Adbrands Weekly Update 14th January 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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First an important announcement regarding future Weekly Update bulletins. From February, we've decided to make the Weekly Update available only to paid subscribers. We'll still be sending out a free weekly email with summary headlines, but the expanded editorial content you're used to from the Weekly Update will only be available to paid subscribers. All subscribers to Adbrands premium content will receive the Update at no extra charge. Alternatively, other users will be able to purchase a separate Weekly Update-only subscription priced at 25 UK or $40 US. Both those options will also give subscribers the right to forward the Update to up to ten additional users. I'm very sorry for the inconvenience this causes to unpaid users, but it's becoming increasingly hard for us to justify producing so much editorial content for free. Hope you appreciate our dilemma. The current format will continue for the next couple of weeks, and we'll supply full details of how to purchase the new Weekly Update-only subscription in due course. As always, please contact me if you have any comments or questions.

Four of our favourite ads this week: 

ClearWay "Monkey"
by Clarity Coverdale Fury

BBC Knowledge "Eat Up Brain"
by Three Drunk Monkeys

BeatBullying "Cyber Mentors"
by M&C Saatchi London

CareerBuilder "Wrong Seat"
by CareerBuilder/Brian Forrest

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.

We're turning over a new leaf for our pick of Ads of the Week for 2010. Yes Sir-ee. No more dumb jokes, lightly clothed girls, fart gags. Nope. Not here, Jack. For our New Year's Resolution we're going serious with knowledge. Issues. Public service announcements. Health warnings. First up is a wonderful spot from Minneapolis indie agency Clarity Coverdale Fury for ClearWay, a Minnesota state-sponsored scheme to persuade smokers to quit. I'm guessing that for the actors involved, shooting this spot might have been a little like hell - I'd love to see the outtakes - but the end results are just spectacular. You guys all deserve an Oscar. And you humans as well.

Independent agency Three Drunk Monkeys is behind a series of attention-grabbing animated spots for the BBC Knowledge cable strand in Australia. These kicked off last summer and have got better and better. This new ad, featuring a voiceover from actor Richard E Grant, is the best so far, clever, entertaining and above all informative. I guarantee you will remember at least two of these facts next week.

BeatBullying is not a government initiative but an independent charity which campaigns against bullying in schools and local communities by encouraging kids to look out for each other as "Cyber Mentors". It's admirable work, and the organisation launched its biggest marketing campaign to-date this week with this startling and disturbing ad from M&C Saatchi. Sadly the campaign has been classified as too shocking for TV broadcast, but is rolling out online with support from YouTube as well as in British cinemas. An excellent initiative. For more see BeatBullying's website.

And finally... You know what, getting serious is all well and fine, but there aren't many laughs in it. Now I'm just depressed. Oh well, New Year's Resolutions are only there to be broken... We'll try again next year. In the mean time, here are some dumb jokes. As you may remember from last year, job site CareerBuilder split with agency Wieden & Kennedy and put out a call to the public to suggest ideas for their next Super Bowl campaign. They were deluged with suggestions, from which three were picked and remade professionally. One will feature during the Super Bowl on Feb 7th. Sadly it won't be this one, suggested by Brian Forrest, which was deemed too hot for broadcast. I urge you to have a look at the other two as well (see them here) and you might find it interesting to check out the originally user submitted versions of all three, available here.


In the news this past week: Brands & Advertisers

General Motors began the process of winding down Saab, dismissing its CEO and board and appointing liquidators. However it is simultaneously continuing talks with several potential buyers, although GM Europe chief Nick Reilly noted that "The longer this carries on ... the more difficult it is for someone to buy [the business]." The newest bidder is Formula 1 boss Bernie Ecclestone, who issued an 11th hour bid for the business late last week with backing from a little-known investment fund based in Luxembourg. GM is also still in contact with Dutch company Spyker, and with a Swedish consortium. However, the auto giant warned that it would not agree any deal unless it feels certain that the buyer is committed for the long term "We have a large carpark of owners around the world which we have to support and we want to support," said Reilly. "If any company comes along that [either] quickly or in a year or two decides they cannot make a go of it, then that will come back to us. We need to know that there will be a company to continue producing components. We look at our responsibility to consumers a least on a ten-year basis and so if we sell [Saab] to somebody who really doesn't have a viable business case, it will hurt our consumers and it will hurt us long term." GM is also expected to confirm this week a merger of the previously separate Opel and Vauxhall management teams to create a single unified structure.

Heineken agreed to acquire the brewery division of Mexican group FEMSA for $5.5bn in stock. That news followed hot on the heels of an earlier announcement that rival bidder SAB Miller, previously considered the favourite to secure the Mexican company, had pulled out of talks. Heineken already handles US distribution of FEMSA's beer brands, including Tecate and Dos Equis, and the deal also includes FEMSA's Brazilian subsidiary Kaiser, in which Heineken is already the minority partner. The Mexican group is cutting loose its brewery business to concentrate on higher margin soft drinks and convenience store retailing. It will end up with a 20% holding in the Heineken group, making it the second largest shareholder after the founding family.

