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No beating about the bush this week. On with the show. You can usually rely on BBH to pull something special out of the bag for key client Audi and this Leni Riefenstahlesque epic is no exception. Stunning. 

Fallon London unveiled its first UK ads for Budweiser, featuring unconventional versions of classic songs by bluegrass combo Harmony Korine. This one is the 1972 hit Popcorn by Hot Butter.

As a complete contrast, this is a new UK cinema ad from Amnesty International to highlight and protest against the use of waterboarding, um, "coercion techniques" as apparently utilised by the US and other countries' military forces. Be warned that you might find the images upsetting. Indie agency Drugstore is responsible for this and a series of other equally hard-hitting films for Amnesty on torture.

Some light relief needed I think. As promised last week, another ad by JWT New York for Huggies. Does this really go by the name "Future fireman"? Oh well. It's a refreshing - or is that the wrong word? - change to see Kimberly-Clark sign off on a more lighthearted approach to diaper marketing. 

In the news this past week: Advertisers

The political row generated by the upcoming Olympics took another turn for the worse this week, as the Chinese retaliated for Western criticism of their human rights record. Last week, Coke, Samsung and Lenovo, the three main sponsors of the Olympics Torch Relay, took the decision to withdraw vehicles carrying their branding from several remaining legs of the procession to avoid unflattering media coverage. Angered by this decision and the scenes already witnessed on the torch relay in Paris, London and San Francisco, ordinary Chinese are apparently starting to mount spontaneous anti-Western protests against American and European companies. French companies have come in for particular attention. There have been a number of demonstrations outside Carrefour's stores in China, and in some cities local groups have attempted to boycott French goods. This negative sentiment appears to have been inspired by news coverage of the Paris relay, in which disabled Chinese athlete Jin Jing, something of a national heroine, was seen struggling to hang onto the Olympic Torch while being attacked by pro-Tibet protestors. Contributing to the anger is a hoax rumour being widely circulated in China that Bernard Arnault, the owner of luxury group LVMH and now also the largest shareholder in Carrefour, is secretly funding the activities of Tibet's spiritual leader in exile, the Dalai Lama. Arnault and Carrefour both deny the report. French president Sarkozy attempted to calm anti-French sentiment by issuing a carefully worded message of apology to Jin Jing. 

Kun Hee Lee, executive chairman and controlling shareholder of the Samsung group, agreed to resign after being charged by the Korean government with tax evasion and breach of fiduciary duty. Several other senior officers including the vice chairman and group president were also charged and resigned. A trial will follow later this year. Lee hopes that these resignations will draw a line under years of investigation by regulators into the labyrinthine structure and alleged shady practises of the Samsung group, far and away South Korea's most influential business. Specifically, Mr Lee was charged with evading a tax bill of around $110m by hiding billions of dollars' of stock in accounts in the names of other Samsung executives. The group is also rumoured to have maintained a substantial slush fund for bribing government officials, but no charges were brought on this count. The Lee family will retain their shareholding in the group, but Mr Lee will surrender all executive powers, and his son and prospective heir is to be transferred to an overseas role, probably in China and India. The group is expected to make further changes to its overall structure, and possibly move towards a Western-style holding company. Despite their huge symbolic impact, the changes are not expected to affect the day-to-day business of the group. 

German retail giant Metro was reported in the FT to be considering a partial spin-off of its consumer electronics chains Media Markt and Saturn. With sales of over E17bn in 2007, that business dominates the audio, video and computer retail sector in Germany and several other continental European markets, selling a huge range of hardware and software. An IPO, if it comes, would give the business funding to make further acquisitions, and its UK counterpart DSG (PC World, Currys etc) is likely to be at the very top of a prospective shopping list. Meanwhile, computer manufacturer Dell was today reported to be considering the purchase of US consumer electronics chain Radioshack.

The latest edition of the annual BrandZ ranking compiled by WPP's Millward Brown was published this week. Google retained its position at the top of the list as the world's most powerful brand with an estimated valuation of $86.1bn. However, the most impressive growth among the leaders was shown by Apple, whose valuation more than doubled, placing it at #7. The overall biggest climber in the table was BlackBerry. Millward Brown almost quadrupled its valuation for the personal organiser brand, which now sits just outside the top 50. The biggest downgrades were for Starbucks and Motorola, down 25% and 30% respectively. Although similar in style to the ranking produced each year by Interpublic rival Interbrand in association with Business Week, the BrandZ report claims to be unique in that it is the only such chart compiled using primary research data, including thousands of qualitative interviews with individual brand users. See the whole report here.

