Adbrands Weekly Update 23rd October 2008
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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First, our favourite ads this week: 

Apple "Bean Counter" 
by TBWA\Chiat\Day 

Pepsi "Kung Fu Fighting"
by Almap BBDO Brazil

Minnesota Raffle "Snow Bot etc" 
by Colle & McEvoy

Aviva Canada "Ring" 
by Taxi

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.

We've featured Apple's Mac vs PC ads several times before in this space, but we can't resist this wicked new spot which takes a deliciously arch dig not just at Windows Vista, but also at Microsoft's own lavish but oddly ineffective new ad campaign. Kudos yet again to TBWA\Chiat\Day.

We also like the new spot by Almap BBDO of Brazil for Pepsi, which manages to throw everything plus the kitchen sink into 60 seconds of insanity.

You must know by now what suckers we are here at Abrands.net for a bit of animation. Here are three ads by Colle & McEvoy for - of all things - the Minnesota State Lottery which charmed and delighted us this week.

And finally, we were tickled by this new spot for the Canadian arm of insurance giant Aviva by Taxi. We especially enjoyed the nicely over-the-top performance from the hapless proposee. Enjoy! 


In the news this past week: Advertisers

Stock markets are sliding, unemployment levels are rising, but it's not all bad news, honest. Several companies reported better than expected quarterly results over the past week or so, proving that some sectors remain resilient despite the general doom and gloom. Household staples and technology products in particular continue to hold their own. Late last week, Paul Moody, CEO of UK soft drinks company Britvic, even went so far as to call his own company "a glowing beacon of hope" because of a 29% lift in sales for the year to September 2008. However, his was far from being the only beacon on show. Global rival Coca-Cola also delivered strong quarterly perf, as did Danone, Philip Morris International, McDonalds and especially US chocolate giant Hershey, whose 3Q profit virtually doubled year-on-year. In the technology sector, Google posted 3Q net income up 26% on the same period last year, while sales jumped 31% to $5.5bn. Apple's figures were also exceptional, with profits jumping 26% on the back of "spectacular" sales for its next-generation iPhone. The company has already sold almost 7m 3G iPhones, and shifted 2.6m Mac computers in the quarter, a best-ever performance. IBM and Intel also delivered solid quarterly profits. 

Meanwhile, a new round of bank recapitalisations kicked off around the globe. ING of the Netherlands accepted E10bn of new capital from the Dutch government last weekend after reporting its first ever quarterly loss. In Germany, state-owned regional lender BayernLB was the first German bank to call upon its government's E500bn rescue fund. WestLB is expected to follow suit before the end of the week. In France, the government injected a total of E10.6bn into the country's six biggest banks to bolster confidence. Credit Agricole, BNP Paribas, Société Générale, Crédit Mutuel, Caisse d’Epargne and Banque Populaire shared between E1bn and 3bn each.

Procter & Gamble has moved heavily into direct-to-consumer retail with an upgrade of TheEssentials.com, an e-commerce website it inherited a few years ago as part of its acquisition of Gillette. TheEssentials was originally launched by Gillette, then an independent company, back in the late 1990s, and offered direct sales of group-owned brands Gillette, Braun and Oral-B. During the past summer, the site's inventory has been overhauled by Gillette's new owners and it now sells a full range of leading P&G products including Crest, Old Spice, Mr Clean, Pampers and Prilosec. P&G is keen to present the business as an independent entity "not operated by P&G", and a spokesman told the FT, "We treat them like any other retailer as they buy product directly from us." However, TheEssentials sells only Procter & Gamble products, and is covered by the packaged goods giant's legal disclaimers, privacy policy and terms & conditions. Even the domain name is still jointly registered in the names of the Gillette Company and P&G. P&G's reticence about acknowledging its close connection with the site is no doubt to avoid upsetting traditional retailers who might worry in these hard times that their own sales may become compromised. 

In France, thousands of bottles of soft drinks, including products from Orangina Schweppes and Danone, were recalled this week after the water supply at a bottling plant in South Eastern France was found to be contaminated with small quantities of a petrol additive. Brands withdrawn include some local supplies of Orangina Schweppes' Oasis, Danone's Taillefine Fizz and private label drinks for the Champion and Grand Jury supermarket chains. 

The general insurance division of Royal Bank of Scotland was back in play, following the bank's part-nationalisation last week. RBS had attempted to sell the business, which includes the Direct Line and Churchill brands, earlier in the year. Despite an initial flurry of interest, many bidders were deterred by the sudden worsening of the credit crisis over the summer. Berkshire Hathaway, Zurich and Generali of Italy all pulled out of negotiations and in August RBS indicated that it might abandon the sale. The bank's current predicament, however, has encouraged it to reopen talks. US company Allstate is said to be the only trade bidder, but faces competition from a private equity offer led by CVC.

In marketing appointments, Anders-Sundt Jensen was named as the new head of global brand communications for Mercedes-Benz passenger cars. He replaces Olaf Goettgens, who had held the role since 2005.


In the news this past week: Agencies

Omnicom's 3Q results provided some interesting reflections on the nature of the current downturn. The world's largest marketing services group posted generally resilient figures for its most recent quarter. Net income rose almost 6% to $214m on revenues up 7% to $3.3bn, while year-to-date figures showed a 10% improvement in both profits and revenues. Only two divisions showed a decline in 3Q: PR and "specialty marketing services", Omnicom's term for diversified BTL disciplines such as Yellow Pages and recruitment advertising and healthcare marketing. These posted single-digit declines for the quarter, although YTD figures were still in positive territory. On the other hand, Omnicom's advertising and CRM units posted quarterly increases of 7% and 12% respectively. Revenues from the UK were also down for the quarter, although that was largely the effect of exchange rate fluctuation.