The battle for Cadbury continues. The confectionery company issued a robust defence of the merits of remaining independent, and launched a stinging attack on the performance record of hostile bidder Kraft. Releasing strong performance figures for 2009, Cadbury's chairman Roger Carr said: "This company is in very good health... there is no reason to be owned by anyone else at all, unless they pay a very large premium." Meanwhile, the chances of a "white knight" bid emerging from Ferrero of Italy appeared to recede. Although the Italian company had successfully lined up funding for a potential offer, disagreement remained among members of the Ferrero family over the merits of such a move. This morning, Ferrero was reported to have abandoned plans to make a formal bid. Hershey, however, is thought to be pressing ahead with a solo offer. Cadbury has already indicated that it would prefer to be aligned in a partnership with the American confectioner than with Kraft's more diversified portfolio. But Hershey would still need to raise its offer price beyond that of Kraft, and that will prove quite a stretch. Our guess? That Cadbury manages to stay independent, but only by a whisker.

McDonalds shuffled its senior management team, with Don Thompson, previously head of the fast feeder's US business, stepping up to become worldwide president & COO. He replaces Ralph Alvarez, who retired last month. Thompson is in turn replaced as head of the US business by Jan Fields. Over at troubled banking giant Citigroup, Terri Dial was removed as head of retail banking arm Citibank North America and replaced with Manuel Medina Mora, also chief of the group's Latin American operations.

Sir Richard Branson's Virgin Money took a firm step forward into traditional banking in the UK with the acquisition of a small regional bank, Church House Trust, for 50m. The group plans to use its new purchase, which already has a banking license, as the platform to launch online deposit accounts and mortgages. Virgin Money already offers credit cards, insurance and various investment products. It could ultimately move into high street banking as well. Several branch networks are expected to come up for sale over the coming year, either through the government's sell-off of Northern Rock or the forced divestment of outlets by RBS and Lloyds.

Meanwhile Spanish bank Santander kicked off the rebranding campaign for its three British banking businesses of Abbey, Bradford & Bingley and Alliance & Leicester. All three are adopting the main Santander name. Group chairman Emilio Botin said he too will be looking to buy additional outlets and vowed to establish Santander as the UK's #1 bank.

The UK arm of mobile network Orange has teamed up with Barclays to launch a co-branded contactless credit card. Customers can get updates on their card balance via text message and earn reward points for spending. Payments can be made via MasterCard's PayPass contactless technology in selected outlets. The tie-up follows in the wake of a similar partnership between O2 and NatWest launched last year under the O2 Money banner.

Ownership of Britain's biggest and best-known estate agency Foxtons has been transferred to Bank of America and Mizuho, the two banks which funded an ill-timed private equity buyout of the company just before the credit crunch caused property prices to plunge. Investment fund BC Partners acquired the business in 2007, paying founder Jon Hunt around 360m, mainly sourced from American and Japanese lenders and loaded onto the balance sheet as debt. However the collapse of the property market left Foxtons struggling to meet its interest payments. Under the new arrangement, the two banks will assume around 60% of Foxtons' equity in return for reducing debts by two-thirds. BC Partners and the Foxtons management team will each hold around 20%. Elsewhere, another group of banks led by RBS took control of UK fashion chain Jane Norman, previously a unit of collapsed Icelandic investment fund Baugur, in an arrangement to reduce its debt burden of 136m.

Strong performance over the Christmas period boosted British retail chain New Look into the #2 spot in the UK women's wear market behind Marks & Spencer, and ahead of Next. Privately owned New Look is widely expected to return to the stock market later this year though an IPO.


In the news this past week: Agencies

The Big Won, the annual ranking of advertising excellence, published its tables of 2009's most awarded agencies and individuals. In the Networks table, the results were broadly in line with that other awards compilation The Gunn Report: BBDO Worldwide took top place, followed by DDB, Ogilvy and Leo Burnett. The Big Won's table of top Agencies was a little different though. Top place here went to Almap BBDO of Brazil, with DDB London in second place. (Gunn had the two shops reversed - each scheme applies different scores when counting the value of individual awards won during the year). In 3rd, 4th and 5th place, The Big Won has BBDO NY, AMV BBDO and DDB Berlin for an Omnicom clean sweep, whereas Gunn listed Goodby Silverstein, Dentsu and Del Campo Nazca Saatchi Argentina. For more details, including leading art directors, creative directors and campaigns, see here.

Publicis Groupe has begun consolidating its twin digital networks of Digitas and Razorfish, following completion of the latter purchase at the end of last year. Although the group says it will continue to maintain the twin brands, that dual existence could be in name alone, if this week's developments in Australia are anything to go by. The Digitas office in Australia has been reduced to a single employee, account director Gareth Pask, and all work for local clients will be executed instead by staff from Amnesia Razorfish.

