Adbrands Weekly Update 12th August 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
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Procter and Gamble

Starcom MediaVest

Coca Cola

Young and Rubicam



Kraft Foods








Johnson and Johnson


McCann Erickson
Bartle Bogle Hegarty


Ogilvy and Mather

Ford Motors




Please note: The Adbrands Weekly Update takes a summer break next week. Normal service resumes on August 26th. See you then!

Four of our favourite ads this week: 

Peroni Nastro Azzurro "Senza Tempo"
by Gabriele Muccino/Peroni Italy

Cadbury "Spots v Stripes"
Fallon London

Stella Artois "Claude vs Pierre"
by Mother London

Starburst "Zombie"
TBWA New York

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A quick round-up of this week's best spots. SABMiller's Peroni brewery in Italy tasked director Gabriele Muccino (best known outside his home country for the Will Smith dramas Seven Pounds and The Pursuit of Happyness) to deliver a short film celebrating the country's cultural heritage and craft. The film was developed in partnership with the Accademia del Film, which promotes Italian cinema in the UK, and is being shown in British cinemas. Peroni's Nastro Azzurro beer makes only the briefest of appearances in the short, although its signature blue sash logo device plays a leading role.

We mentioned Cadbury's new Spots v Stripes chocolate challenge bar in last week's Update. Here's the main creative ad for the product, a contest between two teams of spotted and striped aquatic creatures. See here for moreFallon London is responsible for the ad and also for the product concept.

More beer and another contest in the new spot from Mother London for Stella Artois. Not, in our opinion, up to the standard of Lowe's groundbreaking work for Stella in the 1990s, but still superior to most other British beer advertising.

And finally, another weird spot from TBWA\New York for Mars/Wrigley's Starbust candy. The current campaign is built around the concept of odd contradictions, personified by this bizarre South Korean Scotsman and his Starburst-loving son. For previous entries in this series, see here.

In the news this past week: Brands & Advertisers

In a shock development, Hewlett-Packard's board asked chairman & CEO Mark Hurd to resign following an internal investigation prompted by an accusation of sexual harassment from a female marketing contractor. The investigation cleared Hurd of the harassment charge but discovered other forms of what it described as "inappropriate behaviour". According to an internal memo issued to staff, it found that Hurd "had failed to disclose a close personal relationship he had with the contractor that constituted a conflict of interest, failed to maintain accurate expense reports, and misused company assets". The most serious of these charges seem to be that the woman in question had, on Hurd's authority, received compensation for work that hadn't actually taken place, although the amounts involved were comparatively small. She subsequently revealed herself to be Jodie Fisher, a struggling actress with a background in porn movies and reality TV who had worked part-time as a greeter at sales events for HP. She said in her statement that she was "saddened" by Hurd's ousting, and that this had not been her intention when she made her harassment claim. The precise details of her allegations were not revealed, although she confirmed that she had not had an "intimate" relationship with Hurd, who is married with two children.  

Hurd was appointed as CEO in 2005 after the board ousted his predecessor Carly Fiorina, whose controversial strategy to acquire PC manufacturer Compaq resulted in a dramatic slump in performance. Group chairman Patricia Dunn was also subsequently forced out following revelations that the company had spied on journalists as well as its own directors after details of the board's deliberations over the sacking of Fiorina were leaked to the media. Hurd was widely admired for the way in which he set about repairing the damage from these internal struggles and was credited for returning the widely diversified business to strong and steady growth. Until his sudden fall from grace this week, he enjoyed a reputation as one the technology industry's most effective managers. 

In the wake of his departure, Larry Ellison, CEO of HP's rival Oracle, blasted the board for its poor handling of the situation and in particular for allowing the unfounded harassment allegation to become publicly known. "The HP board," said Ellison, "failed to act in the best interest of HP's employees, shareholders, customers and partners. Publishing known false sexual harassment claims is not good corporate governance; it's cowardly corporate political correctness." Cathie Lesjak, previously EVP & CFO, steps in as interim CEO until a fulltime successor can be found. 

There were three other significant management changes this week. Apple said that Mark Papermaster, the executive in charge of engineering for its iPhone handset, was leaving the company. That announcement comes in the wake of problems with the design of the 4th generation of the iPhone which have led to poor reception and interruptions to calls. Meanwhile, Sara Lee said that Brenda Barnes was stepping down permanently as chairman & CEO for medical reasons. Barnes has been on leave of absence since May after suffering a stroke. Marcel Smits will continue as interim CEO until a fulltime replacement can be found. He is one of the candidates for that role along with CJ Fraleigh, chief executive of the company's North American retail and food service divisions. Separately, Tracy Britton, group head of marketing at HSBC, has left the group without a job to go to. She has been replaced on an interim basis by her predecessor Chris Clark, now HSBC's group head of customer experience. 