Meanwhile, Google's share of the US search market continued to climb. According to figures from ComScore, Google's share of US search edged up in March by 0.6% compared to Feb, reaching 59.8%. The three main competitors all edged downwards. Yahoo was down 0.3% to 31.3%; Microsoft fell 0.2% to 9.4%; AOL sank 0.1% to 4.8%. The latter now runs the risk of being pushed into 5th place by closest rival Ask, which rose by 0.1% to 4.7%.

The financial reporting season dominated business headlines for the week. Despite strong results for 1Q, Nokia's shares plunged by almost 13% at the end of last week. Yet net profits were up by 25%; revenues by 28% to E12.7bn. However the markets were spooked by a comment from CFO Rick Simonson that the Euro value of the sector would drop in 2008 because of the weak dollar and slower global economic growth. Those fears were reinforced this week by a set of poor results from Sony Ericsson, whose 1Q profits fell by almost half. Lower than expected handset sales also lost the company its position as the #4 in the sector to LG. There was a similar shakeout in the pharma industry, with a clear polarisation between winners and losers. In the latter camp were Pfizer, GlaxoSmithKline and Schering-Plough, all reporting results below forecast. Merck, Novartis, Eli Lilly and Bristol Myers-Squibb, on the other hand, did much better than expected.

There was no such split in the tech sector, where all the major players have been showing strong growth. Google's shares jumped 17%, carrying other internet stocks along with them, after the search behemoth unveiled another set of stunning figures for the quarter. Revenues were up by 46% to $3.7bn and net income up 31% to $1.3bn. Both figures were better than analysts had expected. There were also strong results from Yahoo, Amazon and Apple, all ahead of expectations. Nevertheless, there were clear signs that the search advertising market is beginning to slow. The key metric here is growth in "paid clicks", or the number of times users click on paid-for search ads. In Google's case, that figure grew by 45% in the third quarter of 2007. By 4Q it had fallen to 30%, and the latest quarter showed a further decline to 20%. 

Ebay said it might consider selling its internet phone subsidiary Skype at the end of the year unless it can find a valid way of generating higher income from it. The auction giant paid a whopping $3.1bn for the business in 2005 on the assumption that it would help build communication channels between buyers and sellers, and provide a platform for new "click to call" services. So far, however, this growth has not materialised, and eBay wrote off $1.4bn of impairment charges against the business last year. Skype's userbase has continued to soar, reaching 309m registered users by the end of March. However the majority of these subscribers use the service for free. Paid Skype services contributed $126m over the period.

A new worldwide luxury goods group is being established by the Reimann family of Germany. The Reimanns are descendants of Johann Benckiser, whose chemical manufacturing business now forms the core of packaged goods giant Reckitt Benckiser. The family already owns global fragrance giant Coty, and this week announced the acquisition of Swiss shoe and leather goods manufacturer Bally. The latter is to become the core of a new group entitled Labelux. Further acquisitions are planned. Elsewhere in the sector, LVMH snapped up Swiss high-end watchmaker Hublot.

Further consolidation is expected in the UK supermarket sector. The Co-operative Group is currently the UK's 5th largest grocer, although it sits some way behind 4th-ranked Morrisons and the rest of the so-called "Big Four". However chief exec Peter Marks has announced his eagerness to bulk up by acquiring the #7 group Somerfield. So far this is still just a wish rather than an intention. The two companies are in talks, but they differ on price. Somerfield's owners, a consortium of private investment funds, are looking for at least £1.9bn. Marks is offering £1.7bn. A combined business would have around 8% share of the grocery market, compared to Morrisons' 11%.

