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Some heavy hitters among Ads of the Week this week. First up is the new spot by Fallon London for Sony's line of HD TVs. Making the most of Sony's endorsement tie-in with the new Bond movie, Fallon borrowed the services of Daniel Craig for a stunning little film. He certainly wears the character well, does he not?

Didn't we say only last week that commercials are the new movies? Director David ("Se7en") Fincher is behind the camera for a thrilling new spot for Nike's Leave Nothing football campaign, which depicts the eternal rivalry between NFL superstars LaDainian Tomlinson and Troy Polamalu. The agency, as always, is Wieden & Kennedy. Film buffalos might recognise the backing track as Ecstasy of Gold, one of the themes from Sergio Leone's The Good The Bad & The Ugly. 

And another. The new Nissan spot by TBWA\G1 Paris is a pastiche (or is it an homage?) to the Jets vs Sharks fight sequence which opens West Side Story. Great CG effects. (I assume that's CG. Otherwise I wouldn't fancy a lift home from any of those guys.) 

And finally, just one more. This is one of several follow-ups by BETC Euro RSCG to their splendid March of the Emperors ad for cable channel Canal+ from two years. It's not quite as clever, but beautifully designed and produced nonetheless, with a cute gimmick. 

So much for the entertainment... Now let's get down to the bleak business of the news:

In the news this past week: Advertisers

Just when you thought it was getting better, it got worse. After a brief respite at the start of the week, global markets could now touch new lows by close of play tomorrow as the global economic maelstrom gathers pace. It could even be worse than last Friday, when stockmarkets around the world went into virtual freefall. But, somehow that all seemed like a distant memory on Monday morning, when investors were cheered by a bold move by the UK government, subsequently emulated by nations. British prime minister Gordon Brown confirmed plans to pump a total of £37bn into three of the country's largest banks: Royal Bank of Scotland, HBOS and Lloyds TSB. Around £20bn is headed for RBS, whose capital reserves have been stretched to breaking point by a series of huge acquisitions. The architect of those numerous deals, chief executive Sir Fred Goodwin, was ousted and replaced by Stephen Hester, who promised a full review of RBS's strategy. Many observers expect the group to reduce its exposure to international markets. Meanwhile, the government is expected to end up with a shareholding of around 60% of RBS. The remaining £17bn is destined for Llloyds TSB and HBOS, in order to ensure that their planned merger goes forward. The government will get around 44% of that group. Meanwhile Barclays said it was confident it could raise £6.6bn in cash from its own shareholders in a rights issue. Let's see how that turns out. HSBC and Santander's Abbey politely declined the offer of governmental assistance, choosing instead to recapitalise their balance sheets with funds from international operations.

Most other European governments followed the UK's lead. As a result, stock markets soared. The Dow Jones Industrial Average leapt by a staggering 11.1%, its biggest one-day rise since 1933. The general optimism was maintained on Tuesday by confirmation of a similar capital injection by the US government, which bolstered confidence by forcing the country's nine biggest banks to hand over preferred stock in exchange for $125bn of federal funding. According to reports, treasury secretary Hank Paulson summoned the heads of Bank of America/Merrill Lynch, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon and State Street to a historic meeting on Monday. He presented each of them with a contractual agreement and ordered them to sign it by close of business "for the good of the country". Another $125bn will be made available to smaller institutions as and when they apply for it. Both amounts will come out of the $700bn bailout package already approved by Congress. Several of the nine banks involved didn't actually need any funding from the government. In fact a few days later, three of them - JPMorgan, Wells Fargo and State Street - reported 3Q profits totalling $2.6bn between them. However, they were all forced to take the handout to lessen the stigma accruing to those - no hiding at the back there, Morgan Stanley - still struggling to put their houses in order.

By Wednesday, however, the general positivity had eroded in the face of bleak economic data which showed that a long, deep recession is heading our way. In the UK, shares in the three banks being part-nationalised continue to soften on the back of unease among shareholders over the terms of the deal, such as frozen dividends (a condition now to be dropped) and the insistence that the banks return lending to 2007 levels. But it's not just the banks, it's industry. Serious concerns are being raised, for example, over the future of America's big three automobile manufacturers, who are struggling to withstand ever steeper falls in car sales, now prompted not by high gas prices so much as the economic turmoil. And if this is bad, next year is likely to be worse still. According to the head of forecasting at industry researcher JD Power, "While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse." 

