Adbrands Weekly Update 7th January 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
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United Biscuits

Four of our favourite ads this week: 

Walkers "Baked Naked"
by AMV BBDO / Weilands

Mars/Twix "Crooked Face"
by AlmapBBDO Brasil

Seat "Cherub"
by Atletico International Barcelona

LG "Big Laundry"
by Y&R New York

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Welcome back to work. Hope you had an excellent holiday break. There's plenty of news to get through so we'll keep the preamble short. Four interesting new spots for you this week. The first is the latest in a long-running series for Walker's Crisps featuring footballer-turned-TV presenter Gary Lineker. The agency is AMV BBDO, working with director Paul Weiland, who has helmed every Walker's spot since the campaign first kicked off in 1995.

An odd ad from Almap BBDO in Brazil for Mars's Twix brand, playing on the concept that the twin bars resemble a pause button. It's interesting to see how different agencies and different regions interpret the same idea. Also new this week is a spot from TBWA\London for Twix, which takes an alternative angle. (See it here)

The new ad for Seat's Ibiza compact from Atletico International is typically bizarre, almost as if someone devised the script for the ad and then gave it to Quentin Tarantino to direct. The hairy biker cherub wields a surprisingly deadly automatic arrow gun, and that's pretty serious-looking penetration. Thank heavens his victims are smiling when they're hit; otherwise the ad would never have got past the regulators.

And finally, a cool spot for LG's washing machines devised by Y&R New York which supplies proof positive that you can always succeed with an ad which distorts the scale of ordinary everyday objects. Nice.

In the news this past week: Brands & Advertisers

Kraft's hostile takeover bid for confectioner Cadbury stayed in the news after the American company improved the terms, if not the effective value, of its bid. The US group unveiled plans to sell its frozen pizza business in North America to rival Nestlé for $3.7bn and use the cash to increase the cash element in its existing bid. The company also said it would issue 370m new shares to fund the stock portion of the deal, giving the company the option to raise its offer still further. However, that announcement triggered a quick response from Kraft's biggest and most influential shareholder Warren Buffett, who said he voted against any such dilution. "To state the matter simply," said a missive from his investment vehicle Berkshire Hathaway, "a shareholder voting 'yes' today is authorizing a huge transaction without knowing its cost or the means of payment." Several other institutional shareholders lined up behind Buffett. Needless to say, Cadbury was also quick to castigate the sweetened cash offer. "Kraft has once again missed the point," said a Cadbury spokesman. "Despite this tinkering, the Kraft offer remains unchanged and derisory with less than half the consideration in cash."

The sell-off of the frozen pizza business has also concerned investors. Kraft's brand portfolio, which includes DiGiorno, Tombstone, Jack's and the California Pizza Kitchen license, is the clear leader in the sector by some margin. It has also been one of the company's best-performing units for several years. However, Kraft is keen to quit the frozen foods segment - this is its last foothold in that market - and it clearly sees an opportunity to take profits now rather than risk a decline. For Nestlé's part, the pizza deal is likely to be the first in several new acquisitions. The group also completed the sale of its Alcon Laboratories eyecare business to Novartis over the holiday period, generating a substantial cash pile of more than $28bn. Two other possible targets spring to mind: the nutritionals business Mead Johnson, recently spun out of Bristol Myers-Squibb, and another US food group, General Mills, already Nestle's partner in international cereals and Haagen-Dazs ice cream.

Early indications are that, if 2009 was was the year of the smartphone, 2010 will be the year of the netbook, those scaled-down portable devices which plug the gap between traditional laptops and high-end smartphones. Several PC makers already market such devices. However the market is expected to explode this year with the arrival of two new beasts from manufacturers who already have a strong presence in mobile telecoms. The first is Nokia's 3G Booklet, already available in the US and marketed primarily through a partnership with AT&T which knocks the price down to $299. It is also on sale in Germany and other European markets will follow soon. Early reviews have been positive. The Financial Times reviewer called it "one of the most elegant and sophisticated netbooks I have come across" and "a great travelling companion". However most potential buyers are likely to be holding their breath until the end of March, expected as the launch date for Apple's long-anticipated iTablet. Early buzz is considerable, and the new device is expected to energise the marketplace just as completely as did its predecessors, the iPod and iPhone. If the rumour mill is to be believed, the iTablet will have a 10 or 11-inch touch screen and will offer e-books and mobile TV as well as internet browsing. As Wall Street Journal pundit Martin Peers commented, "Last time there was this much excitement about a tablet, it had some commandments written on it."

