• by December 5, 2003

CLASSY ACTION SEEMS TO SUIT INTERPUBLIC - Online investor message boards were oddly silent today following Interpublic's announcement of a settlement of its contentious shareholders suit. And the Riff takes that to be a good thing. Never mind that Interpublic, the parent of Initiative Media and Universal McCann, said it will shell out $115 million ($20 million in cash, $95 million in common stock) to settle the dispute. The fact that it may finally be settled now may calm investor jitters concerning the agency holding company. In fact, as of midday trading, Interpublic's shares were trading up slightly. To cover costs associated with the settlement, Interpublic said it would take a charge of $127.6 million for the third quarter of 2003, which includes $12.6 million for an "unrelated" and undisclosed legal settlement.

FOR THOSE WHO COULD STAND A LITTLE ADVICE - Meanwhile, it's not too late for some of Interpublic's financial managers - to mention the chief financiers of other agency and media congloms - to register to view Forbes.com's webcast on "Corporate Governance in the Era of Sarbanes-Oxley and IAS." The event, hosted by Forbes publisher Rich Karlgaard, will tap the top financial and legal minds of PricewaterhouseCoopers, Gartner, McKinsey & Co. and Oracle in an effort to distill these complex regulations into a few simple and actionable wisdoms. The event runs until Tuesday, Dec. 9.

YOU GET WHAT YOU PAY FOR - The declines in local ad budget shares that have taken place this year appear to have a lot to do with the super-charged network TV marketplace, as well as the complexity of buying local media. That's the conclusion of Merrill Lynch analysts who just released a survey of major national advertisers. "One advertiser we interviewed indicated that local TV is not as efficient as network TV, which we took to mean that it is more difficult to buy and to verify spots," say the analysts in a report sent to investors today. "A second advertiser indicated that the most work intensive buy they do is buying TV in the top 100 markets and therefore they find it imperative to pay an agency to help, which only drives up the expense." The Riff thinks Merill Lynch has hit on an extremely sensitive sore spot for both agencies and the media: agency compensation. Marketers keep asking their agencies to make better, more strategic media decisions and to get more involved in media buys that require heavy lifting, like spot, or new media. But when push comes to shove, these very same advertisers don't seem to want to actually pay their agencies to do this.