Chilling words. Yet as Business Week columnist David Kiley commented, "Ford, General Motors and Chrysler are pretty much burning the furniture to stay warm. And that's now. Never mind that the economic upturn these companies have been banking on happening in 2010 isn't likely to see daylight until 2011 at the earliest." In fact, General Motors' share price fell to its lowest level in 50 years last week over fears that it will run out of operating cash by early next year. It is currently burning as much as $1bn a month in cash to fund daily operations, and Ford is not far behind. General Motors and Chrysler were said to have begun preliminary talks regarding a merger. Chances of a deal were said by insiders to be 50-50. Those prospects are enhanced by the fact that Chrysler's owner, fund manager Cerberus, is also the biggest shareholder in GMAC, the cash-generating finance and insurance division sold by GM last year. GM had already approached Ford over a deal but was rebuffed. The latter is keen to remain independent but is once again considering the sale of its Volvo subsidiary as well as its 33% stake in Mazda. If it can find a buyer that is.

Meanwhile British retail entrepreneur Sir Philip Green, best known as the owner of Bhs and TopShop, is one of several investors negotiating to seize control of the UK interests of Icelandic group Baugur, hard hit by the virtual collapse of its home country's entire banking system. Iceland's economy is further imperilled by the political war over deposits made by British savers and local government bodies in Icelandic banks. The British government has demanded the immediate return of these savings, and has threatened to seize the UK assets of Icelandic businesses unless an agreement is reached. Baugur would be the biggest victim of such a move. It has invested widely in the UK high street and has large shareholdings in numerous retailers including Hamley's, House of Fraser, Woolworths and Karen Millen. 

In times like these, the main beneficiaries are lawyers. Legal firms and accountants will make millions from unravelling, for example, the Lehman Brothers bankruptcy. A Harvard Law professor this week predicted that fees from this case alone will top $900m, overtaking even the $757m expenses incurred in the Enron collapse. Another earner will be the row between Citigroup and Wells Fargo over the takeover of failed rival Wachovia. Citi this week pulled out of talks to split Wachovia's assets, citing its reluctance to take on further debts without government assistance. Wells Fargo therefore keeps the prize it stole from under its bigger rival's nose. Citi however is seriously annoyed by the loss, and reiterated its vow to "vigorously" pursue a $60bn claim for damages against its competitor. 

There are other bones to be picked over as well. Swiss watchmaker Raymond Weil is suing actress and former brand ambassador Charlize Theron for $20m for breach of contract. Under the terms of a deal she signed in 2005 Theron was obliged to wear watches supplied by Weil for all public appearances. However the following year she was photographed at a film festival in Texas wearing a watch by Christian Dior. She tried to excuse the gaffe as a mistake, but a New York judge last week rejected her claims after it was found that she had signed separate advertising contracts with both Dior and Mont Blanc. In another case, brewer Molson Coors and its UK agency Beattie McGuinness Bungay (also see below) are being sued by Hottrix, the developer of a novelty iPhone application called iBeer, which uses the rotational capabilities of the iPhone to make it look like users are drinking a beer when they tip the phone. BMB tried to license the iBeer app for Carling, one of Molson Coors' UK brands, but were refused. Instead they commissioned the creation of a broadly similar application, iPint, which was then distributed free of charge, substantially impacting iBeer's paid-for sales. Hottrix claims $12.5m in damages. Also here in the UK, Absolut vodka has issued a writ for trademark infringement against Absolute Radio, the recently renamed Virgin Radio. It claims that people might be confused between the two products. Presumably only people who have already consumed so much vodka that they can't tell if they're still drinking or just listening to music.

Some less confrontational news now. Best Buy and Carphone Warehouse unveiled plans for their Best Buy Europe joint venture. In addition to expansion of Carphone Warehouse's existing retail network, they will open as many as 200 "big box" consumer electronics stores in Europe by 2013. The new outlets will operate under the name Best Buy Europe. The first UK store is due mid-2009, with four more planned by year's end, and 100 by 2013. The group forecasts annual sales of £6.2bn within five years and operating profit of £348m. 

PepsiCo unveiled plans for a major overhaul of its business designed to boost sales of its soft drinks portfolio, especially in the US. Under the title of Productivity for Growth, the new initiative will include an overhaul of what CEO Indra Nooyi described as "every aspect of the brand proposition for our key brands. How they look, how they're packaged, how they will be merchandised on the shelves, and how they connect with consumers." At the same time the group announced plans to close six factories, and shed around 3,300 jobs. Pepsi has earmarked $1.2bn of investment for the project.

