The Cosmopolitan "Right
Amount of Wrong"
by JWT New York
Volkswagen "Milk Run"
by DDB New Zealand
BC Hydro "PowerSmart
by DDB Vancouver
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No classics this week,
but four good ads nonetheless. Fallon Minneapolis launches the debut spot
for Las Vegas "ultimate luxury" resort The Cosmopolitan. Wild
times, my friend.
JWT New York has
a new film for Smirnoff vodka. It's dramatic, epic and very cool, to be
sure, but stretches that purity analogy about as far as it can possibly go
without breaking. Personally, I like a bit of wolf in my vodka.
Next up, a nice
slice-of-life tale from DDB New Zealand for Volkswagen. We've all
been there, haven't we. But does it really matter which make of car you use for
the early morning milk run?
thought-provoking exaggeration from DDB Vancouver in Canada for utilities
provider BC Hydro. Certainly makes you think twice about wastage.
In the news this past week: Brands &
The future of COI, the civil service body which coordinates British government
advertising, could be in doubt as a result of drastic cutbacks in expenditure
announced this week by the new Coalition administration. A new report released by the
government containing details on almost 200 other bodies which are to be closed
or merged comments that the future of the COI is "under consideration
pending a review of government advertising to be finalised by the end of
November". The organisation is already in the process of executing a 40%
reduction in its workforce, as a result of the freeze on all
non-essential government marketing. The Central Office of Information was
originally formed after the Second World War to replace the old Ministry of
Information. Its power and influence gradually increased over the following 60
years, reaching a peak under the Blair and Brown Labour Governments, when it
became one of the country's biggest advertisers, rivaling even Procter &
Apple reported another set of extraordinary financial results, demonstrating
seemingly unstoppable growth from consumer devices such as the iPhone and iPad.
For its 4th fiscal quarter, the company reported record revenues of $20.3bn, up 67% on
the year before, and profits of $4.3bn, up 72%. The latter figure overtook even
IBM's profits for the quarter, a first for Apple. Announcing the result, CEO
Steve Jobs also took the opportunity to goad its main rival in smartphones,
pointing out that sales of iPhone had overtaken BlackBerry for the first time,
hitting 19m units, compared to BlackBerry's 12m. Apple's full year
revenues hit $65.2bn and net income jumped 71% to $14.0bn. Impressive though
those figures were, investors were worried by a slip in gross profit margins,
and lower-than-hoped sales of iPad. Tablet volumes of 4.2m units for the quarter
were lower than the 5m expected by some analysts. As a result, they marked down
Apple's share price by as much as 6% after the markets closed.
Apple's sales are likely to get another boost over the next two quarters
as it broadens the profile of its wireless devices in the US beyond AT&T,
until now the exclusive supplier of iPhone.
Arch-rival Verizon will start selling the iPad, complete with a wireless
contract, from next week, and is likely to begin retailing the iPhone as
well from early next year. There's no official news on that launch yet, but the
rumour mill suggests that a Verizon version is in final testing stages right
Advertising Age selected Ford as its Marketer of the Year, citing
the auto giant's strong comeback over the past two years. Apple was named Marketer of the Decade, and
other companies commended were Southwest Airlines, PepsiCo and restaurant chains
Domino's and Chick-fil-A. Interestingly, when AdAge readers were polled for their own
opinion, they placed Southwest in the #1 slot, with 24% of the vote
followed by Chick-fil-A with 21%.
Procter & Gamble promoted Greg Ross, its long-serving head of North
American media, to a new role as director of global media innovation, with
responsibility for worldwide media as well as sponsorships including the 2012
Olympics. Those duties are currently overseen by Dina Howell, VP, global media
& operations. However, she was reported recently to be planning a move over
to the CEO role at one of P&G's agency partners, shopper marketing network
Saatchi & Saatchi X. Ross has been replaced as director of North American
media, marketing & shopper marketing by Julie Eddleman. She reports to Kirk
Perry, VP US operations & marketing.
French retail and luxury group PPR announced the creation of a new sport &
lifestyle division built around sportswear brand Puma, which it acquired in
2007. Puma CEO Jochen Zeitz was named as CEO of the new division, as well as
chief sustainability officer for the PPR group. A new CEO of Puma will be
appointed in due course and further acquisitions by PPR could follow.
Ray Ozzie, the technology engineer hand-picked by Bill Gates in
2005 to be his successor as Microsoft's "chief software architect", is
to leave the company at the end of the year and will not be replaced. After a
strong start, when he pushed Microsoft towards developing online versions of its
main software products, Ozzie's visible contribution to the company's
development has become increasingly limited. Most recently he has led
Microsoft's development of cloud computing services, but progress in this area has been slow
compared to rival companies.
