Adbrands Weekly Update 7th October 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

Coca Cola

Young and Rubicam

Unilever

MediaEdge:CIA

Kraft Foods

BBDO

LOreal
DDB

OMD

Nike

TBWA

Sony

JWT

Johnson and Johnson

Carat

McCann Erickson
Apple
Bartle Bogle Hegarty

Diageo

Ogilvy and Mather

Ford Motors

Mindshare

Verizon

ZenithOptimedia

Four of our favourite ads this week: 

Virgin Atlantic "Fall In Love With Flight"
by RKCR/Y&R London

Volkswagen "Cloud Sheep"
by
Almap BBDO Brasil

Clarks "Women"
by AMV BBDO

Garnier Fructis "Monkey"
by
Publicis New York

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

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Virgin Atlantic launched their first global advertising campaign this week with a stunning new ad from RKCR/Y&R, which owes a good deal to those iconic James Bond title sequences by Maurice Binder. Apparently all involved were worried about whether the new spot would live up to RKCR's "Still Hot" ad for Virgin from last year. In our estimation, the new ad is far superior, a fabulously luxurious film which says far more about Virgin Atlantic's top-notch service. There's an entertaining piece in this week's Campaign by RKCR chairman Mark Roalfe about the making of the ad, which is worth checking out. Interestingly, one of his biggest concerns about the original script was whether the technical team could pull off the sequence where a stewardess pulls a cloud over a passenger like a blanket, because he'd never seen clouds done well before. He needn't have worried of course, it works brilliantly... and also provides a neat link to our next ad...

Almap BBDO Brasil deliver their follow-up to the Volkswagen Dog Fish (see here: top right) in the form of a Cloud Sheep. A Cloud Sheep? Yup. Delightful, and the Cloud Sheep is totally adorable.

Meanwhile AMV BBDO unleash a new breed of Amazons over London in support of shoe retailer client Clarks. We've seen this technology done before (starting with giant Rolling Stones in the music video for Love Is Strong back in the 90s), but never in quite such a sexy way.

And finally, Publicis New York have produced a barrage of ads to promote the new anti-dandruff shampoo from L'Oreal's Garnier Fructis range. Here's the longform viral version of the best of the set. The 30-second version, complete with end product sell, is here but we like the long version for extra excruciating embarrassment. The other ads are here on the Garnier Fructis YouTube page.


In the news this past week: Brands & Advertisers

HP named Leo Apotheker, a former head of German software company SAP, as its new CEO. He replaces Mark Hurd who was ousted unceremoniously in August. Apotheker spent most of the past 20 years at SAP, becoming co-CEO in 2008 and sole CEO in April 2009. However, his decision to raise rates for SAP support contracts at the height of the recession proved unpopular with clients, and following several complaints he resigned abruptly from the company earlier this year. His move to HP provides a new threat to that group's delicate relationship with US software giant Oracle, which also happens to be SAP's main competitor. HP and Oracle only recently patched up a row that erupted when Oracle CEO Larry Ellison hired ousted HP boss Mark Hurd as co-president. The appointment of Apotheker has reopened those wounds, not least because the German-born executive retains strong ties to his former employer, which is due to meet Oracle in court next month. That case stems from Oracle's allegation that, for part of the time that Apotheker ran SAP, one of the German group's US subsidiaries routinely hacked into the Oracle computer system to steal customer information. As a result, Oracle's always outspoken Ellison was quick to voice his outrage this week over the hiring of Apotheker, firing out multiple emails to the business media. "I'm speechless," he told the Wall Street Journal. "HP had several good internal candidates…but instead they pick a guy who was recently fired because he did such a bad job of running SAP." To the Financial Times, Ellison said "SAP has already publicly confessed and accepted financial responsibility for systematically stealing Oracle's intellectual property over a long period of time. Much of this industrial espionage and intellectual property theft occurred while [Apotheker] was CEO of SAP. The HP board must have been aware of these facts, yet they appointed [him] CEO of HP anyway." The case, as they say, continues.

British group Premier Foods said it had received offers for its vegetarian and meat-free division, which markets tofu and related products under the Quorn and Cauldron brands. Acquired in 2005, Quorn was for a time Premier's biggest brand, but it has been overshadowed by more recent purchases including Hovis bread and Mr Kipling cakes. At the same time, the group is struggling to pay down the substantial debts it incurred through its string of past acquisitions. It has been under pressure for some time from investors to do something to boost its languishing share price. The sale of the meat-free business, with revenues of around GBP 125m in 2009, won't make much of a dent in Premier's GBP 1.4bn net debt, but will at least demonstrate some positive movement.

Unilever's chief marketing & communications officer Keith Weed expanded his department with the creation of three new global roles. Helena Ganczakowski was named as global VP for agency relations; Jorgen Bartsch becomes global VP for marketing services; and Paula Quazi was appointed as global VP for futures communications. All three are being transferred from existing roles within Unilever. In other appointments, US insurer Progressive named Jeff Charney as chief marketing officer. He joins from the same role at Aflac, where he has been replaced by his deputy Michael Zuna.

