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Adbrands Weekly Update 13th March 2008

A weekly round up of key news about leading advertisers, agencies and mediaowners

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First, our favourite ads this week: 

Carlton Draught "Skytroop"
by Clemenger BBDO

Kotex U "Ultimate Care" 
by The Brandshop

Skittles "Pinata" 
by TBWA\Chiat\Day

Gainomax "Hypnotise"  
by Saatchi & Saatchi Sweden

If there's one type of ad at which Australian agencies excel, it's beer commercials. It all started with Carlton Draught of course, whose Big Ad from 2005 (by what is now George Patterson Y&R) set a benchmark which many creative departments have tried to match or surpass. As a result the pressure for Carlton to come up with a new showstopper each year is pretty intense. Hence a change of agency to Clemenger BBDO for a fresh approach, albeit with the same director, Paul Middleditch, and the same creative team responsible for the last four Carlton "Made From Beer" spots. This new epic ran exclusively in Australian cinemas during February and has only now been released online. It makes its debut on TV in May. Sky Troop outdoes its Big Ad predecessor for budget and spectacle, though perhaps not for wit. It's great anyway. Enjoy! (Responsibly, of course). 

We're still in Australia for a rather startling new ad for Kimberly-Clark's Kotex brand by The Brandshop. Where else in the world would you find an ad like this for a sanitary protection product? Actually, even Australians have apparently been offended by the ad, which received a barrage of complaints after it was first aired on TV. If nothing else, proof positive that that old beaver chestnut is now universal.  

Another bizarre ad for Skittles from TBWA\Chiat\Day. This one follows in the wake of other surreal masterpieces. This time, no prehensile beard or Midas touch, just a Pinata man. What more can we say?

And finally, since we like weird here at Adbrands.net, a striking new campaign by Saatchi & Saatchi Sweden for sports nutrition drink Gainomax. There are three equally strong spots, all of which attempt to persuade consumers to drink a Gainomax after working out instead of eating a banana. We've featured the Hypnotise ad, but see also Ring and Cute


In the news this past week: Advertisers

Most new economic data seems to support claims that the US is now poised on the edge of a full recession. Retailers are feeling the pinch hardest of all, especially those catering to customers from the middle classes or above. Monthly sales figures for February showed continuing declines for traditional department stores, but an unexpectedly strong rise for mass-discounter Wal-Mart, which reported a same-store increase of 2.6%. On the other hand, the equivalent figures for mid-price department stores JC Penney and Kohl's slumped by 6.7% and 3.3% respectively. (Target, perceived by shoppers as smarter than Wal-Mart, but less posh than Penneys or Kohl's, had an increase of 0.5%). Analysts attributed the anomaly to a shift by shoppers towards value sellers. A senior executive at management consultancy Alix Partners, which specialises in turnaround markets, told the Financial Times, “Consumers who were shopping at Nordstrom’s and Macy’s are now looking at JC Penney or Kohl’s, and those [who] were shopping at JC Penney are now at Wal-Mart. You’re going to see a lot more Lexuses and BMWs in Wal-Mart parking lots going forward." And under the Golden Arches as well it would seem. McDonald's surprised analysts and even its own management team with an 8% increase in same-store sales in the US for Feb, more than twice what most observers were expecting.

Research group IRI published its New Product Pacesetters lists for 2007, identifying the ten best-selling new products launched in the US last year. Heading the food and beverage list were Campbell's new reduced-sodium soups, which generated sales of $101m in food, drug and mass channels excluding Wal-Mart. In second place was Birds Eye steamfresh vegetable range with sales of $87m. Tying for third place with sales of $70m were Coca-Cola's Vault and PepsiCo's Gatorade AM. Also making the list were General Mills' Fiber One bars, Heineken Premium Light, Dannon DanActive probiotic drinks, Sara Lee Hearty & Delicious bread, Dannon Activia yogurt and Diet Pepsi Jazz. The non-food list was dominated by Procter & Gamble, which was responsible for half of the ten best-selling launches. However, Kimberly-Clark took the top spot with Huggies Supreme Natural Fit Diapers, which notched up sales of $171m. They were followed by a clutch of hair care products. In second place was the new Herbal Essences care and colorant range with sales of $154m, followed by L'Oreal Vive Pro, Nexxus Salon and Sunsilk. Detergent variants Tide Simple Pleasures and Gain Joyful Expressions were in 6th and 7th place. Rounding out the list were Plan B female contraceptives, Febreze Noticeables air freshener and Crest Pro-Health toothpaste.

