Weekly Update 6th September 2007

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Dear ${token1} ${token2}

Our favourite ads this week: 

This week is Robot Week at the Adbrands Weekly Update. Artificial women are obviously de rigueur these days when selling products to men. DDB London is responsible for "Robot Skin", the new campaign for Philips Philishave with integrated Nivea skin conditioner. It's a beautiful film but the whole "sexy robot shaver" concept seems oddly retro to us, and even a touch sad. (This poor little robot girl could do with a bit more TLC, if you ask us). 

If it comes to a choice, we prefer Heineken Draught Keg's much jollier cyber-maedchen, conceived by Berlin Cameron United. (Just don't mention the spot to Advertising Age's easily provoked ad critic Bob Garfield who has denounced it as "the most sexist beer commercial ever produced"). Also, don't miss the accompanying website which allows you to insert your own head and those of three friends onto a group of dancing animatrons.

Fallon London is behind this new film for Cadbury Dairy Milk, featuring a drumming gorilla. It has received a rapturous reception despite the cardinal sin of reintroducing Phil Collins into the public consciousness.  

...and finally, not a real ad at all, but we just couldn't resist it, especially in the light of this week's launch of a new iPhone-inspired design for Apple's iPod. This spoof spot purports to be for a new phone version of Microsoft's Zune music player. Cruel, yes, but also very, very funny.

In the news this past fortnight: Advertisers & Media

Taiwanese computer manufacturer Acer agreed to buy its US counterpart Gateway for $710m. As a result, Acer will also snatch control of European manufacturer Packard Bell, which was previously in takeover negotiations with China's Lenovo. Asian entrepreneur John Hui is a major shareholder in Gateway, as well as the controlling shareholder in Packard Bell, and the two companies have a pact which gives Gateway a right to veto any purchase of the European manufacturer. The deal, if concluded, will place Acer above Lenovo of China as the global #3 in computers, behind HP and Dell. A combined Acer-Gateway would have annual shipments of around 20m PCs and almost 9% market share, compared to Lenovo's current 8%.

Meanwhile PC manufacturer Dell, struggling to recover from a dramatic slump in performance, concluded a two year internal investigation with the announcement that it had discovered evidence of accounting irregularities between 2002 and the the first quarter of fiscal 2007 by which unidentified senior executives had sought to manipulate company accounts in order to achieve quarterly performance targets. The group will restate its financial results for the four years from 2002 to 2006 as well as for 1Q 2007, and the total restatement is expected to fall between $50m and $150m. Better news came with the release a few days later of 2Q 2007 results, which showed a distinct improvement in performance, including a 46% increase in quarterly net income.

In the most extraordinary demonstration to-date of internet-driven consumer power, Cadbury's UK confectionery division said that next month it will reintroduce Wispa, a chocolate bar it discontinued in 2003. The reason? A huge internet campaign coordinated through social networking sites MySpace, Bebo and Facebook, which has attracted the support of more than 14,000 consumers. Wispa was originally launched in Britain in 1981 and enjoyed considerable success during that decade. Sales steadily declined, however, during the 1990s and the brand was finally discontinued in 2003. Since then there has been a growing campaign by consumer groups to call for its return. The bar will be reintroduced as a limited edition for a test period, but will be shifted to permanent status within the portfolio if there is sufficient demand. Also this week, HSBC reversed a decision to begin charging interest on students' interest-free overdrafts as soon as they leave university, as a result of a campaign on Facebook coordinated by the vice-president of the UK's National Union of Students. 

DaimlerChrysler agreed a deal with Ford Motor Company which will allow the German group to rename itself Daimler AG in October, subject to a shareholder vote. Despite the group's Daimler-Benz heritage, the Daimler automobile trademark is actually controlled by Jaguar, currently a subsidiary of Ford. The Daimler brand was first introduced to Britain in 1891 when engineer Frederick Simms acquired the local patent for Daimler's engines. The business was acquired in 1895 by the British Motor Syndicate, and became the country's first automobile manufacturer the following year. However the German company's rights to the Daimler name effectively lapsed when Daimler-Benz decided instead to use the name Mercedes for its cars. Daimler Motors was eventually acquired by Jaguar in 1960, although the Daimler marque has been more or less discontinued since then. According to Reuters, the new agreement with Ford will allow the German group to use the Daimler name as a trade or corporate name, but not as an automobile brand.

Wal-Mart was reported to be considering acquisitions in the US for the first time in more than two decades in order to bolster its presence in the convenience store and small supermarket segment. In recent years, the group has tended to concentrate on the rollout of its massive Supercenter format, but this has led to repeated run-ins with local planning regulators, and has also left a significant hole at the bottom end of the market, one which Tesco is about to exploit when it opens its first US stores this autumn. Tesco Fresh n' Easy stores will take the format of neighbourhood grocery markets, with about 10,000 sq ft of selling space per outlet. Currently, Wal-Mart's stores are all at least ten times that size, forcing them to adopt out-of-town locations.

Online share brokers TD Ameritrade and E*Trade were reported to be involved in merger talks to create a new sector leader. Currently, Charles Schwab is the global #1 in online share trading with around 6.9m customer accounts. TD Ameritrade and E*Trade are #2 and #3 with 6.3m and 4.7m accounts respectively. Both companies are publicly quoted although TD Ameritrade is controlled by Toronto-Dominion Bank of Canada, which retains a 39% shareholding.

