Adbrands Weekly Update 2nd April 2009
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Just to let you know, Adbrands Weekly Update is on Spring break for a couple of weeks from next week. We'll be back on April 23rd. In the mean time...

  First, our favourite ads this week: 

National Rail of Belgium "Giants"
by WL/BBDO Brussels

Ferrero "Surprise" 
by AndCo Copenhagen

New Yorker "Dress For The Moment 2009" 
by New Yorker/Twin Group

Mini "Have You Seen That?"
by Plantage Berlin

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This almost never happens. This week's selection of ads includes not a single American or British-made film. Instead we've gone all Continental for a change, although I promise you wouldn't know it, since all four spots are (mostly) in English. First up is a striking campaign for the National Rail Company of Belgium by the local outpost of BBDO. Impressive effects, and we especially like the giant hand. We wonder who got to take that home after the shoot.

Danish agency AndCo is responsible for a new spot for Ferrero's Kinder Surprise. (American readers may not be familiar with Kinder Surprise, since the product is banned there because of choking dangers: each chocolate egg contains one of literally hundreds of different miniature toys). The ad captures brilliantly the excitement of discovering what kind of toy is inside the egg from a child's point of view. Nicely done. 

New Yorker is a German fashion company which has developed a strong following for its often bizarre and usually quite black-humoured ads. The great new spot, running throughout Europe, was jointly developed by inhouse marketing director Volker Putzmann and production house Twin Group

And finally, a viral campaign for the Mini Clubman produced (we think - no one ever seems to take responsibility for virals) by the brand's German creative boutique Plantage. Somehow this post-modern little film manages both to celebrate and to mock the idea of internet virals at one and the same time. Cool stunts. "Don't Try Yourself" indeed!


In the news this past week: Advertisers

It was, finally, crunch time in Detroit. General Motors and Chrysler had been given until the end of March to present a plan that justified further financial assistance from the US government. However, the proposals they came back with were judged to be insufficiently convincing. As a result, the Obama administration took matters in hand. General Motors' chairman & CEO Rick Wagoner was ordered to step down, and several of the group's non-executive directors will also be replaced. Group COO Fritz Henderson was promoted to the top job and tasked with delivering a more rigorous restructuring plan. The government will supply working capital to last GM only another 60 days. If Henderson fails to secure a better deal with GM's unions and bondholders, the support machine will be switched off. In that case, the government envisages a "quick and surgical" bankruptcy. Chrysler's plan, which involved a loose technology-for-shares swap with Fiat of Italy, was also judged to be insufficient. Chrysler has just 30 days to come up with a more substantial partnership with Fiat or it too will be allowed to go bust.

It wasn't just in the US that the automotive axe was falling. French giant PSA Peugeot Citroen is also struggling with plunging sales. As a result, the board sacked CEO Christian Streiff over the weekend, an action he was reported to have called "incomprehensible". Instead the group will be run on an interim basis by board member Roland Vardan until newly appointed CEO Philippe Varin, poached from steelmaker Corus, can join in June. Meanwhile the French arm of furniture giant Ikea launched its own automotive scheme. Advance publicity had encouraged many enthusiasts to believe that Ikea was about to launch its own flat-packed electric vehicle. As a result, the actual launch was something of a damp squib. Ikea's Leko service is not a new vehicle but a car-sharing scheme, allowing shoppers to borrow transport at 26 of its French stores so that they can get their purchases home more easily.

"Recession? What recession?" It's clear that the only real solution for the global automobile industry is to hand it over to the management team at Porsche. That group reinforced its growing reputation as a hedge fund which makes cars on the side with spectacular results for its fiscal half-year. In the six months to January 2009, Porsche's net profits quadrupled to E5.6bn. That's quite an achievement considering that sales of its cars totalled only E3bn during the period. The massive gain came from its investments in Volkswagen, Europe's biggest carmaker, which it now controls and whose shares soared in value last year as a result of Porsche's skilful investment strategy.

