Adbrands Weekly Update 9th July 2009
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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Just to let you know: Adbrands Weekly Update is taking a week off next week, back on July 23rd.

Our favourite ads this week: 

Barclays "Fake"
by Venables Bell & Partners

Microsoft IE8 "F.O.M.S." 
by Bradley & Montgomery

Samsung "Impatience" 
by Grey London

Mars Skittles "Hour Glass"
by TBWA\New York

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British bank Barclays is keen to exploit fears among wealthier American consumers regarding the stability of their own institutions with a rather effective new campaign from Venables Bell. We especially like the polystyrene steps and fake buildings. I've had dreams like this, although admittedly they don't usually end with a funny little man in an ill-fitting suit asking "Can I help you?"

In a slightly unusual move, Microsoft has commissioned a set of ads to promote the latest incarnation of its Internet Explorer browser. The agency is Indianapolis-based boutique Bradley & Montgomery, and Dean Cain, former star of the Lois & Clark TV series, delivers a nice comic turn. These spots have developed a life of their own in cyberspace because of the controversial nature of one of the other films, which has since been withdrawn by the client. All four ads play with the idea of bizarre computer-related ailments which can be cured by an upgrade to IE8. The ad in question was for a syndrome known as OMGIGP, or Oh My God I'm Gonna Puke, caused when you accidentally stumble upon a gross site frequented by a previous user of your computer. Actually the verb tense in that acronym is a misnomer, because the sufferer in this ad actually does puke, not once but three times and voluminously, when she sees what her hubby was just browsing. Pretty gross in its own right actually. See also SHYNESS, and especially GRIPES, an ailment with which many of you with less computer-literate relatives will be familiar. (If you're quick you might still find the OMGIGP ad here.. but hurry before it gets removed).

Grey London has stuck its foot firmly in Samsung's door with an excellent just-breaking UK campaign for Samsung's new Jet all-touch mobile phone. It's a one-off project, and marks the first time that Samsung's UK subsidiary has pitched a campaign of its own rather than rely on network content. Officially, the account is held worldwide by Leo Burnett. If this is anything to go by, Grey deserves more. Think you recognise the voiceover? It's supplied by Atonement actor James McAvoy.

And finally, another weeeeird ad for Skittles from TBWA\New York, the people who already brought you dextrous beards, the human pinata, and a man whose touch turns everything to candy. Now this. Enjoy. 


In the news this past week: Advertisers

China's state-owned Beijing Automotive (BAIC) joined the bidding for General Motors' Opel and Vauxhall subsidiaries, offering to acquire a 51% holding in GM Europe for around E660m. GM has already accepted a non-exclusive offer from Canadian car parts manufacturer Magna International, backed by Russian financing, and those negotiations are continuing. However, there have been some concerns that Magna's bid might fall through on terms, so GM is holding the door open for other bidders. The BAIC offer has several major advantages over Magna's in that it gives GM a bigger minority stake in the business and also requires a lower loan guarantee from the German government. In addition, the Chinese have vowed to maintain Opel's existing facilities in Europe, and open a new one in China. GM is also in separate talks with the Belgium-based arm of US investment fund Ripplewood Holdings, and could also renew discussions with Fiat. However time is of the essence. "We need a deal fast," said Opel chief Hans Demant in an internal letter to staff this week.

Meanwhile, the main General Motors business is expected to exit bankruptcy proceedings later today. A select group of assets is being acquired by a company 60% controlled by the US government, with the Canadian government and the UAW labour union's healthcare trust as subordinate shareholders. The Treasury hopes to be able to sell or at least substantially reduce its holding in GM through an IPO as early as Spring next year. The slimmed-down business will start life with debts of around $48bn, considerably lower than the $176bn under which old GM laboured at the end of 2008. "Bad assets", including up to 20 unwanted or asbestos-contaminated factories and around 2,400 surplus dealerships, will remain under the control of the bankruptcy court until they are sold or wound down. That process could another three years.

German brand Audi, part of the Volkswagen Group, is the first major lux car marque to report a year-on-year increase in worldwide unit sales. In June, the company sold around 91,200 vehicles, a 1.2% increase on June 2008. "Since April we see that sales are stabilizing," said management board member Peter Schwarzenbauer. "The trough of the crisis is reached." Audi is one step ahead of rivals, in part at least because it is less exposed to the still-ailing US market. BMW and Mercedes are both experiencing continuing skids, with their sales down 13% and 5% respectively last month.

Following on from the news last week that Deutsche Telekom is seeking to divest its under-performing T-Mobile subsidiary in the UK, the German company has let it be known that its preference is not to sell but to swap that business for a rival mobile service in another country, preferably in Central & Eastern Europe, which is emerging as the T-Mobile network's core region. According to media reports, Vodafone, Telefonica and Orange have all expressed an interest in taking over T-Mobile UK. The Financial Times newspaper suggested that Deutsche Telekom has its eye on Vodafone's Turkish subsidiary as one possible candidate for a swap.

In the US, the Department of Justice has commenced an informal review of the US wireless market, primarily the exclusivity deals commonly agreed between operators and handset manufacturers. The most significant such arrangement is the tie-up between AT&T and Apple to be the exclusive supplier of the iPhone. Smaller rivals have long argued that these kinds of deals hamper competition by restricting the market to the networks with the deepest pockets. In the mean time, 3rd-ranked Sprint Nextel has secured a six month exclusivity deal for Palm's new Pre handset, considered one of the most promising challengers to the iPhone. Telefonica/O2 agreed a similar arrangement with Palm to cover Spain, the UK and Germany, despite the fact that it already has exclusive rights to the iPhone in two of those countries.

