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Lots to get through this week, so we'll keep the preamble short.
Argentina's Ponce Buenos Aires scores another hit with a new spot for Unilever's Axe/Lynx deodorant. The
tagline translates as Axe Twist: "the deodorant which changes during the day". Not quite as charming as their
last, Destiny, which was one of our favourite ads of last year, but still clever, engaging and amusing. If only, eh,
Also this week, BETC Euro RSCG Paris unveiled this cool new
corporate spot for Peugeot designed to highlight the brand's long history of innovative design; Coca Cola
celebrates the Winter Olympics in Vancouver with this fun battle of the nations from Wieden & Kennedy; and
San Francisco indie Pereira O'Dell conjure up mechanical marvels for LEGO. Enjoy!
In the news this past week:
Brands & Advertisers
It has been a sad week for British confectionery. After five months
of wrangling, the board of Cadbury agreed to accept an improved offer from hostile bidder Kraft. The
revised deal goes a long way towards fulfilling Cadbury's demands, not least an offer worth the equivalent of 850p per
share - Cadbury had said it would not accept less - as well as a higher proportion of cash. The final arrangement values
Cadbury at £11.9bn. Although the sale is probably good news for Cadbury's shareholders in financial terms, it marks the
sad loss of yet another British national jewel to a foreign bidder. Initial reaction from consumers has been largely
hostile, based on ill-founded prejudices against a company best-known for processed cheese and meat. However, in all
fairness, Kraft already knows how to run a quality confectionery company in Europe with its existing Suchard business,
whose brands include Toblerone and Milka. A combination of those brands with the Cadbury collection will certainly
create a daunting competitor to Mars. The two confectioners will be almost exactly equal in size, each with around 15%
share of the global market.
But no one should get too excited just yet. The deal still needs to be approved by both companies'
shareholders, as well as regulators, and the biggest obstacle could come not from Cadbury's investors, but Kraft's.
Investment guru Warren Buffett, a major shareholder in Kraft who had already warned the company about paying too much
for Cadbury, voiced his concerns yesterday in an interview on CNBC. He backed Kraft CEO Irene Rosenfeld in general
terms, but described the Cadbury purchase as "a bad deal", adding, "If I had a chance to vote on this,
I'd vote no." And the sale to Nestle of what he called Kraft's "very fine pizza business" was he said
"a mistake". But in response to the question of whether he would be selling his near-10% stake in Kraft as a
result, Buffett's implied answer was no. "That gets expensive," he said. "If I don't like what's going on
in government, it doesn't mean I have to leave the country."
It was very nearly a sad week for British air travellers as well.
On Monday, the union representing cabin crew at British Airways announced plans to ballot their members for a
12-day strike over the Easter holidays. A similar attempt to ground the airline over the Christmas period was narrowly
averted after a court ruled it was illegal. BA's initial response to the latest threat was to invite its ground staff to
retrain as cabin crew in order to keep at least some flights in the air in the event of a strike. Thankfully, BA's cabin
crew appear to have more sense than their union and expressed horror at the idea of a 12-day stoppage, even before the
ballot was issued. Their reaction was no doubt partly inspired by the breaking news that Japanese carrier JAL had
filed for bankruptcy. JAL's administrators are expected to cut 15,700 jobs, or around a third of its workforce, and the
value of most past and present employees' pensions will be slashed by as much as 50%. It was a sobering example to BA's
staff. As a result, the union was forced to backtrack on its plans and reassure passengers that it would not hold an
Easter strike. The current dispute revolves around BA's wish to cut the number of cabin crew by at least one on most
flights in order to reduce losses expected to top £1bn this year. Incredibly, the Unite union, stuck in the timewarp of
the 1970s, still appears to believe that an all-out strike is a sensible way of protecting jobs rather than a fast-track
to the unemployment market.
