Adbrands Weekly Update 11th March 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: 

Gu Puds "Gu You Ganache"
by Mother

Apple "iPad"
by TBWA\Chiat Day

Diet Coke "Stay"
by Wieden & Kennedy

General Electric "Stadium"
by BBDO New York

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

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It's been a good week for new ads, and we've actually had a hell of a time picking just four. First up is this intriguing and really rather twisted spot by Mother London for Gu Puds, those little chocolate desserts which have taken the UK and France by storm. Not sure what this says about Gu's target audience, but the ad is deliciously odd, like a chocolate Twin Peaks.

How could we ignore the debut spot from TBWA\ChiatDay for Apple's soon-come iPad. There's nothing especially new about the ad; all the magic lies in the elegance of the iPad itself. What a lovely little beast it is. It's going to be hard to resist, don't you think.

Wieden & Kennedy unveiled this attractive new branding campaign for Diet Coke during the Oscars telecast. We're a sucker for this type of old-style "Kodak moments" advertising. It's handsome and compelling, and manages to make some kind of point about Diet Coke as a lifestyle choice without stretching belief too far.

And finally, BBDO New York has been busy with a string of new spots to promote General Electric's healthcare division. They're all great, but this is the one which made us laugh. Cute idea. Check out the other four ads here as well as a making-of docu.

In the news this past week: Brands & Advertisers

Global brewery giant Anheuser-Busch InBev reported what were generally considered to be disappointing results for 2009, and especially for the final quarter, which came in below estimates. Strong growth in Latin America was not enough to offset a decline in sales in its dominant markets of North America and Western Europe. Revenues were $36.8bn, a fall from the combined figure of $39.2bn reported by Anheuser-Busch and InBev for 2008, and volumes dipped, especially in the US. Savage cost-cutting led to an uplift in profitability (from $1.9bn last year to $4.6bn), but investors were spooked by the company's downbeat outlook for the near future, marking down its shares by as much as 4%. "Until the economy gets better, we're going to have some tough years," acknowledged CEO Carlos Brito, and CFO Felipe Dutra highlighted the fact that the core beer-drinking market of younger men are also those most likely to be unemployed for longer. In Europe, the company has also been impacted by a cultural shift among many drinkers towards wine, while volumes for the first half of 2010 will be negatively affected by dreadful weather in the US, and lower sales in Russia following on from the introduction of higher excise taxes at the beginning of this year. Although it has paid down some of its borrowings, AB InBev is still weighed down by $45.2bn of debt.

Unilever announced Simon Clift's successor as top marketer. The new man is Keith Weed, previously the group's EVP, home care and oral care. The role has been expanded to include corporate communications, not previously part of Clift's brief. Weed's title is chief marketing & communications officer, and he will also join the group's executive committee. Group CEO Paul Polman said, "This is the first time Unilever has had a CMO at the top table and is a key step to having a sharper consumer focus in the company. Keith will be leading marketing, including the development of the Unilever brand."

Toyota was left staring into the abyss after reports emerged in the US that some of its vehicles are continuing to experience acceleration problems, even after they have been returned to dealers for repair. Worse still, it was widely reported this week that the owner of a 2008 Prius model was forced to call for emergency assistance earlier this week after his car experienced sudden acceleration issues. That incident, currently being investigated, is expected to lead to yet another extension of the existing recall to cover hundreds of thousands of Toyota's flagship hybrid model.

Hot on the heels of last week's deal to sell its AIA subsidiary in Asia to rival Prudential, AIG signed off on another mammoth divestment, agreeing terms for the transfer of ALICO, its other main international division, to MetLife for $15.5bn in cash and shares. Already the leading life insurer in the US and Mexico, MetLife will be transformed into an international giant, bolting on ALICO's substantial operations in Japan, Latin America, the Middle East, Central & Eastern Europe. The share element of the deal means that the US government will end up with an indirect 20% shareholding in MetLife, as well as its 80% of AIG. It will be able to begin divesting the MetLife shares after a nine-month lock-out. Meanwhile those two international deals will effectively strip AIG of most its operations outside the US.

British bank Barclays is reported to be planning an assault on the US retail banking market. It is expected to do this through the acquisition of one of America's smaller lenders. SunTrust, PNC Financial and US Bancorp are among the potential targets. The strategy has been presented as an aggressive expansion of Barclays global profile, but in fact it is primarily a defensive move. The bank already has a huge asset base of around $365bn in the US as a result of its rapidly growing investment banking arm Barclays Capital. But local deposits are little more than $3bn, and this imbalance will create serious regulatory issues for Barclays if the US government's current plans are implemented. These will demand that banks hold higher levels of cash to back up their investment activity. Currently, Barclays would fail these tests by a considerable margin. The acquisition of a local consumer savings bank would provide such resources.

