Adbrands Weekly Update 15th March 2007

Weekly Update 15th March 2007

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Our favourite ads this week:

Adidas launched the new instalment of its ambitious "Impossible is nothing" campaign with the first collection of what will eventually be more than 20 different ads in which celebrated athletes recount moments from their careers in which their faith in their own ability was shaken. The most high profile of the first batch is David Beckham (top left), who talks about the death threats he received after he was sent off in the 1998 World Cup. The first batch of 10 stories, including rugby player Jonah Lomu and NBA basketball star Gilbert Arenas, is available at the Adidas website. Also the latest babe-licious insanity from the Lynx/Axe deodorant range (top right), courtesy of BBH. The new campaign, which runs under the banner Bom Chicka Wah Wah, features four separate spots, of which this is probably the most amusing. The supermarket spot, however, is the sexiest and also the most politically incorrect... Xerox has also chosen a surprisingly unorthodox approach for its new viral spot (bottom left, from RKCR/Y&R) and accompanying website, which explore less satisfactory ways of boosting office productivity. Finally, Madonna plays wittily with her public image in the new TV ad to promote her line of low-priced clothing for H&M. Sadly, she still can't act, but her shortcomings are more than compensated by a well-chosen supporting cast and an endearingly silly script.

In the news this week: Advertisers & Media

New figures for 2006 from US soft drinks industry monitor Beverage Digest showed a continuation of the slow decline in the share of leading manufacturers Coke and Pepsi, both of whom experienced a 1% fall in volume sales and a marginal decline in market share (to just under 43% and just over 31% respectively). The biggest winner in the US carbonated sector was challenger company Hansen Natural, which doubled its market share, albeit from a minuscule base, from 0.3% to 0.6%. Rockstar and Red Bull also did well, although both companies have 0.5% share or less. Overall volumes for the sector also drifted marginally lower, from 10,224m cases in 2005 to 10,158m. Among individual beverages, the main Coke Classic and Pepsi brands experienced 2% and 2.5% falls in volume, though share was only marginally affected. The biggest gainers were Diet Mountain Dew, Fanta and Diet Dr Pepper, with volumes up between 6% and 8.5%.

Separately, activist investor Nelson Peltz this week acquired a 3% holding in Cadbury Schweppes, whose beverages division is the global #3 in carbonated soft drinks behind Coke and Pepsi. Its brands include Dr Pepper and 7 Up. That development led Cadbury to confirm that it has been working for the past two weeks on a spin-off of the soft drinks business, now concentrated almost exclusively in the US. This could result not just in the sale of the drinks business, but also an offer for the core confectionery operations. Private equity buyers have already begun to prepare bids for one or both parts of the group, and trade buyers such as Nestle or Kraft are likely to join any auction.

British pharmacy group Alliance Boots has also become a target for private equity funds. KKR was reported to be backing a Ł9.7bn buyout bid by Stefano Pessina, who is Alliance Boots' biggest individual shareholder as a result of the merger of his wholesale group Alliance UniChem with Boots last year. Alliance Boots chairman Sir Nigel Rudd described the initial offer as too low, and appears to be angling for a higher price. KKR is also the lead member of a consortium assembling a bid for supermarket group Sainsbury.

Schering-Plough agreed to acquire the human and animal pharmaceutical division of Akzo Nobel for $14.4bn. That business, which operates currently as Organon BioSciences, is best-known for a range of contraception and fertility drugs. Separately, Citigroup raised its offer to buy Japanese broker Nikko Cordial after pressure from the latter's US-based shareholders. The new offer is almost $3bn higher at $13.5bn.

After several months of talks with different buyers including former Ford CEO Jac Nasser and French billionaire Bernard Arnault, Ford agreed to sell its ultra-prestige sportscar brand Aston Martin to a British consortium headed by former F1 entrepreneur David Richards. The price tag is Ł480m, and Ford is to keep hold of a 15% stake in the divested business.

Procter & Gamble has taken the decision to pull out of paper tissue products in Europe. It has sold its entire business in the region to rival manufacturer SCA for E512m. In addition to five factories, SCA will take over the Tempo facial tissue and Bess toilet tissue brands, as well as a license to manufacture and market Charmin toilet tissue and Bounty kitchen rolls.

Microsoft and Yahoo's share of the online search market is continuing to fall, while Google's rises. Nielsen//NetRatings estimated a share of just 9% of all US web searches for Microsoft's Windows Live Search in January 2007, compared to 54% for Google and 23% for Yahoo. In the first half of 2006, Microsoft had 14% share, compared to 31% for Yahoo and 48% for Google. Meanwhile the IAB estimated a 34% increase in online ad spend for 2006, to a whopping $16.8bn.

The legal tussle between Viacom and Google and its YouTube subsidiary stepped up a notch this week when Viacom issued a $1bn lawsuit against the online company for copyright infringement in connection with clips from Viacom TV shows uploaded illegally by users to the YouTube service.

In the news this week: Agencies

British-based PR group Hunstworth has strengthened its presence in the US with an agreement to acquire Dorland Global Corporation for up to $50m. Dorland's owners, Harry and Rita Sweeney, will continue to lead the business, which specialises in PR for healthcare clients. Separately, Chime Communications, which owns the Bell Pottinger PR firm, acquired sports marketing agency Fast Track for up to Ł43m. Meanwhile UK creative agency Mustoes was reported to be in talks to buy back the majority holding currently controlled by Japanese group Hakuhodo.

Japanese agency Tugboat, currently regarded as one of that country's hottest creative shops, is to open its first office in London to supervise international work for its existing domestic clients, which include Fuji Xerox, Japan Railways and Maglite/Mitsui&Co.

The week's significant new account assignments or reviews: Nike has separated out the creative account for its global running shoe business and put it up for tender. Crispin Porter & Bogusky is widely considered a favourite to pick up the account. The remainder of Nike's business is still handled by long-time incumbent Widen & Kennedy. In other announcements, McCann Humancare is to handle the launch of smoking-cessation prescription drug Chantix for Pfizer; DaimlerChrysler's Smart cars has moved its business in the UK to AMV BBDO; and US restaurant chain Applebee's called a review of its creative business, out of Draft FCB. Subscribers can access the full Adbrands Account Assignments database here.

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Simon Tesler
Publisher, Adbrands