Bailout? What bailout? JPMorganChase kicked off the
reporting season with a spectacular set of financial results. Revenues reached a record $108bn for the year, and net
income more than doubled to $11.7bn. Those results included benefits from the former Bear Stearns and Washington Mutual
businesses, absorbed by JP Morgan during the year. One of the most startling footnotes was the news that the bank has
earmarked no less than $26.9bn for staff bonuses. According to the Wall St Journal, America's banking groups are
expected to make a record payout to employees this year, with the total figure expected to reach an extraordinary
$145bn. That's 18% up on last year, and also well above the previous record, 2007's $137bn payout. However, in a
concession to public opinion, most banks are capping this year's cash payouts and making the largest proportion of
bonuses in shares or deferred cash. The whopping bonus pool reflects the industry's rapid return to robust good health,
with total revenues expected to come in well above pre-crash 2007. As a result, the US government is pushing through a
new tax to help fund economic recovery in less resilient industries. If approved by Congress this new measure, called a
"financial crisis responsibility fee", will affect around 50 of the country's leading financial services
companies. The big six banks can expect to pay between $1bn and $2.4bn apiece. President Obama is also expected to
announce new measures designed to curb the size and amount of risk undertaken by the nation's biggest banks. This could
well lead to the reimposition in one form or another of the old Glass-Steagall Act, passed after the Great Depression of
the 1930s, which prevented banks from being involved in investment banking as well as consumer lending.
However JPMorganChase's headline figures tend to obscure serious
ongoing problems at grass roots level. Most of the bank's profits were generated by investment banking and private
equity, whereas the group's retail financial services and credit card businesses actually delivered poorer performance
than in 2008. Retail financial services effectively broke even, while credit cards reported a $2bn deficit. Those
underlying weaknesses were easier to see in the results from groups more heavily exposed to consumer lending. Citigroup
reported decent revenues of over $91bn, but three successive quarters of net profit were wiped out by a large 4Q
deficit, resulting in a $1.6bn loss for the year. That figure included the cost of early repayment of the government's
Tarp bailout, a move which the bank deemed necessary in order to relax restrictions on bonuses and thereby keep hold of
senior managers. Citi's figures included a provision for loan losses of almost $39bn, higher even than in 2008. That
figure was eclipsed by Bank of America, whose loan loss provision was a whopping $48.6bn, close to twice the 2008
reserve. Revenues soared to almost $120bn, but the group reported a full year loss of $2.2bn.
Japan's biggest beauty group Shiseido further expanded its
international presence with a deal to acquire US-based prestige cosmetics group Bare Escentuals for $1.7bn, or
about three times annual turnover. That represents the biggest ever international purchase for any Japanese cosmetics
company, although sales outside Asia still account for only a tiny proportion of Shiseido's total revenues. Its other
subsidiaries in the west include Nars and John Varvatos cosmetics products in America, Decleor in France and the BPI
fragrance business which markets the Issey Miyake and Jean-Paul Gaultier perfume brands.
Mobile carrier O2 announced plans to launch a fixed line
residential service in the UK for the first time, heightening the challenge to its former parent BT, from whom it was
demerged nine years ago. Now owned by Telefonica of Spain, O2 already offers residential voice services in its secondary
markets in continental Europe. The new service will be offered exclusively to customers who already take O2's home
PepsiCo named Andrea Fairchild as the new VP, brand marketing for Gatorade.
Once one of PepsiCo's strongest brands, Gatorade has suffered from a dramatic slowdown in sales over the past year or
so. Fairchild was previously global business development director for women's training at
Nike. In her new role she reports to Gatorade CMO Sarah Robb O'Hagan.
Europe's big three automakers announced unit sales for last year. Volkswagen
reached a new record of just under 6.29m vehicles, helped along by dynamic performance in China where sales jumped by
almost 37% to 1.4m vehicles. As a result VW brand sales also climbed, reaching 3.95m units. That offset modest declines
for Audi (to just under 950,000 vehicles) and Seat (to 337,000 cars). Skoda was up marginally at 684,000. The region's
#2, PSA Peugeot Citroen, weighed in at 3.19m vehicles, including 1.84m Peugeot and 1.35m Citroen. China was a key
market for PSA as well, with sales jumping by 52% in the year, and offsetting declines in Europe and Latin America.
