Adbrands Weekly Update 1st July 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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RECENTLY ADDED PROFILES

Procter and Gamble

Starcom MediaVest

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Unilever

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TBWA

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ZenithOptimedia

Four more Cannes Lions winners 2010: 

Old Spice "The Man Your Man Could Smell Like"
by Wieden & Kennedy: Grand Prix for Film

Vonage "High Quality Sound"
by TBWA\Chiat\Day NY: Gold Lion
for Film

Car One Dealership "Inheritance"
by Leo Burnett Argentina:
Gold Lion for Film

Topsy Foundation "Selinah"
by Ogilvy Johannesburg
: Gold Lion for Film

Update only subscribers: click here to view Ads of the Week

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Once again, we're devoting the Ads of the Week spot to four winners from the Cannes Lions advertising festival, which wrapped up last weekend. In the Film category, the Grand Prix went to Wieden & Kennedy for this popular campaign for P&G's Old Spice. In our opinion it was an odd choice. Funny, yes. Technically excellent, yes, but frankly we felt there were more worthy recipients of a Grand Prix. For example, past Ads of the Week choices such as BETC Euro RSCG's Closet ad for Canal+ or BBH London's Man Who Walked Around The World for Johnnie Walker, both of which took Gold, among many others. Or Grey London's stunning Space Chair for Toshiba or Ponce Buenos Aires's Destiny for Axe (our personal favourite for last year), both of which collected Bronze. Anyway, here are three Gold winners which we somehow overlooked over the past year:

TBWA New York was responsible for a series of spots for VoIP telephone company Vonage demonstrating the service's superior sound quality. All three follow the same right way/upside down format, but this is our favourite, if only because it acknowledges the absurdity as well as the brilliance of the concept. Very post-post-post modern. The Argentinean outpost of Leo Burnett also took Gold with this clever spot for used car dealership Car One. A cute idea, nicely handled. And finally, a deeply moving appeal by Ogilvy Johannesburg for the Topsy Foundation, which looks after AIDS sufferers in South Africa. Truly excellent, and with a surprisingly positive punchline.

In the newly created Film Craft category, DDB London and RSA Films were awarded the Grand Prix for their short film The Gift, for Philips, promoting the Ambilight flat screen TV (another past Ad of the Week). In the Titanium & Integrated category, Wieden & Kennedy took home a second Grand Prix for the Nike Livestrong Chalkbot, which already collected a top prize in the Cyber category (and was featured here last week). They shared the Titanium & Integrated Grand Prix with Crispin Porter & Bogusky's Twelpforce initiative for electronics retailer Best Buy, offering technical support via Twitter; and Forsman & Bodenfor's Facebook showroom for Ikea. The Grand Prix for Good was awarded to AMV BBDO for their campaign against knife crime in the UK on behalf of the Metropolitan Police.

There were also corporate awards for the agencies with the most chosen nominations in their respective categories. AMV BBDO was Direct Agency of the Year, Leo Burnett Sydney was named as Media Agency of the Year, Crispin Porter & Bogusky was Interactive Agency of the Year. Jung von Matt of Germany was the first winner of a new Independent Agency of the Year award, recognising nominations across all categories. AlmapBBDO of Brazil was Agency of the Year; and BBDO Worldwide took home Network of the Year for the 4th consecutive time. The Palme d'Or production company prize went to MJZ. For more details, including all the Gold, Silver and Bronze winners, see the official Cannes Lions site.

Ironically, another of this year's Lion winners made a different set of headlines this week when it was banned by the UK's advertising authority, the ASA. Anomaly's "Be Stupid" poster campaign for denim manufacturer Diesel took a Grand Prix in the Outdoor category last week. However the ASA has ruled that two of the ads - one in which a woman takes a picture down her bikini pants while being stalked by a lion, and another in which a girl climbs a ladder to expose her breasts to a security camera - were offensive. The ads were accompanied by the slogan "Smart may have the brains, but stupid has the balls. Be stupid, Diesel". The ASA has ruled that the ads contravened two sections of the advertising code and may not be used on posters again in the UK, although they can continue to appear in print media.


In the news this past week: Brands & Advertisers

Nike reported annual results for the year to the end of May 2010. Total revenues slipped by 1% from last year's record $19.2bn to $19.0bn, as dynamic performance in China and steady but slow improvement in the US failed to offset declines in Europe and Japan. However net income soared by 28% to over $1.9bn. The previous year's results were impacted by a large restructuring and impairment charge. Presenting the figures to investors, CEO Mark Parker was bullish about the future, promising to build revenues to $27bn over the next five years by expanding the group's direct-to-consumer retail operations and improving the contribution from other brands. "We've never been more inspired, innovative and aligned to achieve our goals," he enthused. "We have powerful competitive advantages in our portfolio innovative and compelling products, brands that are distinct and relevant to their consumers, and the world's greatest athletes and teams. Our focus is to build, fuel and accelerate the power of our portfolio." Nevertheless, investors were underwhelmed, and Nike's share price slipped slightly following the presentation.