Meanwhile Google took the wraps off its Nexus One handset, news of which first leaked late last year, to almost unanimously positive reviews. The device is being sold direct to users via a dedicated website ( and is designed to be used on any network. However the company is also lining up deals with specific carriers to bring down the cost. As a result, in the US, a network-free Nexus One retails for $529, but can also be purchased from the local arm of T-Mobile for $179, with a two-year contract costing around $80 a month. Vodafone is being lined up as Google's main partner in Europe; in France it will be aligned primarily with Vodafone's part-owned SFR network.

British Airways was able narrowly to avoid the complete 12-day shutdown threatened by its unions after a High Court judge ruled that the strike vote was invalid because the ballot included a significant number of employees who had already agreed to accept voluntary redundancy. As a result, passengers who had booked flights on BA were able to travel as planned. Indeed BA's Executive Club members also received an additional goodwill bonus of between 10,000 and 25,000 BA Miles to thank them for their support. No such luck for the 2,000 or so passengers on London-Paris Eurostar trains, trapped overnight and deep underground in appalling conditions for up to 16 hours when no less than six trains broke down as a result of the sudden cold weather. Tens of thousands more were stranded on both sides of the Channel because the company was forced to suspend all operations for three days while it sorted out the problems.

Swedish car brand Saab now seems almost certain to be discontinued after talks by General Motors to sell the business to Dutch company Spyker collapsed shortly before Christmas. A final decision is expected today (Thursday), although Spyker vowed to make one final attempt to strike a deal before the final deadline. Separately, GM concluded a deal to sell some of Saab's technology assets, including selected vehicle platform and engine designs to BAIC of China for $200m. The car giant also made further changes to its executive team, appointing former Microsoft executive Chris Liddell as vice chairman and CFO and Brian Sweeney as VP & general manager of its Buick-GMC division. Meanwhile Ford agreed the basic outline of the sale of the Volvo passenger cars brand to Chinese manufacturer Geely. No details have yet been disclosed, but the price tag is thought to have been between $1.8bn and $2bn.

PepsiCo expanded its North American drinks portfolio with a deal to acquire distribution rights for Dr Pepper, Schweppes mixers and other beverages owned by smaller rival Dr Pepper Snapple Group. Previously, those products were manufactured by one of the bottling companies acquired last month by PepsiCo. Dr Pepper Snapple Group retains ultimate ownership of the Dr Pepper and Schweppes brands in North America. In another development, PepsiCo said its would not be promoting any of its beverage products during next month's Super Bowl broadcast. Instead, the company is shifting its drinks marketing into cause-related campaigns, including the Pepsi Refresh Project, which will will award financial grants to community projects proposed and selected by consumers. Group-owned snack brands, including Doritos, will still feature during the Super Bowl. However, this marks a significant climbdown from the company which last year was the Super Bowl's single biggest advertiser. Another marketer planning to take a break for this year's game is FedEx, which cited "cost containment" as the reason for its absence.

Paris-based pharma group Sanofi-Aventis set about establishing a presence in US consumer healthcare by agreeing a deal to acquire local group Chattem, known for a collection of OTC products including Gold Bond, Cortizone and IcyHot skin powders and creams, ACT mouthwash and the sleep aid Unisom. The deal price is $1.9bn, and Sanofi plans to use Chattem as the platform to launch an OTC version of its antihistamine medicine Allegra as soon as the deal is completed.

