Adbrands Weekly Update 19th November 2009
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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Our favourite ads this week: 

Toshiba "Space Chair"
by Grey London

Toyota "Better Together"
by Saatchi & Saatchi Australia

Orange "Snowball" 
by Publicis Conseil

BabyLove "Number 3"
by DDB Melbourne

Please note: If you are attempting to view these ads shortly after receiving this mailout on a Thursday, you may find that the video streams run slowly because of heavy simultaneous demand from other Adbrands subscribers who have also just received the same email. Please wait for the ads to load before pressing play, or try again later. Apologies for any inconvenience.

Grey London scores top marks with a superb new film for Toshiba, promoting its new Regza high-def TVs. The footage is entirely genuine. The Grey team rigged up a frame around the chair holding eight lightweight Toshiba video cameras and then sent the whole device high up into the atmosphere on a weather balloon. The results are spectacular to say the very least. You should definitely check out the excellent behind-the-scenes film as well, available here.

Superb choreography in this spot from Saatchi & Saatchi Australia for Toyota's petrol/electric hybrid engines. Like the Toshiba ad, the impact of this film comes from the fact that the whole thing is being done for real, in-camera rather than post-production by computer animation. Imagine how much less impressive it would be if, for example, we couldn't see the head of the guy behind. And all in a single take. Wow! How long must that have taken to get right. Brilliantly executed, and very memorable.

You know what? Christmas is coming. We tend to avoid Christmas ads like the plague here at Ads of the Week, but we can certainly make an exception for the latest spot from Publicis Conseil in Paris for the French arm of mobile operator Orange. This has been a consistently excellent campaign. Not sure what it says about Orange to be honest, but it's warm and positive, and puts a happy glow in your soul. Which is what Christmas is all about really.

And finally, a great ad from DDB Melbourne for BabyLove nappies (sorry, diapers), from the Australian subsidiary of Japanese company UniCharm. Every parent knows exactly what we're talking about here. Enjoy - or not.


Did you know that you can easily search back issues of Adbrands Weekly Update in descending date order? This allows you to track historical developments affecting specific companies or brands. Simply change the options at the top of the profiles search results page to select "Adbrands Weekly Updates" and Search by Date. For example, to see how the GM/Opel saga has developed over the past few months, click here for a sample search.


In the news this past week: Brands & Advertisers

British Airways announced the broad outlines of an agreed merger with its Spanish counterpart Iberia. Both companies are suffering badly from the current downturn, and hope to cut costs and build share by combining certain aspects of their respective businesses. To preserve their national identities, the two airlines will continue to operate as separate units, but under the ultimate ownership of an umbrella company in which BA's shareholders will have around 55% of the shares to Iberia's 45%. BA's Willie Walsh will be chief executive of the parent group, with Iberia's Rafael Sanchez-Lozano as chairman. Two significant hurdles lie ahead. Firstly, the deal is subject to the results of negotiations with the trustees of BA's pension fund, which is currently reporting a substantial deficit. Iberia retains the right to terminate the merger if the trustees rule that BA must pump in further cash to replenish the fund. The other challenge could be industrial action. BA's employees are currently voting on whether or not to call a potentially devastating Christmas strike to protest job cuts and changes to working practises proposed before the merger announcement. The threat of further changes could exacerbate that unrest. Iberia's cabin staff are already involved in a series of two-days strikes for similar reasons. As a result of the serious problems facing both airlines, the chief executive of rival Ryanair said the proposed merger reminded him of "two drunks trying to prop each other up".

According to the Wall Street Journal and Italy's Il Sole 24 Ore newspaper, confectioners Hershey and Ferrero have been in preliminary discussions regarding a joint bid for Cadbury which might trump the $16bn stock and cash offer currently on the table from Kraft. Hershey and Ferrero lack the size and global footprint of Kraft, but both are privately owned, a fact which could give them an edge in assembling a more attractive bid. Cadbury's existing shareholders would likely be won over by a deal which offered them more cash, or left them with a stake in a UK-listed company. Unlike the publicly held Kraft, Hershey is wholly owned by a charitable trust, while the shares in Italy's Ferrero - makers of Nutella and Kinder - remain in the hands of the founding family. Talks are still at a very early stage, and may not result in an offer. Indeed, Ferrero appears significantly less keen on opening itself up to the sort of public scrutiny a bid would involve. It acknowledged that it was involved in preliminary discussions, but warned "there can be no certainty that any proposal relating to Cadbury will ultimately be forthcoming."