Rival Renault reported sales of 2.31m vehicles, down 3%. The best news was a modest recovery for the core Renault
passenger car brand in Europe, where it had experienced several years of steady growth. However, sales outside Europe, a
key development area for the group, slumped as did sales of light commercial vehicles. Renault's two other brands, Dacia
in Eastern Europe and Renault-Samsung of Korea, both reported strong growth. Interestingly, the European companies'
gains at home created problems for Toyota, which announced a 20% fall in sales in Europe for the Toyota brand,
and a 40% plunge for luxury marque Lexus.
The new CEO of French retail giant Carrefour unveiled a
complete shake-up of his management team, with a raft of new appointments. Perhaps the most surprising was the selection
of British executive James McCann to head up Carrefour's domestic operations, still struggling to find their way back to
growth. McCann had previously run Tesco's Eastern European subsidiaries. He will also join the Carrefour executive
Apple sent out an email to the IT trade press, inviting them
to "come see our latest creation" at a media conference on January 27th. This is widely expected to be the
unveiling of Apple's long-awaited tablet computer, expected to feature a 10-inch touchscreen, and running on a similar
operating system to the iPod and iPhone. The industry is already abuzz with rumours of negotiations between Apple and
different book, newspaper and magazine publishers, generating speculation that the new product will double as a book
reader to rival Amazon's Kindle and other devices. HarperCollins, Random House, the New York Times and Conde Nast, among
others, are all said to have struck deals with Apple. The company is also thought to have been in talks with several
academic textbook publishers, as well as with broadcast networks ABC and CBS over monthly TV subscriptions. Another
likely clue are the bright paint-like splotches which illustrated Apple's press conference invitation, suggesting that
colour will be an important feature of the new product. Notably, all the current generation of e-book readers from
Amazon, Sony and Barnes & Noble display books in black and white only. Meanwhile Amazon attempted to undercut
Apple's offer to publishers by offering a whopping 70% royalty on the list price of all books sold on the Kindle, but
only as long as the Amazon list price is the same as or lower than the list price of the same book on other e-readers.
In an interview with the Corriere della Sera newspaper, Giorgio
Armani firmly ruled out any likelihood of his eponymous fashion empire coming up for sale. "When am I going to
quit? When am I going to sell? There's always a moment in every interview when this question jumps out," Armani
told the newspaper. "So it is time for clarity. I will never sell because I have no need to and I have no desire
to. And I will not step aside as long as, touch wood, I can keep up the pace. I want to follow everything, be busy with
everything, and the last word will always be mine." Now 75, Armani remains the sole shareholder in Giorgio Armani
SpA, although several nieces and nephews have roles within the business.
In a separate development, Armani has teamed up with Reebok
to produce a line of co-branded sportswear which will be sold through Emporio Armani and Reebok outlets. That's pretty
cool, but we're not sure about another partnership, negotiated by Reebok's parent company Adidas. In the most
surprising marketing tie-up we've seen so far this year, Adidas has joined forces (ha!) with George Lucas's marketing
machine to develop a range of footwear and apparel based on the Star Wars franchise. The range includes Storm Trooper
shoes, Skywalker shoes, X Wing Samba shoes, Millennium Falcon shoes, Yoda ZX 700 Boat shoes, the Darth Vader track top
and Darth Vader XZ 8000 shoes. Nerds of the world, rejoice!
In the news this past week:
Interpublic named Nick Brien as the next CEO of McCann
Worldgroup and of the McCann Erickson network. He will take over from long-time incumbent John Dooner on April 1st.
Brien currently runs Interpublic's Mediabrands umbrella which oversees Initiative, Universal McCann and Magna Global,
and is credited with halting the steady erosion of clients at that group's US agencies. In an internal memo obtained by
Adweek, Dooner described Brien as the "ideal choice to lead the multi-disciplinary Worldgroup". According to
Dooner, "he believes, as I do, that when our clients succeed, we succeed. And he is relentless." Dooner, now
in his early 60s, will remain chairman until the end of the year. As CEO of McCann in the 1990s he presided over an
aggressive expansion of that business and the creation of the Worldgroup concept. That resulted in a promotion to group
CEO in 2000, but the next few years proved difficult as IPG struggled with the fallout from an over-enthusiastic
acquisition drive and a series of damaging accounting errors. Dooner stepped back down into McCann in 2003, but some of
the old magic has gone and that agency too has experienced a slow erosion of business, not least from key clients
Microsoft and Pfizer. No new CEO will be appointed at Mediabrands until 2011. Instead, for the time being, Mediabrands
COO/CFO Tara Comonte and each media agency's divisional head will report directly to IPG group CEO Michael Roth.