"PR [is] experiencing some general softness," explained Omnicom CEO John Wren in a conference call with investors. "The specialty media category has been impacted by the continuing decline in directory or yellow pages business. Recruitment advertising is probably our most economically sensitive business, and has been feeling the effects of the economy for a couple of quarters now. And healthcare growth, while positive, slowed in the quarter due to a lower number of new product releases and cuts in medical education." However, he did acknowledge that clients "generally remain very cautious" about future advertising spend, although so far only the automotive and retail sectors have made actual cuts. Wren and CFO Randall Weisenburger also indicated that the current market conditions could lead to some interesting acquisition opportunities. "Maybe there is some good that can result from the financial mess that's out there," said Weisenburger. Wren promised that the group would make the best out of whatever situation arises, quipping “We’ll make lemonade out of the lemons that we’re served.” 

Australian marketing group Photon, best-known in the international community for its surprise purchase this year of strategic communications agency Naked, also reported strong financials for its most recent financial year. Revenues almost doubled to A$376m (approx US$250m) and pretax profits jumped by a third. Photon predicted that performance would remain strong for the new year as a result of strong growth in field marketing, internet marketing and public relations services.

However US agency chiefs should also have experienced a distinct chill from some of the views expressed at the Association of National Advertisers conference in Florida over the weekend. During a roundtable discussion, several senior marketing directors expressed dissatisfaction with their agency partners. Hewlett-Packard's VP corporate marketing, Gary Elliott, was the most outspoken: "The overall message, I would have to say, with HP, is that I don't think any of these [agency] relationships are satisfactory enough that we would continue them without having some degree of experimentation... What's lacking in agency relationships now is speed to market. We're going to pilot a number of different relationships where we go direct with media companies." HP currently works mainly with Omnicom for creative and Publicis Groupe for media, but is expected to consolidate all its work with a single group next year. A key problem is the role of agencies as intermediates sitting between advertisers and media outlets. "If I were an agency, I would be really worried about being disintermediated," said Becky Saeger, CMO of Charles Schwab. "More and more the agencies are almost in the way sometimes."

Digital agency Avenue A | Razorfish has simplified its corporate identity, dropping the Avenue A tag to become simply Razorfish. Now owned by Microsoft, the current agency was formed by the acquisition in the 2004 of the once mighty Razorfish design brand by digital media shop Avenue A. It has since expanded dramatically through a series of purchases of other digital shops around the globe. 

In personnel appointments, WPP appointed Kelly Clark, currently head of GroupM in the EMEA region, as the first global CEO for its challenger media network Maxus. Clark will relocate from London to New York to take up the post.

The London advertising industry was in celebration mode on Wednesday night for the first Big Awards event organised by trade bible Campaign. In the TV & cinema category, Gold awards went to Cadbury's Gorilla and Skoda's Cake films, both by Fallon London, and also to Mother's Here Come The Girls spot for Boots. There were two Digital Golds, to BBH's Get In There mobile tools for Lynx, and to BMB's controversial iPint app for Carling (see last week for news on the lawsuit surrounding this campaign). Press Gold went to DDB London for Harvey Nichols; Outdoor was awarded to The Partners agency for The National Gallery's Grand Tour posters; BBH took the Direct Gold for Flora margarine's London Marathon sponsorship.

In account assignments, Levi's called a review of creative in the US and Latin America. Longtime incumbent Bartle Bogle Hegarty is not expected to defend. In the UK, mortgage lender Nationwide kicked off a creative review after the account was resigned by Leagas Delaney; Boots rewarded OMD with its £50m media business. Conde Nast appointed Hurrell Mosely Dawson & Grimmer and M2M for the UK launch of Wired magazine. For all other appointments, subscribers can access the full Adbrands Account Assignments database here.


In the news this past week: Media

HSBC reinforced its reputation as one of the strongest banks in the currently troubled banking sector by making a splash in the US with its advertising. Targeting wealthy individuals in the world's financial capital, it bought up all 24 ad pages in the current issue of New York magazine, a weekly which claims to reach “the nation’s most influential audience”. Rate card cost of such a deal would be $1.6m. The ads are part of HSBC's current Different Values campaign also running in Vanity Fair, GQ, The Week and other titles, but 10 of the pages featured in New York were specially created for the magazine. “Now more than ever before people are reappraising not just how they manage their money, but what’s important to them,” said Tracy Britton, head of marketing for HSBC Bank North America. “This campaign is very timely and appropriate.” 

Reed Elsevier was said to be considering lower than anticipated bids for its trade magazine portfolio, which includes US entertainment biz bible Variety; Farmers Weekly, Caterer & Hotelkeeper and New Scientist in the UK; and advertising industry titles B&T in Australia and Strategies in France. The group put the business up for sale in February this year, with an indicative price tag of £1.25bn. However it is now said to be looking at offers below the £1bn mark. Reed needs to raise additional cash to pay down short-term borrowings it made to finance the purchase of consumer data company ChoicePoint earlier in the year.

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Simon Tesler
Publisher, Adbrands


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