EMI took another lurch towards the brink following the abrupt resignation of chief executive Elio Leoni-Sceti, recruited from Reckitt Benckiser just 18 months ago. He is being replaced by Charles Allen, the former ITV chief executive who was already non-executive chairman of EMI's parent entity Maltby Capital. The troubled music giant is wrestling with debts and poor performance following its takeover three years ago by investment company Terra Firma. Leoni-Sceti put a positive spin on his departure, telling staff  "My job is now done… the company is operationally on a solid track, contrary to what is reported, the creative momentum is very strong, and I thought it was time for me to move on." Yet late last year, a leaked email sent by Leoni-Sceti to the company's effective owner, financier Guy Hands, complained at length about the bad publicity surrounding EMI. This had, he said, "created a situation that is jeopardising our ability to execute our strategy… Not only are artists and artists' managers raising concerns, but morale within the company has reached a low point. In addition, the top management team are increasingly concerned about the future of EMI Music and seeking assurances about their personal positions." Adding to its woes, rumours are circulating that two of EMI's most valuable acts, Pink Floyd and Queen, are attempting to extricate their back catalogue from the company and shift to another label.

Egged on by her Twitter followers, actress and bonne viveuse Lindsay Lohan issued a $100m lawsuit against E*trade over their recent Super Bowl ad. The ad in question was a continuation of Grey's "talking baby" series for the online broker. In this particular ad, the male baby is videochatting with a girlfriend who suspects he has been getting up to more than just online trading. "And that milkaholic Lindsay wasn't over?" asks the girl baby. This apparently prompted Lohan to take offence at what she sees as a deliberate reference to her own hard-living lifestyle. (The actress also made a celebrated appearance a few years back in the Got Milk campaign.) Lohan's lawyer told the New York Post "Many celebrities are known by one name only, and E*Trade is using that knowledge to profit. They used the name Lindsay. They're using her name as a parody of her life. Why didn't they use the name Susan? This is a subliminal message. Everybody's talking about it and saying it's Lindsay Lohan." Well they are now anyway and, let's face it, Lohan needs the headlines. The truth is more mundane. A spokesperson from Grey denied that the reference to Lohan was intentional, telling the Post "we just used a popular baby name that happened to be the name of someone on the account team."

In the news this past week: Agencies

WPP reported generally strong results for 2009 despite what Sir Martin Sorrell described as "a very difficult year". Performance was helped by the falling value of the pounds as well as the effects of the first full year contribution from TNS. Billings rose 3% to £37.9bn ($59.4bn), while reported revenues were up 16% to £8.7bn ($13.6bn). Like-for-like revenues, excluding the effects of acquisitions as well as exchange rates, fell 8% for the full year, slowing to 7% for 4Q. Pretax profits fell 11% to £663m ($1.1bn), but after-tax profits were flat at £438m ($820m). The group no longer splits out net new billings by individual network, but the total figure for 2009 was £3.1bn ($4.8bn), well above 2008 levels. The five main advertising networks contributed net new billings of £783m ($1.2bn); the GroupM media umbrella generated net new billings of £1.8bn ($2.9bn).

JWT launched another bruising raid on the Lowe network's management team. Its first assault came 18 months ago when Argentinean creative guru Fernando Vega Olmos was poached to become JWT's creative chairman for Europe and Latin America. Now, like a heron to the goldfish pond, JWT has returned to snap up the next three most senior executives at Lowe Latina. Chief executive Jean-Louis Roche, chief strategist Alex Pallete and global creative director Facundo Goldaracena will move over to head up a new task force at JWT to create and develop global business. The trio will be based out of JWT's Madrid office.

Korean marketing network Cheil has launched a new promotional marketing network under the name One Agency. The first outpost will be in London, working alongside part-owned creative shop Beattie McGuinness Bungay, and more offices will open around the world in 2010 and 2011. The new service will also allow BMB to offer a fully integrated service, which also draws on the resources of New York digital shop Barbarian Group, also now owned by Cheil.

Bartle Bogle Hegarty has spun off Ila Security, the unit which produces a range of personal alarms for women, as a separate public company. The business is one of several unconventional entrepreneurial ideas conceived by BBH's Zag product design and development subsidiary. The handheld devices emit a woman's scream instead of traditional siren, and are stocked by several mainstream retailers in the UK including Marks & Spencer and Next. Zag retains a 27% shareholding.

