Adbrands Weekly Update 13th November 2008
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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First, our favourite ads this week: 

Toshiba "Timescultpure" 
by Grey London 

Toyota "Ninja Kittens"
by Publicis Mojo Sydney

Anthon Berg "Sense It" 
by DDB Danmark

Samsung "Ozzy" 
by Leo Burnett Chicago

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Grey London push the boundaries of the creative envelope, technically at least, with this impressive spot for Toshiba, which combines the output from 200 of the client's own HD recorders and about a gazillion gigabytes of data. We like the ad a lot, but feel it might have worked even better with a more interesting backdrop than this grungy old rehearsal studio. If you're in the mood for being impressed by technicalities, have a look at the making of film, also online here.

Oh man, I must stop eating those funny mushrooms. Get your head round this extraordinary Australian spot for Toyota by Publicis Mojo Sydney. We love the way you can get past those ninja kitties by distracting them with a bright light. And all for a tray of fresh pilchards.

Come down slowly now with this stunning ad from Denmark - welcome, Denmark, to your first Ads of the Week appearance! - for chocolatier Anthon Berg. How cool is that, by the way, to have your chocs given a seal of approval by the Royal Danish court. We're not really surprised if they taste as good as this ad makes them look. The local branch of DDB is responsible.

And finally, Leo Burnett finds a use for rock buffoon Ozzy Osborne in the new US ad for Samsung's Propel handset. Enjoy.


In the news this past week: Advertisers

The future looks very bleak for US carmakers. General Motors and Ford both issued dreadful 3Q figures. Privately owned Chrysler didn't publish results but its performance can hardly be better. GM's predicament looks especially serious. CEO Rick Wagoner warned that conditions had "worsened considerably" just within the last month or two. In October alone GM's car sales plunged by 45%, while across the industry as a whole sales were down by almost a third on the same month last year. As a result, GM has been burning its dwindling cash hoard by a staggering $2bn a month. At this rate, it will use up all its remaining resources before mid-2009. The real crunch could come even sooner. The company said it needs between $11bn and $14bn at any given time to pay its bills. At the end of October it had just over $16bn, with little chance of borrowing more from the frozen credit markets. See also General Motors, Ford, Chrysler on Adbrands.

This nightmarish situation raises the grim spectre of bankruptcy unless the government steps in with emergency funding. President-elect Barack Obama has voiced his support for such a move, but so far any such deal has been stonewalled by outgoing George W Bush and Senate Republicans. Though it's easy to blame Bush for yet another stupid decision, he could be right in this case. An article in this morning's New York Times argues that bankruptcy, though agonising, might be just the fix that GM needs, allowing it to rebuild and make a fresh start. A bailout could merely prolong the agony for another year or two as GM struggles to turn itself around. That's not the case for insurance giant AIG, of course. A failure there would have a catastrophic knock-on effect for the rest of the global financial industry. As a result, Treasury Secretary Hank Paulson gritted his teeth and signed off on yet another $27bn of aid, bringing the total AIG has received so far to a eye-watering $150bn. See also AIG on Adbrands.

It's not just Detroit. Even Toyota, widely regarded as the world's best-run auto maker, is feeling the pain from the shrinking car market. The company shocked analysts with a near-70% plunge in 2Q profits, and a warning that it expected little more than break-even for the second half of the year. Despite the skill with which it constantly improves every aspect of its business, Toyota is more exposed even than other Japanese carmakers to the US and Europe, and it has an extensive presence in light trucks and luxury vehicles, the two hardest-hit segments of the market. See also Toyota on Adbrands.

In what could be the first of many such large-scale bankruptcies, America's second-largest consumer electronics chain Circuit City filed for Chapter 11 protection after a long struggle against competition from Best Buy, Wal-Mart and Target. The group plans to restructure, cutting 155 stores in order to get back into profit, but also admitted that it was having difficulty persuading suppliers to keep its stores stocked over the holiday season. Even Best Buy acknowledged the slow down in sales, warning that its 3Q results will reflect a "seismic" drop in sales. In October alone, comparable same-store sales fell by almost 8%. See also Circuit City, Best Buy, Wal-Mart, Target on Adbrands.

Another American manufacturer in pain is Motorola, which lost its position as the leading US handset manufacturer for the first time in the company's history. According to researcher Strategy Analytics, Motorola's US market share in 3Q slipped to 21.1%. Samsung, however, rose to 22.4%, and even rival Korean company LG is breathing down Motorola's neck with an estimated 20.5% share. Nokia still languishes in 4th place. North America is virtually the only world market in which it does not hold the #1 position. See also Motorola, Samsung, LG, Nokia on Adbrands. 

Enough doom and gloom! Australia was selected as the world's top country brand for the third consecutive year in the Country Brand Index, the annual ranking by Futurebrand and Weber Shandwick. Canada and the US took 2nd and 3rd place respectively, followed by Italy, Switzerland, France, New Zealand, the UK, Japan and Sweden. The CBI compiles its results from interviews with around 2,700 international business and leisure travellers. These are broken out into more than 20 different categories including Best Country for Business (the US), Best for Nightlife (Japan), Best for Political Freedom (Netherlands) and Best for Beaches (Maldives). See here for a full listing of results. See also Futurebrand, Weber Shandwick on Adbrands.

