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There are new ads out this week for rival German luxury automakers BMW and Mercedes. In an odd sort of way it's hard to tell them apart. Both rely on elegant visuals and under-stated voiceovers from Hollywood stars (Donald Sutherland for BMW; Josh Brolin, of No Country For Old Men fame, for Mercedes). The agencies are AMV BBDO for Mercedes (but, hey, enough of the moodiness now, OK, BBDO?), and WCRS for BMW. We have to pick a preference, so we' go for the moodier cool of the Mercedes ad over the environmental friendliness of BMW. (See the BMW ad here)

On the subject of environmental friendliness, we like this new ad for The Discovery Channel by 72andSunny of Los Angeles. Nice clip selection!

Beattie McGuinness Bungay is continuing the "Mates" theme of its current campaign for Carling lager with a new epic, apparently shot in the same locations as those Clint Eastwood spaghetti westerns of yesteryear. It's handsomely done but, despite the high production values, the idea doesn't quite live up to the elegance of the last ad, Space, featured here previously.  

Holland is famous not only for its laissez-faire attitude towards certain taboo subjects, like drugs and bad language, and also for the fact that virtually everyone speaks English. As a result, only here could you find a campaign like this new series of prime-time ads for delivery service New York Pizza. See also Disappointed and Protection. Ah, freedom from censorship, it's a wonderful thing. The agency is Selmore.

In the news this past week: Advertisers

It's all (or almost all) deals, deals, deals this week. Some were done, and others were dropped. As had been anticipated, Microsoft CEO Steve Ballmer finally agreed to raise his takeover offer for Yahoo, but only (only!) by $5bn to around $47.5bn, or $33 per Yahoo share. That price too was rejected by Yahoo's CEO Jerry Yang at a face-to-face meeting in Seattle airport on Saturday morning. Yang instead demanded at least $37. As a result, Ballmer withdrew his offer and walked away from the negotiating table. Despite his earlier threat to mount a hostile attack, he decided that such a move would be unwise, especially in the light of evidence that Yahoo was preparing a poison pill defence - outsourcing part of its search service to Google - which would have substantially reduced the value of the remaining business. There were reports of high-fives between members of the Yahoo team as they left the Seattle airport meeting, but that euphoria will not have lasted long. The immediate result of Microsoft's withdrawal has been anger among many Yahoo shareholders (many of whom would happily have settled for a lower figure than Yang's $37) and disappointment among many Yahoo staff. If the internet chatter is reliable, the one thing most Yahoo staff feared more than a deal with Microsoft, was no deal at all, which is what they have ended up with. 

There is now intense pressure on Jerry Yang to prove that his (over) confidence was justified, and this task will be not be easy. Since Saturday, at least two investor groups have already commenced legal proceedings against Yahoo for failing to act in the best interests of its shareholders by not reaching a compromise on Microsoft’s bid. Yang for his part gave interviews to the media in which he attempted to pin the blame for the stalemate on Microsoft, accusing Ballmer of being stubborn over price (some irony there, we think), and suggesting that his $37 price tag was intended as a negotiating stance rather than a deal-breaker. The problem is that at least part of Yang's boast that the Microsoft offer "undervalued" Yahoo was based on highly optimistic forecasts of future performance and possibly a partnership with either AOL or News Corp's MySpace. However both of those businesses are now, according to unconfirmed press reports, courting Microsoft instead in the hope of catching the Seattle software giant and some of that $47.5bn on the rebound. (Already this week, News Corp has acknowledged that it won't hit the $1bn in revenues it had forecast for its interactive division, so it's clearly open to a deal). 

Meanwhile Microsoft was also reported - unconfirmed again - to have made a new approach to Facebook's founder-CEO Mark Zuckerberg about a closer tie-up. There is also of course the possibility that Microsoft might renew its approach to Yahoo if the latter can't deliver the growth that it has promised or if Yang is ousted as a result of pressure from shareholders. As David Kenny, CEO of Publicis-owned Digitas, told the Wall Street Journal this week, "I don't think this is an end point. This is only the closing of a chapter." 

There's a potentially huge new player in the European electrical retailing sector. US consumer electronics giant Best Buy and UK-based handset retailer Carphone Warehouse today announced plans for a new joint venture which will take over and expand the British company's existing retail operations. Carphone Warehouse currently controls a network of around 2,400 stores in nine European markets, including the UK and France. These, along with its existing US partnership with Best Buy, will be transferred into a new company in which Best Buy will acquire a 50% stake for $2.1bn. The joint venture will provide the platform for the rollout of a new European chain selling a broader range of electronics goods than Carphone's current selection of mobile handsets. The deal excludes Carphone’s non-retail businesses, such as its Talk Talk fixed line service in the UK and the broadband business recently acquired from AOL, as well as its holding in Virgin Mobile France. 

