Adbrands Weekly Update 19th April 2007

Weekly Update 19th April 2007

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Our favourite ads this week:

We love this new ad for Nike from Latin America, encouraging weight-conscious women to choose good old-fashioned "dancercise" instead of body-altering surgery. It's a refreshingly light-hearted approach from Nike, which can often be a little po-faced in its celebration of fitness. (Especially liked the quick cutaways to meat slicers and water-filled balloons). The spot actually reminded us a little of that quirky old Fatboy Slim music video for Praise You. No great surprise then to find that it is produced by Madre, the recently established Argentinean subsidiary of Mother, that long-reigning master of quirk. The accompanying rap soundtrack advises you to "Suda el jamon" or "sweat the fat". Great!

Also adding some Hispanic flavour is the new US campaign for Mexican beer Dos Equis, produced by Euro RSCG New York. The series presents a few vignettes from the life and times of The Most Interesting Man in the World. "His beard alone has experienced more than a lesser man's entire body... His blood smells like cologne..." A nice idea, executed with a sharp wit. (Incidentally we also enjoyed the absurdity of the unscripted regulator's caption "Do not attempt" which flashes up when The Most Interesting Man rescues a grizzly from a bear-trap...)

The two TV ads for Cravendale milk by Wieden & Kennedy London are deliciously silly, using stop motion animation to deliver an entertaining glimpse into the domestic life of a toy pirate and cyclist who share their house with a puzzle-solving cow. Oddly enough, the ads actually made me want to rush out and buy a carton (or at the very least shout "Meelk! Meelk!" in a mock-pirate voice).

Nokia has unveiled a lovely ad for its new multi-function N95 phone (from Lowe London), which manages to be both poetic and elegant. Is that former fictional US president Martin Sheen on gruff voiceover? The accompanying online campaign encourages consumers to upload films of their own particular "special thing in my pocket" to win a handset. So far, few of the submitted entries achieve quite the same level of poetry, but we can always hope.

In the news this week: Advertisers & Media

French retail group PPR is adding sportswear business Puma to its expanding portfolio of fashion brands. The company already controls the Gucci luxury goods group as well as retail chains FNAC and Conforama and mail order giant La Redoute. This week it acquired the 27% shareholding in Puma previously owned by members of Germany's Herz family, and offered to buy out remaining shareholders for a total of up to E5.3bn. Puma is one of the two sportswear companies created after World War II by brothers Adi and Rudi Dassler. The Dasslers had jointly controlled a business making sports shoes before the war, but later fell out and launched rival manufacturers. For most of the next 30 years, Adidas and Puma were the world's only specialist makers of sports shoes, until challenged and then overtaken in the 1980s by Nike. Since then, Adidas has tended to overshadow its German rival, and closed the gap with Nike two years ago by acquiring another competitor, Reebok. However Puma underwent a complete overhaul during the 1990s under new CEO Jochen Zeitz and has since established a strong reputation as a style brand. Its alignment with Gucci within PPR will greatly assist its continuing growth.

Nestle consolidated its position as the worldwide leader in infant nutrition by agreeing to acquire Gerber, the dominant brand in North America, from Novartis. The price tag was $5.5bn. Nestle had hoped to include Gerber in the deal it agreed with Novartis at the end of 2006 to acquire the latter's adult nutrition products, but the two sides were apparently unable to agree until now on a price.

Members of the Sainsbury family effectively blocked the attempt by a consortium of private equity funds to acquire the eponymous UK supermarket chain, currently involved in a long-term turnaround programme. Although the family no longer holds management roles with Sainsbury's, it remains the company's most influential shareholder group. A separate private equity bid for European pharmacy group Alliance Boots is, however, continuing, and is expected to go through. US supermarket giant Kroger is also considered to be an attractive target for private equity bids as it struggles to fight off competition from Wal-Mart on one side and from organic specialists such as Whole Foods Market on the other.

