Adbrands Weekly Update 5th April 2007

Weekly Update 5th April 2007

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Adbrands Weekly Update takes an Easter break next week - back on April 19th. In the mean time...

Our favourite ads this week:

First up, a great new set of ads by Leo Burnett for Altoids, the curious breathmint now owned by Wrigley. It's hard to choose a favourite, but we've plumped for "Blowhole" here. Nevertheless, take some time to watch the other three: "Banana Hands", "Australian Doubleback" and "Edwards" (why Edwards?). All four feature superb effects work Weeeeird!

The new Pepsi campaign from CLM BBDO rolls out the soft drink's line-up of soccer superstars. The set-up is weak, as is the dubbed-over English-language voice track, but once the ad gets going, the execution is excellent. Guaranteed to make you dribble, if you know what I mean.

You may already have seen this rather nice spot by Beattie McGuinness Bungay for HP Sauce, an essential accompaniment to the Great British Breakfast, largely unknown beyond these shores. HP has always suffered in the past from a rather drab, downscale image, but BMB give it a complete makeover.

Finally, an interesting and impressively mounted ad for Travelers Insurance. You might be interested to see how popular this "Snowball" concept has been in recent years, now that computer technology makes it so easy to pull off. For comparison, have a look at this Medecins Sans Frontieres spot, originally by Duval Guillaume of Belgium, which preceded Travelers. Also this new Stress Monster ad for Propel sports water, which followed it.

In the news this week: Advertisers & Media

AT&T and America Movil of Mexico are in exclusive talks to take effective control of troubled European phone giant Telecom Italia. Currently, TI's dominant shareholder is holding company Olimpia SA, itself controlled by tire manufacturer Pirelli. But the Italian company is struggling to resolve long-running problems generated by the substantial debts TI has accumulated since the late 1990s. AT&T and America Movil are negotiating to jointly acquire two-thirds of Olimpia's equity. The main reason for the two North American companies' interest is TI's Latin American mobile subsidiary, TIM Brazil. It is that country's second largest wireless company; America Movil's own Claro service is #3, and a merger of those two businesses would leapfrog current #1 Vivo, controlled by Telefonica of Spain. However the bidders face considerable opposition from Italian unions and politicians. Government officials have already appealed to local investors to table a higher offer for Pirelli's shares in order to avoid a transfer of control of TI outside Italy. So far, no Italian bidders have stepped forward, but rival European operators Telefonica and France Telecom are both reported to be preparing their own offers, although they will have to wait until AT&T and America Movil's exclusivity period ends at the end of April.

Altria completed the spin-off of its Kraft Foods subsidiary to shareholders, establishing that business as a fully independent entity effectively for the first time in its history. Kraft cheese was acquired by tobacco giant Philip Morris towards the end of the 1980s and was later merged with that group's existing subsidiary General Foods under the Kraft name. Later the company's operations were further enhanced with the addition of the Nabisco cookies and crackers business. Kraft is now the world's second largest food company after Nestle.

Steve Heyer resigned abruptly as CEO of hotel group Starwood. A statement from the board of directors said that "issues with regard to his management style have led us to lose confidence in his leadership". Heyer has led Starwood through a period of strong growth, and the company's net income more than doubled last year. However his tenure has been marked by simmering tension with the board of directors. A key factor is said to have been Heyer's refusal to relocate from his home base in Atlanta (where he was previously president of strategy for Coca-Cola) to Starwood's HQ in White Plains, New York.

Google is to make its first inroads into television ad sales, having agreed a deal with direct satellite broadcaster Echostar to broker advertising space on the Dish Network's 125 channels along similar lines to its existing online, radio and print ad sales programmes. The search engine giant is also said to have entered the bidding for online ad sales house DoubleClick, which is currently up for sale. Microsoft is already involved in talks with DoubleClick's private equity owners.

