Recommended Reading

 
Boomer Consumer 
by Matt Thornhill & John Martin
Buy it at Amazon 
for less

 DECLARED ADVERTISING EXPENDITURE
Under US regulations, many companies make a public declaration of their actual advertising expenditure, although this may be buried deep in SEC filings or other financial documents. Adbrands tracks these declared figures. 
Rankings link 
(subscribers only)

MULTIPLE SUBSCRIPTIONS
Would your colleagues benefit from their own subscription to Adbrands? All Adbrands subscriptions are for individual use only. If your colleagues also require access, we offer substantial discounts for additional users. One year subscriptions for your colleagues cost just UKP25 (or US$55) per logon provided they run alongside your own full-price annual subscription. We can also offer corporate intranet solutions giving password-free access to all employees companywide from a private doorway page. 
More information 

Dear ${token1} ${token2}

Please note: Adbrands Weekly Update is taking a summer break next week. Normal service resumes on August 2nd.

Our favourite ads this week: 

Wieden & Kennedy Amsterdam and animation house Psyop have teamed up once again to produce a delightful six-minute "documentary" based around the Coca-Cola "Happiness Factory" ad from earlier this year. You'll remember that as the ad which depicts the fantastical events which take place inside a Coke vending machine every time you insert a coin. This film was produced for a display at the New World of Coke museum in Atlanta (which explains the slow opening to allow visitors to get settled), and includes "interviews" with several of the bizarre characters who inhabit the Happiness Factory. We particularly like cheerleader Wendy and Larry the flying candle. It's long but very enjoyable. Stick with it.

There's plenty of life left in the Parkour phenomenon. This film by AKQA is designed to promote a new set of three games for the XBox console, but does so with barely a reference to the actual product. Instead it's a elegant meditation on the philosophy of free-running (and coincidentally of gameplay) as voiced by one of its premier exponents, Chase Armitage.

Berlin Cameron United unveiled its first spot for Hennessy cognac. It's a lavish and envy-provoking update on the old "beautiful people" concept which put Bacardi rum on the map back in the 1970s. I defy you not to wish you were there yourself... Great soundtrack by rapper Pharrell as well.

Finally, Moment of Truth, a nice little ad by Mother for pre-holiday tanning products from Boots The Chemist. Wherever you're planning on spending your summer holidays, I certainly hope it's not on a beach like this!

In the news this week: Advertisers & Media

The music industry is still struggling to adapt to the digital earthquake which has ripped away many of its founding principles. Album sales have continued to slump all year - Nielsen SoundScan counted just under 230m album units sold in the US in the first half of the year, down 15% on the same period in 2006. That slide is partly compensated for by a sharp increase in digital sales, up by almost 49% to 417.3m individual tracks. Bundling up those tracks to count as albums would reduce the overall slide in sales from 15% to just over 9%. However, that comparison doesn't take into account the financial dynamics of this shift towards digital. The tracks being downloaded are hit singles or individual tracks from an album. This creates a serious problem for an industry whose whole structure is geared around making and selling whole albums. If single track sales don't subsequently generate album sales in their wake - and digital track downloads generally don't - then the industry feels the pain. According to Nielsen, Gwen Stefani's "Sweet Escape" is the most popular digital download so far this year, accounting for 1.8m units so far. Best-selling album so far is the debut from American Idol finalist Chris Daughtry, with 1.7m physical units sold.

Hot on the heels of last week's tentative agreement to sell the bulk of its biscuit division to Kraft, Danone has announced a separate deal to acquire Royal Numico, the Dutch-based maker of baby food brands Cow & Gate, Milupa and Olvarit, for around E12.3bn. If approved by shareholders it would, said CEO Franck Riboud, establish Danone as "the world's purest health and nutrition company". Numico would be run as a separate division, becoming a third pillar within Danone to replace the cookies and crackers business. Danone already owns leading French baby food Bledina, and the new deal would heighten the direct competition with Nestle, with whom Danone already competes in bottled water and dairy products.

Fashion group Liz Claiborne announced a major restructuring which is designed to clear out less profitable brands in its extensive closet. During the 1980s and 1990s the company was one of the first fashion businesses to bolt-on additional labels in a string of acquisitions. Yet the changing nature of the retail industry has meant that many of its department store labels are now struggling to maintain revenues and profitability. As a result Claiborne has identified 16 brands - almost half of the 36 it controls - which it wants to sell or sub-license, or otherwise possibly shut down. These are mostly labels sold to third-party stores on a wholesale basis, rather than those with their own retail outlets. They include high-end brands Sigrid Olsen, Ellen Tracy and Dana Buchman; private labels Tint (for JC Penney), Stamp10 (for Kohl's) and First Issue (for Sears); and even recent acquisitions Mac & Jac and Kensie, only acquired last year.