Internet phone service Skype unveiled plans for a $100m IPO. Currently, the vast majority of users pay nothing - Skype had 560m registered users at the end of June, but only 8.1m paying customers. Nevertheless revenues for the first half of 2010 rose by 25% to $406m and the company hopes to increase that sum with premium services, by widening its base of small business customers, and through sales of advertising and licensing. In a separate development, UK satellite broadcaster Sky has opposed Skype's attempt to register its bubble logo as a trademark because of the potential confusion with its own telephone services.

Nestle reported strong results for the first half of 2010, with organic growth of over 6% to CHF 55.3bn (around €40bn). Earnings before interest rose almost 14% to CHF 8.4bn (€6.1bn). Both figures were above analysts' expectations. However like other packaged goods groups, Nestle has warned of challenging conditions for the second half of the year as a result of the rising costs of raw materials. The best growth in the first half came from developing markets and the Americas, with Western Europe lagging some way behind. However the strongest performance of all came from the group's Nespresso division, which scored organic growth of over 25%, with sales this year expected to top CHF 3bn. Nestle is also set to become one of the world's richest companies over the next few weeks when it completes the sale of its Alcon healthcare division to Novartis for $28bn in cash. The group is widely expected to use much of the cash to finance a large acquisition.

General Motors sought to rebuild sales in its European division, which markets the Opel and Vauxhall brands, by making what is thought to be an unprecedented marketing offer. Beating the general industry standard of three to five years, as well as the seven-year warranty offered by Korean company Kia, Opel/Vauxhall has decided to introduce a "lifetime guarantee" on new vehicles. There is one key proviso. The guarantee is only good up to 100,000 miles. However, GM claims that 95% of their new car buyers never come close to that level before selling on their vehicle. Separately GM's chairman-CEO Ed Whitacre said he hopes the US government will sell its entire 61% shareholding in the group at its widely anticipated IPO, which could come late this year or early next. "We want the government out, period," he said at an automotive conference last week. "We donít want to be known as Government Motors." The group is expected to reveal a second quarter of profits in results due later today.

Italian pasta giant Barilla is selling its German retail bakery chain Kamps to private equity group ECM for an undisclosed sum. It acquired the business in 2002 in a hostile takeover. However Barilla is keeping hold of the German company's sizeable manufacturing division, known as Lieken AG, which supplies private label and branded bakery goods to supermarkets. 

In the news this past week: Agencies

Starcom MediaVest tightened its grip on the GlaxoSmithKline media account, winning several territories from MediaCom following a European review. Starcom picked up Germany, Spain, Austria, Portugal and Switzerland to add to its existing business in Central & Eastern Europe. However, MediaCom was reappointed in the UK. 

In other account assignments, Yahoo called a review of global media, currently split between Mindshare and Neo@Ogilvy. In the US Hispanic market, Wendy's appointed Bravo Group and Chevrolet selected LatinWorks. Pereira & O'Dell was tasked with handling a campaign to revive ailing social network MySpace. In the UK, Innocent called a pitch for its core smoothies range. Fallon remains in place for the company's Veg Pots and orange juice. Newly merged DLKW Lowe won its first piece of business, in the form of auto accessories retailer Halfords. In Latin America, Sony tasked Saatchi & Saatchi and its Conill unit with the launch of the Playstation console. In Australia, TBWA\Whybin collected creative duties for insurance group IAG. For all appointments, subscribers can access the full Adbrands Account Assignments database here

In the news this past week: Media

Few industry observers will be surprised by the news that Dawn Airey has resigned as chief executive of UK terrestrial broadcaster Five following its acquisition by Richard Desmond's Northern & Shell. She will remain at the company until the end of October, when she is expected to rejoin Five's former owner RTL in a senior management role. Five managing director Mark White is also leaving, along with several other senior managers and almost a quarter of Five's 300 staff. Desmond, owner of the Daily Express and Daily Star newspapers and OK magazine, is plotting a makeover of the channel which will see it move closer in style and format to his existing publications. He is a notoriously challenging and outspoken boss, who takes a close personal interest in all aspects of his business. As he told an American interviewer this week when discussing the 5th anniversary of the American edition of OK magazine, "I'm not known as 'Easy Richard'". 

Conde Nast announced plans to develop a chain of branded restaurants and bars as an extension to its magazine business. That move follows the success of three outlets in Moscow, the Vogue Cafe, GQ Bar and Tatler Club, all run under license by an independent operator. As a result, Conde Nast has now established a dedicated division to develop further such outlets in other countries, with a particular focus on developing markets in Asia and the Middle East. Conde Nast Restaurants will be based in Hong Kong and is led Stuart Nielsen, recruited from hotel operator InterContinental.

UK cable TV operator Virgin Media confirmed plans to put its 50% stake in cable channel group UKTV up for sale. A joint venture with BBC Worldwide, UKTV controls channels including Gold, Dave, Good Food and Eden. Earlier this year, Virgin Media sold a collection of other channels, including Living and Virgin 1 to Sky. It said it wishes to concentrate its attention on cable and phone services instead of content management.

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Simon Tesler
Publisher, Adbrands