Adbrands Weekly Update 11th February 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
This email was sent to ${recipient}
Adbrands subscriber until: ${token6} (Day/Month/Year)
You may forward this email to 10 colleagues

Recommended Reading

Superfreakonomics by Steven Levitt &
Stephen Dubner

Buy it for Less
 at Amazon

Under US regulations, many companies make a public declaration of their actual advertising expenditure, although this may be buried deep in SEC filings or other financial documents. Adbrands tracks these declared figures. 
Rankings link 
(subscribers only)

Would your colleagues benefit from their own subscription to Adbrands? All Adbrands subscriptions are for individual use only. If your colleagues also require access, we offer substantial discounts for additional users. One year subscriptions for your colleagues cost just UKP25 (or US$45) per logon provided they run alongside your own full-price annual subscription. We can also offer corporate intranet solutions giving password-free access to all employees companywide from a private doorway page. 
More information

Why am I getting 
this email?
You have in the past either purchased a subscription to or or specifically opted to join our mailing list.  


United Biscuits

The Weekly Update is now sent only to active subscribers to Adbrands premium services, but your own subscription gives you the right to forward this email to up to ten of your colleagues at no additional cost. Important: please note that you will stop receiving your copy of the Weekly Update if and when your paid subscription expires. As always, if you have any questions, please don't hesitate to contact me.

Four of our favourite ads this week: 

Dodge "Man's Last Stand"
by Wieden & Kennedy

Coca-Cola "Hard Times"
by Wieden & Kennedy / Gracie Films

Intel "Generations"
by Venables Bell & Partners

Google "Parisian Love"
by Google Creative Lab

Please note: If you are attempting to view these ads shortly after receiving this mailout on a Thursday, you may find that the video streams run slowly because of heavy simultaneous demand from other Adbrands subscribers who have also just received the same email. Please wait for the ads to load before pressing play, or try again later. Apologies for any inconvenience.

Is it me, or did the overall quality of the ads surrounding the Super Bowl this year just - how can I put this? - well, SUCK. I have to say that in ad terms this was just about the least inspiring Super Bowl of recent years, even if the game itself set a new record for viewers, attracting 106.5m Americans, the highest ever for any single broadcast event. It was higher even than the 106m who watched the final episode of comedy series M*A*S*H back in 1983, for years regarded as the ultimate in mass TV audience. Another 50m - 50m! - Americans watched at least part of the three-hour Super Bowl broadcast to generate an extraordinary total audience of 153.4m viewers. So who said TV is dead? CBS chief research officer David Poltrack explained the huge number as a by-product of the current economic environment. "One of the ways the media works is in bringing together this concept of shared experience, and particularly in tough economic times, people really rally around these experiences. Even though there are more and more [viewing] choices out there, certain things transcend just being television to become a phenomenon that we all crave to experience with others."

But as far as advertising was concerned this was a parade of tired cliches, cheap sentimentality and easy jokes, with little of the wit, the spirit, the edginess displayed by the best ads from previous Super Bowls. Notably, it was an outing for unfamiliar brands: Vizio? FloTV? KGB? Homeaway? And many of the slightly more familiar products or services featured, such as Teleflora, Skechers or TruTV are hardly the first advertisers you'd think of for a Super Bowl spot. This was also an opportunity for Super Bowl regulars to try out new agencies. Bud Light's five spots, for example, were not from tried and trusted DDB Chicago, but from little-known promotions agency Cannonball (and it showed). DDB did roll out the Clydesdales for Budweiser after all, but frankly they shouldn't have bothered. This was one of the weakest spots to-date in an increasingly mawkish series. Even traditional Super Bowl stalwart BBDO New York seemed, to us anyway, to be struggling to come up with a decent idea for clients Snickers and, in a pair of ads which featured veteran comedienne Betty White and a beaver violinist respectively. Neither raised much of a chuckle from this viewer.

Oh well. It wasn't all bad. Here are the four best in our estimation. Now, I know that, with a Super Bowl audience of at least 106.5m chances are that many of you will already have seen all four of these ads, but bear with us please for the sake of all us foreigners...

Wieden & Kennedy's spot for the revamped Dodge Charger was one of two ads which, um, celebrated what it means to be a man. Ogilvy's Dove For Men "Manthem" toed a similar line, arguably in a more upbeat way. Actually both made our shortlist for the top four, but in the end we've picked Dodge's for its stronger emotional impact. See Manthem here.

