ I (~,' ,~
'. by t~:e~~~~~:!tl~~~~ r )'1it;. peliA ~~tQ(,r~B~~:~Uniro y.aI · Goodrl~~b. .. ! Gamblestockclo~ ~'''' !;j:> "'l~'I!'T" B ''' ( '''- ~ , .. ',,' .,' , t" d . 'ff' $2 . 1/~V~· " . "' r" ' .e; li1oR"E' s,J1 ' Y i4'2' UI>~lJ . tt • .: · ously, th~y only. had tiresaval1ablEf'at yes er ay, 0 .'. ' maKIng .'\ ,.,. '1 , From 1 .' . h d" .:, ., .. . $3Z:61 ,per ·Noxell ,.. menl'and 'employees,;will greatly ex- te top en .' ., \>, " . :". ~:':. : : _ stock close? yesterday d M' h' I" ff' 'in th US ' Th~takeover-also Will enable..l~m· jn heavY trading. ~ pan . IC. e IJ:! s 0 enngs e. . royal Goodrich, which has had :.to )(R,· npr~· 'p' nt< of mar~etl '~ ~ , .~. . ' ~ :;,: .:: " spend con~ervatiyel)' because of the me.robler' s of the t Mlchehn, a ploneer, In !:ildlal tires, load of debt it incurred' mlts LBO to ;Bunting ,.. alreadyhave gi'len long has sold ' top-of-the.line ·, tires, tap Michelin's financial resources for j>rocter &' Gamble irrev6cabfe prox· while UniioyaUGoodrich's products product development and' expansion
I '~es, makiIjg the deal a fait accompli. :, are less expensive. Uniroyal ,Good" of manufacturing facilities. I I I -Noxell officials said a shareholder , rich is a majo( 'supplier,; of tires to, \~ From Uniroyal Goodrich's pbint ,I meeting ..would be held in November General. Mo'~~rs ~orp .!~ an~ ' . h~s ~ of view, it -iooks like all pluses to . to vote ohthetakeover, which is ex- hu~e b,usmes.s m private-brand tires" me," Millis said. "They definitely pected to I?e completed by the end of w,hlch I.t m~kes under such names as could use some financial backing ;and theyear. . v _ FiSk, Cavaher and Regut 3 help. They were' stretched finan~ial- " "As we considered the options for Michelin "will now ha'{e:an ability ly very thinly. . . . If a little of'the ensuring the future growth of this to offer a dealer a complete product Michelin mystique and quality company and the continued long~ line," said Harvey Heinb!\ch, an ana· rubbed , off, that wouldn't hurt ei· term interests of our shareholders .Iyst. for Merrill Lynch& } ~o. "Previ· ther.", ;ClOd employees, it became clear that ' :'; a significa'nt investment would be reo r------...;.------ ) . quired iri such areas as R&D and in~ . ternational expansion," NoxeU Chair· .,' man George L. Bunting said in a statement. "An association with the R. F. SAUL right compan'y appeared the ideal REAL ESTATE INVESTMENT TRUST SENIOR NOTES • way to achieve this, and Procter ' & , Maturing one to ten'years from date of Issue Gamble is clearly the right compa· · ny." MATURING INTEREST RATE (from Date of IMue) ' (Per Annum) Bunting will continue as chief ex· . B. F, SAUL ecutive of Noxell after the takeover,' ONE YEAR 8.5% REAL ESTATE INVESTNr;NT TRU~T and < a spokeswoman for the Balti· TWO YEARS 10.5% . 8401 Connecticut Avenue more company said NoxeU's opera· THREE YEARS 12.5% Chevy Chase, MD 208.15 tionsand employment base of 2,200 FOUR YEARS 13.0% Phone (301) 986·6207 employees would remain unchanged FIVE YEARS TO 13• .5% .S,nd Me II Senior Note PfO$~ctus for the time being. "There are no immediate plans for changes, arid TEN YEARS ' then 'we'll have to see what devel~ , MINIMUM PURC'HASE $5.000 . Name bps," she said. . This :Is a "dlrect -placement by the ·Trust. No fees or coromlssionswlll · Unde~ Procter & Gamble's own~ . be pald.:Thls announcement Is nel. Address \ For moree'rship, information analysts say, contact Noxell thewill Archiveshave Centerther ah at offer [email protected] to sell nor a solicitation or 202-633-3270 ; . greater resources for research 'and of an offer , to buy any of these • .securities. The offering is made only ' -----5-t-8-te---- development, while being able ~o . bv the Prospectus which Is avail a- City . ?Ip • f" no 1"",.. ;o,"''''''f'''nnll4:t ..... ,- , .. _- 'h.. Trll'lt. .."'