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TWO DIRECT MARKETING FIRMS shut down in 2003 by the Commodities Futures Trading Commission settled Federal Trade Commission charges that they misled investors, who lost $1.46 million in currency transactions. As part of the settlement, defendant Michael Zelener, and his two companies Amgine Corp. and Markham & Co., will refrain from telling consumers in cold calls and printed materials that they can make money by speculating on the movement of foreign currency prices, according to the FTC. The settlement is on file with the U.S. District Court for the Northern District of Illinois, Eastern Division.


VERMONT TEDDY BEAR CO., a publicly traded catalog firm, will go private as the result of a deal between its board and an investment group led by the private equity firm Mustang Group LLC. Shareholders, who still must approve the plan, would receive $6.50 per share of common stock. The transaction is expected to close around Sept. 30.

UNITED PARCEL SERVICE said it will buy Overnite Corp. for $1.2 billion in cash to expand its less-than-truckload and truckload shipping services in North America. The deal is expected to close in the third quarter.


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Search engine marketing expenditures will grow by 33% this year and reach $11.6 billion by 2010, notes a report from FORRESTER RESEARCH. In addition, online display advertising, which includes banners and sponsorships, should expand at an average rate of 11% over the next five years to $8 billion by 2010. Forrester also found that marketers are interested in advertising in new channels. Sixty-four percent of respondents want to advertise on blogs, 57% through RSS (really simple syndication) and 52% on mobile devices, including phones and PDAs. The report includes data from an online survey of 99 marketers and four forecasts.


Direct mail plays a key role in generating traffic for automobile dealerships and financing for new cars, according to a survey conducted by VERTIS. The poll found that 43% of adults who planned to buy a new vehicle responded to direct mail by visiting a dealership in person, while 28% visited the sender’s Web site and 14% called an 800 number. Of the consumers questioned, 57% said they were more likely to open direct mail if it contained a special offer or discount.

NEIMAN MARCUS GROUP INC. agreed to be acquired by Texas Pacific Group and Warburg Pincus for $100 per share in cash, or $5.1 billion. Texas Pacific and Warburg Pincus will own an equal stake in the retail/catalog company when the transaction is closed on the anticipated date of Nov. 1.


URBAN OUTFITTERS said it will cut its Pennsylvania work force by 180 employees, including 75 who work in direct marketing and in mail order returns. The retail/catalog firm also plans to move its call center operations to South Carolina.


JAMES E. THULIN, president of list management/brokerage company TCI Communications Inc., pleaded not guilty to attempted murder, assault and other charges, during a hearing in Los Angeles Superior Court. A pretrial hearing was set for May 31. According to a felony complaint requesting an arrest warrant, Thulin attempted to murder Andrew Solmessen last July 17.

Computer products marketer TIGER DIRECT INC. filed a lawsuit accusing APPLE COMPUTER INC. of trademark infringement and unfair trade practices. On file with the U.S. District Court for the District of Florida, the complaint alleges that Apple has created “perceived confusion” with a marketing campaign for the latest version of its Mac OS X operating system, named “Tiger.” Tiger Direct asked for a temporary restraining order and injunction against Apple.


CANADA’S HOUSE OF COMMONS is considering amendments to exempt charities and organizations with established client relationships from proposed legislation to establish a national do-not-call registry for telemarketers. Minister of Industry David L. Emerson said the amendments “strike a good balance.”

A report by E-MARKETER INC. projected that spending on rich media will hit $2.2 billion by 2008 and grow at an annual rate of more than 20%. The research was sponsored by

THE DIRECT MARKETING ASSOCIATION named Paige Lance vice president of program development. She will help implement new DMA programs. Lance previously served as director for corporate development and senior management programs at the U.S. Chamber of Commerce. The DMA also tapped Ramesh Ratan as senior vice president of membership and market development.


A bill approved by the MICHIGAN LEGISLATURE would allow pharmacists to sell prescription drugs in the state by mail. In addition, the state House passed a separate bill to allow mail order pharmacies and chains to participate in centralized filing, in which thousands of prescriptions are fulfilled from a warehouse each day. The bills now go to the state Senate.


The FEDERAL TRADE COMMISSION is seeking public comment on its implementation of the Children’s Online Privacy Protection Act (COPPA). The FTC enforces the law through the Children’s Online Privacy Protection Rule. The FTC also is soliciting comment on COPPA’s sliding-scale approach to obtaining parental consent, which takes into account how much information gathered from children will be used.


AMERITRADE HOLDING CORP., parent company of online trading firm Ameritrade, said it lost four magnetic tapes containing client information. Three of the four tapes were recovered, and the data contained on them had not been accessed, according to Ameritrade spokeswoman Katrina Becker.


DSW SHOE WAREHOUSE said that purchase information involving 1.4 million credit cards was stolen from 108 of its 176 stores. Among the stolen data: credit/debit card numbers, names and transaction amounts — but not addresses or personal identification numbers. Data on 96,000 checks, including checking account information and driver’s license data, also was compromised. Customer names, addresses and Social Security numbers weren’t reported missing.


Internet service provider HYPERTOUCH INC. filed a lawsuit against KRAFT FOODS INC. alleging it sent unsolicited e-mails for Gevalia coffee to 8,500 Hypertouch customers. The suit also names Kraft subsidiary Victor Th. Engwall & Co. The case is on file with the U.S. District Court for the Northern District of California.

SHARPER IMAGE CORP. was hit with a class-action lawsuit charging that it violated federal securities laws last year in connection with sales of common stock. The complaint, filed by law firm Schatz & Nobel, accuses Sharper Image of making misleading statements about its business condition. This resulted in the company’s stock being traded for inflated prices, according to the complaint.

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Mississippi lawmakers were in an uproar at deadline over the apparent lapsing of the state’s do-not-call law. THE MISSISSIPPI TELEPHONE SOLICITATION ACT, which requires renewal every two years, will expire June 30, following the failure of the House and Senate Utility conference committee to reauthorize it. The reason is that the legislators got into a dispute over an amendment that would have required the state’s public service commission to regulate false statements against public officials and political candidates, according to Mississippi’s Daily Leader.


E-mail service provider RETURN PATH said it will take over operational duties for e-mail white-listing service Bonded Sender from IronPort Systems, in exchange for an undisclosed amount of stock and a seat on Return Path’s board. IronPort developed Bonded Sender in 2002 as a way to identify reputable e-mail senders and speed their messages past the spam filters set up by Internet service providers and portals.


NEW YORK GOV. GEORGE PATAKI wants to close a loophole in the state’s do-not-call law. Implemented in 2001, the law allows telemarketers to call people listed on New York’s do-not-call list if the purpose is to schedule a face-to-face sales presentation. The state’s Consumer Protection Board submitted a bill

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THE NEIMAN MARCUS GROUP INC. said it was exploring a sale of the company and that it had hired Goldman Sachs & Co. as its financial adviser. Neiman’s direct marketing operations include the Neiman Marcus, Horchow and Bergdorf Goodman catalogs and online units.

Almost 25% of all permission-based e-mail was blocked by the top Internet service providers in 2004, RETURN PATH reported in a study. Return Path monitored 50,000 marketing and transactional campaigns through its Mailbox Monitor service. Blocking for each campaign varied from a low of 1% to a high of 57%. In addition, blocking rates varied widely by ISP from a low of 5% to a high of 36%. Companies saw the best delivery success at Earthlink (which blocked only 5% of the mail in question), BellSouth (6%) and CompuServe (8%). The most blocking and filtering occurred at RoadRunner (36%), followed by (34%) and Comcast (31%).


Credit card giant MBNA will close its Rockland, ME call center this month, sending its 300 employees into early retirement, unemployment or jobs at the firm’s other offices in the state, the Bangor Daily News reported. The company said it would sell the 76,464-square-foot building it opened less than four years ago.

SEARS, ROEBUCK & CO. is seeking a buyer for its Lands’ End catalog company at an asking price below the $1.9 billion it paid in 2002. Lands’ End said in February that it would cut more than 375 jobs and streamline its business operations in a restructuring that follows a drop-off in phone orders as customers opt to purchase goods in other ways, including online. Sears, which last November agreed to be acquired by discount retailer Kmart Holding Corp. for nearly $11 billion, declined to comment.


