Adbrands Weekly Update 18th March 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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Four of our favourite ads this week: 

K-Swiss "Have An Awesome Day"
by 72andSunny

Nestle Purina Friskies "Adventureland"
by Avrett Free & Ginsberg

SpecSavers "The SpecSavers Effect"
by SpecSavers Creative

Carlton Draught "Tingle"
by Clemenger BBDO

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

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We love this summery new ad by 72andSunny for K-Swiss which aims to reposition the company as "the Californian Sports Company". It's a really happy, upbeat spot, just the ticket as Spring arrives to erase memories of a pretty brutal winter.

We don't know what they put in Friskies catfood, but if this ad by Avrett Free & Ginsberg is anything to go by, it contains something a lot more mind-altering than meat by-products or even catnip. No wonder cats can't get enough of the stuff. I might try it myself.

The inhouse team at UK-based opticians SpecSavers continue to push the boundaries with this endearing parody of the famed Axe/Lynx "Billions" ad produced by BBH a few years ago here top left). Special permission was obtained from Unilever to use the ad concept and punchline.

And finally, Clemenger BBDO have unleashed a new campaign for Carlton Draught in which a trio of bizarre troubadours serenade us with descriptions of the way in which parts of a man's body tell him he needs a beer with his mates. This is the core ad, which offers an ode to the tingle in your "man plums". There are also several follow-ups, of which our favourite is "Weenis". "Your weenis, your weenis, it's wrinkly and it's pink. Your weenis, your weenis, it's not what you might think..." To find out just what it is exactly, see here.


In the news this past week: Brands & Advertisers

German car giants Volkswagen and BMW demonstrated the impact of the current downturn in their results for 2009, but anticipate a marked improvement this year. Volkswagen's revenues slipped back from last year's record E113.8bn to E105.2bn, and net profits plunged almost 81% to E911m. The strongest performer in the group was Audi, which withstood the worldwide downturn better than the group's other brands. As a result, it emerged as the Volkswagen Group's most profitable division for the first time, with operating profits more than double those of the much larger VW passenger cars business. Worst hit were Seat, whose losses rose sharply, and the Bentley ultra-luxury business, which reported an operating loss of almost E50,000 for every car it sold. At BMW, sales and net profits were down sharply, to E50.7bn and E210m respectively, but the company said it was cautiously optimistic about the future because of increased sales in 4Q. Both BMW and Audi are accelerating their push into the market for smaller cars. Audi's A1 - positioned as a direct competitor to BMW's Mini - launched early this month, and BMW said it is considering the launch of a new BMW-branded model positioned below its current entry-level BMW 1-series.

Meanwhile, Germany's third car giant Daimler was reported to be in negotiations with Renault of France regarding a wide-ranging alliance that could mirror Renault's existing arrangement with Nissan. Daimler, which owns the Mercedes-Benz brand, has been hit harder than VW and BMW by the downturn because of its reliance on luxury cars and heavy trucks, the two sectors worst affected by spending cuts. The proposed tie-up would involve the companies acquiring significant minority shareholdings in each other and co-operating on technology and purchasing. Such an arrangement would be hard to implement but could offer multiple benefits on both sides. It would offer Renault a presence it currently lacks in the luxury and heavy commercial sectors (Renault-branded heavy trucks are not actually manufactured by the French company, but by Volvo under license). Daimler would benefit from Renault's mid-range and small car expertise.

Chrysler Group, now under the control of Fiat, poached Laura Soave from Volkswagen of America to lead the reintroduction of the Fiat brand in North America. The group plans to launch the Fiat 500 city car in the US and Canada at the end of this year. Soave was most recently head of experiential marketing at Volkswagen and previously oversaw the repositioning of the Ford, Lincoln and Mercury brands at Ford Motors. Chrysler/Fiat CEO Sergio Marchionne said "Laura joins Chrysler with extensive experience in automotive marketing. Her rich background will serve as a springboard for reintroducing the Fiat brand when it takes to US and Canadian roads this December after more than a 25 year absence."

Inditex, the Spanish group behind Zara and other brands, and now the world's biggest fashion retailer, reported another year of dynamic performance. For the year to January 2010, revenues rose by 7% to E11.1bn, or around $15.3bn at current exchange rates. Net income rose 5% for the year to E1.3bn, helped by an 18% increase in the final quarter. The group continues to expand at a rapid speed. During the past year it opened more than 343 stores in 46 countries including its first in Syria. It plans to launch up to 425 outlets during the next 12 months, including its first in India, as well as an online stores covering six European markets and the US.

US department store Macy's struck a deal with fashion merchandiser Iconix to introduce a line of teenage apparel and accessories co-designed by pop star Madonna and her daughter Lourdes. The range, which will be marketed under the Material Girl banner, is set to debut at the end of this year. Meanwhile in the UK, singer Amy Winehouse, whose musical career is currently in suspended animation, agreed to lend her name to a line of womenswear for sportswear manufacturer Fred Perry.

As rumoured last week, fashion group Philips Van Heusen, owners of the Calvin Klein trademark and other brands, signed off on a deal to acquire rival "American classic" label Tommy Hilfiger for $3bn. Following completion, the enlarged PVH business will have sales of around $4.6bn, making it one of the world's biggest multi-label fashion businesses. Tommy Hilfiger will continue to serve as chief designer for his name-label, and Hilfiger CEO Fred Gehring will add responsibility for PVH's other international operations. In the UK, retailer French Connection reported another year of increasing losses, which almost doubled to 25m despite a small increase in revenues to 214m. The group announced a restructuring plan which involves the sale of its upscale designer label Nicole Farhi to private equity backers and the closure of all but six of its directly operated shops in North America.