Apple continues to conquer all. The company said on Saturday that it sold 1.7m units of its new iPhone 4 handset in just three days before running out of stocks. CEO Steve Jobs said "This is the most successful product launch in Apple's history. Even so, we apologise to those customers who were turned away because we did not have enough supply."

In a surprise development, the Portuguese government, smarting from that country's World Cup defeat by Spain, intervened in the negotiations between Portugal Telecom and Telefonica of Spain over their Brazilian mobile joint venture Vivo. Portugal Telecom has been under intense pressure from its partner for several years to sell its stake in fast-expanding Vivo, and the Spanish company has issued a series of ever-higher offers for those shares. This week, on the eve of a vote by PT shareholders over such a sale, Telefonica increased its bid to almost E7.2bn. That handsome offer, which is almost three times more than Portugal Telecom's domestic revenues for the whole of 2009, was widely expected to clinch the deal. Indeed, almost three-quarters of the Portuguese company's shareholders had accepted it before the government stepped in abruptly and blocked the sale altogether, using its so-called "golden share". "The offer was not in the interest of PT," explained prime minister Jose Socrates. "The government is protecting the interests of the country." However, this action is almost certain to lead to legal challenges not only from the outraged Telefonica, but also from European regulators already concerned about protectionist barriers to the free movement of capital within Europe, and even from Portugal Telecom's beleaguered shareholders, who would have welcomed an exceptional dividend payout.

Nicolas Hayek, the colourful founder and chairman of watchmaker Swatch, died suddenly this week. Hayek was widely credited as the saviour of Switzerland's horology industry. In the early 1980s, all of the country's watchmakers faced ruin following the Japanese invention of electronic quartz technology which swept away the need for complicated and costly mechanical components. A management consultant, Hayek was called in by the Swiss government to manage a disciplined shutdown of the country's dominant watchmakers. Instead, Hayek merged them into a single company in which he acquired a majority shareholding, and then developed his own simplified quartz process, which he packaged in bright, plastic cases and launched as the Swatch brand, under the prominent banner "Made in Switzerland". The proceeds from this highly profitable new brand were used to underwrite the country's more distinguished premium manufacturers, such as Breguet, Tissot and Longines, which remained subsidiaries of Hayek's Swatch Group, still the world's largest watchmaker. Later, he established a partnership with Mercedes to introduce his own design for a small city car, named Smart, now wholly controlled by Daimler. Hayek is to be succeeded as chairman of the business by his daughter Nayla Hayek. Her brother Nick Hayek remains chief executive.

Walmart named Bill Simon as chief executive of its US stores division, replacing Eduardo Castro-Wright, who takes on a new role as CEO of global sourcing. Simon was previously chief operating officer for Walmart US. The group denied that the shuffle was inspired by Walmart's comparatively lacklustre recent performance, but suggested that personal reasons played a part in the decision. In his new role, Castro-Wright will relocate to California to be near his wife, who is recovering from major surgery.

Volvo Cars is expected to name Stefan Jacoby, currently head of Volkswagen North America, as its new global CEO following completion of the sale by Ford to Geely of China, expected imminently. Jacoby will replace current head Stephen Odell, who will return to Ford in an as yet unspecified role. In other personnel moves, Peter Hope was promoted to marketing director at GM's UK subsidiary Vauxhall. LG appointed Dan Walsh as head of marketing for UK mobile, while Nokia UK recruited Ash Choudhury from Fiat to become head of digital marketing.


In the news this past week: Agencies

Interpublic finalised a deal to acquire London agency DLKW, which will merge it with the struggling Lowe London outpost under the new name DLKW Lowe. IPG is paying around $40m to acquire DLKW from marketing services group Creston. DLKW's senior management team will retain their roles in the enlarged agency, reporting to Lowe Worldwide's chairman Tony Wright and CEO Michael Wall. That merger, which had already been rumoured, is destined to return the beleaguered Lowe brand to upper echelons of the UK Top Ten for the first time since 2003. Combined billings for the two agencies for 2009 were GBP 238m, according to Nielsen, enough to make DLKW Lowe the UK's #2 agency behind AMV BBDO.

