Adbrands Weekly Update 14th December 2006

Weekly Update 14th December 2006

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This is the final Adbrands Weekly Update of 2006. The weekly mailings will resume on January 4th 2007. In the meantime, we wish all our subscribers and users a very happy holiday season, and a prosperous new year.

Our favourite ads this week:

Miami-based creative hot-shop Crispin Porter & Bogusky has unveiled a series of typically twisted ads for menswear supplier Haggar, featuring fictional home improvement-style hosts Pete and Red. In the series of four spots, Pete & Red show you how to "Make Things Right" - like how to throw your daughter's good-for-nothing boyfriend out of the house, how to deal with a blaring car radio, and how to persuade your son to wash the car. However the most controversial by far is the spot dealing with how to stop your preppy neighbour's dog pooping on your lawn. This has provoked a good deal of comment, most notably from Advertising Age's Bob Garfield who railed against the ads at length for promoting "soft-core terrorism" and at CP&B for "shaming the industry". See for yourself at the Haggar website.

Controversy is our friend this week. Mother is responsible for a brutally effective current cinema ad to support Amnesty International's campaign to halt the trading of automatic weapons. Presented in the style of a TV home shopping channel, two bright and breezy presenters canvas orders for AK-47 assault rifles. "And if you call within the hour, we'll even throw in a free gift. Yes, a year's supply of free ammunition. Mmmm. I might treat myself to one of those..."

Recently Revised Profiles & Snapshots

In the news this week: Advertisers

MasterCard has won a case to prevent football governing body FIFA from appointing arch-rival Visa as the lead financial sponsor for the World Cup and other events from 2007 to 2014. MasterCard has held that position since 1990, but was dropped unexpectedly by FIFA earlier this year. The Swiss body has said it will appeal against the ruling, but also dismissed four executives from its TV and marketing department who were involved in the negotiations. According to the US judge, "FIFA's negotiators lied repeatedly to MasterCard, including when they assured MasterCard that FIFA would not sign a deal for the post-2006 sponsorship rights with anyone else unless it could not reach agreement with MasterCard."

Media giants Viacom, Fox, CBS and NBC Universal are in early talks regarding the possible creation of their own video-sharing site to rival YouTube, now owned by Google. In recent months, the big four agreed licensing deals with Google and YouTube, but they remain concerned about the potential copyright infringement caused by users who upload illegally recorded clips from films and TV programmes onto the YouTube service, as well as the revenue which they could generate from a better-regulated on-demand service of their own.

The long hoped-for consolidation within the US air travel industry could finally be starting. In response to the continuing pressure from US Airways to push through its takeover of Delta, rival United Airlines is said to have opened separate merger discussions with Continental. Any such deal could also involve Northwest, which has a special "golden share" in Continental. Meanwhile regional carrier AirTran is preparing a bid for Midwest Air. In Australia, Qantas agreed to a US$8.7bn takeover by a consortium led by local bank Macquarie Bank and Texas Pacific of the US. Elsewhere in the industry, travel bookings network Sabre Holdings is to be acquired by private equity investors for around $4.5bn. The group's best-known brands are Travelocity and Lastminute. In a different industry altogether, Nestle agreed to acquire Novartis's medical nutrition division, with products including Boost, Isocal and OptiFast. Private equity groups KKR and Permira have won the auction for German media group ProSiebenSat1.

Already have your Prada bag? The shoes and the little black suit? How about a Prada mobile phone? The Italian fashion house has teamed up with LG to introduce a Prada-branded handset early next year. It's not the first move by a fashion house into the phone business. Dolce & Gabbana produced a $400 gold Razr for Motorola last year, and Nokia has for several years offered a range of exclusive jewelled handsets under the Vertu brand.

US fast-feeder Taco Bell, a division of Yum Brands, has been plagued by a mysterious outbreak of E. coli affecting around 90 of its restaurants in the US Northeast. At least 67 people are reported to have suffered severe symptoms of food poisoning since the end of November. However the restaurant chain still has no idea what caused the infection. The company initially blamed a batch of green onions, but other ingredients are also thought to have been contaminated. The rate of newly reported illnesses has lessened significantly this week, but several restaurants remain closed pending an all-clear. Meanwhile the chain is boosting its advertising spend in an attempt to assure customers that its other restaurants are safe.