The Tiger Woods saga rumbled on. Nike reaffirmed its support for the embattled golfer, as did EA Games, at least until it finalises its new Tiger Woods PGA Tour Online game, which debuts next month. However, AT&T joined Accenture in pulling the plug on their endorsement partnership, and Tag Heuer followed Gillette in cutting back on marketing which features the disgraced star.

British regulators, which had initially blocked the proposed merger of Live Nation and Ticketmaster's UK subsidiaries in October, reversed that decision after further consideration. The deal is still under review in the US and Canada, but no significant hurdles are expected. As a result, the two companies will almost certainly be able to proceed with their merger, creating the world's biggest live entertainment and ticketing group. Meanwhile music and books retailer HMV Group offered to buy out MAMA Group, its partner in a joint venture which owns a network of live music venues across the UK including London's former Hammersmith Apollo, now the HMV Apollo.

In the news this past week: Agencies

Two agencies on either side of the Atlantic lost their high profile leaders. Alan Kalter, longtime chairman & CEO of Doner, one of the biggest independent agencies in the US, left the company at the end of December. A Doner lifer, he had worked at the agency since the late 1960s and took much of the credit for its reinvention during the 1990s. However, Doner has been on a losing streak for the last couple of years, surrendering a series of high profile accounts. Kalter sold his controlling stake in the business to a triumvirate of senior managers comprising David DeMuth, Rob Strasberg and Tim Blett. Meanwhile here in the UK industry maverick Sir Frank Lowe retired as executive chairman of The Red Brick Road, the indie he set up four years ago after he was freed from his non-compete clause with former employer Interpublic. The creation of Red Brick Road followed Sir Frank's poaching of the Tesco account from his previous agency, Lowe Worldwide. He will remain a shareholder of Red Brick Road.

Juergen Bloemenkamp was named as the new global CEO for trading at WPP's GroupM media umbrella. That unit handles price negotiation and other centralised services for WPP's four media networks, Mindshare, Mediacom, Mediaedge:cia and Maxus. Bloemenkamp replaces Alexander Schmidt-Vogel, who will retire in Spring 2010. Like his predecessor, Bloemenkamp has risen through the ranks at the Mediacom Germany. In addition to his role as global CEO of trading, he will remain chairman of Mediacom Germany. Elsewhere at GroupM, Rob Norman will replace Marc Goldstein as CEO, GroupM North America in the Spring, and will also retain his role as global CEO of GroupM Interaction.

Publicis Groupe merged teams from its MediaVest and Digitas networks to form a dedicated unit servicing the extensive worldwide Kraft Foods account. The unit, titled Kraft Foods One Team, will be based out of MediaVest New York, but is headed by Digitas EVP Susan Canaveri.

Unilever announced its first global roster of digital agencies. So far four agencies have been confirmed: Razorfish, Euro RSCG, AKQA and Lean Mean Fighting Machine. Sapient is expected to join the line-up once terms have been agreed. Most business will be coordinated from each agency's London office, although local outposts will also contribute. The FMCG giant will also draw up regional rosters, although these are likely to be dominated by the global choices.

In account assignments, Carat was reappointed to General Motors' European media business following a review. In the US, GM said it would shift advertising for Chevrolet's passenger cars out of long-time incumbent Campbell-Ewald and into Publicis Mid-America. C-E keeps Chevrolet trucks for now. McCann Erickson New York regained the global account for Holiday Inn hotels. Cramer-Krasselt picked up healthcare remedy Zicam. Abbott Laboratories placed media with Mindshare. Mars shifted media for its chocolate products in France to Starcom, from Mediacom. Unilever completed the first leg of its global media review awarding duties for China to the local office of Omnicom's PHD. For all other appointments, subscribers can access the full Adbrands Account Assignments database here