HANOVER DIRECT INC. named Wayne P. Garten as its acting chief financial officer. He replaced Charles E. Blue, who resigned early in March, less than a month after Hanover’s Feb. 16 delisting from the American Stock Exchange for failure to file Form 10-Q for the period ending Sept. 24, 2004, and for incurring net losses for four straight years.


1-800-FLOWERS.COM INC. acquired Cheryl & Co. Inc., a direct marketer of cookies and baked gift items, for about $40 million. Jim McCann, CEO of 1-800-Flowers, said the deal would increase the firm’s revenue in the food, wine and gift basket category to more than $100 million.

THE ONLINE PUBLISHERS ASSOCIATION reported that online consumer spending grew to $1.8 billion in the United States last year, a 14% increase over 2003. Online personals remained the leading paid-content category, with spending at an all-time high of $469.5 million. Spending on entertainment/lifestyles grew by 90% to $413.5 million. Roughly 19 million U.S. consumers paid for online content in 2004’s fourth quarter, up 2.6 million from the same period in 2003.


A company that provides shopping-cart software to online merchants agreed to settle FEDERAL TRADE COMMISSION charges that it rented personal information about nearly 1 million of its merchants’ customers to marketers. Vision I Properties LLC, which does business as Cart-Manager International, is barred from using the personal data it has collected and from future disclosure of personally identifiable information. According to the FTC, the firm did not adequately inform consumers or merchants that it was collecting and renting this information. In addition, the data rentals violated the privacy policies posted by many merchants. The shopping-cart pages produced by the firm are designed to look similar to the pages on merchants’ sites, but they actually are located on CartManager’s site.


Consumers are seeing less unsolicited e-mail, judging by a survey from BIGFOOT INTERACTIVE INC. According to Bigfoot, 57% of those polled agreed that the amount of spam they’ve received over the past year has decreased, while 39% disagreed and 4% didn’t respond. The same number indicated that the e-mails they received from companies they do business with are more targeted that those sent by the same firms the year before. The survey was based on 1,004 interviews.


Digital marketing services company DIGITAL IMPACT INC. rejected a takeover offer by InfoUSA. Board members said in a statement that the proffered purchase price of $2 per share was “inadequate, opportunistic and fails to reflect the underlying value of the company.” In addition, the board created a “stockholder rights plan” described by some observers as a poison pill. It would give shareholders an additional share for every share owned if a third party acquires more than 15% of Digital Impact’s outstanding shares. In an interview, InfoUSA CEO Vin Gupta said that “when we made our offer, the share price was $1.40. The board looks stupid in saying $2 per share is not enough.”

REP. ED MARKEY (D-MA) picked up a co-sponsor for his Information Protection and Security Act: Rep. Rahm Emanuel (D-IL). The bill calls for the Federal Trade Commission to establish regulations regarding “the conduct of information brokers and the protection of personally identifiable information held by such brokers.” Emanuel joined Reps. Jan Schakowsky (D-IL) and Bennie G. Thompson (D-MS) as co-sponsors.


L.L. BEAN said it would give performance bonuses totaling 12.5% of annual pay to 4,700 employees. In addition, the cataloger planned to offer $150 bonuses to 5,600 seasonal staffers. The company reported a record $1.4 billion in sales for its 2004 fiscal year, a 9% increase over 2003.

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The SEARCH ENGINE MARKETING PROFESSIONAL ORGANIZATION (Sempro), Palo Alto, CA, elected a board of directors comprised of eight new members and re-elected five incumbent directors. The new Sempro directors are Ron Belanger of Carat Interactive; Chris Churchill, Fathom Online; Kolchiro Fukasawa, Wasabi Communications; Gordon Hotchkiss, Enquiro Group; Jeffrey Pruitt, Icrossing; John Sanchez, Zunich Communications; Julienne Thompson,; and David Williams of 360i. The five re-elected incumbents are Barbara Coll, Kevin Lee, Mauro Lupi, Jessie Stricchiola and Dana Todd. The new board will begin its term March 31.


GREY DIRECT named Michael Goodnough to a newly created executive-level position overseeing wireless, search engine and viral marketing. He also will supervise Grey Direct’s marketing and new business activities. Goodnough was previously a principal at full-service agency James Howard. Before that, he launched and ran DraftWorldwide’s interactive unit.


New York state Attorney General ELIOT SPITZER filed a lawsuit against Liberty Productions, a Rhode Island telemarketing firm, for violating New York’s donor protection statutes. Court papers allege that Liberty, along with 49-year-old Thomas Gity of Seekonk, MA and his son, 24-year-old Thomas J. Gity of Barrington, RI, fraudulently solicited consumers on behalf of 16 organizations associated with members of law enforcement. According to a release from Spitzer’s office, the elder Gity was barred from working as a fundraiser in New York state after he was convicted of embezzling proceeds from six Rhode Island charities. Spitzer also alleged that Liberty understated the amount it raised on behalf of the Ballston Spa Police Benevolent Association by more than $20,000.


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Printing firm TRANSCONTINENTAL INC., of Montreal, acquired JDM Inc. for $85 million in cash and $2 million in working capital. JDM, which consists of a printing plant, a primary direct mail lettershop and three ancillary direct mail facilities, will operate under the banner of Transcontinental Direct USA. JDM employs 1,100 workers. The company had $91 million in sales during 2004. The acquisition will boost Transcontinental’s revenue from direct marketing activities to $315 million. Transcontinental reported revenue of $1.7 billion last year.

The U.S. POSTAL SERVICE suspended shipments on American Airlines and US Airways Group Inc. flights because they didn’t get the mail to destinations on time. The air routes used to help ship first class mail across the country were halted Feb. 12 after a five-month analysis showed consistent lateness, the USPS said.


Microsoft Corp., eBay, PayPal and Visa were named among the initial participants in the PHISH REPORT NETWORK, an anti-phishing aggregating service operated by WholeSecurity. The network allows companies being victimized by phishing attacks to securely report fraudulent Web sites to a central database operated by WholeSecurity. Other companies subscribing to the Phish Report Network can then access the database or receive real-time notifications of known phishing sites. Phishing involves an attempt by scam artists to steal the identities of Internet users by sending out e-mails or links to Web pages mimicking popular Web sites.


PFIZER INC. and MICROSOFT CORP. filed 17 lawsuits against online pharmacies they said sent hundreds of millions of unwanted e-mail solicitations to users of Microsoft’s Hotmail e-mail program last year. Pfizer, which makes the male sexual dysfunction drug Viagra, alleges that these operations have call centers in Canada and manufacturing plants in India.

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THE KNOT INC. acquired the assets of GreatBoyfriends LLC, the operator of two e-dating services

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A proposed amendment to the CANADIAN TELECOMMUNICATIONS ACT would establish a nationwide do-not-call list. If the measure is approved by parliament, the Canadian Radio Television and Telecommunications Commission could fine telemarketers $1,500 for each consumer violation and $15,000 for each business-to-business infraction. The commission would be empowered to contract with a third party to maintain the list.

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ONLINE MARKETERS will lose more than $2.6 billion to fraud this year, a 37% increase over 2003, according to a survey from CyberSource Corp. The reason is that fraud is keeping pace with online sales, which grew by 39% this year, the company explained. Firms with annual online revenue between $500,000 and $5 million are expected to lose 2.5% of their revenue to fraud, compared with 1.9% last year. But those with more than $25 million in annual revenue saw fraud losses drop to 1.1%, down from 1.3% in 2003. For every fraudulent order confirmed, the average merchant refuses four or five orders based on suspicion of fraud.

THE FEDERAL TRADE COMMISSION said it is considering a proposal to give telemarketers more leeway for using prerecorded messages when they call consumers with whom they have a business relationship. Current regulations limit the number of recorded messages to 3% of all the calls answered live by a consumer per day. The Direct Marketing Association has asked that the 3% limit be measured by 30 days, not one day. The FTC will accept comments on the proposed changes until Jan. 20.


PRIMIS MARKETING GROUP acquired Hyphos360, a company that offers database and campaign services, from a private investor group led by Bay4 Capital LLC. Mike Dykstra, president of Hyphos360, is expected to remain with the firm.