Wieden & Kennedy scored again with one of two ads for Coca-Cola. We're getting a little tired of the ubiquity of the Simpsons these days, but we can never resist Monty Burns, always our favourite character (hmm, perhaps we need to see a specialist about that...). This isn't perhaps the best Coke ad we've seen in the past couple of years, but it's getting there.

Venables Bell delivered two spots for Intel for the game. The better of the two was this one, featuring different stages in the life development of two computer nerds. Again not up to the brand's best (which must still be "Our rock stars aren't like your rock stars") but still a goody.

And finally, the much talked-about Google ad by inhouse agency Google Creative Lab. Talked about not only because a TV ad from Google is as rare as rare can be, but also because it rather broke the mould cast by every other ad in the telecast. Sentimental yes, but also clever and innovative and memorable. Nice one.

The game? Oh yeah. The New Orleans Saints beat the Indianapolis Colts 31-17. But then you already knew that.

In the news this past week: Brands & Advertisers

Unilever reported lacklustre performance for 2009, demonstrating that there is still plenty of work to be done to restore the group to full health. The slow but steady growth reported over the past couple of years was effectively wiped out by the economic downturn, causing sales to sink back below €40bn to just above 2006's level. Certainly currency fluctuations played their part - the group claimed underlying growth of 3.5% without the negative effects of exchange rate changes. However, even so the regional breakdown demonstrates that Unilever runs the risk of slowly being squeezed out of developed markets by its competitors, and is becoming increasingly reliant on what it now groups as a single global region of Asia, Africa, Central & Eastern Europe. That business was the only one to demonstrate growth at actual exchange rates, and also significantly the only one to show an improvement in profit margins. Without the benefits from the sale of the North American laundry business in 2008, net profit slumped 31% to €3.65bn. New CEO Paul Polman, delivering his first set of annual results for the company, told analysts "I believe our organisation is doing an outstanding job. We have seen our volumes progress throughout the year and we've seen our shares increase throughout the year in fairly tough conditions." However, he also acknowledged that "We still have a long way to go, we still have much to do in Western Europe in terms of areas that we have got to step up. But there is a growing sense of confidence in the team and belief that we can win." Most analysts appear to support Polman's view, believing that he has made a strong start in a difficult role. Nevertheless, the broader market was less positive, making down the company's shares amid a wider market slump.

In a separate development, Unilever's chief marketing officer Simon Clift announced his departure from the company. A Unilever spokesperson denied any rift. "After almost 30 years with Unilever, Simon Clift, has decided it's time to move on, and intends to retire from the company in a few months' time. It's a completely amicable parting, prompted by his desire to spend more time with his family in Brazil and to pursue other creative opportunities."

For a comparison to Unilever, take a look at Reckitt Benckiser, a competitor in several household care segments. It reported another year of extraordinary growth, with revenues up 18% to almost £7.8bn and net income jumping 27% to £1.4bn. Roughly half Unilever's profit from less than a quarter of the same revenues. Certainly currency fluctuations played their part in the general lift, but Reckitt has its focus fixed firmly on high profit margins and aggressive growth. The real question is what the group plans to do next - it is sitting on around £220m of cash and no debts. Announcing the results, CEO Bart Becht ruled out any large acquisitions such as the often-rumoured merger with Colgate-Palmolive. More likely would be a bid for SSL, which owns Durex condoms and Scholl footcare in Europe, or the consumer products division of a pharma group such as Novartis.

Microsoft made several changes to the line-up of its central marketing group. Perhaps the most significant was the appointment of longtime staffer Gayle Troberman to a new role as chief creative officer, overseeing and coordinating the output of the software giant's various agencies and exploring new strategies. She was previously general manager of advertising and customer engagement. In another marketing move, Alison Jones, currently marketing director at British fashion store Debenhams, announced her resignation to join rival Arcadia, parent to Top Shop and other brands, as group marketing director.

Toyota's nightmare continued. The number of cars recalled for floor mat and accelerator adjustment snowballed to a total of 8.6m worldwide, and a new recall was announced for up to 500,000 Prius models said to be experiencing brake problems. Adding to concerns over Japanese manufacturers overall, Honda expanded an earlier recall of its own for problems associated with airbags by another 400,000 vehicles, which followed a separate recall last month of more than 600,000 cars to fix faulty window switches.