In the news this past week: Media

News Corporation's Fox network was involved in an angry dispute with the #2 US cable carrier Time Warner Cable (TWC) over the holiday period after negotiations which have dragged on since the summer. The two giants came to blows over Fox's demands that TWC make a payment for the right to retransmit its content via cable to subscribers. Previously no such retransmission consent fees have been paid to free-to-air channels, but all four of the major networks are now pushing for carriage payments as a way of offsetting the decline in ad revenues. CBS has already negotiated a rate of around 50 cents per subscriber per month with some smaller cable carriers. However, Fox had been demanding as much as $1 per subscriber per month from TWC, or around $180m for the year. The carrier countered with an offer of 20 cents, and the two sides spent several days attempting to hammer out a deal with no success. By New Years Eve, neither side had agreed to compromise, prompting Fox box Chase Carey to warn staff that he was preparing to black out all Fox programming in TWC's 15m homes, including such audience favourites as The Simpsons, House, American Idol and NFL and college football games. Eventually a deal was reached on New Year's Day following a marathon all-night negotiating session. Neither side was prepared to divulge the final rate, but most observers believe that a compromise of rate of under 50 cents was agreed, possibly with a higher rate for key urban markets, and with a built-in increase to as much as 75 cents by 2014. The row carried echoes of a similar battle in the UK between News Corp's Sky service and local cable carrier Virgin Media. That dispute led to Sky's free-to-air programming being pulled from Virgin Media for almost two years in 2007 and 2008.

If 2010 is partly the year of the netbook (see above), it could also be the year that 3-D entertainment comes of age. The huge success of the movie Avatar - now almost certain to take up the #2 spot among biggest movies of all time behind Titanic if not surpass it - has kicked off a frenzy of new product and content development. Sony, LG and Samsung all have a line of 3-D TVs ready for launch this year, albeit at exorbitant prices, and other manufacturers are following close behind. As a result, several content providers have begun unveiling their own 3-D offerings to coincide with the Consumer Electronics Show in Las Vegas, which kicked off this week. First up was a consortium comprising Sony, cable company Discovery Communications and technology developer Imax, which announced plans to launch a 3-D channel in the US in 2011 which will show movies, rock concerts and kids shows. That promise was immediately trumped by sports channel ESPN which said it would launch its own 3-D channel as soon as this summer, kicking off with the upcoming Fifa World Cup tournament and US college football. US satellite broadcaster DirecTV is also expected to go public this week with plans for two 3-D channels as well as a video-on-demand service.

Spain's broadcasting industry is undergoing a process of emergency consolidation as rival groups join forces to counter the impact of economic downturn. Grupo Prisa agreed at the end of last year to merge parts of its broadcast business with that of Mediaset, the Italian group controlled by Silvio Berlusconi. Mediaset is already active in Spain through free-to-air channel Telecinco, the country's #2 broadcaster by audience share. Under the terms of the new arrangement, Telecinco will take over management of Prisa's Cuatro channel, the local #4 by audience, in an all-share deal that will give Prisa an 18% holding in the combined business. It will also pay €500m for a 22% shareholding in Prisa's pay-TV service Digital+. Two other Spanish terrestrial channels, Antena 3 and La Sexta, ranked #3 and #5 respectively, are also discussing a merger. Spain's biggest terrestrial broadcaster is state-owned TVE-1.

Apple raised the stakes in the mobile advertising sector, acquiring the Quattro Wireless network for around $275m. That created further rivalry with former ally Google, which also recently jumped into mobile advertising with the purchase of US market leader AdMob.

US radio giant Citadel Communications filed for bankruptcy. The company, which operates more than 220 stations around the nation has debts of $2.4bn but assets of just $1.4bn and sales of around $720m a year. Under a prearranged deal with its largest creditors, the company will swap around $2bn of debt for equity. Citadel is America's #3 radio group behind Clear Channel and CBS Radio.

Russian businessman Alexander Lebedev, owner of London's Evening Standard newspaper, is said to be close to finalising a deal to acquire the country's national daily broadsheet The Independent and its Sunday edition from its struggling publisher Independent News & Media. A deal could be tied up by the end of January, exactly a year after Lebedev acquired the Standard for a nominal sum.

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Simon Tesler
Publisher, Adbrands

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