A long-running row between artificial sweetener manufacturers Merisant and Johnson & Johnson's McNeil division went to court in the US last week. Merisant, which makes Equal and NutraSweet, sued J&J three years ago over marketing for its Splenda product which appeared to suggest that it was natural. In particular the ads claimed that Splenda was "Made from sugar, so it tastes like sugar". (An additional disclaimer, "But it's not sugar", was dropped from most of Splenda's marketing in around 2003). A separate lawsuit from the Sugar Association, which represents sugar manufacturers, is also pending and alleges that McNeil engaged in misleading advertising to entice consumers away from sugar.

In the news this week: Agencies

Google left rival bidders and industry observers open-mouthed in amazement with its agreement to acquire digital ad serving firm DoubleClick for $3.1bn, half as much again as the $2bn price tag that was being negotiated by Microsoft. The purchase will help the search giant expand its advertising programme from text ads to display banners. Once they had recovered from their shock, several companies issued complaints that any such tie-up would constitute an effective monopoly on interactive advertising. In the most intriguing symptom of the new power struggle in digital media, Microsoft, once the prime target for anti-competitive protests, was among the most outspoken plaintiffs against the huge power Google would now wield. The software giant was supported by AT&T, Time Warner and other companies in calling for regulators to launch an investigation into the deal. Meanwhile, in a separate development, Google's radio advertising division agreed terms to broker ad space across around 675 Clear Channel radio stations in the US. Google will handle around 5% of Clear Channel's total inventory.

Meanwhile, eBay's plans to launch Media Exchange, a TV ad space auction system devised in partnership with leading advertisers, were thrown into disarray after the Cabletelevision Advertising Bureau, which represents most of the leading US cable networks, said its members would not participate in the service unless further improvements were made. The main US broadcast networks, as well as several leading media buying networks, have already withdrawn their support, citing concerns over the commoditisation of advertising inventory.

Havas presented final results for 2006. Despite a much heralded increase in annual revenues (albeit by less than 1%) and net new business which almost doubled during 2006 to E1.9bn, the group's bottom line once again proved a significant disappointment. Operating income drifted lower to E121m, and net income fell 22% to E46m. There were plenty of reasons: higher tax charges, goodwill impairment, recruitment and restructuring costs. However the group badly needs to deliver an improvement in its core financial performance. This particular recovery is now well past due...

Adding to Havas's woes, it was spurned by hot British creative agency Clemmow Hornby Inge, in which it had been negotiating to acquire a minority shareholding since late last year. Instead the UK shop has sold just under 50% of its equity to WPP for an undisclosed sum. A contributing factor to WPP's interest could be the subsequent announcement that CHI had won a brief to produce a global ad for Samsung's flat TVs. WPP's JWT lost the Samsung account last year to Publicis-owned Leo Burnett.

Meanwhile M&C Saatchi has established a foothold in Spain for the first time since it closed its subsidiary there six years ago. It has acquired an initial 25% stake in Grupo Zapping, a local communications group which owns a collection of advertising, marketing and design agencies, and will build that stake to 75% by 2010.

Independent research group Forrester published an updated version of its Forrester Wave report on interactive design agencies. The last report was published two years ago. It identified four companies as "leaders": Avenue A | Razorfish, Critical Mass, Organic and R\GA. "Strong performers" were Tribal DDB, Arc, Digitas, Fry, imc2, Molecular and WhittmanHart. The report named IconNicholson, Macquarium, Sapient and VML as "contenders". The full report can be downloaded here.

A number of significant new account assignments and reviews this week. It was another great week for Goodby Silverstein, which added Hyundai Motors to its client list (following up last week's Sprint Nextel win). Draft FCB made up for the embarrassing loss of Wal-Mart last year by picking up rival discounter Kmart. The Interpublic shop also picked up Kraft's Lunchables snack business in the US. The loser in that case was JWT, which also suffered a review of another six Kraft accounts. TBWA also enjoyed several successes during the week including corporate advertising for newly merged steel manufacturer Arcelor Mittal and the global Singapore Airlines business. In media, Revlon cancelled plans to transfer its media to Initiative in the US. The account will stay at Carat. Initiative's global Credit Suisse also went into review. Subscribers can access the full Adbrands Account Assignments database here.

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Simon Tesler
Publisher, Adbrands