The importance of the so-called BRIC economies, and especially China and India, have been demonstrated in results from all the major marketers. Coca-Cola reported robust performance in 2009 as volume growth in its Eurasia, Pacific and Latin American divisions offset economy-driven declines in North America and Europe. The overall net increase was around 3%. Sales drifted lower by around 3%, to just under $31.0bn, but the company reported an impressive 18% improvement in the bottom line, with net income rising to a record $6.8bn. Performance in North America improved significantly in 4Q and group CEO Muhtar Kent also played down weak performance in Western Europe in a conference call with analysts. However he expressed concern over Eastern European markets. "France was one of the top ten contributors of volume overall in 2009 for the full-year so Iím very pleased with results in growth rates in France and Italy, in Germany and in UK in the fourth quarter. I think Eastern Europe is much more troubled than Western Europe. Itís an anomaly to refer to it in that respect but it is." PepsiCo's figures for 2009 are due out later today.

Daimler named Wolfgang Bernhard as the new COO of its Mercedes-Benz passenger car division, making him the effective #2 to group CEO Dieter Zetsche. Bernhard is an old hand at the group, having won his spurs there between 2000 and 2004 when he played a key role in the restructuring of Chrysler, then a division of Daimler. In 2005, he was to have taken control of the Mercedes division, but fell out with former group CEO Juergen Schrempp, causing him to leave the business. He rejoined Daimler last year after two successful years at Volkswagen.

Even in the current recession, the Louis Vuitton brand has continued to carve out new territory for itself. It was once again the star performer in the lustrous portfolio of luxury group LVMH, notching up double digit increases in sales in an otherwise difficult market. As with other companies, Vuitton's fastest-growing markets were in the east, and especially, yes, China. The group's overall performance was resilient, but it would have fared considerably worse without its star brand. LVMH's Fashion & Leather Goods division, dominated by Vuitton, was the only unit of the group to report an increase in both sales and operating profit. Group revenues and profits both drifted lower, to €17.1bn and just under €2.0bn respectively. Local competitor Hermes also seemed to be unaffected by the downturn. It released preliminary figures for 2009 which showed an increase in revenues of almost 9%, similar to last year, to a record €1.9bn. China is becoming such an important market that the group is even introducing a new brand especially for the Chinese market. Launching this year, Shang Xia will be a new range of fashion accessories and houseware made using traditional Chinese techniques and materials.

Japanese companies Kirin and Suntory abandoned merger talks after failing to resolve differences over how the combined business would be run, and the respective shareholding of its two different sets of owners. Despite the crossover between their respective business activities, Kirin is a publicly quoted company, while Suntory is a private enterprise with a different business ethos. The breakdown in talks was greeted with dismay by investors, and the shares of all the major Japanese brewers fell sharply. In a research note, an analyst at Goldman Sachs Tokyo commented: "We see termination of the merger talks as negative not only for Kirin's longer-term strategy but also for the brewing industry as a whole." In particular, investors are concerned by the long-term effects on all the participating companies from the fierce and increasingly expensive competition in the Japanese beer market. A merger would have taken some of the heat out of this, and most probably resulted in lower promotional spending. The collapse of talks will if anything only heighten the level of competition.

Kraft CEO Irene Rosenfeld rallied the troops at newly acquired Cadbury in a companywide conference call. She said that 2010 would be the year of "BMW - Beat Mars Wrigley." She told staff  "The combination of Kraft and Cadbury creates the biggest and best confectionery company in the world. Tipping those knuckleheads Mars and Wrigley [is] something we have lusted after forever. The year of BMW - Beat Mars Wrigley - went from an aspiration to a reality. The year we combined the best of both organisations to become a global powerhouse - simply put, the year we reclaimed our rights as the world's biggest and best confectionery company. That is what I see for the year ahead. Not fighting amongst ourselves but fighting against the competition and winning with our consumers and our customers."

Deutsche Telekom is said to be considering a partial IPO or even a full spin-off of the US arm of its T-Mobile wireless network. The group has been under pressure for some time from shareholders to boost performance in the American business, the smallest by far of the four national wireless operators. A merger with 3rd-placed Sprint is also an option, but is thought unlikely because of the difficulty involved in consolidating the two companies' conflicting wireless technology.

The position of struggling music giant EMI threatens to get much worse if its owner, the private equity fund Terra Firma, is unable to persuade investors to stump up another £120m or so in cash; and that's just this year. The business is likely to need another £100m next year as well to avoid defaulting on its loan covenants. Terra Firma's chairman Guy Hands is already involved in court action against EMI's bankers Citigroup who, he says, misled him over the true facts regarding the auction of the business in 2007. They have also so far refused to restructure the loan which allowed him to acquire the company, and seem unlikely to do so. If Terra Firma defaults, Citi will be able to step in and seize control of the business. Meanwhile EMI revealed a massive £1.7bn loss for the year ending March 2009, including a further £1bn write down of the value of the business. A few days later, Warner Music chief Edgar Bronfmann, announcing his own 1Q results to investors, hinted that a merger could ultimately be on the cards. The two groups came close to a deal several times in the past before EMI was bought by Terra Firma. He said he hoped the British company would be able "to resolve its difficulties" but also said he believed that "consolidation [of the two groups] certainly is possible".