Coca-Cola is to rebrand all of its global fruit juice brands with a shared design concept and packaging. The group manages an extensive portfolio of more than 100 different brands spread across 45 countries - it is actually the world's biggest juice marketer by volumes. The best-known brand is Minute Maid, based mainly in North America, but other products around the globe include Simply Orange, Hi-C, 5 Alive, Cappy, Montefiore, Sonfil and Qoo. Each will retain its existing name, but pack design will be coordinated so that all products share a similar look and feel, based on Minute Maid's black label and white lettering. It's a big task but by no means unusual. Along similar lines, Unilever's numerous different ice cream businesses worldwide all share the "heart brand" logo, and Frito-Lay's global potato chips, which include Lay's in the US, Walker's in the UK and Smith's in Australia, all carry the same overall logo design.

Marc Bolland was named as the new chief executive of British retailer Marks & Spencer. He will replace Sir Stuart Rose in early 2010. Rose will remain non-executive chairman until mid 2011. Bolland has been poached from supermarket group Morrisons where he spearheaded that group's impressive reinvention following the takeover of Safeway. Separately, Libby Chambers has resigned as global chief marketing officer for Barclays. The pursuit of "new challenges" was given as the reason for her departure in Barclays' statement, but it is not clear whether she has another job to go to.

Pharmaceutical group Bristol Myers-Squibb confirmed plans to spin off its remaining 83% shareholding in Mead Johnson, the nutritional supplement manufacturer, early in 2010. Mead Johnson is best-known for its product Enfamil, the world's top-selling infant formula.

American Express agreed to acquire Revolution Money, an online payment services provider that competes with eBay's Paypal, for around $300m. The business was set up by former AOL founder Steve Case. Other businesses within Case's Revolution group of companies include the car-sharing service Zipcar, which operates in the US and UK.

At a time when many auto manufacturers are pulling out of Formula 1 racing, Daimler reaffirmed its commitment to the sport by acquiring the controlling shareholding in Brawn GP, the former Honda team which clinched a surprise victory in this year's Constructor's Championship. The team becomes Mercedes Grand Prix. As a result, Daimler will gradually pull out of its existing relationship with the Vodafone McLaren Mercedes team. It will continue to supply McLaren with engines until at least 2015, but will sells its shareholding in the business within the next two years. The deal offers Mercedes not only sole branding of a top-rank team, but also a significant reduction in its financial commitment to Formula 1.

Computer chipmakers Intel and AMD settled their long-running, often bitter rivalry. Intel agreed to pay the smaller company $1.25bn in damages in connection with various lawsuits. Earlier this year, Intel was also fined E1.1bn by European regulators for abusing its market dominance by offering substantial rebates to computer manufacturers to ensure they bought chips from Intel rather than AMD.


In the news this past week: Agencies

It's been another good week for WPP's Sir Martin Sorrell. Last week, he received an apology and damages from the former owners of George Patterson Y&R after a lawsuit (see last week's Update); this week, the founders of independent agency Adam & Eve settled with Sorrell out of court, just days before the case was due to start. Adam & Eve's James Murphy, David Golding and Ben Priest jumped ship two years ago from London's RKC&R/Y&R, but were a little too quick off the mark setting up their new shop. In a statement, the trio apologised "unreservedly" for "dealing with clients whilst still under the contractual obligations of our gardening leave. We also retained proprietary information belonging to Y&R albeit unintentionally." The financial terms of their settlement were not declared.

