Weekly Update 8th November 2007

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Our favourite ads this week: 

Some ad campaigns now get the sort of build-up usually accorded to blockbuster movies. Fallon's Sony Bravia spots have much to do with this - consider the buzz which preceded Paint and Play-Doh. But the original buzz brand was arguably Guinness. Its new ads have been hotly anticipated ever since the Dancing Man of the 1990s. The latest spot, Tipping Point, from AMV BBDO, borrows heavily from other ads - it reminded us of both Honda's Cog and Sony's Paint - but it does so with style and panache, along with 6,000 dominos and a reported £10m budget. The director is current industry darling Nicolai Fugslig, who made Sony's first Bravia ad, Balls. We are less impressed by the silly "treasure hunt" game which supports the Guinness campaign online.

We also like You Make It You, the new ad from McCann Erickson's TAG unit for the Microsoft Zune music player. It too seems strongly reminiscent of other ads (like Michel Gondry's Motorola spot for instance - this incestuous self-cannibalisation is becoming a disturbing trend these days). But it represents a huge step forward from the horrendous cobra-ice cream cone spot which we featured here a few weeks ago. It also finally makes the Zune look like a product worth owning, even if it doesn't yet have the cachet or class of the iPod.

Saatchi & Saatchi New York is responsible for a series of spots currently airing in the US for Buckley's Cough Mixture, a famously foul-tasting over-the-counter remedy which has long been available in Canada. Novartis has now launched the product in the US for the first time, and is maintaining Buckley's traditional marketing angle of making the disgusting taste a part of the sell. Here, ordinary consumers try a blindfold taste-test and can't tell the difference between Buckley's and a variety of other substances including "Trash Bag Leakage" and our favourite, "Public Restroom Puddle". Yuck! 

In a very different style altogether, FFL Paris is responsible for Naturellement Pulpeuse, an animated spectacular on behalf of the soft drink Orangina. Who knew that giraffe women and octopus girls could be so fantastically sexy? (Also, trying spotting the pop culture references, including nods to movies American Beauty and Flashdance).

Finally, top marks to adwatcher Rye Clifton who has launched a personal campaign to highlight the shameless hypocrisy of mass-marketer Unilever, which claims the moral high ground in its ads for Dove, warning women against stereotypes of female beauty, while reinforcing exactly the same stereotypes (or worse, even) in its marketing for the Axe/Lynx deodorant range. Clifton has reedited O&M's recent Dove Onslaught ad to include images extracted from various Axe campaigns, and ends with an adaptation of the Dove tagline, presented here as "Talk to your daughters before Unilever does". See the film here. According to Clifton's YouTube profile, he is a senior strategic planner at The Martin Agency.

In the news this past week: Advertisers & Media

Guy Hands, the new executive chairman of music group EMI, promised in an internal memo leaked to the Financial Times to unveil a new "vision" for the company by early 2008, which will incorporate "fundamental change". So far, he says, he is focusing on three key tasks: to build a better relationship with consumers through technology; to alter EMI's internal pay and reward structure to encourage employees to work together more efficiently; and to be more picky about which artists the company is prepared to sign. "There has been a lot of talk about what labels offer to artists and to the consumer," writes Hands. "However, there is not much talk about how artists should work with their label. While many spend huge amounts of time working with their label to promote, perfect and endorse their music, some unfortunately simply focus on negotiating for the maximum advance...advances which are often never repaid." See the full memo here. 

One technology-driven idea that EMI probably won't be trying is the "honesty box" payment method adopted by rock band Radiohead for the download of their latest album In Rainbows. Weekly Update readers will remember that Radiohead is allowing fans complete freedom to decide how much they pay when they download the album. This led to all sorts of rose-tinted guff from some quarters, including claims that this method would become the future of the music industry. We cynics were less convinced, and appear to have been proved correct by new research which shows that the majority of Radiohead downloaders volunteered to pay, yes, nothing at all for the album. Researcher comScore estimated that 1.2m people worldwide visited the site in October, but only 38% paid for the download (that figure was slightly higher for US visitors). Of those who did pay, the average price offered worldwide was just $4.64. Oddly enough, US users were far more generous, forking over an average $8.05. Response to these figures has been just as foolish as the early rapture, with some pundits claiming the figures "show that the majority of music consumers feel that digital recorded music should be free and is not worth paying for". Rubbish. This wasn't some moral judgement on the state of recorded music. All those freeloaders knew perfectly well that they should have been paying for the album. It's just that, given a choice, most consumers would rather have something for free than have to fork out hard-earned cash for it. Welcome to the real world, Radiohead.

Citigroup CEO Chuck Prince is the latest head to roll as a result of this summer's sub-prime meltdown. Citi had already announced $1.6bn of 3Q losses from mortgage-backed securities (out of total writedowns and credit trading losses of $3.3bn), and last week said that it faced further losses in the fourth quarter which could go as high as another $11bn. Prince's departure has strengthened the argument voiced by some investors that Citigroup should be broken up, possibly into four separate units: a US consumer business; an international consumer business; and separate investment banking and wealth management companies. Meanwhile, Morgan Stanley also warned of big write-downs to come in the fourth quarter. It will take a hit of at least $3.7bn, and possibly as much as $6bn if all its current subprime exposure goes bad. These figures paled into insignificance beside the $39bn - yes, that's $39 billion - quarterly loss reported by General Motors. The car giant took a decision to write off deferred tax assets accumulated in its balance sheet. It's an accounting adjustment, not a cash figure, but the huge scale of the write-down says a good deal about the continuing bloodbath in the US car market. Chrysler this week announced new plans to cut close to half of its workforce by 2010.

