Adbrands Weekly Update 18th January 2007

Weekly Update 18th January 2007

Why am I getting this email? You have in the past either purchased a subscription to Adbrands.net or Mind-advertising.com or specifically opted to join our mailing list. Do we have your details correct? This email was sent to ${recipient}. Please make corrections using the Profile link at the end of this mail. Thanks for your help!

Dear ${token1} ${token2}

Our favourite ads this week:

No new ads caught our eye this week, so here's a couple of past gems. The first ad, by Canadian creative boutique Zig Inc, picked up a Gold Lion at Cannes two years ago. I won't spoil the joke by telling you what it's for, other than to say it's called Prison Visitor, and it features a searing (or should that be scouring?) emotional encounter between the woman behind glass and her young daughter.

The second ad is a very clever French spot for Hansaplast condoms by TBWA Paris. As you would expect from one of the world's best creative agencies, it's cleverly constructed and very well performed. A little tyke explains away all the terrible things he does (getting a tattoo, wielding a chainsaw at school, buying a snake...) with the innocent excuse "My mom said I could".

In the news this week: Advertisers

Following the failure at the end of last year of talks designed to take the business private, there was further doom and gloom at EMI. The company issued a profits warning for the current financial year, and said that revenues were likely to come in as much as 10% below fiscal 2006. EMI also launched a new Ł110m restructuring with the dismissal of the two most senior executives at its recorded music division, Alain Levy and David Munns. Instead, executive chairman Eric Nicoli will take over direct control of the music business. Some institutional shareholders expressed their concern over whether Nicoli, formerly CEO of United Biscuits, was the right man to fix the record company's problems.

Even if his football career is in decline, David Beckham is managing to keep his financial advisors busier than ever. The former England soccer star signed off on an astounding deal to move from Real Madrid, which is one of the world's leading clubs, to LA Galaxy, which... well, which is not. In return, Becks has negotiated a jaw-dropping five-year contract worth as much as $250m, said to be equivalent to around 10 times the combined total of the salaries of all LA Galaxy's other players. Not only will Beckham receive an annual paycheck of $10m, but also up to 50% of team jersey sales, a share of club ticket revenue, and an additional $25m or so a year in endorsements. According to the WSJ, LA Galaxy is already seeing benefits from the announcement, with a sharp increase in sales of season tickets and premium seats.

Microsoft's Xbox 360 was reported the overall victor in the battle for supremacy in the games console sector over the holiday season. It recorded sales of well over 1.1m units during December, equivalent to around 51% market share. Nintendo's Wii also did well, pushing Sony's new Playstation 3 into an ignominious 3rd place. Both Japanese machines were hamstrung by production delays which limited the number of machines they were able to push into the marketplace.

Meanwhile, in the PC sector, HP was the #1 PC manufacturer worldwide for the second consecutive quarter in 4Q 2006, with worldwide share of 17.4%, compared to just 13.9% for struggling Dell. The latter was the only one of the top five to sell fewer PCs in the last three months of 2006 than in the same period in 2005. For the year as a whole the two companies were neck-and-neck with 15.9% global share. Lenovo was some way behind in 3rd place with 7%, followed by Acer (5.8%) and Toshiba (3.8%).

On Monday this week, AT&T began rebranding Cingular Wireless, America's biggest carrier, under the AT&T Wireless name, which has been in mothballs for a little over two years. The old AT&T Wireless business was absorbed into Cingular in 2004. However much has changed since then. For one thing, the main AT&T fixed-line business was itself acquired by one of Cingular's two owners, SBC, which then changed its own name to AT&T in 2006. Following completion of the new AT&T's purchase of its Cingular partner BellSouth, it seemed only commonsense to resurrect the AT&T Wireless moniker as well, even if some commentators have questioned the wisdom in phasing out as established a brand as Cingular. Initially, the service will continue under its old name, above the descriptor "Wireless from AT&T", but the Cingular brand will be gradually phased out over the course of 2007.

AOL is working hard to build its business. It agreed an alliance this week with subscription-based music service Napster, which becomes its exclusive supplier of paid-for downloads. AOL also launched a bid of around $900m for advertising network TradeDoubler, a Swedish company active in the UK, France and Germany as well as Scandinavia. The deal was recommended by TradeDoubler's board, but not by its controlling shareholder, pension group Alecta. AOL may be forced to increase its offer.

In the news this week: Agencies

Following last week's announcements from Advertising Age, it was the turn of Adweek to nominate its choice of best agencies of 2006. Omnicom's TBWA and Goodby Silverstein were respectively Global Agency of the Year and US Agency of the Year.

Fast expanding interactive agency Avenue A Razorfish will add a Japanese outpost to its global network next month following agreement of a partnership with Dentsu of Japan to convert the latter's local shop Digital Pallette into a joint venture under the new name Dentsu/Avenue A/Razorfish.

In keeping with the stated goal of reducing its global network to a handful of creative hubs, ad agency Lowe has now effectively withdrawn from Germany. Lowe's branded office in Hamburg was closed down last month, and this week's German trade press revealed that the network's secondary presence, Change Communication in Frankfurt, has been bought out by former Lowe Germany CEO Klaus Flettner. No official announcement has yet been made by either Lowe or Interpublic, but there are reports that some form of additional joint venture could be negotiated with private equity firm Cognetas, also the majority shareholder in independent agency group Scholz & Friends. (In another reflection of its contraction, Lowe surrendered creative responsibility for the Renault account in Latin America. The business has been taken over by Publicis in most local markets except Brazil, where it relocated to Neogama BBH).

There were also senior management changes at Interpublic's two media networks as they become more closely aligned with DraftFCB and McCann. At Initiative, global client and network development director Mike Tunnicliffe, and Holly Stevens, formerly director of worldwide accounts, have both been made redundant. At Universal McCann, worldwide chief operating officer Murray Dudgeon is leaving "by mutual agreement", although he will retain a consultancy role.

More news from Interpublic: the marketing group does get the Wal-Mart account after all. Despite having its DraftFCB subsidiary stripped of the business at the end of last year, Interpublic managed to keep hold of the account through standalone unit The Martin Agency. More surprisingly perhaps, Carat, which had been expected to retain media for the Bentonville giant, was edged out by MediaVest. Interpublic also managed to regain a foothold in the Bank of America account, which it lost two years ago to Omnicom. Another standalone, Hill Holliday, won creative duties for BoA's wealth management division. Also this week, Fox placed the North American portion of its huge media account with ZenithOptimedia (the international assignment has yet to be confirmed); and office supplies group Staples called a review of its media business, estimated at around $100m per annum. Subscribers can access the full Adbrands Account Assignments database here.

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

Simon Tesler
Publisher, Adbrands