TWST: What is JMC Marketing?

Mr. Mallen: JMC is a marketing communications and public relations firm. It helps other organizations use communications as a strategic tool for success. And I can get into that in a few minutes with you because I think it is a key differentiator of our firm from the many other organizations like it in the marketplace. But you wanted to ask a little about history? I founded John Mallen Communications in 1987 after a decade working with the major public relations firms and it was an opportunity to scratch an entrepreneurial itch. It was developed in a mirror image of those larger firms, providing a wide range of services to the clients, with a breadth of experience and depth of capability, but in the spirit of a small business, providing very intensive care of the customer. So, that was the origin of the business.

TWST: What historically has been the size, the type of clients for you? How is that typical client now changing or evolving, either where they are or what they are or what they do?

Mr. Mallen: Our base client has always been a national or an international business. We have always been attracted to larger companies that do business across the nation in a segment or a variety of segments, or that do business across the world. That hasn't changed, but what has changed is an evolved focus on business units or divisions of these companies - this is the sweet spot for JMC. It is that, plus working with the general manager, managing director or executive leadership team that is responsible for moving that business forward. So, our clients are large companies, but usually divisions or business units of them, or pretty substantial small businesses, and we work directly with the leadership teams.

TWST: What is the agenda today for you company? What are your priorities for the next 12 months?

Mr. Mallen: In the very short term, we are looking for and finding new business opportunities for ourselves, both to replace some of the more mature accounts that we have been servicing and to add business to the bottom line - to grow the business. So, we are very active in the marketplace, bringing in new relationships and we are really pleased to see that what we have to offer is being well received. I'd like to talk just a little bit about what we offer. First, we are offering communications, as itself, as a force multiplier to companies. We see communications as an added ingredient - or sometimes we will say as a "secret sauce" - to help clients reach their goals or achieve the successes that they've outlined. We offer that to a group of businesses that are in what we call the "real world," and we define the real world as a large swathe of companies that is just below the Fortune 1000 mark. Above the bottom rung of the Fortune 1000 ladder, you have companies that really do have the resources and the executive team and, I must say, some really stellar ad agencies, PR firms and consultants that enable them to manage their reputation, support their brands and otherwise drive communication success in the marketplace. Below that, we find something else - the "real world," where attention is split between manufacturing, offering services, hiring new people and other HR issues, various logistics, trying to make a profit, and of course, market and compete. Management is spread a little bit thin, focus is diffused, and there is a real welcome for an organization like ours that can come in and say, 'Hey, we can help you focus on communications. We can help you not just do the due diligence with communications, but really use it to make an impact and use it to move forward toward achieving what you set out to do this year or in the next few years. ' That is what is working for us.

TWST: What is changing? What is it perhaps your current clients and perhaps potential clients should be asking or should be requiring that you know about but they don't know about, but they should become informed?

Mr. Mallen: That is an interesting question. We have just done a study on the changing landscape in media which, of course, is one very well-known part of what PR offers, helping clients get their name in the paper or on the television or whatever the medium might be. And the sea change that is talking place in media is awesome. For people in the PR business, it is actually a great opportunity because there are lots of areas where we in this business can help our clients find recognition. It is also a little scary, because the people running PR businesses are finding that all kinds of other companies are stepping into this opportunity and competing with them. So, for example, last year we were working with a client who had one of the leading technical firms come in - Frost & Sullivan - and they not only came in and gave the client an award, but then put together a press conference and used the very tool that we offer to create the environment for presentation of the award and they charged the client for the service. And you are seeing that kind of competition coming about from accounting firms - there are a whole mix of professional service firms that see what has traditionally belonged to PR as a new opportunity. So, that's seen by many in PR to be a threat, but I don't agree. The multiplication in media and the speed of media is a great opportunity, but I think that what we need to be aware of is that the root of what communications is about hasn't changed and keeping an eye on that is a very valuable thing for companies. I am so incredibly surprised by the sophisticated organizations that we've worked with, I mean very sophisticated in technology and science, who don't know who their customers are, who don't know how their customers think, and who don't understand why the competition is nipping at their heels. They get caught in decade-long patterns of transactions in their marketplace and they have actually lost the ability for dialogue with the people in them. For us, it is a golden opportunity to go in and help them do that.

TWST: Introduce us to your top-level management team, two or three of your key individuals.

Mr. Mallen: The top-level management team at JMC actually represents the steps that we are making towards our future growth. So, just to set the stage for you, we are moving from an owner-directed and operated organization, like so many thousands of PR firms and similar businesses in this country, to one where there is a team. The team has three legs of the stool. One is client services and that is led by Marjorie McCord, Director of Client Services, who comes to our organization with a good depth of agency experience working with Pepsi for the Tracy Locke organization, and is a young and eager player on the executive team. The second person is Director of Operations, and that is everything that is not client services and not business development, and that is led by Sylvia Alles. She comes to us from very successful, small, high-tech manufacturing businesses here in the Mid-Hudson Valley and is a real wiz at making all the gears in the organization mesh. The third person is Jennifer Spiegler, Director of Business Development, who is filling a new role for us in driving toward new relationships in the marketplace to bring new clients on board. She has been with the business and with me for quite some time and is really proving that the shoemaker's children can really have good shoes. It is so common in our business that organizations that help clients market don't market very well for themselves, but we have been very aggressive with that and Jennifer is taking the lead there. So, three people - three legs of the stool.

