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Adbrands Weekly Update 14th February 2008

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

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First, our favourite ads this week: 

Persil "Roboboy"
by Bartle Bogle Hegarty

Ford "Beautifully Arranged" 
by Ogilvy London

Honda "Problem Playground" 
by Wieden & Kennedy London

Renault "Petrol Pumps"  
by Publicis Germany

You may remember that we're suckers here for Unilever's "Dirt Is Good" campaign. Like the company's Axe/Lynx and Dove series, it has shown an impressive degree of creative consistency and imagination despite the fact that the ads are being generated all over the world by different agencies. This new spot, Roboboy, is by BBH. Call us sentimental, but we think it's great. The ad originally launched in France for Skip, Unilever's local detergent brand, and is now being rolled out elsewhere for Persil and other local brand equivalents.

Ford has raised its creative game with this new ad by Ogilvy & Mather for the new - and rather good-looking, it must be said - Ford Focus. Client and agency are keen to assure us that all the music in the ad was created on the instruments shown, which were themselves created entirely from car parts.  

For Honda, Wieden & Kennedy London have returned to the fruitful territory first explored in the celebrated Cog ad, with another constructivist epic. The jigsaw car and building block house are both great but we were especially impressed by the method for adding sugar to coffee... 

Finally, to round off this week's rather mechanical selection, an entertaining ad for Renault by Publicis Germany. I'm guessing that these badly behaved petrol pumps are what Persil's Roboboy would have grown up to be, if he hadn't gone out in the garden.

All links below refer to pages on Adbrands.net

In the news this past week: Advertisers

Wal-Mart is getting into the healthcare business. For the last two years, the retail behemoth has been testing walk-in health clinics at several of its larger US stores. Now it has announced a dramatic scale-up of the service, with plans for as many as 300 such clinics across the nation. Branded as The Clinic at Wal-Mart, these units are staffed by qualified nurses who can deal with a wide variety of minor procedures. The facilities are owned and run by regional healthcare groups or hospitals, but they share an administrative system, including standardised electronic medical records, which has been developed by Wal-Mart. The biggest benefit to patients (and health insurers) is that the cost of a visit to a Wal-Mart clinic is considerably cheaper than for a regular doctor or hospital appointment. Rival retailer Target is also testing the in-store clinic idea, and pharmacy groups CVS and Walgreens have each acquired their own independent clinic networks.

Universal Music Group was reported to be canvassing the other "Big Four" music groups about a jointly owned music download service which might provide them with a more lucrative and flexible alternative to iTunes and other third-party operations. With a working name of Total Music, the proposed service would involve production of a dedicated music player similar to the iPod. Under one possible working model, purchase of the device would give users unlimited access to the entire Universal Music catalogue, as well as that of any other music groups who signed up to the service. (Amazon explored a similar idea in 2006, but eventually scrapped it in favour of its current rights-free offering).

Despite the lavish ad campaign which launched at the end of last year (and which was featured as one of our Ads of the Week in January), UK credit card Goldfish has changed hands yet again, and the latest deal could ultimately lead to the termination of the brand. The card has been through a string of different owners over the past decade. It was originally launched in 1996 as a partnership between British Gas and HFC Bank. The gas company's parent group Centrica took full control of Goldfish in 2001, and recruited Lloyds TSB as a new partner a year later. Llloyds bought the business outright in 2003, but sold it on again in 2005 to Discover, the consumer finance unit of Morgan Stanley, which was itself spun off as an independent company in 2007. Now Discover wants to pull out of the UK, and has agreed to sell its entire credit card division, which also includes the Morgan Stanley Card brand, to Barclays. The 1.7m credit card accounts, worth around £2bn in transaction volumes, will now be merged into Barclaycard. Apparently, no firm decision has yet been made as to whether or not to maintain Goldfish as a separate brand.

Hot on the heels of the news that Motorola is considering a spin-off of its troubled mobile handsets business, WSJ reported this week that the US group is also in talks to combine its network infrastructure operations into a joint venture with Nortel Networks. This unit supplies the equipment and software used by wireless operators to manage their networks, and is currently part of Motorola's Home & Mobility division, which also makes set-top boxes for cable companies. According to the WSJ, Nortel could end up with the controlling stake in any resulting combination, leaving a much smaller Motorola to focus on set-top boxes, two-way radios and handheld scanners.

In the news this past week: Agencies

Publicis added a new unit to its French network this week with the acquisition of La Vie Est Belle, a Parisian creative boutique run by Eric Salomon and Mylene Berrebi. Rather than continue under its own name, however, the new shop has been merged with an existing group subsidiary, Paname. The enlarged unit is being relaunched under the new name of Publicis Full Player, with Salomon and Berrebi as chairman and CEO respectively. The move solves the question of what to do with Paname, which has floated around a little uncomfortably within the group for several years. It was previously linked to Publicis Constellation, the group's regional French network. In 2006, Publicis announced with great fanfare that it, and German counterpart BMZ, were being assigned as European liaison shops to work with Dentsu, the Japanese advertising giant and a large shareholder in Publicis. But there was little subsequent visible evidence of any such liaison, and Paname has tend to drift since then. The new merger creates a much stronger agency, which will still concentrate on local and regional clients rather than multinationals.