Deutsche Telekom was reported by various sources to be considering a bid for the struggling #3 US mobile carrier Sprint Nextel. The American company has been wrestling with a whole host of problems since its merger in 2005, including integration of two incompatible mobile networks, flat subscriber levels, a stock price on life support, and now even an obligation to vacate some of its wireless frequency because it's interfering with public safety radio systems. Deutsche Telekom's T-Mobile on the other hand, the US #4, is growing fast but still trails the top three, at just over half Sprint Nextel's size. A merger of the two businesses would catapult T-Mobile into the #1 spot by users ahead of both AT&T and Verizon. However such a move would need to overcome several major hurdles. The most significant of these would be regulatory approval. Deutsche Telekom's largest shareholder is still the German state. As a result it is unlikely to get permission to acquire one of the biggest US communications companies without making a number of significant concessions. T-Mobile would also, of course, inherit the problems of what to do with Nextel's incompatible network technology, and the enlarged business would still lack the means to offer subscribers the quad play mix of voice, data, TV and wireless which both AT&T and Verizon now provide.

Elsewhere in the telecoms industry, US local fixed line carrier Qwest agreed a significant partnership with Verizon under which it will offer the Verizon Wireless service to its customers. In South Africa, Indian operator Bharti tabled a $19bn offer to acquire a majority stake in local wireless service MTN. And despite being shut out of the original round of deals to offer Apple's iPhone in key European markets last year, Vodafone has pulled off a crucial victory by securing rights to the handset in ten other territories for launch this year. Vodafone will launch iPhone in markets including Australia, Italy, India, Greece and South Africa. However, in the light of the legal furore instigated by Vodafone in Germany last year, when it attempted to overturn an exclusive deal between between Apple and T-Mobile, the British company will not always have exclusive rights to the handset. In Italy, for example, Apple has also sealed a separate deal with Telecom Italia to offer the handset.

US pharmaceutical group Bristol Myers-Squibb continued to slim down, selling off another of its non-core subsidiaries. In the latest announcement, the group will sell its world-leading woundcare division ConvaTec to private equity funds Avista and Nordic Capital for $4.1bn. Avista already agreed to acquire BMS's medical imaging unit earlier in the year. This process of concentration on its main pharma business could preface the acquisition of Bristol Myers-Squibb itself by another manufacturer, probably Sanofi-Aventis of France, whose Plavix and Avapro drugs its markets in the US.

In other deal news, billionaire investor Warren Buffett confirmed that he was weighing up a bid for the UK-based Direct Line and Churchill insurance businesses being sold by Royal Bank of Scotland, and said that one of the other subsidiaries of his Berkshire Hathaway group was in the process of finalising a deal to acquire another unnamed mid-size British company.

Adidas was awarded $305m in damages by a US court, which upheld its claim that US shoe retailer Collective Brands, which owns the Payless and Stride Rite chains, had infringed its copyright. The American group had introduced a line of shoes featuring a design similar to Adidas' three stripes trademark. Collective is appealing against the size of the award, which it called excessive and unjustified.

And proof, if proof were needed, that the gaming is the new top dog in entertainment came with reports that the latest instalment of the hugely popular Grand Theft Auto software franchise has broken all records to become the fastest-selling title in gaming history, and possibly the most valuable launch in the entire entertainment sector. Developer Take Two said GTA IV had notched up worldwide retail sales of over 6m copies in its first week, with a total value in excess of $500m. On its first day alone, GTA IV sold a staggering 3.6m copies. The previous recordholder, Halo 3, notched up sales of $300m in its first week. 

In the news this past week: Agencies

Things are heating up in the dry and dusty world of market research. WPP attempted to break up the planned merger of research giants Taylor Nelson Sofres and Gfk, announced last week, by making its own unsolicited offer for TNS of almost £950m. Under this proposal, WPP would reverse its own, much smaller Kantar subsidiary into the larger company. The British group's bid, almost a third above TNS's share price, also offered shareholders a significant premium, whereas the Gfk deal contains no such incentive. Nevertheless, the WPP offer was rejected by TNS's board. (According to press reports, the board had already rejected a previous overture in which WPP proposed selling Kantar to TNS in return for a large shareholding in the combined business). Despite this apparent intransigence on the part of TNS, WPP's famously combative CEO Martin Sorrell is unlikely to accept two consecutive no's as a final answer. The planned TNS-Gfk merger could also be under threat from rival Nielsen, the global #1 in the sector. That company was itself reported to have retained investment bankers to advise it on a separate bid for Gfk. Meanwhile, Havas chairman Vincent Bolloré was rumoured to be preparing an offer for another research group, US-based Harris Associates. He already holds a stake of just over 12% in the business.