TWST: As you assess bench strengths and skill sets and where you are headed, are there areas or positions to add or augment?

Mr. Mallen: We are always looking for bench strengths and skill sets. We will very carefully add to our core team. The business model is pictured something like a target where, at the center, you have what we call the core team, the employees who support the customers and manage the business. And then the next ring around the center - we call it the inner ring - are people who are independent contractors or sometimes other collegial firms that work with us all the time and work in a seamless way with our own people and our clients. So, our force is much larger than the employee roster. At the outer ring are organizations and people who bring in specialty skills that we require for all the types of communications we do; video production is that kind of example. But it is not unusual for us to be able to put 20 or 25 people on a project and most of those people are core and inner ring people we know and trust. Back to your question, yes, we are adding people to the core. We have done so in the past year, and we will be doing so in the future. The main core skill set that we look for is experience managing and maintaining client relationships.

TWST: What has been the funding history to date with your company? Have you had outside investors involved?

Mr. Mallen: Not yet, but we are interested in looking in that direction. The company is like the garage story in that it was founded with a small amount of personal investment on my part and it has grown organically in the years since. We are coming to a point where we realize that, in order to drive towards the kind of growth that is in our business plan, we may have to do something different and seek some outside financing or some other kind of relationship to do that. Based on a recommendation by one of the consultants in this business, the strategy has been to look around the industry for a while, and not jump too quickly at any one funding source or JV or any such opportunity. So, we have been doing that for the past two years and probably we will do some refocusing in the first quarter.

TWST: If you could step outside of your company and look at it as an investor might, what is it that has value? What are the right strategies, what are the right tools and services, what is the right client space, what might be some of the road bumps or dead ends to avoid?

Mr. Mallen: We would be a kind of company that, three years ago, you wouldn't buy and that two years from now, you would buy into because I think what we are doing is what will add value and create value that an investor would want. A company headed by an individual like me - who has some relationships, who brings in a book of business - that company lives and dies on that person's ability - literally on that person being alive and functioning. The company that we are developing has a core team of young, but experienced, people who are confident in bringing along business, who have created a base where the business itself generates new relationships or attracts new relationships, and where the quality of work and the quality of service is also fueling growth. Then you have an organization that's worth investing in and you have something that somebody would be interested in buying into. We think that is a target to consider in the next three or five years. Even if JMC were to remain private, there is a much more robust base from which to move into the future.

TWST: What is it about the tools and the services themselves that is changing? How much investment do you have to make in what you are providing, how you are providing it, the skill sets that you have today, the types of knowledge that you have to have on board as you look ahead?

Mr. Mallen: The types of investments that are needed to move into the future is an excellent question and I don't have the complete answer yet - I am actually working on developing that answer. I am fascinated that, at this stage of my career, I have as much to learn looking forward as I have learned when I look backward. And I realize that one of the key factors that we need to pull together is exactly what you just asked about and we'll be working on that, probably in the first quarter of 2006. I believe that our prime focus of learning and development will be on new technologies and techniques - from social networking and viral network marketing to leveraging Internet 2.0 utilities and the growing stew of blogs, wikis and such.

TWST: From your listings, things and topics that you discussed, perhaps what are the misperceptions that you often encounter about what you are and what you do or any other items you feel are important that we should discuss before we close?

Mr. Mallen: Almost every single person you run into believes that they are a public relations expert and they really secretly know more than anyone in the business, and this is particularly true of clients. It is a kind of profession where there is no licensing, there are few professional standards, and everyone really thinks they know more than you do when you walk into the room. So, that's one situation that you are always encountering and you have to work around this with your clients and bring them in to see the strategic side of the business. If I can just ask you, we are really speaking to people who are investors, right?

TWST: Generally or people that are looking comparing their markets with your markets, you as a competitive entity against the competitive landscape. Are there any new entries in this competitive landscape, a competitor changing or evolving?

Mr. Mallen: Yes. The research that we just prepared for the Public Relations Global Network - an international association of owner-operated PR firms to which we belong - showed that there is a lot of activity, a lot of organizations entering the landscape and taking on the kinds of assignments that have traditionally been in the ballpark of the PR or advertising agency or even sometimes the marketing firm. So, there is a kind of "Wild West" out there. Some of the those types of agencies that were identified in the survey - which is available at www.prgn.org - that are coming into the traditional PR space include advertising agencies, lawyers, Internet providers, management consulting firms, corporate managers, and Web marketers.

TWST: Thank you.

JOHN MALLEN President and CEO JMC Marketing 10 Pearl Street Kingston, NY 12401 845-331-1200 www.mallen.com