In account assignments, GM confirmed Bartle Bogle Hegarty New York as the new agency for its premium Cadillac brand. Mitsubishi Motors called a review of North American creative, out of indie Traffic. Insurer AFLAC, best-known Stateside for its long-running duck mascot, called a review of its business out of Kaplan Thaler. It plans to keep the duck. In Europe, denim marketer Diesel placed regional creative with the London office of Anomaly, already established as one of the new year's hottest creative boutiques following its capture of Sony Europe. Deutsche Bank appointed Carat to pan-European media, replacing MediaCom. Carlsberg reappointed OMD. Fiat shifted media in several markets including the UK from Mediaedge:cia to Maxus. For all other appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

Google threatened to suspend all business operations in China after it identified a series of cyber attacks on its corporate infrastructure during December originating from that country and thought to have been sponsored or at least endorsed by the government. The internet giant said the attacks had resulted in the theft of intellectual property and also stated that there was evidence to suggest that a primary goal of the attackers had been to access Gmail accounts belonging to Chinese human rights activists. As a result, Google said it had informed the Chinese government of its plans to remove all censorship filters from its search results. These filters were imposed by Google four years ago, at the insistence of the government, to block results deemed politically sensitive. In return, Google was granted permission to establish a local presence in China. Yet the company has long agonised over that compromise, and removal of the filters is likely to prompt the government to throw Google out. Ironically, the news that Google had threatened to quit China was reported in almost every around the globe except China itself, where the story was given minimal prominence and also heavily censored to remove any references to free speech or government surveillance. The financial implications for Google of pulling out of the vast Chinese market are minimal - it accounts for only a tiny proportion of revenues - but could be a dangerous step strategically. The country is one of very few where Google doesn't dominate the online marketplace: it ranks second in local search well behind local company Baidu, which appears to have no such qualms about state censorship.

Meanwhile in France, the Sarkozy administration is considering plans to levy a tax on the local advertising revenues of international internet companies, primarily Google, but also Microsoft and Yahoo. The funds generated by the scheme would be used to bankroll worthy internet-related causes. One possibility already under discussion is the creation of a government-subsidised music service that would allow users to download tracks for free in a bid to wean them off pirate suppliers. That plan already has the support of President Sarkozy's wife, the musician Carla Bruni. The government is also threatening to bar Google from a deal struck last year with France's national library association to digitise the country's extensive book collection unless the technology giant drops its demands for exclusivity.

Lastly regarding Google, the company appointed Torrence Boone, former CEO of WPP's disbanded Dell agency Enfatico as its new manager of agency development for North America.

AOL, now an independent company once more almost exactly ten years after its disastrous merger with Time Warner, has begun closing local offices throughout Europe as it attempts to slash costs. Its outposts in Finland, Germany, Spain and Sweden are all being shuttered, and most of the rest, including the UK and France, are being scaled down significantly. The group has already set a target of reducing its global workforce by a third.

British media group Time Out also launched a round of redundancies following publication of its 2008 financial results, which showed a steep increase in losses. Declines in advertising and newsstand circulation resulted in a 3m loss for the year to December 2008, more than double the previous year's figure. According to a report in London's Evening Standard newspaper, founder-owner Tony Elliott will inject 3m of his own money into the business by June in order to maintain the company as a "going concern". Nevertheless, Elliott told the paper that the group made a profit in 2009 and that 2010 also looks promising.

Several media celebrities hit the headlines this week as key TV pundits on both sides of the Atlantic considered (or were forced to consider) new pastures. In the UK, the BBC's best-paid presenter Jonathan Ross said he would not renegotiate his 6m a year contract with the Corporation when it expires in July this year. Although Ross claimed to have taken the decision himself, there were some suggestions in the media that the decision to leave the BBC may have been mutual. In the US, Simon Cowell said he would be departing American Idol at the end of the current season in order to launch a local version of his own rival format The X Factor, already a huge hit in Europe.

Also in the US, NBC conceded defeat in its disastrous attempt to shake-up its late night schedules, centred around the Tonight Show, a long-established nightly fixture at 11.30pm following the news. Former Tonight Show host Jay Leno has struggled to win viewers in a new vehicle going out at 10pm, while his successor Conan O'Brien has been unable to stop the Tonight Show falling behind cross-channel rival David Letterman on CBS. NBC said this week that Leno's show would be shortened to half-an-hour and moved to 11.35pm, before The Tonight Show in a new slot at 12:05. After several days of consideration of the prospect of following Leno instead of the news, Conan O'Brien broke his silence this week. Trade bible Variety summed up his response to NBC with typical bluntness: "Drop dead". O'Brien's statement said "I sincerely believe that delaying the Tonight Show into the next day to accommodate another comedy program will seriously damage what I consider to be the greatest franchise in the history of broadcasting. The Tonight Show at 12:05 simply isn't the Tonight Show." He would not, he said "participate in what I honestly believe is its destruction". Rival network Fox is thought to have made its own handsome offer to O'Brien in an attempt to persuade him to jump ship from the Peacock network. Perhaps he could team up with former vice presidential candidate Sarah Palin, who made her own debut on Fox News this week as a pundit and by most accounts acquitted herself quite well, without making any serious gaffes. Better still, maybe Sarah Palin could replace Simon Cowell as the lead judge on Idol. Now that would be something!

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Simon Tesler
Publisher, Adbrands


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