There were two senior management resignations at struggling handset manufacturer Motorola. First the company announced the restructuring of its marketing department, dropping the role of chief marketing officer and devolving responsibility to two separate teams tackling consumer and B2B marketing respectively. Ken "Casey" Keller, who had held the CMO position, left the company. Days later, so too did Stu Reed, who was head of the mobile handsets divisions. His resignation was widely expected after incoming CEO Greg Brown assumed direct control of the handsets business last month, effectively demoting Reed. Meanwhile, over at brewer Molson Coors, Dave Perkins was named as the new president, global brand and market development, a new position. In the UK, Marks & Spencer CEO Stuart Rose angered some shareholders by taking on the role of executive chairman as well, despite UK corporate guidelines which suggest that a split appointment is preferable. 


In the news this past week: Agencies

French group Havas reported its full financials for 2007. As already reported in Feb, revenues rose 4% to over E1.5bn. Organic growth was 7.1%, making Havas arguably the best performer out of all five main marketing groups, equal to Omnicom. (Arch rival Publicis was bottom of the league with organic growth of just 3.1%). Euro RSCG accounted for 62% of group revenues, or E950m; Arnold for 7% or E107m; and Havas Media for 25% or E383m. However the best news in the full results was an impressive 81% jump in net income to E83m, which showed that the new direction provided by chairman Vincent Bolloré and CEO Fernando Rodes Vila is delivering results.

Awards initiative the Effies, which rewards marketing effectiveness, announced the winners of its first global awards. The gold prize went to Bartle Bogle Hegarty, along with Mindshare, Colangelo and MBooth, for Vaseline's "Keeping skin amazing" campaign. Silver went to another Unilever agency, Ogilvy & Mather, along with Mindshare and Edelman, for Dove Pro-Age. JWT took Bronze for Special K's "Drop a jeans size" campaign, with back-up from Cheetham Bell JWT in the UK, France's K Agency and Mindshare.

Omnicom announced the dissolution of Zulu, the UK-based marketing services mini-network built around direct marketer Claydon Heeley and digital outfit Agency Republic. Instead, Claydon Heeley will be repositioned as the UK arm of American database marketing agency Targetbase, also an Omnicom subsidiary. Agency Republic is to become the core of a new grouping, Republic Family, which will also take responsibility for the other former members of Zulu, such as interactive TV shop Weapon 7.

There was a little more action on the account assignments front than in recent weeks. Honda placed advertising for 12 Asia Pacific markets including Australia with Wieden & Kennedy. In the US, PepsiCo moved its Lay's and Tostitos brands out of Element 79 to Canadian agency Juniper Park (a BBDO offshoot) and Goodby Silverstein respectively. New in review were Welch's grape juice and Callaway Golf. OneWorld, the marketing alliance between American Airlines, British Airways and others, placed its global advertising account with design agency Imagination. In the UK, the Nationwide Building Society placed media with MPG, and start-up Adam & Eve, a breakaway from RKCR/Y&R London, secured the advertising account for the Daily Telegraph newspaper, as well as the brief to handle Lloyds TSB's Olympics 2012 sponsorship. For all other appointments, subscribers can access the full Adbrands Account Assignments database here.


In the news this past week: Media

Time Warner's AOL division today announced it had sealed a deal to buy privately owned social network Bebo for a handsome $850m in cash. What a payout for its founders, husband and wife Michael and Xochi Birch! Although it ranks behind Facebook and MySpace, Bebo still has a whopping audience of more than 40m registered members, despite the fact that it employs only 100 staff worldwide. Does this mean AOL might now not be quite so interested in helping Yahoo out of its bind with Microsoft? Meanwhile, Rupert Murdoch has also sought to play down speculation of a tie-up between News Corp's MySpace division and Yahoo by commenting this week “We’re not going to get into a fight with Microsoft, which has a lot more money than us. We’re very happy to be in the Google camp. They sell our search advertising and pay us well for it. Yahoo missed out.”

The Observer newspaper in the UK reported that private equity funds Blackstone, Cinven, KKR and Providence have been in talks to make a joint bid for UK cable giant Virgin Media. That company is now the country's dominant cable TV provider and the #2 in pay TV and broadband services behind Sky and BT respectively. However the former NTL has struggled to digest its two major acquisitions of Telewest and Virgin Mobile, and lost considerable ground last year after a bitter PR battle with Sky over the latter's free-to-air channels. Any such bid could include the purchase of Sir Richard Branson's near-11% stake in the business. Virgin Media is already considering the sale of the small collection of cable channels it owns, including Living TV and a 50% share in UKTV.

Sony Pictures Television, the TV production arm of Sony's movies division, agreed to acquire 2Waytraffic, the independent production company which now owns the rights to the Who Wants to Be a Millionaire game show, for almost £140m. Sony already owns the hugely successful US game shows Jeopardy and Wheel of Fortune. 2Waytraffic itself acquired the Millionaire format in 2006, paying around £106m to buy its original developer Celador.

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Simon Tesler
Publisher, Adbrands