Low-cost airline Ryanair launched a new marketing campaign this week in which it claimed to have become "The World's Favourite Airline", borrowing a slogan originally coined by British Airways. "Ryanair: now twice the size of British Airways" crowed the ads. The Irish carrier's claims are based on the latest figures from the International Air Travel Association, which showed that Ryanair has overtaken even Air France-KLM and Lufthansa as the biggest airline by number of international passengers carried in 2008. Ryanair transported almost 57.7m international passengers, compared to 56.3m for Air France-KLM and 54.9m for Lufthansa. Including domestic flights, however, Ryanair slipped to 8th place, and is smaller than even British Airways when ranked by revenues. Even so, because of the damage inflicted by the other airlines' plunging share prices, Ryanair also surpasses all its main European rivals by market capitalisation. Its current valuation of around $6.7bn is more than $1bn higher than Lufthansa and twice as high as British Airways. In global terms, only Singapore Airlines outranks Ryanair, with a current capitalisation of $10.5bn. The Irish carrier's market cap reflects its ruthless approach to cost-cutting. The group has already announced plans to make passengers carry their own bags onto the plane, and hopes to introduce an extra charge to use its aircraft's toilets by 2011. In a still more controversial development, the carrier is currently in discussions with Boeing to convert some flights to standing-only, a move that would allow it to squeeze in almost a third more passengers.

Procter & Gamble's chief of global media, Bernhard Glock, is leaving the company. His role overseeing P&G's mammoth $8bn media budget has been split between Dina Howell, now general manager, global brand building strategy & planning, and Stewart Atkinson, general manager, global brand building purchases. Both report primarily to chief brand building officer Marc Pritchard. In other management news, Doug Conant, CEO of Campbell Soup Company, was injured in a car accident last week. He underwent surgery and remains in hospital, but is expected to make a full recovery.


In the news this past week: Agencies

One of the world's oldest surviving advertising agencies, recruitment specialist Barkers, collapsed last week following a plunge in classified advertising expenditure compounded by pension liabilities and punishing conditions attached to its property leases. The Barkers name and its remaining business was acquired by Penna Consulting, now rebranded as Penna Barkers. The company was originally founded by Charles Barker in 1812 to place notices in The Times newspaper to advertise public share sales. It continued to prosper over the next two centuries, and as recently as 1981 counted as one of Europe's ten biggest advertising groups. However, the expansion of the Saatchi empire during that decade, as well as the push into Europe by American advertising agencies, left Barker on the periphery of the industry. A partnership with NW Ayer of the US failed to lift the fortunes of its consumer advertising arm, Ayer Barker, which was sold at the end of the 1980s, along with its PR division. Instead, the agency narrowed its focus to the recruitment advertising sector.

In account assignments, Unilever has kicked off a review of global media, starting with North America, China, India and the major European territories, including the UK, France and Germany. Mindshare is defending. Also, Brand Republic today reports that Korean car brands Hyundai and Kia are preparing for a review of their own combined budget. Currently that business is split between several different networks, including Initiative in the US, and OMD and ZenithOptimedia in Europe. In the US, Gap handed responsibility for its Thanksgiving and Christmas marketing to Crispin Porter & Bogusky, threatening the hold of incumbent Laird & Partners. British dairy producer Dairy Crest appointed Universal McCann to take over its UK media budget. For all other appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

Google announced its biggest assault to-date on Microsoft's core business, with plans to launch its own PC operating system in direct competition with Windows. The system, set for launch in early 2010, is an extension of Google's Chrome internet browser, designed initially for portable "netbook" computers and optimised for running web-based applications. Like its Android operating system for mobile phones, the new Chrome OS system will be open source, giving ordinary developers the opportunity to use it as the platform for their own sophisticated applications. However, some observers have expressed doubt that the new software will be powerful enough to inflict real damage on Windows, used by as many as 95% of the world's computers. Despite its parentage, Google's Chrome browser, for example, has had only minimal impact on Internet Explorer, and continues to trail some way behind the most popular Microsoft-alternative, Mozilla's Firefox.

Bertelsmann is plotting a move back into music publishing, an area it more or less exited in 2006 with the sale of its existing operations to Universal Music. However, at that time, the group retained a small catalogue of mainly European song rights, which formed the core a newly created unit, BMG Music Rights. This week, the group announced the sale of a 51% holding in that business to private equity fund KKR. It plans to use the resulting E250m of finance to buy up other song catalogues as and when they become available. Several such prizes are expected to come to market in the near future, including Allen Klein's ABKCO, which owns songs by the Rolling Stones and the Kinks, and possibly Michael Jackson's half of Sony Music/ATV, which owns songs by Jackson himself and The Beatles.

Penny Baldwin, a former managing director of Y&R North America, was named as the new SVP, global integrated marketing & brand management for Yahoo, reporting to chief marketing officer Elisa Steele. Separately AOL named Kate Burns as head of European advertising sales. Burns is a veteran of the European online industry. She was Google's first employee outside the US in 2001 as head of the UK sales operation, and later worked at video streaming site Daily Motion, and most recently AOL subsidiary Bebo.

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Simon Tesler
Publisher, Adbrands


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