TEXAS cracked down on do-not-call violators, levying fines on several companies. The state’s Public Utility Commission cited two firms for making telemarketing calls to phone numbers that were listed on the state’s do-not-call registry for more than 60 days. American Home Maintenance will pay $6,000, American Eagle Builders Supply Inc. $1,000. Another, AMI Benefits, will pay $1,800 to settle a notice of violation for sending an improper fax solicitation. Several other companies were fined for failing to answer complaints in a timely way.


After almost two years of development work and more than $100 million in capital spending, MICROSOFT unveiled the beta version of its new search engine, MSN Search. The service, available at, crawls more than 5 billion Web pages and comes in 11 different languages.

The Chicago Association of Direct Marketing presented the Pat Wheelless Award for Outstanding Mentorship posthumously to KEVIN LEO, former CADM president and president of Leo Direct Unlimited. He died in July at age 58.


HANOVER DIRECT announced that its financial statements for fiscal years 1999 through 2003, as well as the last five quarters,

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Direct marketers boosted their bottom lines during the third quarter, according to a quarterly business review by the DIRECT MARKETING ASSOCIATION. Companies averaged a revenue index of 62, roughly the same as the third quarter of 2003. (In the DMA’s index, numbers over 50 represent growth, and those under 50 indicate a decline.)

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SIDNEY T. ROSS, founder of the $188 million jewelry cataloger Ross-Simons, died Sept. 21 at age 88, according to Catalog Age magazine. Ross started the company with his wife Lillian and partner Phil Simons as a jewelry store in downtown Providence, RI, in 1952. His son Darrell is now the firm’s president.

JAMES E. THULIN, president of list management/brokerage company TCI COMMUNICATIONS INC., was accused of attempted murder, assault and other charges based on an alleged July 17 incident in Los Angeles. A pretrial hearing is scheduled for Dec. 10 in Los Angeles County Superior Court, according to Thulin’s attorney Mark Werksman. Werksman said Thulin is innocent of all charges. According to a felony complaint requesting an arrest warrant, Thulin attempted to murder Andrew Solmessen. In addition, he assaulted Luis Hernandez, and committed

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D&B agreed to sell its business in France to Base d’Information Legales Holding S.A.S. (Bil Holding) for $32 million. D&B generated roughly $38 million from the business last year. The unit has 170 employees, most of whom will remain. As part of the agreement, Bil Holding will distribute D&B products in France. In return, D&B will gain access to Bil’s French business database for international use. Bil also has agreed to enhance the database with technical support provided by D&B through a multiyear service deal.

MOTOROLA INC. kicked off a multimedia campaign with COX COMMUNICATIONS to market digital video recording and high-definition broadcasts to football fans during the NFL season. Priest Holmes, a running back for the Kansas City Chiefs, is featured in all media, including direct mail, e-mail, Internet banner ads and a national television spot. Consumers are directed to a Web site featuring information on Motorola’s DCT6412 digital cable set-top box, and told how to get the unit along with personalized Cox system offers. The system allows fans to halt the game for snacks, and to replay any action.

GERS RETAIL SYSTEMS, a San Diego-based supplier of retail management technology, acquired ESCALATE INC., a provider of multichannel fulfillment systems for retailers. Escalate serves clients like Eddie Bauer, Williams-Sonoma and Restoration Hardware. Its systems enable retailers to pick, pack and ship orders entered through any channel.


VERMONT TEDDY BEAR CO. scored several recent product placements for its toy bears on television and in the movies. One was on the Discovery Channel cable TV show

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THE FEDERAL TRADE COMMISSION announced that the resignation of Commissioner Mozelle W. Thompson would be effective at the end of August.

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WISCONSIN GOV. JIM DOYLE AND SEN. JON ERPENBACH sought legislation to reinstate a $10,000 penalty for violators of the state’s model no-call list and restore the right of citizens to sue companies that violate the law. They also urged the 1.5 million Wisconsin residents currently on the list to sign up again before Sept. 1. To ensure the list’s accuracy, sign-up is required every two years or names are dropped. On June 29, a Dane County Circuit Court decision upheld the basic provisions of the law, but struck down the penalties. Gov. Doyle and Sen. Erpenbach also reiterated their opposition to any action by the federal government to pre-empt Wisconsin’s no-call list with the weaker federal do-not-call registry. “In Wisconsin, telemarketers can only call current clients, but the federal registry allows unlimited calls to former clients for 18 months. That’s a long time to get harassed by a company you choose to leave,” the senator said in a statement.

Boston-based DIGITAS INC. signed an agreement to acquire MODEM MEDIA INC. of Norwalk, CT, in a stock-for-stock transaction. Following the merger, Modem Media will continue to operate under its existing name, and will be led by Martin Reidy, currently president of Digitas San Francisco. Modem Media’s agency offices will be led by their present managing directors. The companies expect to merge the Digitas San Francisco and London offices into the Modem Media agency offices in those locations.


Call center operator EPIXTAR CORP. will acquire Innovative Marketing Strategies Inc. and its Philippine subsidiary Innovative Marketing Strategies International Inc. for $14.4 million in cash and stock. IMS has call centers in Wheeling, WV;, Duluth, MN; and Pittsburg, KS. IMS Asia is located in the Makati area of metropolitan Manila. Epixtar, of Miami, has been building call center operations in the Philippines since last year.

RAPP COLLINS WORLDWIDE named Robert Horvath president, direct marketing. He was formerly chief financial officer. Edward R. McNally Jr., onetime RCW president/chief operating officer, was made president, diversified services.


HANOVER DIRECT INC. tapped Charlie Pellenberg as president of its Domestications catalog. Pellenberg first joined Hanover in 1983, where he founded the home furnishings book. In 1993, he also took over responsibility for The Company Store catalog when Hanover acquired that book. For the past seven years, Pellenberg has been senior vice president of the home/lifestyles division at catalog holding company Brylane.


SIEGENT INC. acquired Rechannel Communications Inc. of Miami. Rechannel provides Web site design, hosting, data sharing and lead- management systems for the real estate industry. Siegent, of Boca Raton, FL, plans to use the new capacities to expand its efforts in the online space. The acquisition was funded in part by a cash infusion from venture capital firm Summit Partners. A published source put the amount of the infusion at $5 million. Brian Shapior, president/CEO of Rechannel, is staying on to serve as vice president of business development for the eNeighborhoods suite of products.

SKYMALL started an incentive program for travelers who take advantage of its in-flight catalog while flying on Continental Airlines or Continental Express. Continental passengers can earn 15 OnePass frequent flyer miles for every dollar they spend on SkyMall merchandise. To earn the rewards, travelers use an order form available from Continental flight attendants. Passengers must mail the form within 48 hours after arriving at their final destination. On Continental Airlines flights with video equipment, the carrier will air a 60-second promotion that touts the offer. Continental Express flight attendants will also make an announcement about the offer shortly after takeoff.


BOOK-OF-THE-MONTH CLUB created Smart Reader Rewards, a program that allows participants to select the genre of books they want to receive. The new club marks a departure from Book-of-the-Month Club’s traditional business model. Under the traditional plan, club members are automatically sent a current selection, regardless of genre. Existing Book-of-the-Month club members will remain enrolled in the traditional program. Smart Reader Rewards members choose from one of six categories — Mystery and Suspense; History and Biography; Fiction; Nonfiction and Current Events; Home and Family; and Health and Self-Help. Each month readers will be offered a book from their chosen category and can elect to accept it, refuse it, or choose an alternative title. Members may switch categories every month and will be able to order books from other categories as well.

LAW ENFORCEMENT AGENCIES from the United States, United Kingdom and Australia agreed to share resources to combat international spam mailers. A memorandum of understanding was signed by the U.S. Federal Trade Commission, U.K. Office of Fair Trading, U.K. Information Commissioner, Her Majesty’s Secretary of State for Trade and Industry in the U.K., the Australian Competition and Consumers Commission, and the Australian Communications Authority. The agreement allows these government agencies to disclose information to each other concerning commercial e-mail investigations for law enforcement purposes. The pact does not apply to competition-related investigations. Law enforcement authorities from throughout the world plan to meet in London in October to discuss spam enforcement issues.