Draftfcb named Aurelio Lopes as its new regional president
for Latin America, replacing Rafael de Guzman. Lopes is already head of the network's Giovanni Draftfcb outpost in
Brazil, and will retain that position. The agency's Latin American HQ will transfer from Miami, where it is currently
located, to Giovanni Draftfcb's offices in Sao Paulo Brazil. Meanwhile, Publicis Worldwide named Kevin Ramsey as
its new regional CEO for Asia Pacific. Ramsey was previously regional director for McCann; he replaces Matt Godfrey, who
is thought to be heading to a new role at Publicis Australia & New Zealand.
In other news, digital network AKQA opened its first German
office, in Berlin, to manage the local Nokia account; and in France, TBWA is to merge a collection of subsidiary
agencies including through-the-line shop Jump, creative unit TBWA\Map, TBWA Consulting and the Paris office of Integer
into a new multi-discipline business under the name Being.
In a quiet week for account assignments, DHL handed global
creative to 180 Amsterdam. MPG was reappointed to media for EDF in France and the UK. TBWA\Manchester
won consolidated advertising for the UK's Co-operative Group across all divisions except financial services. American
Family Insurance moved from Element 79 to Ogilvy Chicago. For all other appointments, subscribers can access
the full Adbrands Account Assignments database here.
In the news this past
Following in the wake of last week's furore over its late night
chat show line-up, NBC finalised a pay-off early this morning for aggrieved host Conan O'Brien, who will make his
last appearance as host of The Tonight Show tomorrow. According to advance press reports, O'Brien gets $33m for himself
and another $12m for his staff, and is barred from bad-mouthing his former employer. He will have to stay off air for a
period of time, but according to leaks, will be allowed to launch a new show on a rival network as soon as September.
That deal caps a week of intense and increasingly bitter talks in which, according to several accounts, NBC switched
from trying to mollify O'Brien to trying to force him out, even threatening to keep him off air for the remaining 2 1/2
years of his contract if he didn't agree terms. O'Brien's response? "See you in court". The threat of an
embarrassing law suit appears to have brought the Peacock to its senses with what appears to be a handsome parachute. In
the mean time, Jay Leno will return as host of The Tonight Show, a role he held for 17 years before he was replaced by
O'Brien in Spring last year. NBC will have to pay millions more to generate new programming to fill the 10pm time-slot
Leno is vacating.
YouTube extended its footprint in broadcasting by securing
rights to stream live coverage of more than 60 matches from cricket's Indian Premier League, that sport's most lucrative
annual tournament, watched by a global audience. The company already streams entertainment content from various TV
channels, and scored a big hit with exclusive live streaming of a U2 concert last year which attracted 10m viewers.
Further live pay-per-view events are likely, and the company is also testing the idea of movie "rentals". From
tomorrow, US users of YouTube will be able to watch five independent movies from this year's Sundance Festival, A fee of
just $3.99 buys unlimited viewings of each movie over a 48-hour period. Meanwhile Microsoft was reported to be in
negotiations with cable broadcaster ESPN to stream live sports events through Xbox Live, the online channel of its Xbox
360 consoles. That service already has some 20m subscribers, who are able to access on-demand movies and TV content as
well as multi-player games.
JCDecaux extended its lead in the UK outdoor advertising
sector by acquisition the local operations of failing rival Titan. The latter company was saddled with substantial debts
following its acquisition in 2006 of another poster site operator Maiden. Titan sold off its less valuable roadside
sites last year, but had kept hold of rail, retail and bus sites. In what is thought to have been a pre-arranged move,
it filed for administration on Monday morning and was sold to JCDecaux later the same day. That deal gives Decaux around
29% share of the UK out-of-home market, ahead of rivals CBS (23% share), Clear Channel (22%) and Primesight (12%).
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