Meanwhile US TV network Fox is preparing to introduce an entirely new concept for its standard ad breaks. Rather than merely interrupt programmes to show ads, the network will also start interrupting its ads to show programming. It has commissioned a series of 8-second inserts featuring an animated taxi driver character named Oleg. Fox hopes to keep viewers interested in commercial breaks by interspersing the ads with humorous Oleg-isms. The concept is being driven by the launch next month of Nielsen Media Research's new ad ratings system, which will for the first time provide minute-by-minute audience figures for ad breaks as well as for the programmes in which they appear.

Discount retail group TJX, which owns TJ Maxx in the US and TK Maxx in the UK, was found to have been the target of the world's biggest ever computer fraud. Hackers are thought to have breached the company's security systems repeatedly over a period of 18 months and stolen credit card details for some 45m customer transactions dating back to 2002. Despite the size of the theft, the company has been quick to reassure customers that in several cases, card details stolen were incomplete, or out-of-date, rendering them unusable.

In the news this week: Agencies

There were several corporate reshufflings within the advertising industry this week. In London, as had been expected, the shutters were brought down on the local office of the United micro-network. Its remaining clients and some staff will be transferred into Grey London. That development marked the final phase of the troubled recent history of the former HHCL, one of the most highly admired agencies of the 1990s, but which experienced a slow and sad decline after 2001. Creative agency DFGW was also said to be close to sale. The former Duckworth Finn Grubb Walters is to be acquired by Publicis-owned PR company Freud.

In New York, MDC Partners announced plans to merge its Margeotes Fertitta Powell subsidiary into larger and stronger Kirshenbaum Bond. The latter's creative director Neil Powell is expected to leave and will start his own agency with backing from MDC. Meanwhile fast-expanding independent network Nitro was reported negotiating the purchase of New York creative boutique AKA Advertising, whose principal client is retail chain Foot Locker.

Publicis Group is fighting hard to beat off any further encroachment by Omnicom's BBDO network into its much-prized Procter & Gamble business. BBDO joined P&G's roster for the first time as a result of the packaged goods giant's purchase of Gillette, Oral-B and Duracell, all long-time BBDO clients. Now Publicis has managed to win back some of that turf by establishing a new agency, as yet unnamed, which will devote itself exclusively to the Oral-B account.

Vincent Bolloré's proposal to have two of his supporters elected to the board of Aegis has been defeated for the third time at an extraordinary general meeting of shareholders. Despite the fact that Bolloré is the largest single shareholder within Aegis, controlling almost 30% of votes, he still has no representation at board level. Shareholders remain nervous of a conflict of interest - he is also the controlling shareholder and chairman of rival group Havas. What happens next? Will Bolloré continue to hold onto his shares in the hope of winning over Aegis investors in the long term? Or will he put them up for sale?

A number of significant new account assignments and reviews this week. Interpublic faces the threat of losing the media buying account for one of its biggest global clients, Johnson & Johnson. Following its acquisition of Pfizer's OTC division, the pharma and personal care giant has called a global review of its $3.3bn media business, mostly handled by Universal McCann or Initiative. MindShare is responsible for media planning in several regions, and OMD also holds selected briefs in some markets, notably China which it won from Interpublic in 2006. All four networks will contest the business. Meanwhile, Carat kept hold of consolidated global media for Philips.

On the creative side, Omnicom's Goodby Silverstein walked off with the $1.2bn consolidated Sprint Nextel account. Incumbent Euro RSCG was knocked out of the account review for Volvo; however sister agency Arnold is still in the pitch in partnership with Nitro London, competing against Fallon. Arnold is at the same time participating in the pitch for the Hyundai account in North America. Also in the automotive sector, Cutwater, the creative boutique recently spun out of TBWA San Francisco, has picked up its first major client, DaimlerChrysler's Jeep brand, working in partnership with incumbent BBDO Detroit. Another creative boutique, start-up Barrie D'Rozario Murphy of Minneapolis, captured the US creative account for United Airlines. Founding partners Barrie and D'Rozario previously handled the account at Fallon. Subscribers can access the full Adbrands Account Assignments database here.

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Simon Tesler
Publisher, Adbrands