WINDY CITY INNOVATIONS LLC filed a complaint against America Online Inc. for alleged patent infringement due to its use of the “group communications multiplexing system” patented in 1999. AOL is using the system without license in its AOL Instant Messenger Version 5.5 software and AOL Version 9.0 software, according to the complaint filed June 24 with the U.S. District Court for the Northern District of Illinois, Eastern Division, Chicago. “The complaint is without merit and we intend to vigorously contest it,” said AOL spokesman Jim Whitney. The invention allows for communication of multimedia in real time over the Internet, and was created by Daniel Marks, who now serves as consultant for Windy City Innovations, Chicago.

THE LOUISIANA ECONOMIC DEVELOPMENT CORP. awarded a $1.8 million grant to help Direct General Corp. to set up a larger telemarketing center in Baton Rouge, LA. The Nashville, TN auto insurance company reportedly intends to boost its staff of 400 by four times within the next few years. Louisiana’s labor department has committed to cover the cost of training new employees. Direct General is expected to spend more than $4 million for equipment purchases to outfit the center.

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SPIEGEL INC. received approval from the U.S. Bankruptcy Court for the Southern District of New York to sell the assets of its Spiegel Catalog business to investment firm Pangea Holdings Ltd. Under the purchase agreement, Hamilton, Bermuda-based Pangea will acquire substantially all the assets of Spiegel Catalog for approximately $31 million. The deal also includes $22 million in inventory commitments. Spiegel, of Downers Grove, IL, and its principal subsidiaries filed for Chapter 11 bankruptcy protection in March 2003. On May 11, the company entered an agreement with Pangea to buy its Newport News division for $28.6 million.

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WINE.COM named George Garrick president and CEO. Garrick had been CEO of PlaceWare since 2002 and negotiated its acquisition by Microsoft for $200 million last January. Before that, he was CEO of Flycast Communications, taking it from startup to a $500 million IPO a year later. The company eventually was sold for $2.3 billion in January 2000.

PHISHING ATTACKS by hackers against online consumers have become so widespread that an estimated 57 million Americans likely have received these fraudulent e-mails, according to a new study by Gartner Inc. Direct losses from identity-theft fraud against phishing attack victims cost banks and credit card issuers in the United States about $1.2 billion last year. Phishing occurs when a dishonest online marketer sends an e-mail containing a link to a fraudulent Web site where users are asked to provide personal information. The e-mail and Web site typically are disguised to appear legitimate. According to the survey, some 30 million adult Internet users believe they definitely have experienced a phishing attack, and another 27 million feel they’ve observed what looked like a phishing attack. Seventy-six percent of the known or suspected incidents occurred since October and another 16% in the six months before then. The survey, which polled 5,000 adults, was completed in April.


THE FEDERAL TRADE COMMISSION settled charges with two individuals it alleged used spam to drive unsuspecting consumers to a sexually explicit Web site. The FTC claimed Brian Westby of Ballwin, MO and Martijn J. Bevelander of the Netherlands sent spam that used deceptively bland subject lines, false return addresses and empty

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MONSTER WORLDWIDE INC., parent company of online job search site, bought European career portal for more than $57 million. Monster said the acquisition will enhance its presence in Germany and its expansion into Central Europe.


BUYSEASONS INC. named Daniel Haight COO. Buyseasons is the parent of and Prior to joining the company, Haight was an executive at OfficeMax, where he was responsible for its e-commerce, catalog and direct marketing businesses.


SPIEGEL INC. will eliminate 255 positions during the next two months. The move comes as the company is negotiating with an unnamed buyer for the Spiegel Catalog, although the sale is by no means a done deal.

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Online car marketer AUTOBYTEL INC. acquired iDriveonline Inc., a Houston-based provider of automotive customer loyalty and retention marketing programs, for about $11.7 million in cash and stock. Autobytel, of Irvine, CA, will keep a unit in Houston, but its size will be determined over the next six months, said CEO Jeffrey Schwartz in a statement. None of iDriveonline’s 30 employees will lose their jobs now, but that may change in the future, Schwartz noted.

WEST TELEMARKETING SERVICES planned to lay off 300 workers when it closed its Fort Smith, AR call center in early May, according to reports. The center has operated since 1998. Company officials said they began planning the closing in 2000. When the lease for the 14,000-square-foot building came up for renewal this year, the company decided to close. They noted the jobs would not be sent overseas. Rather, they blamed the cutbacks on a weak economy, the national do-not-call list and other industry restrictions.


Over 1 million AMERICA ONLINE members entered a sweepstakes to win a Porsche Boxster seized from a spammer. AOL reported that during the first 24 hours of the sweepstakes on March 30, entries were being processed at a rate of several hundred per minute. The promotion has generated 3 million page views after being showcased on AOL’s “Welcome” screen. AOL seized the car at the successful conclusion of a legal action taken against the spammer, who was caught thanks to members reporting spam.

THE CHICAGO ASSOCIATION OF DIRECT MARKETING named C. Eduard Bjorncrantz the 2004 Charles S. Downs Direct Marketer of the Year. Bjorncrantz’s 23-year career — from 1967 to 1990 — at Sears, Roebuck & Co. took him from a catalog marketing manager in an Arlington, VA in-store catalog pickup desk to national manager for advertising production in Chicago. At Sears and subsequent top marketing positions with Lab Safety Supply, Moore Medical Corp., Quill Corp. and J.C. Whitney & Co., Bjorncrantz pioneered the development of electronic publishing systems for catalog and direct mail advertising. He’s now a partner in The Callahan Group LLC of Rosemont, IL, a consulting firm specializing in strategic marketing.


AMERICAN PHARMACISTS estimate they have lost 10% of their business to Canadian pharmacies — usually via the Internet — and most expect that loss to continue unless the government limits the practice. According to a new study, conducted by NOP World Health, one-third of uninsured patients who compare prices when buying drugs tell pharmacists they will fill their prescriptions through Canadian pharmacies. The study shows that a small proportion of pharmacies — usually independents, rather than chains — are trying to compete with their less-expensive Canadian competition by negotiating prices with customers. However, American pharmacies usually won’t discount prices by more than 10%.

A FEDERAL JUDGE in Sacramento, CA ruled that the state legislature can block an overwhelming number of electronic messages to state lawmakers to combat a potential breakdown of its e-mail system, according to reports. While the constitutional guarantee of free speech extends to the Internet, reasonable restrictions may be imposed as long as they are not content-based, serve a significant government interest and leave other communication channels open, wrote U.S. Magistrate Judge John F. Moulds.

In a bid to increase online sales, U.K.-based bank ALLIANCE & LEICESTER is investing 10 million pounds ($18.4 million U.S) in Web marketing and advertising this year. According to reports, the campaign is the bank’s first effort to redefine itself as a direct bank amid growing evidence that customers are becoming more confident in using technology to process financial transactions. The bank’s online business tripled last year.


THE SPIEGEL GROUP retained Miller Buckfire Lewis Ying & Co. to solicit bids for its Eddie Bauer business. The Downers Grove, IL-based cataloger and retailer also reached an agreement with Pangea Holdings Ltd. under which Pangea will acquire Spiegel’s Newport News Inc. subsidiary. Pangea will pay $25 million in cash for Newport News, and will assume some of the company’s liabilities. Newport News will continue to be based in New York, and also will maintain the distribution facility it operates in Virginia. Spiegel, which is undergoing a bankruptcy restructuring, will file the Newport News acquisition agreement with the Bankruptcy Court, opening the acquisition to other bids. Final approval of the bidding process was anticipated in late April.

W.W. GRAINGER INC. has divided its operations into three groups, and chief operating officer Wesley M. Clark will leave the firm June 1. Chicago-based Grainger supplies businesses and institutions with facilities maintenance products. Under the new structure, the United States operations, which include branches, distribution centers and an outsourcing business, will be run by James T. Ryan, who was promoted from executive vice president to group president. The other units include Grainger’s international business and Lab Safety Supply, its DM arm. All units will report to CEO Richard L. Keyser.


Japan’s YAMANOUCHI PHARMACEUTICAL CO. will sell cataloger Bear Creek Corp. to investment fund Wasserstein & Co. for $260 million, according to reports. The Medford. OR company is the largest direct marketer of fruits and food gifts in the United States through its Harry and David subsidiary. It also operates mail order nursery business Jackson & Perkins. Yamanouchi is also selling its three nutritional and household products DM operations — Shaklee Corp. and Inobys in the United States and Shaklee Japan K.K. — to a partnership formed by two U.S. investment funds for $310 million.