In account assignments, Crispin Porter & Bogusky got its first toehold in the Kraft Foods roster, taking over the company's iconic Mac N' Cheese brand from Draftfcb. The Planters nuts business is also up for review. Carat had a great week, picking up US media for Beiersdorf's Nivea and other brands, as well as Wyeth's OTC healthcare products, now owned by client Pfizer, and De Agostini partworks across most of Europe. BBDO New York added US creative for travel service Orbitz. Honda appointed Elvis of the UK to manage digital and CRM across Continental Europe. For all other appointments, subscribers can access the full Adbrands Account Assignments database here

In the news this past week: Media

Walt Disney switched off supply of its ABC network to around 3m homes in the New York area over the weekend in a row with cable company Cablevision over carriage fees. Under the general historical precedent set by US cable companies in the 1990s, they have been carrying the main TV networks free of charge, but paying a premium cost per subscriber to air more specialised cable streams. The big broadcast groups have become increasingly unhappy about that arrangement over the years, especially since network ad revenues started to slump two years ago. In this latest row, Disney demanded an additional $40m per month from Cablevision for the ABC stream, on top of the $200m a month it already pays for ESPN, Disney Channel and other cable-only strands. Cablevision declined, and so Disney shut down supply of its ABC service just after midnight on Saturday, blacking out all programming to Cablevision customers, including the upcoming Oscars telecast scheduled for that evening. "Cablevision's legendary greed and disregard for the needs of their customers continues," said the general manager of ABC's New York station in a statement. "Now the only way for their subscribers to get ABC is to ditch Cablevision and switch to a provider that cares about them." The move served to kickstart emergency talks later that morning, and a deal was finally agreed at around 8pm. As a result, ABC's stream was immediately switched back, restoring service to Cablevision customers around 15 minutes into the Academy Awards show. Talk about the nick of time. Most observers see Disney's hardball strategy as shot across the bows to Time Warner Cable, an old adversary, whose existing contract to carry ABC free of charge is due to expire in August. In response, a group of cable operators including TW Cable have petitioned the FCC to prohibit such channel blackouts during fee negotiations.

Congratulations to all the Academy Award winners, but especially Hurt Locker director Kathryn Bigelow for making history as the first woman ever to win Best Director. The ABC broadcast was generally considered a success, attracting an average audience of 41.3m viewers, the best since 2005 and a marked improvement on 2008 and 2009's lows of 36.3m and 32m respectively. Our favourite bit? Ben Stiller as a non-CGI Na'avi. The New York Times offered an interesting perspective on the event, noting that the Oscars telecast was suffering an apparent identity crisis: "Almost everything about the ceremony was big and commercial; almost everything about the winners was small and arty." The show was clearly designed specifically to attract a mainstream TV audience, and it obviously succeeded in this, with its choice of five additional crowd-pleasing Best Picture nominees, teen-market presenters, a wholly out-of-character horror movie montage. Yet all the winning movies were generally arthouse rather than mainstream. The Hurt Locker, pointed out the NY Times, was "one of the least-watched films in its theatrical run to ever win the top prize. It sold about $14.7m in tickets in North America and about $6.7m overseas." Quite a contrast to $2.5bn grossing Avatar, which got only technical awards, or even George Clooney starrer Up In The Air, nominated in eight categories, but a winner in none. "Over the last decade the voting membership of the Academy has skewed increasingly toward indie- and foreign-based filmmakers. That is because revised admissions rules strongly favor Oscar nominees over the kind of Hollywood old hands who were once a shoo-in for admission. As smaller films got a footing in the awards over the last few years, those who made and appeared in them became voters, increasing the tilt toward little movies."

The family behind Spanish media group Prisa, best-known as the owner of the El Pais newspaper as well as various broadcast, publishing and radio assets in Iberia and Latin America, sold a controlling stake to a US-based investment company run by former hedge fund trader Nicolas Berggruen. Prisa has been struggling with mammoth debts built up during a disastrous attempt to restructure its ailing TV and cable businesses. Berggruen's Liberty Acquisition vehicle (which has no connection to John Malone's Liberty Media) acquired a 50% stake in Prisa for $900m. The founding de Polanco family's stake reduces from 70% to 30%.

Facebook founder and CEO Mark Zuckerberg (known to his colleagues as "Zuck") is to receive the award as Media Person of the Year at this year's Cannes Lions ad festival. Separately, "Zuck" told the Wall Street Journal would not issue its hotly anticipated IPO this year, but 2011 looks like a strong possibility. Analysts are already anticipating a valuation well ahead of Google's at the time of its own IPO.

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Simon Tesler
Publisher, Adbrands