Adbrands Weekly Update 9th September 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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Procter and Gamble

Starcom MediaVest

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ZenithOptimedia

Four of our favourite ads this week: 

Delta Airlines "Human Factor"
by Wieden & Kennedy New York

VB "Cry"
by
Droga5

Philips "Nigel & Victoria episode 1"
by Hoot/Wenneker TV

Baby Carrots "Extreme"
by
Crispin Porter & Bogusky

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

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Decisions, decisions... Sometimes it's really hard to make a selection of just four ads out of the hundreds of new spots which bombard us each week. This week is one of those weeks. So we'll pick four, and then send you elsewhere for another four that didn't quite make the cut. First up, the strikingly photographed new campaign for Delta Airlines, by Wieden & Kennedy, featuring the honeyed tones of actor Donald Sutherland. It's nicely done, and unusually stylish for an airline ad.

We love Australian beer ads! Is there ever a bad one? Droga5 takes on nancy boy metrosexuals in this new spot for the country's top-selling brew VB. Lovely.

Philips is trying another new approach with this web series Nigel & Victoria, an eight-part "unromantic comedy" in which newly appointed Philips brand manager Nigel attempts incompetently to woo spokesmodel Victoria. The series - of which three episodes are available so far - is designed to highlight new Philips product innovations and is greatly assisted by strong performances from Ben Willbond as Nigel and Dutch TV celebrity Victoria Koblenko. It's hardly rocket science, but we were charmed, and will probably be tuning in for the remaining five instalments. One thing that continues to surprise is just how inessential some of these Philips products are. I mean, really, laptop cushion speakers? Washable headphones? See the other episodes in Nigel and Victoria's evolving relationship here. The series is produced by comedy collective Hoot and production company Wenneker TV.

And finally, one of three clever new ads by Crispin Porter & Bogusky to make fresh carrots cool wiv da kidz. The Baby Carrots product is real, a new line of healthy snacks containing exactly what it says on the wrapper, but designed to compete with factory produced artificial junk foods. CPB have come up with three very entertaining parody commercials, each one full to the brim with genre cliches. This one is Extreme. See also Indulge and Future. Extreme Pterodactyl!

The ones that got away? Guy Ritchie's lavishly produced film for Dior Homme fragrance, starring Jude Law. We would have picked this, had it not been for Law's mockney smugness and the teeth-grindingly awkward dialogue. You should check it out anyway. Also, the new Orange "Gold Spot" cinema ad by Fallon London, which promotes forthcoming Jack Black comedy Gulliver's Travels. Then, Clemenger BBDO's amusing cautionary tale for Australia's Angus Pies, featuring kilt-wearing Scotsmen on a building site. And the stylish spot by Wieden & Kennedy celebrating Nike's retail partnership with Foot Locker.


In the news this past week: Brands & Advertisers

HP was victorious in its attempt to break up the agreed takeover of data storage company 3Par by Dell. The bruising bidding war finally ended last Thursday when Dell declined to match HP's final offer of $33 per share, or getting on for twice Dell's opening bid of $18 per share. 3Par's shareholders must be ecstatic with the final price: just over three weeks ago, the company's equity traded at under $10 a share. However, HP may face a daunting new threat to its software and services division from technology rival Oracle, which appointed Mark Hurd, the CEO ousted only a month ago by HP, to the role of co-president alongside current president Safra Katz. Both will report to Oracle's chief executive Larry Ellison, who was one of the most outspoken critics of the way in which HP pushed Hurd out for a comparatively innocent relationship with a freelance consultant. Hurd will take charge of sales, marketing and support services, or at least that is Oracle's intention. However, HP immediately issued an injunction to block Hurd's appointment, claiming he has breached the terms of his exit agreement: "Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information. HP intends to enforce those agreements." As a result, Oracle's Larry Ellison issued a new attack on HP, a former marketing partner of the software company, arguing that this "vindictive" lawsuit makes future co-operation between Oracle and HP "virtually impossible". This means war!

