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A quick run-down of this week's selection: First up is the new PSA for UK drug counseling service Frank, which offers a compelling vision of skunk-generated multiple personalities. We think this is rather better than the last ad in the campaign, also by Mother, which featured Pablo, the deceased drug dog.

Market-leading Greek wireless operator Cosmote has a great new ad showcasing its mobile video services. It's quite an epic production, conceived and executed by local O&M outpost Bold Ogilvy. 

Maintaining that epic theme, here's the impressively mounted new spot for British mortgage bank Halifax. Thankfully, Halifax appears to have dispensed with long-time brand mascot Howard. Although the bank is famed for using its own staff in all of its advertising, we strongly suspect that this is not the case with this latest installment, which was filmed in New Zealand, a country which does not as yet have any Halifax branches or staff. Longtime incumbent agency DLKW is responsible for the spot.

And finally, let's chill out with another handsomely photographed spot for Lurpak butter, from Wieden & Kennedy London. Ah, Saturday!

In the news this past week: Advertisers

Recession? What recession? This week it was the turn of that behemoth of the retail universe Wal-Mart to defy economic gloom-mongers. In its results for the year to January 2009, the group reported a 7% increase in revenues to the astronomical figure of $401bn, a number so big it is hard even to comprehend. (Think about this: if Wal-Mart were a country, it would be the world's #31 biggest, larger than Belgium, Sweden, Greece and Austria). Judging by recent performance, the group is providing a safe haven for bargain-seeking shoppers deserting pricier stores, and even rival discounters. Bottom line was also resilient, with net income up 5% to $13.4bn. 

Food manufacturer Nestle also delivered a generally impressive set of results, with sales holding up well despite the impact of currency fluctuations. Reported revenues rose 2% to just under 110bn Swiss Francs or around E73bn. At constant rates the increase would have been around 10%. Let's face it, when times are hard you've still got to eat. Separately, Nestle appointed Petraea Heynike as its new EVP, strategic business units, sales & marketing. Previously head of the group's confectionery division, she replaces Lars Olofsson who left at the end of last year to become CEO of Carrefour. 

The sun may be shining in Bentonville and Vevey, but the clouds hanging over Detroit get blacker with every passing moment. The future of the US auto industry looks even bleaker - if such a thing were possible - following pleas from General Motors and Chrysler for even more financial assistance. At the end of last year, the two groups said that $17bn of government aid was what they needed to execute their turnaround strategies. Oops, is the current message, we got that number wrong. Make it $30bn, and we'll be fine. We think. Yet with new car sales at rock bottom, the chances are that their requirements will increase still further over the coming weeks. The alternative, said both companies, would be far costlier. GM claims that a traditional bankruptcy reorganisation would cost as much as $100bn in taxpayer's funds; Chrysler estimated its own Chapter 11 bill would be $24bn. The effect on the two companies' suppliers would also be devastating, almost certain to trigger numerous additional failures. This adds up to a nightmare scenario for the new President. Switch off the life support now for two of the country's best-known industrial titans at a cost of tens of thousands of jobs around the globe, or keep them hobbling along with the almost certain knowledge that such a move will only prolong the current economic depression by many months if not years.

First to go is likely to be GM's Swedish subsidiary Saab. That company, which has not turned a profit since 2001 and was only rarely in the black before then, will be forced into bankruptcy by the end of next week unless it finds some cash. Sweden's enterprise & energy minister Maud Olofsson has already ruled out government assistance. "Voters picked me," she said, "because they wanted nursery schools, police and nurses; not to buy loss-making car factories. I'm disappointed in General Motors, because they're abandoning Saab and are pushing the responsibility over to Swedish tax payers, and I think that is irresponsible." GM also declared its willingness to take on a financial partner prepared to share the burden of its main Opel and Vauxhall businesses in Europe. So far, there have been no takers.

Meanwhile two other established giants are trying something new to bolster performance. Starbucks introduced its first instant coffee product, sold under the Via Ready Brew banner. Priced at well below the cost of your regular Starbucks fix, the brand will be sold through the company's stores in the US and other markets from this Spring, as well as at Target and Costco. If all goes well it will be rolled out to other grocery outlets next year. Countering critics who might accuse the company of desperation, CEO and founder Howard Schultz said "We are going to reinvent the company, reinvent the category. This is not your mother’s instant coffee."

Meanwhile Microsoft announced plans to launch its own retail network, and hired David Porter, a former Wal-Mart executive, to take charge of the project. No firm decision has yet been reached on exactly what format the stores will adopt, but Microsoft has clearly been influenced by the success of Apple's retail network, which offers drop-in support and advice as well as the full range of its own products. "The purpose of opening these stores," said a Microsoft spokesperson, "is to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy." One of Porter's first tasks will be to decide whether the new stores will merely showcase other companies' products running Microsoft software, or will actually sell that merchandise along the same lines as a traditional reseller.