Disney sealed a deal with Paramount Pictures to buy back rights
to the next Iron-Man movie as well as another Marvel spin-off, The Avengers.
Those films were due to be developed under a distribution agreement signed five years ago
by Marvel and Paramount, which has already scored considerable success with the first two Iron-Man
films. However, all the Marvel characters, including Iron-Man, are now owned by
Disney, and the House of Mouse is attempting to unravel prior marketing
partnerships. Disney agreed to pay Paramount $115m to buy back
eBay named Richelle
Parham as its chief marketing officer for North America, filling a position that
has been empty since Mike Linton left the company in 2009. Parham was
previously head of global marketing innovation and initiatives at Visa.
Video subscription service Netflix vowed to take its first steps beyond
North America in a bid to establish itself as a global broadband entertainment
supplier. The company is already changing its positioning in its domestic market
with a growing emphasis on on-demand streaming of movies via the internet
instead of its heritage business of mail order DVD rental. In its latest
quarterly results, the company reported a 26% jump in net earnings and 31%
increase in revenues. It now expects to finish the year with between 19m and
19.7m subscribers, well ahead of earlier targets.
The conflicts within L'Oreal's controlling family reached a new level
this week when the 88-year-old Liliane Bettencourt, sole heir of founder Eugene
Schueller, issued a lawsuit against her only child Francoise Bettencourt-Meyers,
also a director of the company. The elderly billionairess accuses her daughter
of harassment through the media. This is the latest development in a
long-running saga known in France as "L'affaire Bettencourt", prompted
by the relationship between the elderly Bettencourt and society photographer
Francois-Marie Banier. Bettencourt-Myers issued a lawsuit against Banier three
years ago, accusing him of exploiting what she called her mother's mental
weakness to obtain paintings and other gifts with a combined value of almost
E1bn. She has also demanded that an independent legal guardian be assigned to
oversee her mother's business affairs. The case has been widely covered in the
media, resulting in the publication of intimate details of Bettencourt's life.
There was even the threat of political scandal after tape recordings made
secretly by Bettencourt's butler were uncovered which appeared to suggest she
had made secret cash payments to leading French politicians. In her own lawsuit,
the elderly Bettencourt demands an end to what she believes is her daughter's
victimisation of her. "The successive and fierce legal complaints, the
totally indecent exposure of her private life and her smallest health details in
the press are repeated attacks on her tranquility," said her
In the news this past week: Agencies
Japanese giant Dentsu was reported to have pulled out of talks to acquire
digital agency AKQA after developing "cold feet" over
the quoted price tag of $600m. AKQA could now move forward with an IPO, thought
to be the preferred option of the management team.
The Q3 reporting season kicked off with strong results from Havas, Omnicom and
Publicis. Havas was first out of the gate with reported revenues up almost 13%
in the third quarter, averaging out to almost 7% for the year-to-date. On an organic basis,
stripping out the effects of currency or acquisitions, the Q3 increase was 5.3%,
averaging out to 2.9% YTD. Total revenues for the first nine months were just
under €1.1bn. The UK led European markets with an organic increase of 7.5% for
Q3, well ahead of France at 5.2%. Other European markets remained weak, though,
and overall revenues for the region are still negative for YTD. North America
delivered 5.5% for the quarter, but the best performance by far was from Latin
America, with Q3 revenues up an astonishing 38% organic, on top of 24% and 26%
respectively for Q1 and Q2.
Omnicom reported a 5.5% increase in reported revenues for 3Q (or
6.7% on a like-for-like basis), and a 5.4% lift in net income. Total revenues
for the first nine months totaled just under $9.0bn, up almost 6% on the same
period in 2009. In a conference call with investors, Omnicom CEO John Wren said
"In the US, every client I speak to seems to have a renewed focus on
top-line growth. While improvements in the economy are inconsistent from region
to region, we have been pleasantly surprised by the recovery in the US and
renewed strength in Western Europe." He added that every major category of
advertiser was spending more than last year, with the exception of travel and
Publicis Groupe topped both its rivals with an impressive 26% jump in 3Q
reported revenues, equivalent to 9.2% organic. Total YTD revenues were almost
E3.9bn, up 7% on last year on an organic basis. Perhaps the most striking aspect
of the quarter's results was a 12% organic increase in revenues from North
America, supported by 10% increases in Asia and Latin America. Europe continued
to lag behind (+5.0%), as another quarter of negative performance in Germany
offset good growth in France (+12.6%) and the UK (+9.3%). Publicis highlighted
the strength of its digital subsidiaries, which together contributed over 44% of
North American revenues and almost 29% of global sales during the quarter.