The human cost of the ongoing sub prime credit crunch was demonstrated by another round of job cuts by major banks. In the 10 months since the squeeze began, more than 20 leading financial firms have shed a combined total of almost 49,000 jobs. The biggest contributor to that total was inevitably Citigroup, also the world's biggest bank, which is eliminating around 15,200 positions. Merrill Lynch and Lehman Brothers both let go around 5,000 employees. As the 1Q reporting season continued, virtually all the banks reported another set of dismal results. Royal Bank of Scotland announced plans to shore up its capital reserves with a massive rights issue, which is likely to become the biggest ever in Europe, exceeding £12bn. The group's finances have been stretched not just by bad debt provisions and write-downs but also its pricey acquisition of ABN Amro last year. The news was received by RBS shareholders with dismay. Group CEO Fred Goodwin said that the group was also considering the sale of its insurance division, one of the largest in the UK, with brands including Direct Line and Churchill.  

In the news this past week: Agencies

BBDO ousted Publicis from the international creative account for HP printers, picking up the business for the computer giant's printing & imaging division alongside Omnicom stablemate Goodby Silverstein. Billings are estimated at around $200m. It includes the current campaign featuring singer Gwen Stefani. Goodby retains responsibility for the core creative concept, while BBDO will handle execution and adaptation for local markets. Unusually, HP and Omnicom also inked an unorthodox extension to the arrangement, agreeing a separate partnership to develop a digital print supply chain based around HP technology to streamline creation, management and printing of marketing campaign materials for this and other major Omnicom accounts. (As Advertising Age noted, one Omnicom client likely to be excluded from this partnership with be TBWA's Apple). Publicis will continue to manage digital marketing for the HP account through its Publicis Modem unit.

David Verklin, the high-profile and often outspoken CEO of Aegis Media Americas, announced his resignation. He is understood to be leaving to run Project Canoe, an organisation funded  by several US cable operators to establish a joint standard for video-on-demand services. As a result of his departure, the Aegis Americas regional group is being divided. Sarah Fay, current CEO of Carat and Isobar in the US, becomes CEO of Aegis North America; Latin America is being spun off as a separate region, reporting directly to Aegis Media worldwide CEO Mainardo de Nardis.

Robert Campbell, formerly the founding creative partner of what is now RKC&R/Y&R, announced details of his new venture, to be launched this summer. Tgi50 will be a through-the-line agency specialising in marketing to the 50-plus age group. Campbell and business partner Toby Constantine want to change attitudes towards what is traditionally considered to be a distinctly unglamorous market segment. However, some of the most influential figures in contemporary popular culture are now heading into their 50s and Campbell and Constantine are keen to take advantage of what is likely to become an ever more significant demographic sector. The agency plans to launch officially on August 16th, which is also Madonna's 50th birthday.

Havas and Omnicom reported 1Q results this week. Havas's figures were a little disappointing. Revenues were E345m, up just 2.5% over the same period in 2007 although organic growth - excluding the impact of fluctuating exchange rates - was a more impressive 7.4%. (The company doesn't release quarterly profits.) Those results didn't begin to compare to another classy performance from Omnicom, which reported a 12.5% rise in revenues to almost $3.2bn, and earnings up 14% to $209m. The world's #1 marketing services group also cheered market sentiment by saying that it "didn't see any unexpected shifts in client spending patterns", despite the current economic squeeze.

Separately, Omnicom's healthcare agencies took a clean sweep of Med Ad News' Manny Awards. In the three categories for Agency of the Year, Cline Davis & Mann was the winner in the top category for large agencies; Corbett took first prize among medium-sized agencies; and Flashpoint won the small agency category. 

Russian drinks group SPI is seeking a new global creative agency to replace Publicis-owned Marcel on its Stolichnaya vodka account. The US Navy called a review of creative, currently managed by Campbell-Ewald; financial services giant GMAC is also in search of an agency. UK mortgage lender Halifax called a review of its creative business, out of DLKW. For all other appointments, subscribers can access the full Adbrands Account Assignments database here.

In the news this past week: Media

BSkyB was reported to have received expressions of interest from Bertelsmann's RTL and billionaire media investor Haim Saban over its shareholding in British commercial broadcaster ITV. Sky is being forced by regulators to reduce its stake in the beleaguered ITV from almost 18% to under 7.5%. RTL is already the owner of rival UK terrestrial broadcaster Five, while Haim Saban is best-known as the producer of children's superhero show Power Rangers, a huge global success in the 1980s. On the other side of the Atlantic, Rupert Murdoch is through to have reached an agreement in principle to buy New York daily paper Newsday for around $580m.

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

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