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Ogilvy Paris has another set of great ads out for the Scrabble boardgame, owned in Europe by Hasbro. There are three in all. Here's our favourite. See the others here. If only the average game of Scrabble was as exciting as the advertising...

Forgive us for giving Ogilvy two bites of the cherry this week, but we couldn't resist this new ad for Perrier, which had us drooling in less than 10 seconds. Fabulous digital effects too. 

M&C Saatchi are responsible for a terrifying spot for Ladbroke's online casino. I'm not sure it makes me want to have a flutter, but it certainly sticks in the imagination. I've had nightmares like this.

And finally, an entertaining ad for Schweppes mixers, running in the UK but developed for some reason by Grey Israel. This is an amusing idea for a campaign, even if it doesn't quite fit the Schweppes brand. Memorable nonetheless. There's an alternative spot, not quite as clever but worth looking at. See it here.

In the news this past week: Advertisers

The attempt to prevent Chrysler from sliding into bankruptcy turned into a real nail-biter over the past week, as the clock ticked down to today's deadline. At the end of last week, it was revealed that Fiat CEO Sergio Marchionne had hedged his bets by opening separate talks with General Motors about its Opel subsidiary in Europe as well as its Latin American operations. If the Chrysler deal collapsed, that discussion suggested, he would move straight on to Opel. This development seemed to focus the attention of the two groups upon whom any deal with Chrysler depended: the workforce and the banks holding its $6.9bn of secured debt. On Monday one of those barriers was removed when the United Auto Workers union agreed in principle to take a 55% stake in the business in return for significant cuts to healthcare payments. Unfortunately, the other hurdle has proved too high. The US Treasury has been trying to persuade Chrysler's debtholders, a mixture of banks and hedge funds, to accept a lower payout against the $6.9bn of secured debt they hold. Although the four biggest banks accepted an offer of $2bn on Monday, smaller lenders refused to budge, even after the deal was sweetened to $2.25bn. As a result, Chrysler is almost certain to file for bankruptcy later today. Most observers expect the company to get through that process reasonably smoothly and quickly. In fact, some of the Chrysler's more troublesome liabilities, such as its large dealer network, can be restructured much more easily under Chapter 11. As a result, the chances of an eventual deal with Fiat remain good, though now probably within weeks rather than days. However a risk remains that the company could still be broken up if recalcitrant debtholders or disenfranchised dealers choose to mount a legal challenge against any proposed restructuring.

General Motors, which has until the end of May to deliver its turnaround plan, also unveiled its proposals this week. It will kill off rather than merely sideline its iconic Pontiac brand by the end of next year, cut another 21,000 jobs, and eliminate more than 40% of its US dealerships. Saturn, Hummer and Saab will be either or sold by the end of 2009. GM is also offering to pay half of the $20bn it has pledged to a workers' healthcare trust by transferring a 39% shareholding to the UAW union. Around another 50% of the group or more would be transferred to the US government in return for $11.6bn of additional funding. However, the biggest roadblock here too will be the bondholders, sitting on a weighty $27bn of debt. Instead of the 45 or so institutions which hold Chrysler's debt, GM's is spread between thousands of different investors, making unanimous agreement virtually impossible, especially in the light of GM's unexciting proposal to swap their holdings for a combined 10% of equity. The main bondholders are expected to issue a counter proposal today under which they would take a 51% stake in GM, and the UAW would end up with 41%.  Privately, most of GM's creditors already regard Chapter 11 as the only viable way of restructuring the business.

According to the Wall Street Journal, Coca-Cola is back in talks with Huiyuan Juice of China. Last month, Coke's $2.4bn bid to acquire the company, the country's largest juice marketer, was blocked by Chinese regulators, ostensibly for competitive reasons. Most observers believed, however, that it was a protectionist measure designed to prevent Chinese assets from ending up in foreign hands. Even Huiyuan's managers voiced their disappointment at the decision, and there was a surge of negative comment not only from other potential investors in the country but also other Chinese companies. The WSJ said the two companies are now discussing a minority stake rather than a full buyout in the hope of appeasing regulators. 

The UK government said it is considering a sell-off of the more profitable parts of Northern Rock, the UK mortgage lender which was nationalised in February 2008. Richard Branson's Virgin Group was quick to reiterate its interest in acquiring any assets and combining them with its Virgin Money subsidiary. Virgin was one of two bidders for Northern Rock last year before it was taken under state control. Separately, pharmacy chain Boots said it too was considering a move into financial services as a way of diversifying its consumer business.

Packaged goods giant Unilever is back on the acquisition trail. This week it acquired Russian company Baltimor, maker of Baltimor, Pomo d'Oro and Vostochniy Gourmand ketchup, mayonnaise and tomato paste. The group is also said to be vying with Nestle to snap up Belgian soya milk and yogurt manufacturer Alpro. 