Britain's two most financially stable banks announced changes of management. At Barclays, chief executive John Varley announced plans to step down from that role in March next year, when he will be replaced by American-born Bob Diamond, currently head of the bank's investment and corporate banking operations. Diamond is largely responsible for rebuilding that side of the business virtually from scratch since the 1990s. Varley, who has been CEO since 2004 and is several years younger than Diamond, said he wishes to devote his attentions to charitable interests and non-executive roles. News of Diamond's appointment was greeted with outrage by politicians, because of his perception as one of the fattest of "fat cats" in the British banking industry. Last year, he received a total remuneration of around GBP 40m from Barclays, including share sales. Meanwhile, over at HSBC, chairman Stephen Green resigned to take up the role of minister for trade and development in David Cameron's coalition government. His successor as chairman has yet to be named. Michael Geoghegan remains CEO of HSBC.

In what could be the first of several sales of minority shareholdings in affiliates, Vodafone divested its 3.2% stake in China Mobile for a handsome $6.6bn, making a sizeable profit on its ten-year investment. The shares were acquired by a trio of investment banks who will sell them on to institutional investors. The British mobile giant is under considerable pressure to boost its flagging share price by selling its collection of low-return minority investments. Chief among these is a 45% stake in Verizon Wireless of the US, which offers no cash benefit whatsoever to Vodafone, because controlling shareholder Verizon Communications has blocked the payment of dividends since 2006. There is also a large minority holding in SFR of France. Vodafone could do with the cash: also this week, a court ruled that the government of India could pursue a claim for tax payable on the mobile giant's purchase of a controlling stake in local carrier Hutchison Essar. That judgement could cost Vodafone as much as $2.6bn.

Samsung and Toshiba unveiled their iPad challengers. Samsung's Galaxy Pad will launch this month in Italy, and is expected to roll out in other markets during October. The Android-powered device, which offers a seven-inch screen and integrated camera, comes with a pre-installed cellular connection. As a result, it will be marketed to the public primarily by wireless carriers. Vodafone will be its launch partner in Italy, the UK, Germany and other countries. Meanwhile Toshiba's new Folio 100 tablet has a ten-inch screen and is being positioned more specifically as a computer. Both devices follow Dell's Streak pad, which launched in August with a five-inch screen.

Separately, Samsung's UK marketing director Mikah Martin-Cruz has jumped ship to join Microsoft as chief marketing officer for consumer and online.

Burger King accepted a bid to be acquired by investment group 3G Venture Capital for $3.3bn. The fund is backed by Jorge Paulo Lemann, Marcel Herrmann Telles and Carlos Sicupira, the three Brazilian entrepreneurs, whose most celebrated recent coup was to engineer the effective reverse takeover of brewing group InBev by their own Brazil-based AmBev. The resulting business is now Anheuser-Busch InBev. Their particular interest in Burger King was its weakness internationally compared to arch-rival McDonald's. A key strategy will be to ramp up international expansion of the business, especially in Latin America, a substantial potential market. Burger King chairman-CEO John Chidsey is expected to remain in place, although 3G's Alex Behring will become co-chairman.

GlaxoSmithKline is likely to be forced to withdrawn its diabetes therapy Avandia in Europe as a result of a rising tide of concern over side-effects associated with the drug. Although it does successfully delay the onset of full-blown diabetes in at-risk patients, Avandia also appears to increase the possibility of heart attacks. The drug has been at the centre of a media storm this week, in the form of strongly negative BBC documentary and an editorial in the influential British Medical Journal which argued that the product should never have been granted a license in the first place. The UK regulator is pressing for a full Europe-wide ban on Avandia later this month. It faced similar concerns in the US last year, although the FDA eventually allowed sales to continue provided the drug carry a "black box" health warning on its packaging. Avandia generated sales of GBP 770m for GSK last year.