Sony is to knock $100 off the price of its Playstation 3 consoles in the US in an attempt to lift sales, although even after the cut PS3 will still cost a whopping $499. Meanwhile Microsoft said it would take a charge of as much as $1bn this year against the cost of fixing widespread technical problems in its own high-end Xbox 360 devices. Both companies are struggling to counter the spectacular success of Nintendo's Wii console, which is expected to notch up further sales increases from the introduction later this year of additional three-dimensional bats and wands.  

Axel Springer cancelled plans to launch a version of its market-leading German newspaper Bild in France, despite two years of preparation. The group blamed the turmoil in the French magazine and newspaper industry. However Springer's board was also said to have been concerned about France's more limited distribution network, given the mass-market audience targeted by Bild. According to the Financial Times, Germany has more than 120,000 sales outlets for newspapers, serving a population of around 87m people. France, on the other hand, has only around 30,000 outlets for a population of 60m.

There was further management turmoil at Alliance Boots, the European healthcare retailer and distributor. Following its recent buyout by entrepreneur Stefano Pessina, backed by private equity, the two most senior managers from the old Boots business have resigned, although their departure was said to be amicable. Group CEO Richard Baker and Scott Wheway were apparently reluctant to commit to a further five year contract, preferring to seek other opportunities.

Coca-Cola is said to have made a preliminary approach to the two private equity consortia currently negotiating to acquire Cadbury Schweppes' US soft drinks division. Although the bulk of the Cadbury business consists of Dr Pepper and 7 Up, Coca-Cola has apparently registered its interest in taking over non-carbonated brands Snapple and Mott's from whichever consortium clinches the overall deal.

After months of negotiations with different partners, struggling Australian supermarket group Coles agreed to be acquired by diversified conglomerate Wesfarmers for A$22bn (around $19bn US). Investors were gloomy about the prospects of that arrangement, and marked down both companies' shares. Wesfarmers has interests in several sectors including mining and insurance, but also owns the country's biggest home improvement retailer, Bunnings. In other deals, private equity group CVC agreed to buy high-end luggage manufacturer Samsonite for around $1.7bn in cash and debt. Google spent a generous $625m in cash to acquire Postini, a software developer which specialises in email security and anti-spam technology. Telefonica has offered to buy out Portugal Telecom, its partner in Brazilian mobile joint venture Vivo, for E3bn. 

In the news this week: Agencies

Dell was reported to have dropped BBDO from its creative roster. According to reports in the WSJ, Dell was concerned about a conflict with BBDO's electronics retail client Best Buy. The struggling computer company already works with BBDO stablemate DDB in several markets, as well as Euro RSCG in Asia, and recently handed a creative brief to the US outpost of London hot-shop Mother. The latter has just completed its first ad for Dell, promoting a new line of Inspiron laptops available in a rainbow of different coloured housings rather than standard-issue grey. BBDO was able to console itself with the fact that it has been elevated to lead status on the mammoth AT&T account. Incumbent GSD&M, also an Omnicom subsidiary, will continue to work on the business, but reporting to BBDO in New York.

According to Campaign today, Chris Ingram is seeking a buyer or partner for his strategic communications consultancy Ingram. The creation of that business in 2003 marked Ingram's return to the industry following the lucrative sale of his CIA media network to WPP. However the unit has struggled to build up a sufficiently weighty client list, despite Ingram's own reputation, and that of his other partners.

After a strong run of new business wins by its London office, Wieden & Kennedy announced plans to open an office in India, a key strategic market for new global client Nokia. The Lowe network is also strengthening its presence in India, having agreed to take full ownership of Lintas India, an affiliate left over from the old Lintas network, and in which it was previously a minority shareholder 

Reflecting the problems it is having with the PS3 console, Sony is said to have informed long-standing Playstation agency TBWA\Chiat\Day that it will be calling a review of the account in an attempt to boost sales. Apparently TBWA has not yet decided whether or not it will defend the review. In the UK, Toyota was reported by Campaign to have made a decision to consolidate its local advertising with Clemmow Hornby Inge, which has previously shared the business with Saatchi & Saatchi. No firm date has yet been set for the transfer, but CHI has steadily increased its hold over the account since it joined the roster in 2004. Saatchi's is expected to keep the account in other European markets as well as in the US. Meanwhile, GM's Opel/Vauxhall division has appointed StrawberryFrog to manage the launch of the new Agila model across Europe. Subscribers can access the full Adbrands Account Assignments database here. 

As always, if you haven't already done so, please confirm your subscription to the free Adbrands Weekly Update by clicking here or on the link at the foot of this email. Thank you for your assistance! 


Simon Tesler
Publisher, Adbrands