Corporate break-up is already on the schedule for media mogul Barry Diller. After years spent assembling interactive services roll-up IAC, he announced plans to split that business into five separate companies, pursuing a strategy already initiated by the split-off of Expedia in 2005. Diller wants to spin out slower-growing subsidiaries to allow IAC to concentrate on high-growth internet properties such as search engine Ask.com and dating service Match.com. The units being spun off will be cable channel Home Shopping Network and its various mail order subsidiaries; ticketing giant Ticketmaster; financial services portal LendingTree.com; and vacation club Interval International.

Kraft was said to be close to agreeing the sale of its Post breakfast cereals business to Ralcorp, a maker of private label cereals, for around $2.8bn. An announcement is expected before the end of the month. Unilever agreed to sell its French soft cheese Boursin to Groupe Bel, maker of Babybel and La Vache Qui Rit (The Laughing Cow) for E400m. Luxury goods group LVMH confirmed that it would acquire French business newspaper Les Echos from Pearson for E240m. Journalists went on strike in protest, refusing to produce the paper on Tuesday and Wednesday. LVMH will sell its existing business paper La Tribune to NextradioTV, the company behind digital news broadcaster BFM. Dell unveiled plans to buy EqualLogic, a company which develops data storage systems, for $1.4bn. If approved by shareholders, it will be the biggest acquisition in Dell's history. 

Facebook finally unveiled its plan to generate higher advertising revenues. Advertisers can now establish their own profiles on the social networking site. By allowing users to become "fans" (the advertiser equivalent to normal Facebook "friends"), they can potentially promote their products by word of mouth to other users. Advertisers who pay can have a promotional message attached to each such buzz endorsement. It's a hard system to describe and therefore one that, albeit innovative, may have trouble establishing significant support after an initial rush. Control of a brand's reputation once it ends up in the hands of ordinary consumers is likely to be one major hurdle, as will be measurability. But for now, several large advertisers are prepared to have a go. Noticeably, however, Coca-Cola, which made its debut on Facebook early Wednesday morning, had signed up fewer than 300 of Facebook's estimated 50m users in its first 24 hours. Not an auspicious start.

In the news this past week: Agencies

The American subsidiary of Japanese giant Dentsu has been in the news over the past week as a result of an embarrassing lawsuit. Steve Biegel, formerly a creative director at Dentsu America, was fired last November, apparently over performance issues. He now claims the real reason for his dismissal was that he refused to participate in various sexual shenanigans organised by his boss, Toyo Shigeta. These included a trip to a brothel in the Czech Republic and naked dips in a Tokyo bathhouse. According to the lawsuit, Shigeta got angry with Biegel for declining to take part in these activities, and criticised him for being "no fun". Biegel also alleges that Shigeta on several occasions took inappropriate photographs of women's crotches including, on a photo shoot for client Canon, an upskirt snap of tennis player Maria Sharapova. That picture, taken with a zoom lens, has been submitted as evidence in the suit, and can be seen online here on the AdAge website, along with Biegel's full 21-page legal submission which also implies, with the flimsiest of evidence, that Dentsu discriminates against Jewish employees. 

Dentsu responded with a threat to countersue Biegel for libel and fraud, not least because earlier this year he sent a draft of the submission to Dentsu's two biggest US clients. Although the agency stops short of denying the stories about Shigeta, Dentsu says that Biegel didn't complain about these incidents at the time - most of them took place two years ago - and has only now worked up the story in order to make an excessive claim for severance pay. It appears that Biegel at one point demanded as much as $1m to go quietly and, according to Adweek, warned Dentsu's managers "You had better be generous... because I'm from Queens, I know how to play dirty". Dentsu USA president Doug Fidoten told Adweek: "If Steve Biegel had exhibited as much creativity and effort when he worked here as he has on manufacturing this frivolous complaint, the company would not have fired him." Ouch. Whatever the legal outcome, Biegel does seem to have captured the support of his peers at least. In a survey on AdAge.com, 73% of respondents agree that he has valid cause for a complaint against Dentsu.

Steve Biegel may do well to bear in mind the latest development in another recent marketing-related legal skirmish. The long-running battle between marketing executive Julie Roehm and her former employer Wal-Mart came to an end this week. Regular readers of the Weekly Update will recall this scandal-packed saga, which led to the abrupt dismissal of DraftFCB as the retailer's agency, and included salacious allegations regarding inter-office trysts between Roehm and a subordinate (more recent subscribers, see background here). Roehm initially filed her suit for wrongful termination in Michigan, but was ordered by a judge to refile in Wal-Mart's home state of Arkansas. Wisely perhaps, she has decided that perpetuation of a battle against the world's biggest retailer on its own turf would not be in her best interests, financially or personally, and she has dropped her case. In a statement she says the case proved "more difficult and financially draining than I ever imagined". We bet. Wal-Mart has in return called off its own countersuit. Roehm must now attempt to rebuild what once promised to be glittering career. That may not be an easy task. Potential employers are likely to be more than a little concerned by Wal-Mart's account of the fickleness she apparently displayed while she worked for them.

WPP announced that its design and branding subsidiary Enterprise IG is to adopt a new identity of its own as The Brand Union. The revamp has been masterminded by new CEO Simon Bolton. Meanwhile Euro RSCG announced that the New York office of its below-the-line network Euro RSCG 4D would be merged into the existing above-the-line agency to create a single integrated Euro RSCG agency. 

In account assignments, Samsung consolidated its global media account, worth an estimated $500m-$600m, at Starcom. Foster's of Australia pulled its beer brands from George Patterson Y&R (who were responsible for the much applauded Big Ad for Carlton Draught a few years ago). Coca-Cola consolidated UK media with Vizeum. E*Trade shifted its $180m US creative account to Grey. For all other appointments, subscribers can access the full Adbrands Account Assignments database here

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Simon Tesler
Publisher, Adbrands