WPP announced plans to merge its two biggest healthcare marketing networks to create what will become the clear #1 in the market by global footprint. CommonHealth and Ogilvy Healthworld are to join forces under the new umbrella name of Ogilvy CommonHealth. CommonHealth's Matt Giegerich will remain chairman & CEO of the merged business, which debuts with with over 1,100 employees in 64 offices across 33 countries. Ogilvy Healthworld's Gloria Gibbons will manage the merged group's international operations. Although some offices will be combined, the new group is expected to maintain separate Ogilvy Healthworld and Ogilvy CommonHealth units in several markets. Giegerich said, "This couldn't be a more perfect union. CommonHealth has collaborated extensively with Ogilvy Healthworld for the past fifteen years and we have an enormous amount of trust in the talent, leadership and capabilities of this considerable network. By combining our two organizations - and the remarkable collective talent pool within - we can now offer clients all the communications resources necessary to create and grow powerful, unified global brands in a rapidly evolving healthcare environment." According to Ad Age estimates, the merged group would have revenues of around $246m for 2009, making it the #3 by revenues behind Publicis Healthcare and inVentiv. However it has a wider global presence.

In yet another potential merger, Campaign reports today that Cossette of Canada is considering the merger of its two best-known British subsidiaries, traditional agency MCBD and digital shop Dare. The combination is being prompted by the group's desire to provide a fully integrated full service offering in the UK. It is already planning to relocate all of its UK agencies, which also include direct marketer Elvis, design agency Identica and PR firm Band & Brown, to shared offices in central London. If the merger of MCBD and Dare goes ahead, the resulting business may even use the Dare name. Three of the four founding partners of MCBD have already left the agency, with only chief executive Helen Calcraft remaining. One key obstacle to a merger would be the conflict between supermarket clients Waitrose, held by MCBD, and Sainsbury's, whose digital is handled by Dare.

There's no word yet on where exactly the Cadillac account will end up following the decision by new GM marketing chief Joel Ewanick to shift the business from five-month incumbent BBH. AdAge initially reported that Fallon would be the new agency for the Cadillac account, but that creates a significant clash with Chrysler, also currently held by Fallon. Publicis Groupe managers are reported to be desperately trying to assemble a hybrid team to handle both accounts without a conflict. What is certain, though, is that this latest change of heart by GM's Ewanick has been as badly handled as his transfer of the Chevrolet account last month. Like Publicis Worldwide with Chevrolet, BBH only learned that it was losing the Cadillac account from reading the story on the AdAge website. As AdAge subsequently commented: "Marketers are always looking for more efficient relationships with agencies, and General Motors Co. seems to have found a new one: Don't waste time telling shops they're fired when they can just read it in the press."

In other account assignments, US satellite broadcaster Dish Network placed its media with independent Horizon Media; pancake restaurant chain IHOP shifted creative back to McCann Los Angeles; and Deutsch New York won back insomnia cure Lunesta. In the UK, insurance broker CompareTheMarket called a review of media, out of ZenithOptimedia, and of digital; Santo joined Nestle's roster with a brief for Milky Bar; Doner Cardwell Hawkins collected creative for heritage car brand MG; and ING Direct reappointed PHD for media. For all other appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

An overwhelming majority of journalists at French daily paper Le Monde, which had been facing a liquidity crisis, spurned the rescue offer made by France Telecom and existing shareholder Le Nouvel Observateur and instead voted in favour of a rival bid from three left-leaning businessmen: banker Matthieu Pigasse, internet entrepreneur Xavier Niel and Pierre Berge, the former business and life partner of Yves St Laurent. Attempts by President Sarkozy to block the trio's bid because two of them have close links to his political rivals appear to have swung the decision in their direction. Around 90% of Le Monde's journalists, who currently have collective control of the business, rejected the France Telecom offer on Friday last week. The paper's supervisory board followed suit on Monday, after several hours of discussion. As the only remaining bidder, the investor trio made available an immediate cash lifeline of E10m, and will now negotiate exclusively to acquire a controlling stake in Le Monde in return for an additional E100m investment.

Hearst Magazines raided rival Conde Nast to recruit David Carey as divisional president, overseeing titles including Cosmopolitan and Good Housekeeping. He replaces Cathleen Black, who moves up to a new position of chairman. Carey was previously publisher of titles including Wired and Golf Digest. Separately, Hearst named Michael Clinton to the role of president, marketing and publishing director.

Larry King announced that he will finally be hanging up his trademark red braces this Autumn, at least on a nightly basis. The longserving chat host will step down from his nightly show on CNN, although he will continue to make a number of special shows for the cable news channel. The channel has yet to name King's successor, likely to be either celebrity newscaster Katie Couric and or British pundit and former newspaper editor Piers Morgan.

Web-based video-on-demand service Hulu introduced paid-for option Hulu Plus, which offers expanded content, including the full current seasons of hit TV shows, for a $9.99 monthly subscription. Previously the service, which is jointly owned by the Fox, NBC and ABC networks, was entirely free, funded by advertising.

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Simon Tesler
Publisher, Adbrands