SHOPPERTRAK tapped Jan L. Davis as its president and CEO. Davis had been with TransUnion LLC, Chicago, for eight years, most recently as an executive vice president and president of its TrueLink division. John Banaher, former chief operating officer of TrueLink, will become the division’s president. Shoppertrak, also Chicago-based, offers in-store data-gathering programs to clients, including customer-traffic counting capabilities.


Computer marketer GATEWAY INC. planned to close its network of 188 company-operated retail stores on April 9. About 2,500 retail positions will be eliminated. The company will continue direct sales of Gateway products online and by phone and is pursuing other retail distribution of its products both in the U.S. and abroad.

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Targeted communications firm CATALINA MARKETING CORP. plans to sell its card and data-entry services business to Capture Resource Inc., a provider of data capture, transaction-based processing and business process outsourcing. Capture Resource now provides 99% of the data-entry services performed by the division, according to a statement from St. Petersburg, FL-based Catalina. As part of the agreement, Capture will absorb Catalina’s card and data-entry employees and its Farmingdale, NJ facility. Catalina said the decision to divest this business is part of a strategy to focus on proprietary applications at points of sale.

COSSETTE COMMUNICATION GROUP combined its Cossette Interactive and Proximi-T business units to form Fjord Interactive Marketing + Technology, an e-business services provider. Pierre Delagrave will serve as president of Montreal-based Fjord, which has about 150 employees. Alex Sakiz and Shari Walczak, formerly vice presidents of Cossette Interactive, and Yves Poir

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POSTAL UNION LEADERS testifying before a Senate panel blasted the attacks on collective bargaining recommended in the report of the President’s Commission on the U.S. Postal Service. In testimony before the Senate Governmental Affairs Committee, William Burrus, president of the American Postal Workers Union, said that

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YANKELOVICH PARTNERS named DM veteran Mike Hail as chief executive officer. Hail, the former CEO of KnowledgeBase Marketing, hopes to better position Yankelovich as a provider of database services. The company, which had revenue of $17 million last year, intends to grow both

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DRAFT CHICAGO has been named the Direct Marketing Educational Foundation’s first volunteer advertising agency of record since 1985. Sid Liebenson, Draft Chicago’s executive vice president and director of marketing, will head the account. Projects Draft will oversee for the DMEF include a new planned giving campaign, the DMEF’s renewal series and a fall fundraising effort.

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ENTREPRENEUR KEN HAKUTA said he is negotiating to buy toy direct marketer FAO Schwarz from bankrupt parent FAO Inc., according to reports. Hakuta has hired as an adviser the Peter J. Solomon Co., located in the same building as the flagship FAO store in New York. Hakuta is known for developing unconventional toys. FAO, which filed for Chapter 11 bankruptcy protection the first week of December for the second time this year, had until Dec. 15 to find a buyer for both FAO Schwarz and Right Start, its cataloger and retailer of baby apparel. In a separate development, FAO hired DJM Asset Management LLC to dispose of the leases of 89 Zany Brainy stores.

ABERCROMBIE & FITCH said it would increase the size and distribution of its catalog in the wake of its decision to shutter A & F Quarterly, its controversial magalog. “While it has enjoyed success with the quarterly over the years, the company believes it is time for new thinking and looks forward to unveiling an innovative and exciting campaign in the spring,” said the company in a statement. Spokesman Thomas Lennox said the New London, OH-based company would increase the circulation of its quarterly catalog Scope in January but declined to reveal specific numbers.


AN ARMED FORMER EMPLOYEE OF PRINT XCEL, a printing plant owned by Mail-Well Inc., entered the Visalia, CA plant the morning of Dec. 9 and shot an employee before killing himself, according to a statement from Mail-Well. The murdered employee and the gunman were not identified. The shooter, who according to reports had been fired several years ago, also set fire to several paper rolls, according to published reports. The plant normally employs 80 people. According to reports, 46 staffers were inside the building at the time of the shooting. According to Mail-Well, all other employees have been accounted for. The names of the gunman and the victim were not available at deadline.


MAILING FIRM LAUNCHPOINT INC. acquired the outbound telemarketing division of Acacia International Inc. from ComSpan USA. ComSpan will retain Acacia’s inbound call center operations and will provide Launchpoint access to ComSpan’s technology platform for future upgrades. The outbound call center will be run out of Launchpoint’s headquarters in Portland, OR. Mark Hollis, former general manager at Acacia, has been appointed as the new director of teleservices at Launchpoint.


TOM BAZZONE left his position as chief operations officer and board member of cataloger and retailer Restoration Hardware to pursue other opportunities. Bazzone was named executive vice president and COO of the Corte Madera, CA firm in June 2001.


THE MOBILE MARKETING ASSOCIATION, an industry trade group for wireless and mobile-commerce technologies, released a code of conduct for the prevention of mobile spam in wireless marketing campaigns. Under the code, consumers must opt in to receive mobile messaging programs. They may choose to receive messages by sending a text message, calling a voice response unit or registering on a Web site or through some legitimate paper-based method. They must opt in for a specific program only. Mobile programs with multiple message strings must also provide an opt-out for consumers.

LOWE & PARTNERS WORLDWIDE AND DRAFT INC. rebranded Lowe TTL in Sao Paulo as Draft Brazil. With this Brazil operation, Draft has 29 offices in 23 countries. Lowe and Draft, sibling agencies under the partnership division of the Interpublic Group, formed a global alliance under the Lowe Plus Draft banner.


RICHARD N. TOOKER joined Richardson, TX-based KnowledgeBase Marketing as vice president, solutions architect. He will offer consulting services to KnowledgeBase’s clients and develop integrated, ROI-driven programs for them. Tooker had previously been with DMW LLC, a direct response agency, where he was responsible for business development, strategic partnerships, database marketing and interactive marketing initiatives.


TRANSUNION acquired Douglas-Danielle Inc., a firm that offers marketing campaign creation, management and analysis products and services. Terms of the deal were not disclosed. TransUnion will integrate Douglas-Danielle’s SmartSites Web-based campaign management tools into its own offerings. Additionally, Trans Union will incorporate the agency services capabilities Douglas-Danielle brings to the firm, such as program planning, creative, data and media services, into its operations. Michael Browning will remain as the company’s president, and will become a group vice president within TransUnion. Plans call for all 42 employees, including upper management, to join TransUnion.

EASTMAN KODAK CO. acquired Scitex Digital Printing for $250 million. Based in Dayton, OH, Scitex furnishes systems for printing direct marketing materials, as well as utility bills, banking and credit card statements, invoices, financial statements and other transactional documents. This acquisition is part of the Rochester, NY film giant’s $3 billion plan to expand into digital markets. The deal is expected to close in the first quarter.

WOLFGANG HAF has been tapped to serve as CEO of Wunderman Central Europe, a newly created position. The office will unify Wunderman’s direct marketing operations across nine offices located in Germany, Switzerland and Austria. Haf most recently served as president and chief client officer of Wunderman EMEA. Before that, he was president of Wunderman’s Asia-Pacific operation. Prior to joining Wunderman, he spent 14 years in the Young & Rubicam group of companies.


PAUL M. WILLIAMS, 56, a sales leader at Acxiom Corp., was killed in a car crash. In a message to Acxiom employees, company leader Charles Morgan described Williams as “an exceptional man — one of the kindest, most gracious, most caring people I have ever known.” Prior to being named sales leader, Williams had headed Acxiom’s services division, which focuses on managing client relations across a variety of industries. Williams had been with Acxiom since 1989. Before joining the Little Rock, AR-based firm, he held several jobs in the data industry, including positions with Computer Associates International, IBM Corp. and several financial services companies. Williams is survived by his wife Nancy, and his daughters Traci and Melissa.


CREATIVE DIRECT RESPONSE INC. promoted Ray Grace from president to chairman of the board. Geoff Peters, former executive vice president, now becomes president of the Crofton, MD direct marketing agency.


SHOP AT HOME NETWORK named Michael S. Lubka executive vice president, chief merchandising officer. Lubka joined Shop at Home from Neiman Marcus Direct, where he was senior vice president and general manager of the firm’s Chef’s Catalog and businesses. He also oversaw the men’s electronics and collectibles division for Neiman Marcus Direct.