Diageo confirmed Simon Burch as the new global brand director for Smirnoff vodka. He was previously SVP for vodka and rums in North America. Elsewhere in the drinks industry, Foster's Group of Australia said it had turned down an unsolicited A$2.7bn bid for its wine business, which manages the Beringer, Wolf Blass, Penfolds and Rosemount brands, on the grounds that it was under-valued. An offer of at least A$3.1bn - the current book value in Foster's accounts - is thought to be what the group is looking for. The unnamed bidder is understood to be have been a buy-out group. That development caused Foster's share price to jump by almost 5% on speculation that further bids will materialise, for both the wine business and Foster's more attractive Carlton & United Breweries division..

H&M named luxury fashion label Lanvin as its latest designer collection partner. H&M has worked with several different designers in the past for what has become a regular annual limited edition collection. Previous contributors have included Karl Lagerfeld, Stella McCartney and Comme des Garcons. Lanvin's artistic director Almer Elbaz said "I have said in the past that I would never do a mass-market collection, but what intrigued me was the idea of H&M going luxury rather than Lanvin going public." H&M's creative director Margareta van den Bosch added, "It is very much a Lanvin collection, using their cut and tailoring, with lots of focus on form and details for both women and men." The new range will launch in H&M stores for a limited period at the end of November.


In the news this past week: Agencies

In the most serious of a string of departures to have beset the London outpost of Fallon in recent months, managing partner Laurence Green and executive creative director Richard Flintham have quit the agency, along with group finance director Steve Waring, to launch their own agency. They are joined in the new venture by former Cadbury marketing director Phil Rumbol. The four partners promise to offer prospective clients a new way of working. Green told Campaign magazine, "We're calling ourselves a creative company, not an advertising agency." He said the as-yet-unnamed shop will operate as a flexible collective, allowing it "to really listen to what clients want, rather than having a fixed approach". Fallon London has suffered a steady string of management departures and account defections since it was yoked to Saatchi & Saatchi in 2007 in order to address earlier declines by the latter agency. Since then, Saatchi London's star has risen, while Fallon London's has fallen. Fallon London's last remaining founder is Robert Senior, now chief executive of the Fallon and Saatchi umbrella entity SSF Group. He promised a new start for the agency this week, naming Gail Gallie, a former head of marketing at the BBC, as the new chief executive, and promoting several other second-level managers to partner status. Magnus Djaba, already a partner, was named as managing director. Katrien de Bauw (client services director), Gareth Goodall (planning director) and Augusto Sola (creative director) were all made partners.

The shake-up at Fallon London is certain to dominate conversation at party taking place tonight to celebrate the 40th anniversary of the Saatchi brand. The event, which takes place at the Saatchi Gallery in Chelsea, is being co-hosted by the Saatchi & Saatchi and M&C Saatchi agencies. Once bitter enemies, the two agencies now co-exist in a sort of friendly rivalry. Charles Saatchi is expected to make a rare appearance at the event, along with his less reclusive brother, Lord Maurice Saatchi.

DDB New York's recently departed chief creative officer Eric Silver acquired a majority shareholding in indie shop Amalgamated Advertising, reuniting a team which originally worked together at Cliff Freeman & Partners in the 1990s. Silver becomes executive creative director for the agency working alongside co-owners Eric Rosen and Doug Cameron, who have the titles of CEO and director of strategy respectively. Silver left DDB during the summer following a series of account losses.