Mattel was forced by the US Consumer Product Safety Commission to issue a recall order for more than 11m baby and toddler products sold under its Fisher-Price brand because of concerns over potential choking injuries. The recall affects a range of different items including tricycles, high-chairs and play sets. The timing could hardly be worse for Mattel, coming as it does at the start of the holiday season. Three years ago, the company was forced to issue another massive recall over products imported from China that were contaminated with lead-based paint.

If you can't beat 'em, sue 'em. That appears to be the new motto of the mobile phone industry. At the end of last week, Microsoft issued a lawsuit against Motorola, alleging that several of the handset manufacturer's Android-based phones violate Microsoft patents covering functions such as synchronisation of email and calendars, as well as applications illustrating changes in signal strength and battery power. The legal challenge comes a few days before Microsoft releases an updated version of its own mobile phone operating system, but for now the software giant seems to be powerless to prevent itself from being gradually squeezed out of the market. According to researcher IDC, Microsoft's share of the worldwide smartphone OS market is expected to fall to 6.8% this year from 13% two years ago, while that of Google's Android could jump to 16.3% from less than 1% in 2008. Oddly enough, Google wasn't itself directly named in the Microsoft lawsuit. (Was Microsoft nervous about a direct legal challenge to its biggest competitor?). However, a Google spokesman responded to Microsoft's filing, saying "We are disappointed that Microsoft prefers to compete over old patents rather than new products. While we are not a party to this lawsuit, we stand behind the Android platform and the partners who have helped us to develop it."

In another curious wrinkle, Motorola's response to the Microsoft suit was not to fight back with a counter-suit, but to go for appeasement, saying it would now consider using the Microsoft OS in some of its phones. Then it issued its own set of patent-infringement claims against... not Microsoft, but Apple. According to Motorola, Apple's iPhone, iPad, iTouch and some Macintosh computers are infringing as many as 18 different Motorola's patents without permission. As most observers pointed out, within the mobile industry lawsuits have become little more than a ruse to slow down the growth of faster-moving competitors with drawn-out but largely irrelevant legal challenges.

In the pharmaceutical industry, Sanofi-Aventis finally decided to go hostile in its pursuit of biotech company Genzyme, which has been resisting a friendly takeover for several months. As a result, Sanofi has now taken the decision to bypass the smaller company's board and address its arguments directly to Genzyme shareholders. Elsewhere, Johnson & Johnson took its first steps into biotechnology with an agreed acquisition of Dutch vaccine developer Crucell for $1.75bn.

VimpelCom, best known as the parent of Russia's #2 mobile service Beeline, expanded its operations into Western Europe and the Middle East this week, agreeing to acquire the telecoms interests of Egyptian billionaire Naguib Sawiris for $6.5bn in cash and stock. That gives VimpelCom control not only of emerging markets provider Orascom but also the Wind service in Italy. Sawiris is expected to end up with a 20% stake in the enlarged group, partnered by Telenor of Norway with 29% and Russian oligarch Mikhail Fridman's Alfa Group with 36%. VimpelCom becomes the world's fifth biggest mobile provider by subscriber numbers, with operations spread across several of the former Soviet Union territories, as well as Pakistan, Bangladesh, Tunisia, Vietnam and Italy.


In the news this past week: Agencies

As had been expected, Publicis Groupe agreed to acquire a 49% shareholding in Talent Communicao, the Brazilian marketing services group, for a sum reported to be as much as $110m, a more than generous multiple of four times Talent's total revenues for 2009. The justification for Maurice Levy's generosity? Brazil is currently regarded as the most exciting of the so-called BRIC emerging markets of Brazil, Russia, India and China. It is due to host the Fifa World Cup in 2014 and the Olympics two years later, making it a potential goldmine for international marketers. The Brazilian group's two main agencies of Talent and QG are to be aligned with the Publicis Worldwide network.

M&C Saatchi reported resilient interim results for the first half of 2010 despite the cancellation by the UK Government of the high-profile Change 4 Life anti-obesity campaign, which M&C had handled. Revenues and pretax profits both rose by 17% to GBP 58.2m and GBP 6.3m respectively. The UK accounted for 43% of total revenues, or GBP 25.3m. M&C chief executive David Kershaw said: "The group has started the year well in what remains a challenging market. These results have been driven by both new business wins and continued cost control."

Euro RSCG promoted Sander Volten, currently chief executive of Euro RSCG Netherlands, to a newly created role as managing director of digital for Europe, with responsibility for building the group's interactive services across the region. Meanwhile, Dina Howell, currently VP, global media & brand operations at Procter & Gamble, is reported by AdAge to be crossing over to the agency side as the next head of Saatchi & Saatchi X, that network's shopper marketing division and already a key supplier to P&G. She will replace longtime CEO Andy Murray. In the UK, there was another departure from Fallon London, with the resignation of marketing director Helen Weisinger to become chief marketing officer at McCann London.