British Airways is girding its loins for the first phase of a strike by cabin crew which is intended to ground the airline for three days from Saturday, with a further four days planned for the following weekend. The dispute has become a political hot potato with even Prime Minister Gordon Brown and his cabinet colleagues urging both sides to resolve their differences to avoid action which will inflict further damage on both British Airways and the economy. This "deplorable" situation, said Brown, "is not in the company's interest, it is not in the workers' interest and it is certainly not in the national interest". This was a dramatic u-turn for the Labour Party, traditionally seen as the champion of the trade unions. In a bitter irony, the Unite union involved in this dispute is also Labour's biggest financial supporter. BA hopes to be able to operate around 60% of planned flights if the strike goes ahead by using replacement crew or chartered aircraft, and chief executive Willie Walsh is determined not to give in to the union's pressure. No doubt he hopes that, by refusing to back down, he may be able to crush the union's stranglehold on British Airways once and for all. If the company survives, that is. BA's sadly misguided cabin crew seem to be under the delusion that grounding an airline that is already facing losses of 1bn this year is somehow going to help protect their jobs.

DVD rental chain Blockbuster warned that it is unlikely to survive the current year in its present form. The collapse of the DVD sales market, and increasing competition from low-cost vending machines, mail order suppliers like Netflix and cable and internet on-demand services is pushing the company ever closer to bankruptcy. The company said that these "increasingly competitive industry conditions" raise "substantial doubt about our ability to continue as a going concern". It is also struggling under a substantial debt burden of around $1bn, loaded on when the business was spun off from Viacom in 2004. From a market capitalisation of $2bn in 2005, Blockbuster's shares are now worth only around $50m. That creates another set of problems: the retailer also says that its international subsidiaries are having trouble obtaining DVD inventory from the major studios because of their low credit rating. Chapter 11 restructuring may be the only option for survival. In the mean time Blockbuster plans to close another 500 stores in the US and internationally on top of the 572 already shuttered last year. Its main rival Movie Gallery, which also owns the Hollywood Video chain, filed for bankruptcy protection last month for the second time in three years.


In the news this past week: Agencies

Chime Communications, the UK-based marketing group which owns PR giant Bell Pottinger and ad agency VCCP, broke the mould as far as results for 2009 are concerned, reporting full year organic growth as well as an increase in profitability. All the other major marketing groups have reported declines. Operating income - equivalent to the figure for revenues reported by other companies - rose 10% to 123m. The organic increase, with exchange rates and acquisitions stripped out, was also 10%. Pretax profits were up 14% at 18.6m. All the group's divisions reported an increase in profitability apart from its small research business.

In personnel moves, Jerry Buhlmann has been named as group chief executive of Aegis. That appointment is designed to end a long period of instability in the Aegis C-suite since the abrupt departure of Mainardo de Nardis and Robert Lerwill in 2008. Group chairman John Napier had been standing in as interim CEO in place of Lerwill; Buhlmann had been head of the group's main media services division. Elsewhere, Ari Merkin, one of the two principals of recently shuttered New York boutique Toy, is to join Crispin Porter & Bogusky as executive creative director of its Miami office.

The Australian arm of global recruitment advertising network TMP Worldwide is understood to have called in administrators. Although affiliated to the US network which was spun out from Monster Worldwide in 2005, TMP Australia is actually an independent company. It traces its roots back to Australia's first ever recruitment advertising agency, Neville Jeffress, acquired by the American TMP in the 1990s. The business has struggled to maintain performance through the current recession.

In account assignments, Coty reappointed OMD to its media account for the US, UK, Canada and Ireland. CHI & Partners is to handle all UK advertising for Samsung's TV range. CBS Films shifted US media to MediaVest, out of MPG. Branding consultancy Erasmus Partners is to take over global advertising for packaging giant Tetra-Pak from Ogilvy. However Ogilvy and hispanic partner SCPF were appointed to handle Ikea's US business. For all other appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

European media giant RTL reported a generally resilient set of results for 2009. Revenues slipped 6% to E5.4bn, but net profit edged up by just under 1% to E298m. Performance was helped considerably by a reduction in impairment losses compared to the year before. Without that adjustment, operating profits would have fallen by 18%. The group's weakest business by some margin is UK terrestrial broadcaster Five. That channel's revenues fell by more than 21% in local currency in 2009 to 269m, and it was the only one of RTL's main subsidiaries to report an operating loss. The media group's main businesses are RTL TV and radio in Germany and M6 in France.

The extraordinary growth of Facebook was in the news once again this week following publication of new figures from researcher Hitwise that suggest that it has now overtaken Google as the internet's most visited website. According to the data, Facebook accounted for 7.07% of all US internet traffic last week, compared to 7.03% for the Google search service. Only a year ago, Facebook accounted for just over 2% of traffic, an extraordinary increase. The Google figure only includes search; adding in other company-owned services such as YouTube and Google Maps, the figure rises to 11.03% of all US web visits, while Yahoo's combined properties accounted for 10.98% of traffic, but at the current rate Facebook will have overtaken all Google services by the end of the year.

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Simon Tesler
Publisher, Adbrands