."" ...... _.. ... - _.. .. - -- share. NoxeU stock closed yesterday pand Michelin's offerings in the U.S, 1it $31.25, up $lO, in heavY trading. , market. royal Goodrich. which has had ' to : :Holders of 86 percent of No;xeU's spend conservatively because of the c .. tock , primCl,rily members of the Michelin. a pioneer in radial tires, load of debt it incurred in i,ts LBO, to long has sold top-of·the-line tires, J)unting fa, milyj ;. already c ~ave ' :given tap Michelin's financial resources' for frOcter~ ':, Gamble irrevocable prox· while Uniroyal Goodrich's products; product development and ,<.ex~nsion leS, milkir)g the'oealaIait,accompli .. are less expensive; Uniroyal ' GOO:d., . of manufacturing facilities', >. i; , ,Noxell (jtfichl" ,said a shareholder rich : is 'a major 'supplier of tirel')to; \'From Uniroyal GoOdrich' $'; !lJ>int' . meeting would be 'hel-:! in November General Motors Corp. and; haa ::ar of view, it .Iooks like, all. pluse~ to , to vote on the takeover, which is ex huge business in private-brand tires,. me," Millis said. UThey definitely pected to be completed by the end of which it makes under such names as could use some financial backing land the year. , . Fisk, C'avalier and Regul. .. ,!j,',,', : help .. They were stretched financial. ' "As we consid~red the options for Micheiin Uwill now have an ability · ly very thinly . . .. If a little of man ' George L. Bullting said in a " B F . SAU. ·L'}:;·:;·J{;:~':l i.t~ 'i statement. "An association with the , , • • ' . I,·,i'. , ~ . . . t" right ~ompany appeared the ideal REAL ESTATE INVESTMENT TRUST SENIOR NOTES ,.< way to , achieve this, and Procter ' & , Maturing one to ten' years from date of Issue Gamblel is clearly the right compa MATURING INTEREST RATE ny.", . 1~'i (I'rom Date oflssuel ' (I'er Annuml Bun~ing will continue as chief ex· . B. r. SAUL '--' ecutive of Noxell after the takeover, ~ ONE 'YEAR 8.,5% REAL ESTATe INVESTNENT TRU~T , and ' a spokeswoman for the' Balti TWO YEARS 10.5% : 8401 Connecticut Avenue ' more company said Noxell's opera THREE YEARS · 12~5% , Chevy Chase, MD 208.1q;:i-\";·: tions and employment base of 2,200 FOUR YEARS 13.0% Phone (301) 986~62Q7 ,~: k;, ~mployees ~ould remain unchanged FIVE YEARS TO 13.5% ' ,Send Ma a San/or Nota PrOl#Ctifi £~ for .the tiine being. "There are no'.' TEN YEARS'; . . ', .. l" fin mediate plans for changes, arid .~~ 1 then we'll have to see what devel MINIMUM PURCHASE $5,000 ' ~Na"""m-6-· ---~-~...,j ops," she said. .This Is a direct pfacem'ent·· by the . r Trust. No fees or commissions '.wlII . Under Procter & Gamble's own- , , , be paid: This announcement is nsl· AAA'6SS' ership, anaiysts say, Noxell will have ther an offer to sell nor a 'solicitation 101101" ( '-' gre:ater, reSource9'fot' research and , of an offer to buy anYr ot,.these , , , . F ' . 'securities ..The offering is madeoniy ;. -, ------~..,.....;...... development, while being able to l. . by the Prospectus wlllc'l!~ ,: avilUa.~ ,' City '·: St8t6.. ".. -:::.6.: ': : . ~, ~p " take advantage of P&G's enormol,1s ; 'bis from the Trust. ,,".' - " . advertlsfng"and marketing know~ : : how. ~'.! . /,' "'. " . . ,'.' -" ' ~'It'8 all marketing, cosmetics, and [Noxell' is being) taken over by the. '~'i' "4'- No. 1 marketer," Offutt ,said; ' ~ With ' the verY strong P&G sales force, it .. Cashmere:, r', ,; will allow , them to get more shelf . ~pace for their current toiletries and to butter you up household products." " Noxell also is expected to be ' able ~189.9S ' '~ ~o take advantage of P&G's interna· !~ orial strength to expand into for- "Made in England. our soFt