Adbrands Weekly Update 25th March 2010
A weekly round up of key news about 
leading advertisers, agencies and mediaowners
 
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Please note: our video streaming supplier YouTube has been reporting intermittent technical problems this morning (25th March). If you have trouble viewing ads, please come back and try again. Apologies for any inconvenience.

Four of our favourite ads this week: 

Adidas "The Street Where Originality Lives"
by Sid Lee

Orange "Magic Numbers"
by Fallon London

Sara Lee / Moccona "Candles"
by M&C Saatchi Australia

P&G / Old Spice "Armpit Mountain"
by Wieden & Kennedy

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

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.

You know who throws a good party? Canadian agency Sid Lee, that's who. They've committed another of their house party spectaculars for Adidas to video in this new campaign. I defy you to watch this ad and not want to be there yourself. Sadly, poor old David Beckham has to console himself with taking pictures and growing a beard quietly in the corner. Presumably Victoria won't let him get off his crutches and go near any of those hot girls...

Fallon London is back on form with a new campaign for mobile service Orange, promoting the carrier's magic numbers and Orange Wednesdays cinema promotions. Here's the magic numbers spot. Beware. Viewers who suffer motion sickness may experience feelings of vertiginous nausea from the ad's swoops and skirls. The other spot for Orange Wednesdays is here.

And now for something romantic. M&C Saatchi Sydney established something of a house style for Sara Lee's Australian coffee brand Moccona two years ago with a lavishly shot update of the Cinderella story. Here's their follow-up, another charming romantic tale. We like this a lot. But, really, how desperate is this girl? That guy can't even grow a real beard. See the original Cinderella ad here.

And finally, more foolishness from Wieden & Kennedy on behalf of Old Spice. "Is handsomeness a burden your face has to live with every day?" Love it! There are around a gazillion other ads in the current campaign - seriously guys, slow down or you'll do yourself an injury. Catch up with the others here. And don't miss our next most favourite, "Freshershist".

And finally, finally, a postscript to last week's selection of the new Carlton Draught "Tingle" campaign as an Ad of the Week. The ads were officially pulled on Monday from the brand's dedicated website, although they are still to be found on YouTube. No official explanation was given. However, trade paper B&T reported that the move was caused by a dispute between the marketing department at Carlton & United Breweries and senior managers at parent Foster's Group. According to B&T the ads were originally to be aired on TV, but were subsequently considered too controversial by Foster's management, presumably because of the references to "goolies", "man-plums" and "your weenis". As a result, they were redirected for a web-only campaign. But even that caused cold feet at Foster's and the ads have now been suspended altogether. Foster's Group declined to comment when questioned by B&T. A spokesperson for agency Clemenger BBDO said only "The campaign is over and the site is down. Thereís enough debate out there at the moment, so we donít want to say any more than that." Who'd have thought an Ozzie brewery company could be so sensitive?


In the news this past week: Brands & Advertisers

There were further changes in the C-suite at Unilever. The group's effective #2 executive Vindi Banga is stepping down as president, global foods, home & personal care after 33 years at the company. His replacement is Mike Polk, previously chairman Unilever Americas. Polk is being replaced in turn by Dave Lewis, currently chairman Unilever UK & Ireland. The new moves are the latest in a slow-motion shake-up instigated by new CEO Paul Polman, who joined the company 18 months ago. They include the appointment of a new finance director at the end of 2009 and a new chief marketing officer earlier this year. 

According to UK advertising expenditure figures published today by Marketing magazine, the government overtook Procter & Gamble to become the country's biggest advertiser in 2009. Communications arm COI increased spend by 13% to £208m, while P&G's adex was cut by the same percentage to £195m. Rounding out the top five were Unilever, Sky and Tesco. The biggest year-on-year increase was shown by DIY store Wickes, whose spend increased by 131% to almost £20m. Other brands seizing the opportunity to boost their brand include Lidl and insurer Aviva (both up 87%), NatWest bank (up 64%), and bedding store Dreams (up 50%).

British Airways followed through on its threat to remove staff travel privileges for cabin crew who went on strike last weekend, prompting further outrage on the part of the union. The perks, which offer crew heavily discounted or free flights, are perceived as one of the biggest benefits offered by the company. Cabin crew were warned before the original strike ballot that these privileges would be revoked if they refused to work, and again before the first wave of strikes. They can hardly be surprised that BA is now holding firm to its promise. "This is a noncontractual perk that the company can withdraw at its discretion," BA said. "The industrial action impacted on our operation and our customers and we will, undoubtedly, suffer additional costs and further losses as a result." Another four days of industrial action are due to commence this weekend. 