North American brewery giant Molson Coors could be considering a bid for its Australian counterpart Foster's Group. The latter is struggling to regain balance after several high-priced acquisitions in the wine sector, leading to widespread speculation that some or all of the business could be sold. This week, Molson Coors rather hesitantly acknowledged that it had "accumulated an approximate 5% economic exposure" to Foster's (that's corporate waffle for a 5% shareholding). However it attempted to calm any assumptions that a full takeover was in the offing. "Our alternatives include decreasing, maintaining, or increasing our exposure," warned Molson Coors CEO Peter Swinburn. So far there have been no meaningful talks between the two companies. Molson acquired its stake in the open market via Deutsche Bank. Meanwhile, financial analysts have been speculating on possible disposals by InBev following completion of its merger with Anheuser-Busch, expected next month. One potential victim could be Beck's, seen as a weak third behind what will be the merged group's power brands Budweiser and Stella Artois. In the non-alcoholic drinks market, Coca-Cola is to acquire UK mineral water Abbey Well. See also Molson Coors, Foster's, Anheuser-Busch, InBev, Coca-Cola on Adbrands.

Also in the UK, Topshop and Bhs owner Sir Philip Green agreed the purchase of a 28.5% controlling stake in menswear chain Moss Bros. Best known for its sale and rental of formal wear, Moss Bros also owns the Cecil Gee menswear brand and has the UK license for Hugo Boss. The shares had been owned by distressed Icelandic investment group Baugur. Green is considering whether or not to make a bid for the remaining shares in Moss Bros. See also Arcadia (Topshop) on Adbrands.

As had been expected, Vodafone succeeded in acquiring a further tranche of shares in South African mobile operator Vodacom, lifting its stake in that business from 50% to 65%. The price tag for the deal was around £1.4bn. Joint venture partner Telkom continues to hold the remaining shares. See also Vodafone on Adbrands.

Dell's VP marketing Casey Jones has left the company. According to industry blog AgencySpy, he is being replaced by Andy Lark, VP, global communications. See also Dell on Adbrands.


In the news this past week: Agencies

Japanese advertising giant Dentsu boosted its US profile considerably this week with the acquisition of independent New York agency McGarryBowen for an undisclosed sum. The purchase virtually doubles Dentsu's revenues from the US, and also gives it a clutch of major non-Japanese clients including JP Morgan Chase, Disney, The Wall Street Journal and HP. See also McGarryBowen, Dentsu on Adbrands.

A couple of major personnel changes at agencies. Bob Isherwood, worldwide creative director at Saatchi & Saatchi, announced his resignation after 22 years with the agency. He cited a need to have "more than one life in my lifetime". He first joined the Sydney office of Saatchi's in 1986, becoming worldwide creative director a decade later. CEO Kevin Roberts said that Isherwood would not immediately be replaced. Meanwhile, JWT has successfully wooed the admired Argentinean creative director Fernando Vega Olmos, who will join the WPP-owned network in a new role as creative chairman, continental Europe & Latin America. The move is a blow to Interpublic's Lowe, where Vega Olmos was Latin American chairman, responsible for creative output on several accounts, not least Unilever, a client Lowe currently shares with JWT. It was Lowe's second bit of bad news this week. The agency also lost its hold on the global Nokia Nseries account, which is joining the rest of Nokia's business, held by Wieden & Kennedy and JWT. See also Saatchi & Saatchi, JWT, Lowe, Wieden & Kennedy on Adbrands.

The Gunn Report announced its ranking for the year's most awarded agencies and ads. BBDO took the prize as the world's most awarded network for the third consecutive year. It has taken the top spot a record six times in ten years, three times more than any other network. Flagship BBDO New York was the #1 most rewarded agency, with Fallon London and DDB London in 2nd and 3rd place respectively. Fallon London's Gorilla for Cadbury was the single most-awarded ad. Two companies shared the prize for Most Awarded Advertiser - Sony and Volkswagen who took an equal number of award points. The Gunn Report compiles the results from all the year's most prestigious awards events. This year's figures collect the prize-winners from the top 39 shows for TV and Cinema, the top 20 for Print, the top 20 for Interactive and the top 16 for Mixed/Integrated media. See also BBDO, Fallon, DDB, Sony, Volkswagen on Adbrands.

In other account assignments, sportswear company Puma awarded its $100m global creative account to creative boutique Droga5. Heineken handed global creative to Bartle Bogle Hegarty, although Frank Lowe's Red Brick Road will remain on the roster in the UK. It was another good week for OMD, which collected North American media for Levi's.  AT&T placed its US B2B marketing in the hands of DDB Chicago. For all other appointments, subscribers can access the full Adbrands Account Assignments database here. See also Heineken, Bartle Bogle Hegarty, Red Brick Road, OMD, Levi's, AT&T on Adbrands.


In the news this past week: Media

Yahoo's share price took a tumble after Microsoft CEO Steve Ballmer dismissed speculation that he might come back with a new offer for the web portal. Last week, Google walked away from a proposed search advertising alliance with Yahoo because of opposition from competition regulators and advertisers. That plan had been the key pillar in Yahoo CEO Jerry Yang's plan for future growth. The collapse of the alliance prompted Yang to tell reporters on Wednesday last week, "To this day, I would say that the best thing for Microsoft to do is to buy Yahoo. I don't think that is a bad idea at all." No thanks, was the response from Microsoft's Ballmer. "We tried at one point to do a partnership around search," said Ballmer a day later, "and that didn't work either, and we moved on and they moved on. We are not interested in going back and re-looking at an acquisition." In the wake of Ballmer's comments, Yahoo's share price had fallen by last night's close to a record low of just over $10, close to a third of the figure Microsoft offered in the summer. Yet there are still some glass-half-full sceptics (no doubt all Yahoo shareholders) who like to tell themselves that this is just a negotiating tactic on Ballmer's part, designed to drive down the share price. You know what? It worked. See also Yahoo, Microsoft on Adbrands.

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Simon Tesler
Publisher, Adbrands


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