In the news this past week: Agencies

Omnicom and Havas released financial figures. The effects of the economic crisis were clearly visible. Omnicom's full year revenues fell by 12% to $11.7bn, while net income plunged by almost 21% to $793m. The organic decline in revenues, excluding currency fluctuation and acquisitions, was 8.7%. However, performance warmed significantly in the final quarter, prompting Omnicom chief John Wren to comment "As economies improve, we believe the worst of the recession and its impact are behind us. We anticipate many clients will at least modestly increase spending in the second half of this year." Matt Chesler, analyst at Deutsche Bank, was generally positive on Omnicom, acknowledging the company's "hats off" job in managing its P&L and saying it deserves more credit for its long-term track record. However, he reiterated earlier comments that he expects the company to lag behind a broader recovery in the market and that, as far as share price is concerned, "for the next couple of quarters we think investors will find more value in names more leveraged to the recovery (eg, IPG, WPP, and Publicis)."

Figures from Havas were topline only, with full results to follow next month. The group reported an 8% decline in revenues (8.1% actual; 7.9% organic) to €1.4bn. Significantly, the contribution from digital marketing increased to over 16% of total revenues and is expected to hit 20% for 2010. Net new business for the year was €1.3bn, the lowest for Havas since 2004. There were also annual figures from STW, the Australian group part-owned by WPP which manages the local operations of JWT, Ogilvy and Mindshare, as well as other indigenous brands. It reported revenues of A$269 (around US$239m), down 11%, and net profits of A$22m.

More than 20 of Belgium's leading advertising agencies, including the local branches of JWT, TBWA, Publicis, BBDO, McCann, Saatchi & Saatchi and Ogilvy, launched a "virtual strike" this week to protest at the way in which, they claim, they are being unfairly exploited by clients in account reviews. For example, according to a longstanding charter drawn up by the country's association of communication agencies, no more than three agencies should be asked to compete for new business. However that ruling is customarily ignored by clients who encourage pitches from as many as ten different agencies, causing untold distractions and wasted time, effort and money. The full letter of complaint is split between the websites of all the protesting agencies. See it here, starting at the site for independent agency Famous.

The New York Times reported on the culture shock being suffered by staff at Grey New York, who moved last year from their longtime HQ on Third Avenue to the International Toy Center building on Fifth: "The change was astonishing - and a little unsettling - for the 1,200 employees, who now occupy just six floors instead of 26. Before, most everyone had an office; now there are three in the entire company. And the floor that houses the creative and production departments lacks even cubicle walls." According to chief creative officer Tor Myhren, "Grey was a symbol of what advertising used to be: very slow and not very nimble. We've created a faster environment, one that is more open and collaborative. This space reflects what's happening in the digital world." However adjusting to a world without walls has not been easy. "Employees are still adjusting to the lack of privacy. They are working on a gesture to replace the traditional knock on the door and have learned to duck into a conference room to take important calls. Unofficial house rules have emerged, too." The most important of these? According to chief talent officer Natalia Schultz it's "Tuna should never be consumed in the open plan." See here for the full article.

Bartle Bogle Hegarty shuffled the senior management team at its New York office, promoting CEO Emma Cookson to the position of chairman, with responsibility for supervising the agency's newly won Cadillac account, its first automobile brand. Greg Andersen moves up from managing director to CEO, and former chairman Steve Harty was named as group chairman North America. Across town, Jon Bond, co-founder of what is now Kirshenbaum Bond Senecal & Partners, is stepping down from the agency after 23 years to launch a new venture of his own.

Euro RSCG finally dropped the old Brann name from its UK digital & direct subsidiary EHS Brann. That agency adopted the new name EHS 4D, maintaining its link to the old Evans Hunt Scott agency from which it evolved, as well as the Euro RSCG 4D below-the-line network. Another brand now consigned to the dustbin is advertising expenditure specialist TNS. Following that company's acquisition last year by WPP and merger into the Kantar Group, all the combined company's advertising expenditure and market measurement data will now be presented under the Kantar Media banner.

The Gunn Report finally published its rankings of the most awarded media networks in 2009. Publication was delayed by computer problems. OMD was once again the #1 agency, taking that title for the fifth consecutive year. Mindshare, BBDO, Leo Burnett and Mediacom rounded out the top five.