In the news this week: Agencies

No question of what made Story of the Week in the industry this week. Following the abrupt dismissal last week of Wal-Mart's marketing communications head Julie Roehm, the retail giant also sacked its newly appointed creative agency Draft FCB and announced that a new review would be conducted. This time, however, DraftFCB is specifically excluded from the re-pitch. (Media agency Carat was also dismissed, but is included in the review). Reasons for this abrupt turnaround eventually emerged this week. The principal cause appears to have been Roehm's presence - along with VP-communications architecture Sean Womack, who was also dismissed by Wal-Mart - at a lavish dinner party thrown by DraftFCB for agency search consultants during the course of the review. In order to avoid any suggestions of favouritism, Wal-Mart is well-known for operating an almost puritanically strict code of conduct which prohibits its "associates" (as employees are known) from accepting even so much as a free cup of coffee from suppliers.

In this case, Roehm and Womack's presence at a party which had no connection to the account review appears to have been considered a major breach of the code. More serious still were reports of Roehm's effusive endorsement of the newly merged DraftFCB's business model in conversation with other guests at the party, as well as suggestions of inappropriate personal behaviour - the latter vehemently denied by Roehm. Other stories had already appeared in the trade press during the course of the review which suggested a camaraderie between Roehm and DraftFCB's CEO Howard Draft which was hardly unusual by general industry standards, but could certainly be seen as a violation of Wal-Mart's especially strict code. (Draft was reported to have presented Roehm with various gifts, and even arranged to take her for a ride in his new Aston Martin, surely a risky strategy given Wal-Mart's well-known sensitivity about perks). In interviews since her dismissal by Wal-Mart, Roehm has denied any wrongdoing, and said she had tried at all times to abide by the code. All gifts were, she claims, later paid for. However, the dismissal is a considerable personal embarrassment for her, as well as a savage blow to Draft FCB, which had proudly trumpeted its capture of the Wal-Mart business as a ringing endorsement of its new integrated structure.

In what is apparently an unrelated incident, DraftFCB's most senior new business officer is to leave the agency and join rival Digitas. Chief growth officer Tony Weisman was a key figure in the Wal-Mart pitch and actually organised the dinner party which is at the centre of the furore. The agency has taken pains to point out that his resignation from DraftFCB was agreed before the agency was sacked.

Leo Burnett announced a restructuring of its global service offering to more closely align its main advertising agency with marketing services arm Arc. The two brands already work together closely on some accounts, but under the new structure, Burnett and Arc will merge in all but name, sharing a single profit and loss account. The company has yet to define the precise operating model it will pursue, said Tom Bernadin, Leo Burnett's worldwide chairman-CEO, but for the time being "consider Burnett and Arc as one entity, albeit with two facets. Neither brand name will disappear, and either will continue to go to market individually if a competitive advantage is to be gained by doing so."

Fifty years after he joined the company, Ed Meyer, the long-serving head of Grey Global Group, is finally to retire on January 1st 2007, just days short of his 80th birthday. As expected, he will be replaced as chairman & CEO of Grey Global by Jim Heekin, currently CEO of the Grey Worldwide advertising network. Meyer negotiated the sale of Grey to WPP last year for around $1.7bn, earning himself a personal payout estimated at over $500m.

In account news, ConAgra reappointed MediaCom New York to handle US media after a review, while Starcom UK was appointed by British group Premier Foods. Volvo put its global creative account into review. The business is held in many countries by Euro RSCG, mainly through conflict shop Fuel. In the UK it is shared with AMV.BBDO. P&G transferred creative for its Herbal Essences brand from Kaplan Thaler - responsible for the long-running "Yes! Yes! Yes!" campaign - to Leo Burnett. Kaplan retains several other P&G brands. French mobile phone giant SFR appointed Euro RSCG subsidiary LeG after a long review. Subscribers can access the full Adbrands Account Assignments database here.

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Happy holidays!

Simon Tesler
Publisher, Adbrands