Unsettled Affair

Connecticut’s attorney general urged consumers to turn down a proposed class-action settlement offered by Publishers Clearing House, Inc., Port Washington, NY, and vowed to file a formal objection in court about a “deceptive” mailing sent out by the company to propose the settlement.

“This settlement is as much of a sham as the sweepstakes mailings,” Connecticut AG Richard Blumenthal said in a statement released in late August.

Billed as a “Notice of Class Action, Proposed Settlement and Final Fairness Hearing,” the document is not related to the lawsuit Connecticut filed against PCH last March, but to a private suit filed by attorneys representing consumers who bought magazines or merchandise from the sweepstaker from 1992 to 1999.

PCH’s proposal would create a $10 million fund to reimburse consumers who claim they were lured by false promises of multi-million dollar jackpots into buying magazines and goods in hopes of increasing their chances to win.

Blumenthal contends the proposal falls “far short” of a “fair and equitable outcome,” in part because as much as $6 million is earmarked for attorneys’ fees and administrative costs. “That would leave only about $4 million of the total for possible refunds to millions of victims across the country of Publishers Clearing House tactics,” he said. U.S. consumers have purchased more than $1 billion worth of product from PCH since 1992.

“The only thing I can say is that the proposal has been preliminarily approved by an Illinois federal court and the class-action counsel for the consumers bringing the suit,” said PCH spokesman Chris Irving. “We’re disappointed to hear Blumenthal’s remarks, but we think the class-action offer is fair and comprehensive and substantial.”

The Times Mirror Co., Los Angeles, acquired a 16-percent stake in Alternative Marketing Networks, Inc., a Grand Rapids, MI-based marketing services company. Through the deal, the companies will create a strategic alliance that will enable Times Mirror to expand product sampling initiatives through its network of 35-odd weekly suburban newspapers using Alternative’s capabilities. Alternative owns U.S. Suburban Press, Inc., which represents 1,000 small daily and weekly newspapers nationally.

Microsoft Corp, Redmond, WA, named Boise Marketing Services, Toledo, OH, as sole supplier of brand-specific promotional products for the software giant’s company stores. A subsidiary of Boise Cascade Office Products, Itasca, IL, Boise Marketing will manage the store at Microsoft headquarters and help launch a new outlet in Silicon Valley next year. Products will include apparel and ad specialties, and will be sold through catalogs and a Web site as well as the stores.

KPE, a unit of Grey Interactive, New York City, formed a new division called KPE Rich Media to develop broadcasting promotions for clients in the film, publishing, music, and electronic gaming industries.

Leo Burnett, Chicago, formed a separate Hispanic marketing unit called Lapiz (Spanish for “pencil”) to handle marketing, advertising, and promotional programs for clients including Procter & Gamble, Kellogg Co., Coca-Cola Co., and Latina Magazine. Lapiz will operate as a division of Leo Burnett USA reporting to Linda Wolfe, group president of Leo Burnett North America. “By creating a separate brand identity, we acknowledge the importance and power of the [Hispanic] marketplace,” said Lapiz president Dolores Kunda.

News America Marketing, New York City, acquired Consumer Card Marketing, Inc., a Boston-based developer of loyalty marketing programs for the retail and packaged goods industries. The acquisition complements News America’s existing in-store marketing services by adding “database customer-specific promotions to the company’s product line,” said News America ceo Paul Carlucci. Consumer Card Marketing provides customer database development and management, supplies gift cards, and assists retailers in all aspects of loyalty programs from card issuance to database maintenance. It also develops database partnerships with manufacturers for joint promos targeted to profiled customers.

Catalina Marketing Corp., St. Petersburg, FL, has acquired Alliance Research, Inc., Cincinnati, a behavioral research company. Alliance runs programs that measure opinions and attitudes related to consumer purchase behavior. Catalina will integrate the research into the portfolios of its other business units, which include Health Resource Publishing Co. and Supermarkets Online. Alliance generated sales of $10 million in 1998 from clients that included packaged goods manufacturers and high-tech and healthcare companies.

America Online, Dulles, VA, signed a five-and-a-half year marketing agreement with AmericanGreetings.com that will make the Cleveland-based company the exclusive electronic greetings provider for AOL services. AmericanGreetings.com guarantees payments totaling at least $100 million to AOL, with “additional promotional considerations” that include customized and exclusive offers on the companies’ co-branded sites. AmericanGreetings.com products will be offered on AOL’s international services as well.

Pepsi-Cola North America tapped Latino singing sensation Ricky Martin to endorse its brands to Latin-Americans. The top-of-the-charts performer will appear in print, TV, and radio ads for the Spanish-focused portion of the company’s new Goza el Sabor (Joy of Cola) campaign.

Purchase, NY-based Pepsi used Martin in a TV spot for Pepsi-Cola International earlier this year, and is a sponsor of the singer’s fall tour. He’ll grace more Pepsi International spots later this year.

Catalina Marketing Corp., St. Petersburg, FL, signed up San Antonio-based H.E. Butt Grocery Co. for a test run of its in-store marketing system. If the pilot proves successful, Catalina’s program will roll out into 266 HEB Food & Drug and HEB Pantry stores. The Catalina Marketing Network provides purchase-based, customized promotions using sampling, instant-win games, prepaid calling cards, rebates, coupons, and advertising.

Insignia Systems, Inc., Plymouth, MN, added Eagle Food Centers’ 90 supermarkets to its Point-of-Purchase Services (POPS) network, a system that lets manufacturers deliver pre-approved promos to participating retailers. Insignia’s network now boasts about 40 retail chains and divisions representing 2,650 stores.