The Co-operative Group confirmed its position as one of the UK's biggest retailers with strong results for 2009. As a result of its acquisition of supermarket chain Somerfield it is now the UK's 5th largest food retailer after the big four of Tesco, Asda, Sainsbury and Morrisons. The merger of Co-operative Financial Services with the Britannia Building Society also makes it one of the country's leading savings banks. Total sales for 2009 were £13.7bn, and pre-dividend profits almost doubled to £402m. Supermarket retailing is the group's biggest business, contributing sales of £7.5bn during the year, but the Co-op is also involved in holidays, funeral homes, farms and pharmacies. The Co-operative Group remains a mutual society, jointly owned by around 5m members.

Samsung patriarch Lee Kun-Hee was reappointed as group chairman this week, a little less than two years after he resigned from the group following a conviction for tax evasion and breach of trust. His exile didn't last long. His three-year suspended jail sentence was lifted last year with a presidential pardon so that he could head up a committee which is bidding for the Winter Olympics to be held in South Korea. The new appointment was supposedly at the request of Samsung group presidents worried about the group's future. In a statement, Mr Lee explained "We are in a real crisis where global top companies are collapsing. We donít know what is going to happen to Samsung. Within the next 10 years, the businesses and products that represent Samsung will disappear. We have to start anew. We have no time to hesitate." In reality through, there is no such crisis facing Samsung, which recently overtook HP as the world's biggest technology company, and is expected to report its biggest ever profits for the current year.

Family-controlled fashion group Benetton split the role of CEO, appointing two co-chief executives, Franco Furno and Biagio Chiarolanza. They succeed three-year incumbent Gerolamo Caccia Dominioni. Furno will be responsible for commercial, product and human resources; Chiarolanza for administration, finance, operations and foreign business. 

Two of the most admired US marketers of recent years changed jobs. Nissan North America poached Joel Ewanick, previously a senior manager at fast-growing Korean rival Hyundai, as its new VP, marketing. Ewanick has been widely credited as the major force behind the strong growth in Hyundai's US market share during 2009. Elsewhere Lenovo named David Roman as its new global chief marketing officer. He joins from HP, where he spearheaded that company's "the computer is personal again" campaign.

Bťatrice Guillaume-Grabisch, formerly head of Coca-Cola Deutschland, was named as the new head of Beverage Partners Worldwide, the joint venture between Coke and Nestle that markets Nestea and other tea-based beverages in most international territories.


In the news this past week: Agencies

In one of the most significant management changes to hit JWT's North American operations for several years, two of its most senior managers tendered their resignations to set up their own shop. Rosemarie Ryan is president of JWT North America; Ty Montague is co-president & chief creative officer North America. JWT has already named David Eastman, recruited in 2009 to become worldwide digital director of JWT, as the new CEO for North America. Montague's successor will be named in due course. Elsewhere, Randy Browning quit as CEO of Publicis in the West, based in Seattle, and was replaced by Bob Moore, already chief creative officer .

Aegis, parent of the Carat and Vizeum media networks as well as research group Synovate, reported final results for 2009. The figures were to some extent flattered by the falling value of sterling. Reported revenues were more or less unchanged at £1.3bn, although in organic terms the decline was almost 9%. Pretax profits were more significantly dented, falling 27% in reported terms (or 37% organic) to £91m. That figure included a hefty £56m charge for restructuring and depreciation. The group's media division accounted for revenues of £825m, up marginally in reported terms on last year. Performance is still heavily biased towards the EMEA region, which accounted for almost 71% of media revenues. At an investor conference, chairman John Napier was asked whether there had been any further discussions with Havas chairman Vincent Bollorť, also the biggest shareholder in Aegis, about a merger of the two firms. Napier brushed off the question. This, he said, is "one of those love affairs that [only] take place in the newspapers. I haven't even had my hand held yet."

The Aegis announcement was followed a few days later by publication of full results from Havas. The French company had already reported headline sales of E1.4bn. Net income slipped from E108m in 2008 to E92m, but perhaps the most significant development was the news that the group had paid off what was once a weighty debt mountain. This peaked in 2005 at E417m, and was still E79m at the end of 2008. By the end of 2009, though, the group was sitting on net cash of E48m. Although acquisitions are a possibility, a large portion of that cash will be used to buy back shares. Euro RSCG accounted for 60% of group revenues, or E865m; and Havas Media for 31% or E447m.