WPP's Millward Brown Optimor research subsidiary published its updated Brandz 100 ranking for 2009, listing the world's top 100 brands. For the third year running, Google topped the list, and this year was the first brand to break through the $100bn barrier. Microsoft was second, with Coca-Cola third, its debut in the top three. The biggest riser was China Merchants Bank, virtually unknown outside its domestic market, but one of country's most dynamic lenders. Its brand value jumped 168% over the year. Other big climbers included BlackBerry, Amazon, Wendy's and AT&T. Several established brands entered the ranking for the first time, including Pampers, the highest new entry, as well as Nintendo, Visa, Wrigley's and Aldi. Download the full report here.

In the news this past week: Agencies

There was grim news for the industry in first quarter results from the four major marketing groups. Omnicom reported a 21% drop in net income in revenues down 14% to $2.7bn. Interpublic's sales fell 11% to $1.3bn, and the group slipped back into losses with a $67m deficit. Costs included almost severance charges of almost $42m reflecting a large reduction in staffing levels. The two US groups were especially hard hit by the troubles of General Motors (primarily an IPG client) and Chrysler (held by Omnicom). WPP maintained its position as the world's biggest marketing services group. Reported revenues jumped by more than third to £2.1bn (equivalent to just over $3.0bn), but that figure included the contribution from newly acquired TNS. Like-for-like sales slid 5%. At Publicis Groupe, revenues fell 4% to just under E1.1bn. CEO Maurice Levy, a man who rarely resists the opportunity to have a go at his rivals, crowed to Advertising Age: "We are down, but if we look at all things being considered, we are doing much better than our competitors. That's fact." All the groups expect the market to decline further in the current quarter before improving slowly in the second half.

Coca-Cola's director of worldwide media & communication operations told a US conference audience that all leading marketers should adopt a performance-based fee structure for their agencies rather than the current flat-fee model. Addressing the the Association of National Advertisers Financial Management Conference in Phoenix, Sarah Armstrong said "We want our agencies to earn their profitability, but it's not guaranteed. We need them to be profitable and healthy, but they have to earn it through performance." Coke quietly introduced a value-based model in five markets in 2008, including the UK, Germany, China and Australia, and intends to roll the system out in 35 more during 2009. The company agrees an upfront target with its agency on what it intends to achieve with any particular campaign. If results exceed those expectations, the agency can make a profit of as much as 30% on the project; otherwise it gets back only costs.

According to the Financial Times, McCann Erickson has been awarded the three-year contract to handle all marketing for the London 2012 Olympics. The win includes public relations, digital and promotions as well as advertising, although no official confirmation has yet been made. However, there is a twist. McCann will not be paid for its work. In a break from the usual process, the agencies pitching for the contract were asked to bid for marketing rights. McCann is said to have clinched the deal with an offer of £10m of services-in-kind. Rival WPP was, says the FT, eliminated because it refused to separate the main marketing contract from the one for market research, which is being considered separately. 

Talent agencies William Morris Agency and Endeavor, the #2 and #3 respectively, agreed to merge to create a stronger rival to market leader CAA. That deal had been under discussion for several months.

Otherwise it was a quiet week for assignments, Home Depot reappointed Initiative as its offline media agency, and also handed over digital duties previously held by Digitas. German pay-TV channel Premiere, part-owned by News Corp, appointed Heye & Partner as its new creative agency, in place of DDB. For all other appointments, subscribers can access the full Adbrands Account Assignments database here. 

In the news this past week: Media

Responding to widespread speculation in the market, Time Warner confirmed that it was likely to spin off part or all of AOL to shareholders at some point in the near future. AOL's newly appointed chairman-CEO Tim Armstrong said that details of the new structure would be announced "very soon". Merger with another online publisher remains a possible alternative. Meanwhile Yahoo is looking for a buyer for its HotJobs recruitment service, and is thought to have had an offer from IAC, owner of dating service Match.com and search engine Ask.com, for its Yahoo Personals unit.

News Corp made further changes to the management team at its digital division, following the appointment of Jonathan Miller as new divisional CEO earlier this month. This week, the group appointed former Facebook COO Owen Van Natta as the head of its flagship property MySpace, shifting founders Chris DeWolfe and Tom Anderson into advisory roles. The group is attempting to win back audience from arch-rival Facebook, which has overtaken it as the most popular social networking site worldwide, with almost 300m unique users in March, to around 125m for MySpace. In the US Facebook still sits in second place, with 61.2m unique users in March, to MySpace's 70.1m. However, its audience is growing fast, up by more than 70% on March last year, while MySpace's is declining, down almost 4%.

Conde Nast closed its glossy business magazine Portfolio, launched just two years ago, citing plunging ad revenues and sales. Other titles are likely to follow, or go digital-only, as the US magazine industry struggles to survive the current recession. Time Inc, for example, the country's biggest publisher, this week reported a staggering 30% fall in ad revenue for the first quarter.

ITV appointed Rob Farmer as director of viewer marketing, with responsibility for promoting the channel's programme and channel brands to consumers. He reports to group marketing director David Pemsel.

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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