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COLLECTIBLES DMer FRANKLIN MINT notified 200 employees that they would be downsized as part of a general restructuring. The company plans to develop a smaller business based on product development and marketing, according to published reports. Franklin Mint was founded in 1963 by Joel Segal, who later founded the QVC shopping network.


CONSUMERS are more interested in contacting retailers through online means, noted a new study commissioned by software company RightNow Technologies. While 74% of consumers continue to contact retailers by phone, and 47% go to the retailer’s store, 26% prefer to reach retailers through e-mail. Some 15% like to contact their store on Web sites and 8% prefer instant messaging. The survey was conducted by Harris Interactive. Retailers can expect a 60% spike in overall service inquiry volume over the holidays, the study claimed. On average, consumers consider a seven-minute wait time to be acceptable for an e-mail or Web site inquiry. Most consumers (68%) said less than five minutes is OK for responding to phone inquiries. Nearly half said less than five hours is reasonable for responding to e-mail or Web queries.

THE HOME DEPOT will mail its first holiday catalog this year. The 68-page

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INFOUSA appointed Ray Butkus president of its large business group, which includes Donnelley Marketing, Catalog Vision, Walter Karl and Yesmail/ClickAction. Butkus previously served as president of Donnelley Marketing. Alan Kuritsky, currently senior vice president of sales at Donnelley, will replace Butkus as president of Donnelley Marketing effective Jan. 1.

MORE THAN 27 MILLION PEOPLE between the ages of 2 and 17 used the Internet during September. The kids represented 21% of the online population, according to Nielsen/NetRatings, which conducted the study. Twelve million of these users were younger than 11, while 14.9 million children between the ages of 12 and 17 connected. The most popular Web destinations among the younger set included Diva Starz, which champions a series of dolls from Mattel; ToonTown Online, a Disney site; and Polly Pocket, another Mattel site. Among the older kids, Originalicons, an instant message icon site, proved most popular; followed by Blunt Truth, a marijuana educational site; and Teen People.


SAKS FIFTH AVENUE ENTERPRISES launched a customer relationship management division. The unit will focus on retaining customers in the luxury goods market, and will incorporate Saks First, the New York retailer’s current loyalty program. Rob Rosenblatt has been named senior vice president of the division. Rosenblatt was previously CEO in residence at iFormation Group, a new-business generation firm. Teradata will provide an enterprisewide data warehouse system which will serve as a backbone for Saks Fifth Avenue’s market research and loyalty program operations.

VETERAN COPYWRITER SHELL ALPERT died Oct. 15. Friend and colleague David Bancroft Avrick said in reporting the loss that Alpert

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A SECOND FEDERAL JUDGE weighed in against the Federal Trade Commission’s do-not-call registry, saying it violates free-speech protections. U.S. District Judge Edward W. Nottingham of Denver blocked the list, which sources said will result in a continued court battle. Meanwhile, the U.S. Senate and House of Representatives voted to reinstate the list and sent the bill to President Bush for his signature. In a related development, a flash survey by Insight Express found that over half of all U.S. consumers are angry over the first court decision to block the list. Of those who have registered, 73% were angered by the decision, 78% see no reason to delay implementation and 66% view the list as “essential to their tranquility.” The survey also found that the nuisance factor isn’t the only reason 50 million Americans have signed up for the registry. Among the do-not-call registrants, 88% said that telemarketing doesn’t provide the products they want, and 67% don’t view telemarketers as honest and trustworthy.


U.S. JUDGE LEE R. WEST threw out the Federal Trade Commission’s do-not-call registry on the grounds that the FTC lacks authority to operate such a list. West wrote that power to regulate must “always be grounded in a valid grant of authority from Congress.” On file with the U.S. District Court for the Western District of Oklahoma, the ruling was in response to a suit filed by the Direct Marketing Association and several companies challenging the agency. FTC Chairman Timothy J. Muris denounced the ruling as “incorrect. We will seek every recourse to give American consumers a chance to stop unwanted telemarketing calls.”

REDENVELOPE, a cataloger and Internet retailer, announced an initial public offering. The company is making available 2.2 million shares of its common stock at a proposed price of $14 per share. Founded in 1997, the firm reported a $7.7 million net loss for the fiscal year that ended March 30. However, that loss was almost half the one reported for the prior year. In its prospectus, the company reported net revenue of $70 million for the year ending in March, compared with $55.7 million for the year earlier.


THE ELECTRONIC PRIVACY INFORMATION CENTER (EPIC) filed a complaint with the Federal Trade Commission against Acxiom Corp. and JetBlue Airways Corp., alleging that both firms engaged in deceptive practices when they provided consumer data to a U.S. Defense Department contractor. According to the complaint, JetBlue supplied itinerary information on more than 1.5 million passengers to Torch Concepts, a firm that had developed pattern-recognition technology for the DOD. Torch Concepts bought overlay information from Acxiom on 40% of the individuals in this file, and Torch Concepts used it to generate a presentation for the Tennessee Valley Chapter of the National Defense Industries Association. This, the complaint said, was in violation of both firms’ privacy policies. Acxiom representatives denied the charges, saying the firm “acted in a manner that complied with applicable laws and with our published policy.” Meanwhile, JetBlue was hit with a class-action lawsuit. The airline has said that it shared passenger itineraries at the request of the Defense Department and that it did not receive any payment for the information.

IAC/INTERACTIVE CORP. said it will acquire, a discount travel Web site, for $665 million in cash and assumption of $20 million in options and warrants. Hotwire will remain a separate brand within IAC after the purchase.


MASSACHUSETTS STATE LEGISLATORS scheduled a hearing on a bill calling for the establishment of a do-not-mail list. The bill, authored by State Rep. Susan Pope (R-Wayland), would allow consumers to add their names to the list by checking a box on their annual tax returns. The do-not-mail list would apply to unsolicited mailings to generate new customers or new donors for a charity. Mailers would be required to send postcards to customers they have not heard from in two years. If the card is not sent back requesting mailings, the marketer would have to stop mailing. Violators could face penalties of up to $5,000.


THE J. JILL GROUP INC. said it expects to report a third quarter loss of about 15 cents per share, compared with income of 18 cents per share last year. The cataloger/retailer’s net sales are expected to fall in the range of $80 million to $83 million, flat as compared with last year’s results.

THE BRITISH GOVERNMENT said it passed a law requiring spammers to get permission beforehand from their recipients. Violators will be subject to fines of 5,000 British pounds sterling (about $8,000) and may be subject to additional lawsuits. The rule, aimed at shrinking the heavy traffic of unsolicited e-mail messages, also applies to unsolicited text messages sent to mobile phones. But the government won’t be able to touch bulk e-mailers who target Britons from outside the country.


WESLEY CLARK, the former Army general who announced his candidacy for the Democratic presidential nomination on Sept. 17, has terminated his $150,000-a-year consulting agreement with Acxiom Corp. but will remain on its board of directors, according to an Acxiom spokesperson. Clark, an Arkansas native, joined Acxiom in 2001 and played a part in the company’s efforts to market its services to federal organizations involved in homeland security.


THE HOUSE OF REPRESENTATIVES passed H.R. 49 by a voice vote, making the Internet Access Tax Moratorium permanent. The bill also would roll back access taxes in nine states. The Direct Marketing Association praised the quick passage, and urged the Senate to follow suit. “The relatively easy passage of H.R. 49 today by the House reflects a widespread and bipartisan belief that the Internet is an important and growing channel for communications, education and commerce, both here at home and around the globe, said Jerry Cerasale, the DMA’s senior vice president for government affairs, in a statement.


SEN. RICHARD SHELBY announced he had drafted a bill that would prevent federal provisions on collecting and using consumer data to be pre-empted by state laws. But the bill does not preclude setting federal standards that are as stringent as those enacted by the states, if not more so, sources said. The House of Representatives passed a similar bill extending the prohibitions on Sept. 10.

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SEARS, ROEBUCK AND CO. said it had acquired the rights to the Structure brand from Limited Brands Inc. The financial consideration was less than $10 million. The firm hopes that the brand will fit in well with its Lands’ End brand.