Omnicom also recorded one of its busiest ever weeks for acquisitions, with no
less than four new companies joining the fold. In China, the group bolted on
field marketing agency Unisono and instore promotions specialist Sales Power,
previously a joint venture with a local partner working primarily on Unilever
brands. In the Netherlands, Omnicom acquired medical communications agency
Excerpta Medica, which will join the group's Adelphi network of health care
marketing shops. And the group also added Russian PR agency Maslov, which
becomes part of the Ketchum network under the new name Ketchum Maslov.
Also out shopping was Engine Group, parent to WCRS, Partners
Andrews Aldridge and other agencies. It made its first significant acquisition
in the US, snapping up New York-based digital shop Deep Focus. Further purchases
are expected. Engine recently secured up to an
additional $100m in credit from investment fund HIG.
Continuing the steady consolidation of its portfolio, MDC folded its Canadian
subsidiary agency Allard Johnson into larger stablemate
Kirshenbaum Bond Senencal & Partners, based in New York. As a
result, KBSP gains its first outposts north of the border, with offices in both
Toronto and Montreal. It already established a presence in Atlanta earlier this
year with the absorption of another MDC subsidiary.
According to Brand Republic, the UK office of ZenithOptimedia is "believed
to be heading for a dramatic split". Its sources suggested that Publicis Groupe
is planning to establish the Zenith Media and Optimedia brands as two separate
units once more, with Stephen Farquahar named as likely head of
Zenith and Mark Howley as MD of Optimedia. Both men would report to current ZO
chief executive Gerry Boyle. At the same time, the group may dispense with its
two existing conflict units Zed Media and Equinox, each of which would be absorbed
into the new entities. The Zenith and Optimedia brands were originally merged in 2003, following
Publicis Groupe's acquisition of Zenith Media, previously the media network of
Saatchi & Saatchi. Optimedia was at the time the
media network spun out of Publicis Worldwide. However in several key territories, not
least the US, China and Germany, the two brands were never merged, because of
client conflicts, and still operate separately today.
Media agency MPG filled a hole in its North American management team, appointing
Sasha Savic to a new position as chief commercial officer. He reports to Maria
Luisa Francoli, MPG's global CEO, and current head of the agency's North
American operations following the departure of Shaun Holliday earlier in the
year. Savic was previously COO of PG2, the unit of Publicis Groupe which
oversees its worldwide relationship with Procter & Gamble. In a separate
development, Sandy Thompson is to join Y&R as global planning director,
replacing John Gerzema, who is moving to a new role as president of the
network's brand strategy arm Brand Asset Consulting.
In account assignments, Sanofi-Aventis reappointed ZenithOptimedia
to its global media business following a review. Expedia called a review
of creative in Europe, handled mainly out of London-based Meteorite. In the US,
restaurant operator CKE, parent to the Hardee's and Carl's Jr
chains, launched a review of creative, out of Mendelsohn Zien. In the UK, mobile
operator 3 is said to be plotting a review of traditional creative,
currently handled by digital shop Glue Isobar. Biscuit maker Burton's
is also calling a review of creative. Neither of the incumbent agencies, Adam
& Eve and Fallon London, are expected to take part. For all appointments, subscribers can access the full Adbrands Account
Assignments database here.
In the news this past
UK newspaper The Independent, now owned by Russian media tycoon Alexander
Lebedev, announced the launch of a spin-off title, which claims to be the first
quality daily newspaper launch for almost 25 years. Since the launch of the
Independent itself in fact. The new title is named "i", and will in
effect be a slimmed-down version of the main paper, priced at just 20p instead
of the Independent's GBP 1 cover price. It is aimed at "readers and lapsed
readers of quality newspapers, and those of all ages who want a comprehensive
digest of the news in printed form... [It] will combine intelligence with
brevity and depth with speed of reading, providing an essential daily
briefing." Independent editor-in-chief Simon Kelner will supervise the new
Facing pressure to cut costs, the BBC agreed to
accept a freeze in the price of the license fee for the next six years.
Despite the steady growth of its commercial operations, most of the BBC's
revenues are generated by the license fee, an annual sum of GBP 145.50 payable
under law by every owner of a television set in the UK, irrespective of which channels
they watch. Currently, combined revenues from the license fee total around GBP
3.6bn a year. The BBC also agreed to fund the costs of running the BBC
World Service, its international radio operations, out of its own pocket.
Previously that bill had been met largely by the Foreign Office. In return
for these sacrifices, however, the Government dropped its demands that the BBC
broadcast public service advertising free of charge.
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