Various media sources confirmed this week that Chrysler's creative account will go up for pitch, most likely before the end of the year. The Detroit office of incumbent BBDO is expected to close at the end of January 2010, when its current contract expires. All three Chrysler Group brands - Chrysler itself, Dodge and Jeep - will be up for grabs. Meanwhile the contest for GM's Cadillac business has narrowed to three agencies: Bartle Bogle Hegarty, The Martin Agency and Publicis.

In other account assignments, insurance giant Allianz consolidated its global creative account with Grey. Taking lead on the account will be Grey's London office and German affiliate Atletico Berlin. Grey London also picked up the account for six retail chains owned by Philip Green's Arcadia group. The contract covers all brands except Top Shop and Miss Selfridge, which will continue to manage their creative inhouse. BBC Worldwide appointed ZenithOptimedia to handle global media for its various DVD, cable and publishing interests. US healthcare group Matrixx pulled the creative account for its OTC remedy Zicam from the merged Deutsch/Lowe agency because of  conflicts with Deutsch's Johnson & Johnson client. Ikea reappointed Mediaedge:cia to handle US media. For all other appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

Drawing a line under at least one part of its embarrassing seven-month search for a new leader, ITV announced the appointment of Archie Norman as its new non-executive chairman. An experienced and highly regarded businessman, Norman is best-known as the man who revitalised supermarket group Asda during the 1990s before engineering its sale to Wal-Mart. He will join the company when current executive chairman Michael Grade departs in January. Norman's first task will be to recruit a new permanent chief executive. In the meantime, chief operating officer John Cresswell will serve in that role on an interim basis. However he too will leave ITV when a fulltime replacement can be found.

Former PepsiCo International chief Michael White was confirmed as the new CEO of US satellite broadcaster DirecTV, replacing Chase Carey, who left during the summer to return to the News Corporation fold. In a separate development, DirecTV's controlling shareholder, John Malone's Liberty Media Group agreed to acquire Germany's #2 cable operator for around E2bn plus debt. Unity Media provides broadband Internet, telephone and digital TV to 4.6m customers in 10 of Germany's biggest cities, including Frankfurt, Cologne and Dusseldorf. One of the world's most powerful but low profile moguls, Malone already holds controlling stakes in a variety of media businesses including the Discovery Communications cable group, QVC home shopping channel, IAC/InterActiveCorp and Sirius/XM satellite radio.

Walt Disney reported full year results for the year ending October 2009. Total group revenues slipped 3% to $36.1bn, while net income dropped 25% to $3.3bn. The reasons for the recent shake-up of management at the company's studio division were clearly visible in the figures. Disney's movie and home entertainment unit saw operating profits plunge from over $1.0bn last year to just $175m, reflecting a succession of box office disappointments and the significant decline of the global DVD market. In a further change to the management team, the group merged the teams responsible for theatrical and home entertainment distribution, so that the same people will oversee the full lifecycle of individual releases. The group is also expected to announce a new head of marketing for the studio entertainment business, following the resignation of worldwide president Mark Zoradi last week. All of Disney's corporate divisions felt the impact from the economic downturn, with one exception. Its cable operations, comprising ESPN and the Disney Channel, were the only business to report an increase in both revenues and profits.

As if to prove the elevation of computer games as the new top dog in the entertainment industry, Activision Blizzard set a new record this week for the world's biggest and fastest-selling game. Call of Duty: Modern Warfare 2, a military shoot 'em up, sold an extraordinary 4.7m copies in its first 24 hours on-sale in just North America and the UK, with total sales worth around $310m. By comparison, that's more in a single day than the entire worldwide gross for all but the top ten or so of last year's movie blockbusters over their entire run! The only movie which can claim a bigger debut than Modern Warfare 2 was Harry Potter & The Half-Blood Prince, which claimed total ticket sales of $400m in its first 24 hours earlier this year. Yet that figure was from a simultaneous worldwide opening, whereas Modern Warfare 2's is just from North America and the UK. Industry watchers expect total sales for Modern Warfare 2 to exceed $750m.

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Simon Tesler
Publisher, Adbrands


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