A REPORT BY AN INDEPENDENT EXAMINER CHARGED THAT SPIEGEL INC. delayed filing its 2001 annual report after being told to do so by its German directors. Spiegel’s U.S. auditor, KPMG, had informed the company that it would have to include a “going concern” warning with the annual report, which was scheduled to be filed in May 2002. But Spiegel’s directors, led by Michael Otto, recommended a delay because they feared the news would dissuade suppliers from extending credit, according to the report by examiner Stephen Crimmins of the law firm Pepper Hamilton LLP. The firm was delisted by Nasdaq that spring.


THE CALIFORNIA STATE LEGISLATURE passed a bill outlawing Internet cigarette sales unless sellers provide the buyer’s name and address so the state can collect sales taxes. The bill, SB-1016, also requires online retailers to provide the quantity of cigarettes bought and the amount paid for them.

SEN. SUSAN COLLINS (R-ME), chairman of the Governmental Affairs Committee, questioned the U.S. Postal Service’s “standardization” plan which calls for the shuttering of some post offices. “The fact that the postal service is cutting back service in rural areas greatly concerns me,” Collins wrote in a letter to Postmaster General Jack Potter. “What I find particularly disturbing is that almost 200 of Maine’s 425 post offices have already been affected by the process, with more having posted notices describing pending cuts.”

E COM FORCE CORP. acquired E Commerce Systems Corp. of Florida, an Internet commerce systems developer, for an undisclosed sum.

TOMMY CHONG, of the Cheech and Chong comedy team, was sentenced to nine months in prison and given a $20,000 fine for conspiring to sell drug paraphernalia through the Internet and catalogs.

BROWN AND WILLIAMSON TOBACCO CORP. said it would send out more than 100,000 direct mail packages in September as part of a reworked advertising campaign for its Pall Mall Filters brand. The campaign, which also includes magazine and newspaper advertisements, was to have “a new look to convey a more upscale image, aligning the brand’s advertising with the premium tobacco product,” said Brown and Williamson spokesman Steve Kottak.


THE FEDERAL TRADE COMMISSION filed a complaint against Datatech Communications Inc., a Canadian company, alleging the firm deceptively telemarkets directories to small U.S. businesses. According to the complaint, telemarketers for Datatech contact businesses and say they’re calling to “renew” a listing in a business directory. The FTC alleges that Datatech makes it difficult for victims to cancel these listings, and that the defendants disguise that they are based in Quebec and not the United States.


CIGNA announced it has opened a new company in the People’s Republic of China. Cigna & CMC Life Insurance Co. Ltd., a joint venture with Shenzhen Dingzun Investment Advisory Co. Ltd., will sell personal accident, hospital indemnity, term life and credit insurance policies in the city of Shenzhen — through telemarketing and affinity relationships.

UNITED STATIONERS INC. renewed its printing contract with Quebecor World. The multiyear contract, which will include catalog printing, mailing list services and paper procurement, is expected to be worth over $100 million.


SPIEGEL GROUP said it is looking for a buyer for its Newport News Inc. subsidiary, and has hired Miller Buckfire Lewis Ying & Co. to help it with the transaction. Spiegel filed for Chapter 11 bankruptcy protection on March 11. Interim CEO Bill Kosturos called the decision to sell assets “a normal part of a Chapter 11 proceeding.”

ONLINE GROCERY FRESH DIRECT INC. raised $31 million in a private placement of its equity securities. The biggest investor was an AID-sponsored fund which contributed $15 million. Other investors included CIBC Capital Partners, Canyon Partners and Mercantile Capital Partners.


DIRECT COMPUTER MARKETER CDW CORP. announced it will buy the North American assets of Micro Warehouse, a computer reseller, for $22 million. The deal includes a U.S. customer base that generates more than $900 million in annual revenue, and inventory valued at roughly $14 million. The deal does not include receivables or liabilities, but CDW will receive a 5% service fee for collecting existing receivables.

MOE BILLER, president of the American Postal Workers Union for two decades, died at age 87. Biller, who started as a mail clerk in 1937, led a strike in 1970 that led to the post office reorganization the following year. Workers won the right to bargain for wages and benefits and a system was set up to avoid strikes through arbitration.


P.C. RICHARD & SON agreed to pay $1.8 million for remnants of bankrupt retailer Nobody Beats The Wiz, including $200,000 for its customer lists. P.C. Richard plans to use the list for direct mailings and possible credit card solicitations.


EXPERIAN named Ben Isaacson, former head of the Association for Interactive Marketing, as privacy and compliance leader. Isaacson initially will focus on oversight of privacy policies and procedures, particularly in the data company’s e-marketing business.

CONSUMERS may be signing on in droves, but they’re still not sure which calls are covered by the Federal Trade Commission’s national do-not-call registry, Harris Interactive found in a new survey. Eighty-four percent correctly said the registry applies to “telemarketing, sales-related or commercial calls.” But 42% also thought it covered fundraising calls from political parties or calls to conduct surveys about products and services. In addition, only 50% of those who have registered or are planning to register think that the unsolicited calls will be substantially reduced. Harris estimated that 60 million households will sign up for the registry.


BUSINESSES AND CONSUMERS were robbed of $48 billion by identity thieves last year, the Federal Trade Commission found in a survey. Almost 10 million consumers were victimized, resulting in out-of-pocket losses of $5 billion, the FTC reported. The survey also showed that 27.3 million Americans were victims of identity theft in the last five years. According to the FTC, 51% of all victims discovered the theft when they monitored their personal accounts. Another 26% were alerted by credit card issuers or banks. Eight percent found out when they were turned down for credit.

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THE VERMONT TEDDY BEAR CO. INC. purchased Calyx & Corolla, a floral direct marketer, in a cash and stock transaction valued at $3.7 million. Vermont Teddy Bear bought the company from Equity Resource Partners LLC, which had purchased it in 2001 from Gerald Stevens Inc. for $20 million. In its most recent fiscal year, Calyx & Corolla generated $16.8 million in net revenue.

GEOFF SMITH, who worked at ClickAction for more than four years, joined SOMC Group Inc. as director of direct marketing. SOMC is a member-based distributor of home computer software through clubs like Software of the Month Club and Learning Library.


NOVARTIS PHARMACEUTICAL CORP. interrupted a $25 million advertising campaign for Lamisil, a toenail-fungus drug, after the U.S. Food and Drug Administration sent the Swiss firm a letter of complaint. The FDA claimed that the firm’s TV spots overstated the drug’s effectiveness and understated its side effects. Novartis spokesman Harry Rohme said the firm would work with the FDA to clarify the spots. According to Rohme, the FDA was provided storyboards while the campaign was in production, as well as a videotape of the final ads. The campaign features the character Digger the Dermatophyte (Direct, May 15).


RETAILER SAM GOODY and its sister companies misled consumers by failing to tell them that their credit and debit cards would be charged for Entertainment Weekly subscriptions, attorneys charged in a class-action lawsuit against parent company Musicland. Filed by the Tampa, FL law firm of James, Hoyer, Newcomer & Smiljanich and other law firms, the suit alleges that employees of Sam Goody, Suncoast and Media Play stores offered customers eight free issues of the magazine, but did not tell them they would be charged unless they called a number to cancel.

THE SECOND QUARTER was a tough one for many direct marketers, largely because of the war in Iraq, the Direct Marketing Association reported in a new benchmark study. The DMA’s overall revenue index slipped five points to 49, compared with 54 during the first quarter. And the response rate index fell from 47 to 45. The DM employment index also dropped by a significant amount, resulting in the first wave of downsizing since the 2001 recession, according to the DMA. This was probably due to the continuing troubled economy, the DMA said. DM agencies and suppliers also reported declines in employment.


AMAZON.COM filed 11 lawsuits in the United States and Canada aimed at stopping

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LANDS’ END CEO DAVID F. DYER left the Dodgeville, WI-based cataloger to join clothing company Tommy Hilfiger as president and CEO. He replaced Joel Horowitz, who stayed on as chairman of Hilfiger. Dyer joined Lands’ End in 1998. During his tenure, the company’s net income more than doubled from $31.2 million in fiscal 1999 to $66.9 million in fiscal 2002.