Altria confirmed that it will proceed with a full separation of its US and international tobacco businesses, most probably in the first half of 2008. Philip Morris International will be spun off to shareholders, giving it greater room for growth without being held back by its declining domestic business. The latter could then be sold or even merged with its main US competitor, Reynolds American. 

The US is to get a fifth national wireless network with the planned merger of MetroPCS, based in Texas, and LeapWireless, which offers the Cricket and Jump TM Mobile services out of headquarters in San Diego, California. Metro has offered to buy Leap for $5.3bn. Both companies serve mainly low income urban customers, offering unlimited calls for a fixed monthly fee. Together they will be able to offer coverage across almost all of the top 200 wireless markets in the US, with combined subscriber numbers of around 6.1m.

NBC Universal greatly strengthened its cable portfolio with the purchase of Sparrowhawk Media, a UK-based company which controls an extensive collection of international cable assets including 18 regional versions of The Hallmark Channel, broadcast to more than 150 countries outside the US. NBC is also rumoured to be finalising an agreement to acquire US women's channel Oxygen. NBC has also declined to renew its contract to supply digital downloads of video content via Apple's iTunes store, after the two companies failed to agree terms for pricing or the bundling of related content. Instead NBC will start selling new material through Amazon's Unbox service from next month, although some shows, including The Office and Battlestar: Galactica will still be available on iTunes until the end of the year. NBC Universal is the #1 supplier of broadcast content on iTunes, accounting for around 40% of video sales. Separately, NBC and News Corporation's Fox division announced the name for their own soon-to-launch online video broadcast joint venture: Hulu.com. 

Viacom's MTV subsidiary has effectively pulled the plug on its music download service MTV Urge, formerly a partnership with Microsoft's MSN Music portal. Microsoft has been preoccupied with its own Zune music player, and subscriber take-up for the Urge service was disappointing. Instead Urge, and its existing users, are being merged into rival subscription download service Rhapsody, which becomes a joint venture with Rhapsody's owner, Real Networks. The latter has 51% of the enlarged company to MTV's 49%. At the same time, Verizon Wireless has signed up as the exclusive mobile distribution partner for the expanded service. A few days later, Sony announced plans to close down its own music download service, Sony Connect, because of insufficient demand. The service will be terminated at some point after March 2008 to avoid any impact on the current financial year. Instead Sony is thought to be planning a separate video download service, for launch next year, using the technology within its Playstation 3 consoles.

Despite the problems faced by MTV and Sony, Nokia is determined to travel in the opposite direction. It has ramped up its digital download offering substantially with the launch of a new internet services portal, Ovi (Finnish for door). This will serve as a portal for various download offerings including an extensive new Nokia Music Store (based on LoudEye, the digital music distributor acquired last year); a navigation and maps service; and games for its N-Gage and multimedia phones. Social networking and media sharing portal Twango, also acquired in 2007, will be integrated into Ovi by the end of the year.

In the news this past fortnight: Agencies

Vincent Bolloré has continued to acquire shares in Havas, of which he is chairman, to a holding now just under 32%. More significantly, he has also built his holding in Carat parent Aegis, where he has so far been denied a board presence, to a fraction under 30%, the magic level over which, under Stock Exchange rules, he must make a formal offer for the whole company. Separately from Havas, Bolloré has made a private investment in independent start-up agency @Just, founded by creative duo Dominique Julien and Thomas Stern. Julien was a founding partner in Le Nouvel Eldorado, now owned by Havas; Stern is the former creative director of Draftfcb Paris. This is Bolloré's second advertising investment outside the Havas umbrella. He is also a silent partner in creative shop Fred Farid Lambert (FFL), launched last year by former Publicis trio Frédéric Raillard, Farid Mokart and Christophe Lambert.

Interpublic is the target of two new but separate lawsuits issued in London by the former owners of companies it acquired. Barnett Fletcher sold his sales promotion company to McCann's Momentum division in 1997. Fletcher was paid in Interpublic shares, but the marketing giant's subsequent financial problems subsequently caused a sharp decline in the value of that stock, from which it has yet to recover. Fletcher claims that IPG's senior European management team caused that slump by knowingly overstating revenues and profits. The three founders of customer publishing agency TPD, absorbed into McCann Worldgroup in 2001, are also suing Interpublic for the drop in the value of the shares they received in part-payment. Meanwhile, at the New York office of IPG's Lowe network, CEO Nancy Hill announced her resignation, just over a year after she joined. Mark Wnek remains chairman & chief creative officer.

AT&T called a review of its massive media planning and buying account worth around $2bn in billings. Currently, the business is split between several different shops, a legacy of the company's creation from the merger of the old AT&T, SBC and BellSouth entities. GSD&M handles media for the fixed line service in all regions except nine former BellSouth states where Initiative is the incumbent. Mediaedge:cia handles broadcast and outdoor media for AT&T Mobility, while OMD is responsible for print and Digitas manages online. AT&T wants to consolidate the account at a single agency. In other assignments, Visa widened its ongoing international media review to include the US business, currently handled by OMD. Samsung also has called a review of its global media account, currently with MindShare. In creative, Draftfcb picked up the $200m campaign to launch the 2010 US Census survey. Porsche appointed Cramer-Krasselt to its US account. (C-K also picked up carpet cleaner Bissell). Restaurant chain Chili's moved its $100m account to Hill Holliday. In the UK, Heinz split its creative account between AMV BBDO and M&C Saatchi. For all other appointments, subscribers can access the full Adbrands Account Assignments database here

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Simon Tesler
Publisher, Adbrands