And what happened to that reputation for canny conservatism once enjoyed by Scotland's financial institutions? Following the humbling of the country's two biggest banks, RBS and HBOS, it was now the turn of Scotland's largest mutual, the Dunfermline Building Society, which effectively collapsed at the end of last week. Despite signs of an impending collapse in values at the end of 2007, the Dunfermline mounted an inexplicable expansion of its investments in commercial property over the year that followed, more than doubling its lending to the sector with predictably disastrous results. It also waded into subprime, acquiring mortgage-backed securities from GMAC and Lehman Brothers. Nationwide, already the UK's biggest building society, has agreed to take over the Dunfermline's branches, deposits and £1bn of its best mortgages, but British taxpayers will be forced to take responsibility for £750m of toxic loans. Nationwide is expected to run Dunfermline as a standalone business to take advantage of its still-strong following north of the border.

New product launches from secretive chocolate giant Mars are as rare as coconuts in Antarctica, so it's inevitable that much fuss is made any time one comes along. This week, the company unveiled its first completely new product line in the US since the introduction there of Twix in 1980. Launching with a blaze of publicity and marketing, Fling is a premium low-calorie chocolate bar which comes in girly pink packaging designed to tempt a target audience of younger women. In fact, this phenomenon isn't quite as new as it seems. Europeans are already familiar with the product, but under a different name. Fling launched in the UK and other local markets in 2007 as an extension to the Mars Bar brand, known as Mars Delight (which itself bore considerable similarities to rival Ferrero's Kinder Bueno). The main difference between Fling and Mars Delight is that it is sold as a twin-pack similar to Twix, instead of single stick Mars Delight.

US drinks industry monitor Beverage Digest published its report on the carbonated soft drinks sector for 2008. Volumes declined for the fourth consecutive year, falling 3%, with the result that all of the steady growth experienced in the sector between 1997 and 2004 has now been wiped out. Total volumes for 2008 were 9.6bn cases, a level last seen in 1997. However, price increases meant that the total value of the sector edged up by 1% to $72.7bn. Among the leaders, the most noticeable change was a more marked decline by the Pepsi family. Volumes for Pepsi and Diet Pepsi slipped 6.5% and 7.5% respectively, compared to a decline of only 2.5% and 3.0% for Coke and Diet Coke. Diet Pepsi's fall caused it to lose a place in the overall ranking, slipping to 6th behind Dr Pepper. See more here

UK dairy company Dairy Crest sold back local rights to the Yoplait yoghurt brand to its French owner, the SODIAAL dairy cooperative. The brand had been managed through a joint venture since 1991. Dairy Crest will continue to distribute the product on behalf of SODIAAL until 2010. 

Gill Barr, group marketing director for UK retail group John Lewis Partnership, left the company following its decision to axe the role of board-level marketing director, the job she had held since 2007. The group's marketing team is now led by head of brand communications Craig Inglis. Also this week, Ketil Eriksen stepped down as CEO of V&S Absolut, the Swedish vodka maker acquired by Pernod-Ricard last year. His replacement has yet to be named.

Anheuser-Busch InBev is considering offers for its Korean subsidiary Oriental Breweries, the country's second largest beer maker, with brands including OR and Cass. Three private equity firms have submitted preliminary offers, as has local conglomerate Lotte. Meanwhile in the UK, Coors Brewers, the country's #2 beer company, changed its name to that of its North American parent, becoming Molson Coors UK.


In the news this past week: Agencies

Recma, the market research organisation best known for its monitoring of media agency networks, published its first ranking of the top 25 digital agencies. Unlike most other reports from Recma, the digital survey ranks agencies not by estimated billings but by staff numbers. It places Ogilvy Interactive in the #1 spot, with 3,800 employees worldwide, followed by Isobar, which comprises more than 50 separately branded units around the globe. In 3rd place was Sapient, followed by Publicis Modem & Dialog and Razorfish. See the full ranking here.