In account assignments, Diageo is shifting US media from MediaCom to Carat following a review, and is also calling pitches for global creative for the Captain Morgan and Tanqueray brands, held by Grey and Wieden & Kennedy respectively. Verizon transferred part of its substantial Hispanic marketing account from Global Hue to Lopez Negrete. Drive-in restaurant chain Sonic called a review of creative and media, held for the past two decades by Barkley. The independent agency has declined the opportunity to defend. Tourism Ireland announced a global review of creative and media, currently managed by JWT and Mindshare. Grey picked up a global brief for Sony's Bravia televisions while CHI & Partners was awarded a global brief for Samsung mobile phones. In the UK, Vodafone appointed G2 as its new digital and direct agency, following a review. The business was previously managed by Partners Andrews Aldridge. Pfizer launched a review of UK media, currently split between Universal McCann and Vizeum. For all appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

Britain's Coalition Government is attempting to persuade the BBC to begin showing public service advertising for free as part of its goal to slash state-sponsored advertising expenditure, which soared to extraordinary levels under the previous Labour administration. The talks are being led by Cabinet Office minister Francis Maude, himself a former marketer. Maude told the Conservative Party Conference this week, "We can do things very differently in future. Instead of paying more than GBP 200 million [a year] to buy ad space in the media, why shouldn't we use publicly owned channels, such as government websites, to deliver public service messages?" Those plans have met with strong opposition from the BBC, which despite its position as a state-owned organisation wants to preserve its "no advertising" policy. (Or rather no advertising for anything apart from BBC products and services). Not too surprisingly, commercial channel ITV, keen to protect its own share of Government spend, also opposes the plan.

Cyberspace was abuzz this week over the departure of three senior executives from Yahoo: Hilary Schneider, head of Yahoo Americas, US Audience head David Ko and Jimmy Pitaro, VP, media. (Pitaro is heading over to the House of Mouse to become joint head of Disney Interactive Media alongside John Pleasants of Playdom). The renewed turmoil raised further questions about the efficacy of Yahoo's turnaround under CEO Carol Bartz. According to All Things Digital blogger Kara Swisher, Bartz "came in with guns blazing and styling herself as an agent of change. Except not too much has changed – except for finally striking a search technology deal with Microsoft – as the exodus of talent from Yahoo increases, advertising revenue growth is anemic, innovation is stalled, metrics are weak and the stock remains moribund." Ouch.

The world's two largest Spanish-language broadcasters strengthened their longstanding strategic alliance. Grupo Televisa of Mexico acquired a 5% shareholding in US Hispanic network Univision for $1.2bn in cash and transferred full control of TuTV, their former joint venture which broadcasts Televisa's HD pay channels in the US.

German trade paper Horizon T published its annual ranking of that country's biggest media companies. Bertelsmann remains firmly in the top spot with revenues of E15.4bn, more than five times the turnover of its closest rival, broadcaster ProSieben Sat 1, with E2.8bn. Newspaper and magazine publisher Axel Springer holds the #3 spot at E2.6bn, making it the country's largest periodical publisher (Bertelsmann's Gruner & Jahr division reported E2.5bn). In 4th place came Georg von Holtzbrinck (E2.4bn), best known for its regional newspapers and large educational publishing division. The biggest climber among the leading groups was Heinrich Bauer Media, which moved up to the #5 position after reporting a 15% increase in revenues to E2.1bn, largely as a result of the addition of the former EMAP consumer publishing business in the UK. Rounding out the top 10 were state-controlled broadcaster ZDF, book publisher Weltbild, magazine publisher Hubert Burda Media, broadcaster WDR and newspaper publisher WAZ.

Meanwhile in the UK, three of the country's leading magazine publishers reported results for 2009. Time Warner's IPC Media suffered an 11% slump in revenues to GBP 351m, while pretax profits dropped 37% to GBP 50m. The magazine is currently involved in a sell-off of several of its smaller or less profitable titles. Hearst's local subsidiary The National Magazine Company (NatMags), which publishes the UK editions of Harper's Bazaar, Cosmopolitan and Good Housekeeping among others reported a 14% slump in revenues to GBP 297m (from GBP 344m in 2008), but was back in the black with a pretax profit of GBP 1.3m. It reported a GBP 43m loss the previous year as a result of an impairment charge of GBP 55m. Conde Nast Publications UK, local publisher of Vogue, Glamour and Vanity Fair, reported revenues of GBP 107m, down from GBP 125m in 2008, while pretax profits plunged 70% to GBP 5.6m.

Carat published the results of its Consumer Connection Survey which measures the perceived "trustworthiness" of British media brands. The BBC remains the clear leader, trusted by 46% of the survey's 11,000 or so respondents. Taking up second place was Google, with a score of 32%. Amazon was trusted by 27% of adults, and the Financial Times was the highest-ranking newspaper with a score of 24%, level-pegging with Microsoft. The Times newspaper and ITV came next with 23% and 22% respectively, and the top ten was rounded out by the Daily Telegraph (19%), and Channel 4 and The Guardian both with 18%.

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Simon Tesler
Publisher, Adbrands