Advertising Age published the 2008 edition of its annual agency report. Perhaps the most significant change in the latest survey was the leap by Omnicom's DDB Worldwide into first place among the world's largest consolidated agency networks. Including estimated income from marketing services, DDB jumped from third place last year, overtaking both McCann Worldgroup and Japan's Dentsu. In the core business of US advertising, McCann reclaimed 1st place from BBDO. Taking worldwide revenues into account, however, McCann remained #3 behind both Dentsu and BBDO.

Also this week, McCann agreed to settle charges of accounting fraud brought by the SEC in connection with the multiple financial restatements it made during the early 2000s. Parent group Interpublic struggled to resolve a number of different accounting problems over this period, but arguably the most serious was the overstatement of income by McCann's EMEA group, in which several different subsidiary units all apparently claimed the full benefits of income from shared projects. McCann's group CFO and regional director of operations both resigned after the overstatements came to light and were also charged with negligent fraud. McCann agreed to pay a fine of $12m; the two former employees will also pay fines and interest of around $70,000 apiece to settle the charges. 

Havas acquired the shares it didn't already own in UK-based direct marketing and digital agency Archibald Ingall Stretton and announced plans to make the company core of a new international network. In a surprise move, however, AIS is to be aligned specifically with Havas's media division, working alongside interactive media brand Media Contacts and French digital agency Lattitud. Stuart Archibald will lead the international expansion. Havas already owned a 40% holding in the business.

In account news, AMV BBDO had a good week, capturing Capital One's UK creative (from DDB) and retaining Pizza Hut. Cadbury called a review of UK media out of Starcom MediaVest. LL Bean appointed GSD&M Idea City in the US, a much needed win for that agency. Disney subsidiary Miramax transferred most of its US media into Maxus (from Palisades). Miller Genuine Draft dropped Mother from its global account, and moved the business into Leo Burnett. UK-based RKCR/Y&R took over European creative for Boursin and Leerdammer cheese. For all other appointments, subscribers can access the full Adbrands Account Assignments database here.

In the news this past week: Media

UK terrestrial broadcaster Five, owned by Bertelsmann, could face some turbulence over the coming months following the resignations of chief executive Jane Lighting and head of content Lisa Opie. Both those announcements came in the wake of the appointment last week of Dawn Airey, one of the UK broadcast industry's most high-profile managers, as Five's new executive chairman. Airey originally made her name at the channel in the 1990s, and later spent several years at BSkyB, before joining the UK's main commercial broadcaster ITV just under a year ago as managing director of global content. Under the terms of her ITV contract, however, she cannot join Five for several months, possibly not until May 2009. Lighting and Opie, however, have both already left Five, leaving something of a vacuum. Head of sales Mark White is standing in as interim chief executive until Airey's arrival.

As expected, the battle for Long Island daily Newsday turned into a three-ring circus, with a new bid of $650m from Cablevision's Dolan family, trumping the $580m offered by each of Rupert Murdoch and Daily News owner Mortimer Zuckerman. Separately Cablevision, which owns the cable strands AMC and IFC among others, acquired art movie channel Sundance for $496m, from a consortium of owners including actor-director Robert Redford, CBS and NBC Universal. 

Elsewhere in the newspaper industry, France's leading daily paper Le Monde failed to appear for the third time in recent weeks as journalists went on strike on Monday over plans to cut jobs and sell off the company's small magazine portfolio, which includes seminal movie title Cahiers du Cinema. Le Monde management claims the restructuring is essential to stem the group's steep losses and rising debts.

NBC takes over from Fox as the broadcast network for the 2009 Super Bowl, and has begun setting out its stall for advertisers. The company is expected to announce that the starting price for a single 30-second spot will be $3m, a steep rise of 10% on last year, and about twice the usual annual hike. For the 2008 broadcast, Fox averaged $2.7m per slot, although some of the final ads are said to have gone as high as $3m. NBC's confidence has been reinforced by the 2008 Bowl's record viewing figures of 97.4m viewers, the biggest TV audience to-date for any US sporting event.

As always, if you haven't already done so, please confirm your subscription to the free Adbrands Weekly Update by clicking here or on the link at the foot of this email. Thank you for your assistance! 

Simon Tesler
Publisher, Adbrands

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