Unilever announced the results of its global media review. For the most part the status quo was maintained, with Mindshare reappointed in the US and most of Europe. The WPP network also picked up Canada from PHD. That helped a little to make up for the loss of Unilever's much bigger China account to PHD, announced last month. Initiative is expected to keep Unilever's business in Latin America, and gained Mexico and also Russia; PHD was reappointed in most of Central Europe, except Poland where the account went to Omnicom's Media Direction.

In other account assignments, Vodafone Australia handed creative to Host after a long-running review. New York creative boutique Laird & Partners picked up three accounts from cosmetics group Coty. In the Netherlands, banking giant ING appointed the local arm of JWT. For all other appointments, subscribers can access the full Adbrands Account Assignments database here

In the news this past week: Media

Yahoo agreed to sell its job listing service HotJobs to Monster for $225m. That deal squares a circle that was left open when the two companies duked it out to acquire the business nine years ago. Monster initially agreed to acquire HotJobs in 2001 but its offer was trumped by Yahoo, who snapped it up for a handsome $436m. The combined Monster/HotJobs will remain Yahoo's exclusive provider of job listings for the next three years, and combined traffic will give it a clear lead in the online job market over rival CareerBuilder.

Facebook announced that the total number of its registered users broke through the 400m mark last week, having more than doubled in a year. The total userbase is equivalent to the combined population of the US, UK, Ireland and Australia. The company said that more than 100m users were accessing the site via mobile phones. Partly in response to Facebook's growth, Google launched a new social media service designed to win over some of those users. Google Buzz is an extension of the search giant's Gmail system and allows users to share status updates, photos and even locations with contacts. It is designed primarily for use on mobile phones. Separately, Google announced plans to get into the ISP business, with a high-speed fibre-optic broadband network that will allow people to surf the web at up to 100 times the speed of most current broadband connections.

Meanwhile, over at MySpace, CEO Owen Van Natta quit after only eight months in the role, reportedly as a result of friction with his boss Jon Miller, who oversees all of News Corporations' digital activities, and MySpace's chief product officer Jason Hirschhorn. Following Van Natta's departure Hirschorn and COO Mike Jones have been promoted to co-presidents. MySpace is still struggling to cope with the meteoric rise of Facebook. The business recently admitted it would miss the traffic targets guaranteed under a $900m search deal with Google and would as a result receive $100m less than it had anticipated.

Publicis Groupe's media umbrella VivaKi released the results of research it has conducted with online publishers including Hulu, Microsoft, Yahoo and CBS into the most effective forms of video advertising online. The study was inspired by the general dissatisfaction among web users with "pre-roll" ads, the obligatory spots we are usually required to sit through before we can watch free video clips online. That process can become exceptionally tiresome, especially when viewers are forced to watch the same pre-roll ad multiple times for different clips. VivaKi tested various alternatives, and the found the most popular to be what they called "ad selector", whereby viewers can make their own choice from one of three different pre-roll ads. Hulu already runs a version of this system. Click-through rates for the ad selector format  were more than double than for standard pre-rolls, and consumers were twice as likely to remember what company the ad was for.

The British government threw a lifeline to commercial broadcasters in the UK by confirming that it will henceforth allow product placement in UK television programmes. However no placements will be allowed in programmes targeting children, and alcohol, cigarettes and food or drink high in sugar, salt or fat will also be banned. So are gambling companies, OTC medicines and baby formula. Only commercial companies will be able to strike up product placement deals with advertisers; the BBC's licence-fee funded services are excluded from the new ruling. Introduction of the new freedoms will follow public consultation, set to take place this summer.

Satellite broadcaster Sky gave up its fight to keep hold of its sizeable minority stake in terrestrial channel ITV. The company had already lost four appeals against a court verdict that it should reduce its holding from 17.9% to under 7.5% on competition grounds. Sky sold over half of the shares it held, but keeps a stake of around 7.49%, making it still one of the two biggest shareholders in the business.

British newspaper publisher Guardian Media Group agreed to sell its portfolio of regional papers, including the Manchester Evening News, to Trinity Mirror in a deal worth just under £45m. The deal ends GMG's long-standing links with the city of Manchester. Its flagship paper The Guardian, was originally launched in Manchester in 1821 and was known as The Manchester Guardian right up until 1959 when it began to develop a national presence. It had owned the Manchester Evening News since 1924.

As always, if you haven't already done so, please confirm your subscription to the 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