In account assignments, New York's McGarryBowen swelled its client list further with the capture of analgesic Advil from Grey. MasterCard consolidated media with Universal McCann, shifting planning duties from GSD&M Idea City. In the UK, AB InBev appointed Vizeum as its new media agency, in place of Starcom MediaVest. BBH picked up fashion retailer Matalan. For all appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

Google renewed its search partnership with troubled online service AOL for a further five years. Google will continue to provide all search services for the smaller company, and will also expand that coverage to mobile devices. It will also host selected AOL video content on YouTube. The relationship was originally created in 2002, and strengthened four years later when Google acquired a 5% stake in the portal for a whopping $1bn. It was forced to write off virtually all of that investment over the following years as AOL's share of the online market plunged, prompting fears that Google might pass on the option to continue its relationship. However, the danger of AOL being snapped up by Microsoft instead seems to have been too much to contemplate. AOL's chief executive Tim Armstrong, previously a senior exec at Google, said "Today is another important step in the turnaround of AOL. AOL users will be getting a better search and search ads experience from the best search company in the world Google. After nearly a decade-long partnership in search we're looking forward to expanding our global relationship to mobile search and YouTube. All aspects of our partnership will be improved by this deal."

Ever wondered just where Google's $23bn of annual ad revenue comes from? AdAge magazine managed to get its hands on a partial breakdown of spending on Google's AdWords paid search service for the month of June. It makes fascinating reading. Google's top advertiser that month was AT&T, which spent almost $8.1m on search ads, mainly to support the launch of iPhone 4. Not far behind was Apollo Group, parent company for the University of Phoenix, which spent almost $6.7m. Expedia, Amazon and eBay spent between $4m and $6m each, while the #6 advertiser was BP, which poured just under $3.6m into search ads as it attempted to manage widespread concern over the handling of the Gulf of Mexico spill. According to AdAge, "BP bought up dozens of keywords associated with the disaster such as 'oil spill', 'leak', 'top kill' and 'live feed' as it vied for clicks with news stories, images of oiled wildlife and plaintiff attorneys trolling for clients." Rounding out the top ten spenders were Hotels.com, JC Penney, Living Social and ADT Security. Almost another 40 advertisers spent $1m or more in June, and a further 71 spent between $500,000 and $1bn.

Meanwhile, elsewhere in the search world, AdAge also reported that Publicis Groupe is having trouble fulfilling a commitment to hit specific spending targets for search advertising through Microsoft's Bing and other properties. As part of its $544m deal to acquire Razorfish from Microsoft in 2009, Publicis agreed to commit a sizeable additional sum to annual search spending. That figure was not publicly disclosed but is thought to be somewhere between $200m and $300m annually. According to AdAge's sources, it is failing to hit that target, a fact that could result in financial penalties. Inevitably, neither Publicis nor Microsoft was prepared to verify the story, but Microsoft's head of sales said that the technology company remains "very pleased with the current state of our relationship with Publicis".

Further details emerged this week of the new structure of UK terrestrial broadcaster Five, recently acquired by Richard Desmond's Northern & Shell media group. Following the departure of chief executive Dawn Airey in October and a raft of other senior figures this month, no replacements will be appointed. Instead, Channel Five will become just an additional department of Northern & Shell, working alongside the group's magazine titles. Surviving sales director Kelly Williams and programme director Jeff Ford will report directly to N&S's management team of Stan Myerson, Paul Ashford and Martin Ellice.

David Westin, long-serving president of ABC News, announced his resignation from the US network, reportedly as a result of disagreements over the continuing demands from group management to cut costs. Westin has run ABC News since the mid 1990s, but the division currently faces unprecedented financial pressures as a result of competition from better funded cable services. Westin has already cut costs by as much as a quarter, partly through the appointment of individual "one-man band" reporters who do their own camera work rather than rely on a separate crew. ABC has several times in the past considered the possibility of outsourcing its news to another supplier such as Time Warner's CNN or Bloomberg, and those talks could now be renewed.

CNN confirmed that Piers Morgan, the former tabloid newspaper editor turned panel show pundit, will replace Larry King as the host of the cable channel's flagship nightly interview show. Jon Klein, president of CNN US, described Morgan as "the ideal choice to update the storied tradition of newsmaker talk on CNN" and said he was "able to look at all aspects of the news with style and humour".

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Simon Tesler
Publisher, Adbrands