M&C Saatchi also reported this week. Reported revenues slipped 1% to £103m, or by 5% on an organic basis with currency fluctuations stripped out. The UK remains the group's biggest market by far, accounting for 56% of revenues, or £57.6m. Asia and Australia is the biggest international region, contributing revenues of £33.2m. Europe added a further £9.5m. America is the agency's weakest market, with revenues slumping to less than £3m despite the benefits of the strong pound. Group pretax profits fell 27% to £10.3m.

WPP announced the creation of Blue Hive, a new integrated agency headquartered in London that will absorb all regional responsibility in Europe for Ford's brand advertising and marketing communications. The agency will combine staff from WPP's existing Ford agencies Ogilvy, Wunderman and Mindshare, along similar lines to the WPP Team Detroit construct in North America. Dealership marketing and price promotions will still be handled by the local outposts of Ogilvy, Mindshare and Wunderman. Tony Grigg was named as chief executive of the business, reporting to WPP's global leader on Ford, George Rogers. Gregg Burke is creative director. The new agency is based in Ogilvy's existing offices in Canary Wharf, London.

In account assignments, Merck & Co consolidated media duties with an Interpublic team, led by Initiative for buying and Draftfcb for planning. The review followed completion of Merck's takeover of Schering-Plough. IPG was the incumbent on Merck's business; Schering-Plough's planning and buying was previously split between Zenith Media, MPG and MediaVest. Independent The Brooklyn Brothers picked up an important global brief to handle advertising and PR for Land Rover's soon-to-launch Range Rover LRX model. Y&R remains the global incumbent on the main Land Rover business. In other assignments, US food group JM Smucker consolidated media with Carat. Leo Burnett was appointed to handle UK advertising for Chrysler, Dodge and Jeep. For all other appointments, subscribers can access the full Adbrands Account Assignments database here


In the news this past week: Media

Bertelsmann reported its first loss in more than 30 years. However, CEO Hartmut Ostrowski put a positive spin on performance, saying that the group "performed well in a difficult year". In his address to shareholders he said that "Bertelsmann has proven itself to be robust and flexible. Like other media companies we felt the global effects of the economic crisis, particularly in the areas dependent on advertising. But Bertelsmann responded quickly and in a decentralized way." Revenues slipped 5% to E15.4bn, their lowest level for almost a decade, mainly as a result of disposals. However another large restructuring and impairment charge of E730m caused total profits to plunge to just E35m, from E270m in 2008 and more than E2.4bn in 2006. However, the deduction of minority interests - mainly the 9% of RTL's equity still held by public shareholders - resulted in an E82m loss for Bertelsmann's shareholders, the first such deficit in three decades.

Google effectively quit mainland China, as it had threatened, after talks with the country's government over censorship and alleged hacker attacks failed to make progress. The group removed its self-imposed filters on politically sensitive search terms (such as Tianenmen Square and Dalai Lama) and is now redirecting Chinese web users to its uncensored Chinese language service based in Hong Kong. The government reacted with anger and outrage, and has started to impose its own filters on web searches originating in China. A spokesperson told the state-run Xinhua news agency "We're uncompromisingly opposed to the politicization of commercial issues, and express our discontent and indignation to Google for its unreasonable accusations and conducts." The first commercial impact from Google's decision came yesterday when China Unicom, the country's second largest mobile service, said it would remove the Google search function from handsets using the company's Android operating system. "We are willing to work with any company that abides by Chinese law," said Unicom's president. "We donít have any co-operation with Google currently."

Germany's Axel Springer and Ringier of Switzerland agreed to merge their newspaper and magazine publishing operations in five Central and Eastern European countries to create a clear market leader in the tabloid market. Ringier's Blesk is the leading tabloid paper in the Czech Republic, and the company also has operations in Serbia, Slovakia and Hungary. Springer's Fakt is the top-selling tabloid in Poland, and the company also publishes titles in the Czech Republic and Hungary. The merged business will be jointly owned, and is expected to issue an IPO in three to five years.

Carolyn McCall, chief executive of the UK's Guardian Media Group, announced her resignation after 25 years at the company to take up a career in a completely different industry. She was named as the new head of low-cost airline Easyjet.

Rupert Howell, commercial director of UK terrestrial broadcaster ITV, told an industry conference that the company is exploring the possibility of introducing some form of pay-TV service to head off competition from "a recession-proof BBC and a Sky that's growing rapidly". He also acknowledged the need to develop digital channels ITV2, ITV3 and ITV4 which, though successful, "lack identity and need further investment in channel-defining content". The broadcaster received received a green light from regulators to launch a long-awaited high-definition service, which debuts next week.

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Simon Tesler
Publisher, Adbrands