In marketing jobs, Mark Kaline, formerly global media director for General Motors, was named to an equivalent position at Kimberly-Clark, reporting to CMO Tony Palmer. 

Vodafone resumed negotiations with South Africa's state-controlled fixed line operator Telkom to increase its holding in their mobile joint venture Vodacom from 50% to 65%. The British company is offering around $2.5bn for the additional shares.

In the news this past week: Agencies

Storm clouds are gathering in the ad industry and agency chiefs are fastening their seatbelts for a bumpy ride. Sir Martin Sorrell of WPP has been making dark prognostications for next year for some time. This week it was the turn of Maurice Levy of Publicis, who told French business paper La Tribune that he expects "a difficult fourth quarter... and a very difficult year 2009". Some analysts suggest that one of the industry's most vulnerable sectors is the emerging medium of mobile phone advertising. Despite high hopes for this new interactive sector, it is as yet still in its infancy and highly fragmented. Jean-Paul Edwards, executive director of futures at Omnicom's Manning Gottlieb OMD agency, told the FT that in times of economic trouble advertisers tend to "retreat into what is most proven". Mobile advertising "has had false dawns for several years," he said. "The current economic climate will push things back a bit." 

Sir Martin Sorrell's second legal battle with former WPP employee Marco Benatti was settled quietly after a five day hearing in the UK High Court. Terms of the settlement were not disclosed. See last week's update for details of the case.

Lowe Worldwide chief executive Steve Gatfield is to step down from that position in April 2009. His role at Lowe was always intended to be temporary, and he will now return to his previous group-level role as Interpublic's EVP, strategy and network operations. Gatfield commented, "We are committed to building a Lowe executive management team based in London that will take the new Lowe organisation to greater heights now that it has been stabilised and is profitable. We are looking for a candidate to replace my role." 

Here's a funny thing. No disrespect to Saatchi & Saatchi worldwide CEO Kevin Roberts, but does the man employ a personal publicist? It's quite extraordinary how much media coverage he gets. Despite the fact that Saatchi ranks as the smallest but one of the global advertising networks by revenues, Roberts is always popping up in different corners of the media to provide his viewpoint on virtually any topic under the sun. He even has his own personal website, a feat unmatched to our knowledge by any other network CEO. In a spare moment we thought we'd try a little experiment and Google all the network CEOs to see how many search results they got. To be fair, and to avoid namesakes and the effect of job changes, we searched each one with the name of their agency, eg "Andrew Robertson" BBDO. Here are our findings, ranked in order of worldwide revenues for the agencies they run. 

Yup. That's no typo. 165,000 pages. Try it yourself. How does he find the time? Not even Sir Martin Sorrell can match that figure (125,000 pages), let alone Roberts' boss Maurice Levy (58,800 pages) or Maurice Saatchi (21,800). And it's not even the publicity for his Lovemarks books. Exclude any references to Lovemarks and Roberts still weighs in with 149,000 pages. Don't get us wrong. We're not suggesting that Kevin Roberts pursues publicity for its own sake. (Heaven forfend). But we do find it astonishing at just how ubiquitous the man manages to be, compared to the guys who run agencies with two, three, four or five times the annual revenues.

In account assignments, Fallon London replaced Mother as agency of record for Coke's Powerade drink across Europe. The soft drinks giant also called a global review for its Glaceau vitamin water brand, out of Berlin Cameron. Bristol Myers-Squibb handed professional marketing in Europe for its bipolar drug Ablify to TBWA\WorldHealth in Paris. McDonald's charged BETC Euro RSCG for a new branding assignment in France. USAA, the insurance and savings group for American military personnel, called a review of creative out of Deutsch. For all other appointments, subscribers can access the full Adbrands Account Assignments database here.

In the news this past week: Media

Iconic but loss-making US magazine TV Guide finally found a buyer. Investment firm OpenGate Capital agreed to buy the title for just $1, around a third of the cover price for a single weekly issue. Seller Macrovision, which acquired the magazine last year because of its more profitable digital programming sideline, is also lending OpenGate $9.5m to run the print business, which reported losses of around $20m last year despite a circulation base of around 3m weekly subscribers. 

As always, if you haven't already done so, please confirm your subscription to the free Adbrands Weekly Update by clicking here or on the link at the foot of this email. Thank you for your assistance! 

Simon Tesler
Publisher, Adbrands

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