Newsweek has a fascinating feature interview this week with Peter Arnell, the brilliant/monstrous brand guru behind Omnicom's Arnell Group. Opinions on Arnell are greatly divided. Some see him as a genius, others as a fraud. What no one can deny that he is larger than life. On one hand he's a tyrannical bully who regularly reduces assistants to tears and dresses up pretentious nonsense as marketing strategy. On the other he's a Renaissance man with an encyclopaedic knowledge of art and culture, and unlimited creative ability. Not only does he come up with brand strategy for his clients, but he also art directs and shoots almost all of their ads himself. Most recently, Arnell has been in the headlines for his much touted, then much derided, reinvention of PepsiCo's Pepsi and Tropicana logos and packaging. Here he sets about dealing with that brouhaha while also burnishing his reputation as one of the industry's most extraordinary high-achievers. It's a must-read. Access it online here

McCann should probably be getting worried about the increasingly cosy relationship between its long-time client Microsoft and JWT New York. The latter agency joined the roster last year when it won a large brief to handle the software giant's enterprise software. That animated campaign featured various different marketing execs, including Coke's Katie Bayne, talking about how they use Microsoft's products. Now, JWT has snagged another brief to launch Microsoft's hotly anticipated new search engine, which has several working titles including Kiev and Kumo. Billings are estimated at $100m. With Crispin Porter & Bogusky still holding down the "I'm a PC" campaign, that doesn't leave a whole lot for McCann to do...

Last week's announcement that DDB Germany would take over global marketing for the Reebok brand was not viewed favourably by Nike, whose account had been handled in France by DDB Paris. The latter was summarily dismissed from the account. No announcement has yet been made of who will take over, but this development offers a clear opportunity for Wieden & Kennedy to open its first office in France.

In other assignments, UK retail group The Co-op called a review of media for its various businesses, including newly acquired Somerfield supermarkets. The incumbents are Rapp and PHD Rocket. Lloyds Banking Group is also reviewing media for its Lloyds TSB and Halifax brands, currently split between ZenithOptimedia and Vizeum. US independent David & Goliath opened a UK office to handle the Kia Motors account. In the US, Wal-Mart appointed Interpublic's R/GA agency to handle a new digital strategy to support its SaveMoneyLiveBetter.com website. Grey New York snagged Diageo's Ketel One vodka. Independent start-up London Advertising stole the business of Mandarin Oriental Hotels off M&C Saatchi. In Australia, Universal McCann retained the account for discount retailer Target. For all other appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

The woes of the US newspaper industry continue. This week the Chicago Sun-Times daily followed its local rival, the Tribune, into Chapter 11 protection. In addition to its main title, the Sun-Times Group also publishes more than 50 suburban papers in and around Chicago. It is the fifth newspaper publisher to file for bankruptcy protection since December. Unlike the other companies, Sun-Times's problem isn't so much debt as a series of operating losses over the last six years which have obliterated its cash reserves. One contributing factor was the cash siphoned off by former owner Conrad Black, who took around $118m from the company to pay for legal fees and costs relating to various still-pending civil lawsuits. Black and other executives of the former Hollinger International media group were convicted in 2007 of fraud. Separately, yellow pages directory publisher Idearc, spun off from Verizon in 2006, also entered Chapter 11 protection as it attempts to restructure its $9bn of debt.

US-based Spanish language broadcaster Univision could become the target for a takeover from a larger media group. Struggling with its own huge debt burden of more than $10bn and falling ad revenues, the group posted a $5.1bn loss for 2008. That figure was weighed down by a large impairment charge relating to an ongoing legal battle with Grupo Televisa of Mexico, which supplies most of its programming. Currently the group is owned by a consortium of private equity funds.

News Corporation added to its senior management team again, appointing former AOL chief Jonathan Miller to a new role as CEO, digital media, overseeing all the group's interactive assets including MySpace and Hulu.com.

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Simon Tesler
Publisher, Adbrands


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