ZKID NETWORK CO. plans to send 10 million direct mail pieces to families with children between 4 and 10 years old in an effort to interest subscribers in its McGruff KidsKeep Safe Internet program. The Chicago-based firm markets software for children’s safe use of the Internet, e-mail and chat rooms. McGruff the Crime Dog is part of the firm’s education content for kids. The offer is an opportunity to receive the McGruff Child Safety Tool Kit free with a $6.95 shipping and handling charge.

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IN A PACKED JOINT HEARING July 9, members of two House subcommittees listened to testimony from experts on all sides of the spam issue, including executives from Microsoft, America Online and “The members were pretty much unanimous in their desire to get some kind of spam bill passed rather than quibbling over details,” said Kenneth Hirschman, vice president and general counsel with Digital Impact. Hirschman, speaking on behalf of his firm and the E-mail Service Providers Coalition, testified that he supported legislation but called for a strong safe-harbor provision. This measure would allow companies that adhere to published standards and accept accountability not to be liable under the law — unless they violate the standards. “This allows the good guys to say, ‘We’re not hiding anything,’” Hirschman said. “Marketers will always be worried that because of some minor mistake, they might get sued by an ISP.” The two bills being debated — one introduced by Rep. Billy Tauzin (R-LA) and one authored by Reps. Heather Wilson (R-NM) and Gene Green (D-TX) — have weak safe-harbor measures in them, Hirschman added. “What they say is if you can prove you have best practices, the damages against you can be reduced.” The hearing was conducted by the House Energy and Commerce committee’s Commerce, Trade and Consumer Protection subcommittee, and its Telecommunications and the Internet subcommittee.


THE DIRECT MARKETING ASSOCIATION’S List and Database Council named Chris Paradysz, CEO of ParadyszMatera, List Leader of the Year. Paradysz started his career in the list industry as a senior account executive at American List Counsel in 1985, and formed ParadyszMatera with Angelo Matera in 1990.


SIX IN 10 DM COMPANIES plan to add staff during the third quarter, according to a study by Bernhardt Associates Executive Search. That number is up from 49% a year ago, but flat when compared with the second quarter. Most of the hires will be for new positions as opposed to replacements for vacated jobs. Another 11% of companies will reduce head count, a figure steady with last spring. More than 300 firms participated in the study.


COMCAST agreed to sell its stake in QVC Inc. for about $7.9 billion to Liberty Media Corp. The transaction, a combination of cash and stock, is expected to close before year end. In a statement, Comcast president/CEO Brian L. Roberts said the company was looking to focus on its cable television business. Comcast has 21.3 million cable subscribers and is the majority owner of several networks, including E! Entertainment Television, The Golf Channel and G4.

A FEDERAL TRADE COMMISSION study showed most states have reported few or no underage drinking problems associated with direct shipments of wine. FTC Chairman Timothy J. Muris said in a statement that the primary consumer benefit of e-commerce in wine — access to lower cost sources of high-end, expensive vintages — isn’t important to most underage drinkers. The FTC urged states to adopt stringent requirements to curb underage access to direct liquor shipments, such as requiring signatures upon delivery and clearly labeling the packages as containing alcohol.


SEAN F. ORR resigned as CFO of the Interpublic Group, effective at the end of this month. He will be replaced by COO Christopher J. Couglin. Interpublic is the parent company of Draft-Worldwide, FCB Direct and several other ad agencies. News reports said stock analysts expected the move following a Securities and Exchange Commission probe into a six-year earnings restatement.

A CONVICTED SCAM ARTIST agreed to pay $200,000 in consumer redress to settle FTC charges that he and other defendants bilked consumers via the Web. Nelson Barrero and his partners, Eduardo Gonzales and Illeana M. Morales, ran a fraudulent work-at-home scheme through the sites and, according to the FTC. Barrero pled guilty to two counts of wire fraud and faces up to five years in prison when he is sentenced Sept. 5. A federal judge shut down the sites, which had been advertised through bulk e-mail, last July. The settlement also names Corp., American Publishing Inc., Sound Publications Inc. and Mailmax Inc.


DOUBLECLICK INC. purchased CSC Advanced Database Solutions. Specific terms of the all-cash transaction were not disclosed. The acquisition will allow DoubleClick to launch a data management solutions division, which the New York-based company anticipates running as a stand-alone business. Schaumburg, IL-based CSC employs more than 100 individuals.


PRICELINE.COM acquired the domain name and customer base of The purchase price was not disclosed. pulled more than 300,000 visitors a month last year and reported more than $10 million in gross bookings.

THE DIRECT MARKETING FUNDRAISERS ASSOCIATION named Linda Ferruzzi president. Ferruzzi is a senior account executive at May Development Services, a division of Direct Media Inc. The DMFA has more than 350 members.


DOLAN MEDIA sold its public records business to LexisNexis for an undisclosed price. Two-hundred people are employed by the units sold, which include Dolan Information Center, U.S. Corporate Services LLC and Inc. The units compile public records such as bankruptcies, liens, court judgments and eviction notices. Dolan will retain its newspaper and teleservices divisions.

HARTE-HANKS signed an option to acquire Sydney, Australia-based partner Communique Direct. San Antonio-based Harte-Hanks has been working with Communique to provide clients with lead generation, call center, database and market research services in the Asia-Pacific region since 1998. The earliest the deal would close is August 2004.


CROSS MEDIA MARKETING CORP. and its subsidiary Media Outsourcing Inc. agreed to a $1.1 million civil penalty to settle telemarketing misrepresentation charges with the FTC and the Department of Justice. The settlement bars deceptive sales practices and requires the company to monitor claims made by their sales agents. The penalty is suspended on payments of $350,000, based on the financial status of the corporations. The charges against the companies were filed in April 2002.

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A PENNSYLVANIA COMPANY has agreed to refund money to consumers whose credit cards it allegedly charged without authorization, according to the Pennsylvania Attorney General’s Office. Villanova LTD agreed to refund the consumers in a deal it reached with the AG’s office. Villanova, which could not be reached at press time, admitted no wrongdoing in the agreement. Investigators said that from 1998 to 2001 Villanova marketed buyer’s club memberships offering discounts on a number of products. Consumers would call a toll-free number to order a product they saw advertised in an infomercial, said the AG’s office. If the consumer used a credit card, the company would then try to upsell by offering a free trial membership to the club. If consumers agreed, they were required to cancel within 30 days or their credit cards would be billed on an ongoing annual basis. The yearly fee ranged from $79.99 to $89.99. Consumers complained they were not told they had to cancel to avoid being charged, according to a statement by Attorney General Mike Fisher. In other cases, consumers were billed for the memberships even though they rejected the free offer.


MONSTER.COM named Carole Johnson senior vice president of marketing. She will oversee all the job search site’s marketing activities, including its search for a new ad agency of record. Previously she was with the Gillette Co. for 22 years, most recently as vice president of business services and commercial operations for North America.


THE FEDERAL TRADE COMMISSION surprised direct marketers by speeding up telephone registration for its national do-not-call registry. The rollout that was to occur over eight weeks this summer will be cut down to two weeks during this month. Phone registration began July 1 for consumers west of the Mississippi River, including Minnesota and Louisiana; the rest of the country was set to begin a week later. The phased rollout was initially planned to prevent too many calls coming in on one day, said an FTC spokesperson. However, the agency’s contractor, AT&T Government Solutions, said it could handle the call volume.

ROARK CAPITAL GROUP, of Atlanta, acquired direct mail co-op marketer Money Mailer LLC. Neal Aronson, founder and managing partner of Roark, was named chairman of the board of Garden Grove, CA-based Money Mailer. Godfred Otuteye will continue as Money Mailer’s president and CEO.


RETURN PATH, an e-mail change of address service, acquired Assurance Systems Inc. Financial terms were not disclosed. Assurance Systems, founded in November 2002, markets technology to ensure the deliverability of e-mail campaigns. Return Path also recently acquired the e-mail consulting arm of GasPedal. Andy Sernovitz, CEO of GasPedal, will become general manager of Return Path’s consulting operation.

CATALOG SALES INCREASED an average of 9.24% a year between 1998 and 2003

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THE POSTAL RATE COMMISSION approved the U.S. Postal Service’s first negotiated service agreement

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SEN. CHARLES SCHUMER (D-NY) planned at deadline to introduce a bill that would create a national


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