Meanwhile, in the US, the group has created a new unit designed to encourage closer cooperation between creative executives at Publicis USA and sister media shop Optimedia. (In the US, Zenith and Optimedia still operate as separate brands because of client conflicts). The new unit, Optimedia Inside, is designed to help advertising creatives better understand the way consumers react to advertising and relate to different media. It marks a further step back to the good old days, pre-2000, when media planning and creative departments co-existed within advertising agencies, instead of being unbundled as separate businesses with their own profit and loss accounts. As Publicis USA CEO Susan Gianinno told the WSJ, "It's a way for us to give clients bigger ideas and to bring everything together, as opposed to having the marketing disciplines siloed like they are now. Right now, the interactive people do their own take on the consumer, the ad-agency people do their own take on the consumer, and the shopper-marketing people do their take on the consumer. Everyone creates their separate briefs."

Interpublic agreed to provide financial backing for new multicultural agency Translation Advertising, which will be jointly run by industry veteran Steve Stoute and hip hop impresario Shawn "Jay-Z" Carter. That arrangement adds yet another arrow to Jay-Z's quiver. Like his counterpart Sean "P Diddy" Combs, he has traded up from a music background into a variety of other business ventures including clothing, nightclubs, even hotels and sports management. Interpublic acquired Stoute's previous business, African-American marketing consultancy Translation Consulting, at the end of last year, and will take a 49% holding in the new shop. 

Engine Group, the corporate parent of UK advertising agency WCRS, announced the acquisition of well-respected direct marketing agency Partners Andrews Aldridge in a deal thought to be worth around £18m. Andrews Aldridge will absorb Engine's existing direct marketing subsidiary Personal. Engine has built up quite a substantial portfolio of satellite companies since it cut loose from Havas in 2005. Other businesses operating within the structure now include brand consultancy Dave, digital agency Meme and sponsorship company Karen Earl among others.

It was a quiet week for account assignments. IAC's financial services subsidiary LendingTree.com moved its creative account from Mullen to Euro RSCG. Billings are estimated at around $250m, mostly online. Mullen will retain media. PepsiCo moved its Propel vitamin water from Element 79 to Omnicom stablemate Goodby Silverstein, presumably to mount a stronger defence against Coke's newly acquired and fast-growing Glaceau brand. Australia's tourism authority called a review of its global advertising and media business, currently held by M&C Saatchi and Carat. The ads have stirred up some controversy because of their "Where the bloody hell are you?" tagline, now officially terminated. M&C are defending the account. Also in Australia, George Patterson Y&R lost another brace of accounts in what has become a slightly worrying losing streak. Panasonic transferred to The Campaign Palace; James Boag's beers to Publicis Mojo. For all other appointments, subscribers can access the full Adbrands Account Assignments database here.

In the news this past week: Media

As predicted, Yahoo formally rejected Microsoft's takeover bid, claiming that it "massively undervalued" the company. However Yahoo's alternative options are beginning to look slim. Some media outlets reported that, after initially offering to lend its support to Yahoo, Google has now distanced itself from any alliance. The search giant has already voiced a public complaint over a Microsoft-Yahoo combination on the grounds that it would "dominate" web mail and messaging. Yet the group already has plenty of antitrust issues of its own to worry about - its Doubleclick acquisition has yet to be cleared in Europe - so is probably wary of stirring up any more trouble with regulators. Latest reports suggest that News Corporation is considering some form of alliance with Yahoo, although this would stop well short of a full takeover bid, which was explicitly ruled out by Rupert Murdoch last week. If these talks progress, they could involve the merger into Yahoo of News Corp's Fox Interactive Media division, which houses a variety of online properties including MySpace, IGN and Photobucket. News Corp would end up with a large minority shareholding in the combined business. Another possible escape route could be a renewal of merger talks with AOL, although that would be a longshot. 

At this point, though, the most likely scenario is that Yahoo's board (if not perhaps its CEO Jerry Yang) will merely settle for a better offer from Microsoft. The software giant's opening bid offered $31 per share for Yahoo. As a result of the decline in Microsoft's share price since then, it is now worth around $29 per share. That, however, is well below the $43 per share Microsoft is said to have offered when the two companies first discussed a merger in early 2007. Yahoo's board is thought to be holding out for at least $40 per share. That would raise the overall cost of the deal for Microsoft to around $66bn, a big increase, but well within the software giant's means. Yahoo's second largest institutional shareholder, Legg Mason, which holds a 9% stake, has already indicated that it would back a deal at that price.

It was - finally! - business as usual once again in the US entertainment industry following a vote by writers to end their 100-day strike. The action was sparked off by a refusal by the major studios to accept new conditions proposed by the Writers Guild of America labour union to cover film and TV material streamed over the internet or resold for download through iTunes or similar services. Under existing terms, writers were due only minimal residual payments for these transactions, despite the fact that they are fast becoming a substantial revenue stream for the studios. When the existing contract expired without resolution last November, the WGA called a strike which threw the industry into turmoil, halting production of numerous TV shows and movies, and even for a while chat shows such as Jay Leno and Conan O'Brien. (Attempts to carry on without writers proved disastrous because the hosts were unable to come up with funny enough material on their own). In January, the Golden Globes awards ceremony was cancelled because actors threatened to boycott the event rather than cross picket lines. The knock-on effect from the three-month strike on service industries catering to showbiz clients - limos, restaurants, florists and the like - was also huge, estimated as high as $2bn in lost earnings. The new deal comes just in time to allow the highlight of the awards season, the Oscars, to go ahead as planned next week. 

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Simon Tesler
Publisher, Adbrands