Bounty, the kitchen towel brand acquired by Swedish paper manufacturer SCA from Procter & Gamble in 2007, is to rebrand in the UK next month under the new name of Plenty. P&G continues to own the brand in North America, but pulled out of the paper products business in Europe in 2007, selling its portfolio, which also includes Charmin toilet tissue, to SCA. Other rebrands announced this week include new corporate logos for Kraft Foods and Reckitt Benckiser. French auto giant PSA unveiled a sporty new brand logo for its Citroen marque last week. 

Media scare stories over the possible fate of British banking group Lloyds dominated the weekend headlines. These followed its announcement at the end of last week that HBOS, which it acquired at the beginning of this year, had racked up greater than expected losses for 2008 of £10bn. Almost three-quarters of these additional losses were incurred in the corporate banking division of HBOS, which continued to invest in property-backed deals during the second half of last year, despite the fact that other, more prudent banks had stopped. This prompted speculation that the merged group, already 43%-owned by the UK government, may need to seek additional financial assistance to remain solvent. 

The weekend papers also savaged Royal Bank of Scotland once again over the revelation that, despite its substantial financial problems, it has frittered away as much as £200m on sports sponsorships. Among the sports stars with whom it currently has binding long-term contracts are the Queen's granddaughter Zara Phillips, golfer Jack Nicklaus and tennis player Andy Murray. Some of the contracts in question were only signed off by former CEO Fred Goodwin a few weeks before his ousting in October last year. Next week the bank, which was nationalised at the end of the year to avoid its collapse, is expected to report the biggest loss in British corporate history, totaling £28bn. 

Farewell then, Bud TV. Anheuser-Busch InBev finally announced the closure of its online video experiment. Launched with a fanfare during the 2007 Super Bowl, Bud TV failed to live up to expectations, and has steadily lost viewers ever since. The group also announced plans to stop paying an annual retainer fee to its core advertising agencies. Instead, it will agree fees on a project-by-project basis. That decision is likely to have a significant effect on core suppliers such as DDB Chicago, the main agency for Budweiser and Bud Light. According to industry commentators, some agencies on A-B's roster could see their fee income cut by between 25% and 30%.

In the news this past week: Agencies

UK trade paper Campaign published its annual ranking of the country's agencies by estimated billings for 2008 from Nielsen Media Research. AMV BBDO remains the #1 agency, a position it has held for more than a decade. McCann and JWT were in 2nd and 3rd place respectively, followed by Bartle Bogle Hegarty and Euro RSCG. The latter rose by three places, breaking into the top five for the first time. Other big climbers were DLKW (#10), Fallon (at #13) and Beattie McGuinness Bungay (#23). There were declines for WCRS (down two places to #8), DDB, Publicis and above all Lowe, which fell out of the top 20 altogether.

New York agency Cliff Freeman & Partners, struggling to make up for the loss of several key accounts, bought back the 20% equity stake previously held by Canadian marketing services roll-up MDC Partners. In the latest blow to the agency, sandwich chain Quizno's, its biggest client, this week announced a review. For all other appointments, subscribers can access the full Adbrands Account Assignments database here. 

In the news this past week: Media

US group Liberty Media, which controls satellite broadcaster DirecTV as well as various cable channels, acted as white knight to rescue troubled satellite radio group Sirius XM. That business had been struggling to find ways of repaying more than $3bn of debt scheduled to fall due over the next three years. The most urgent of these bills was a $175m bond controlled by DirecTV's arch-rival Echostar, which had been hoping to use this leverage to force Sirius XM to accept its own hostile takeover. Liberty agreed to loan Sirius XM around $530m to pay off Echostar and other creditors, in return for convertible stock equivalent to around 40% of equity.

In a second retrenchment of its offline ad sales business, Google this week cancelled its automated radio ad sales and brokerage business. A similar service targeting the newspaper industry was shuttered last month. Both services launched in the wake of Google's enormously successful search advertising business, but struggled to attract mediaowner clients, because of fears that Google would transform media inventory into a mere commodity. Google's online advertisers too were slow to expand into the new medium. The search giant still offers an automated TV spot buying service, handling a small proportion of inventory on Echostar's Dish network and some regional cable channels.

Conde Nast announced the closure of the German edition of Vanity Fair as a result of "serious business challenges" and "difficulties which could not have been foreseen even a short time ago". The German version of the company's politics and celebrity monthly was launched almost exactly two years ago. Unlike the British edition, which carries more or less the same content as the main US magazine, Germany's Vanity Fair was published weekly, with a much broader selection of local content.

Ailing British broadcasting giant ITV was said to be considering the sale of its online subsidiary Friends Reunited, an early pioneer in social networking, but one whose initial lead was entirely eclipsed by faster-growing rivals Facebook and MySpace. ITV paid £120m for the business in 2006, with up to another £55m in earn-outs payable this year. Yet revenues from Friends Reunited have remained small, only around £20m or so last year. ITV is unlikely to recoup more than a third of what it originally paid for the business.

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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