Ad agency Goodby Silverstein & Partners may be riding high in the US as a result of their nomination as Agency of the Year by both the country's leading trade papers, but don't expect that sentiment to be echoed in Australia. In an unusual trans-Pacific tie-up, the agency was hired last year to produce a new domestic campaign for Australia's Commonwealth Bank. The first fruits of those labours were unveiled this week, and the response from Australians has been... well, the word "negative" doesn't do justice to it. Actually, the words chosen by local trade mag B&T were "disappointing", "gutting", "self-indulgent" and even "masturbatory". Hmm. See for yourself. It's an ad that doesn't work on so many different levels. Could this be the beginning of the Goodby Silverstein backlash?

McCann Erickson, on the other hand, have turned out a great new spot for Weight Watchers clubs. It might not seem the most promising of campaigns, but Weight Watchers and McCann have successfully turned the whole concept of "dieting" on its head with an ad which is both entertaining and memorable. Nice work.

You may remember the computer animated "Fight For Kisses" spot we featured here last year by JWT Paris for Wilkinson Sword. The same team (or so it looks) are responsible for a new campaign for Kit Kat. This extended viral film is actually just the teaser for the website flagged up at the end, but is a superb piece of work in its own right. Nicely judged humour and superb animation.

Finally, an unusually light-hearted ad for Belgian bank Centea (and heaven knows, you could use a laugh or two if you work for a bank these days). BBDO's local shop Darwin BBDO take the credit.

In the news this past week: Advertisers

Economic news has continued to dominate the headlines over the past week. Global stock markets rose and fell like a rough sea, plunging with every morsel of bad news, then soaring with relief at a new set of upbeat company results. Most of the negative sentiment has hung like a black cloud around the banking sector, where there has been plenty of gloom to keep the bears in business. It wasn't just the continuing pain from subprime investment writedowns and bad debt provisions. France's second-biggest bank Societe Generale already had enough to worry about with a $3bn charge against US subprime investments. The discovery of a massive E5bn fraud placed a very large cherry on this already sour cake. Over the course of a whole year, Jerome Kerviel, a comparatively low level employee in one of the bank's less glamorous trading departments, managed to run up huge losses by placing hundreds of thousands of unhedged trades on stock-index futures markets. He then used past experience working in the bank's risk control unit to conceal the losses, making fake orders in another account to offset the values of the genuine orders he had placed. His aim was not to embezzle money from the bank, but simply to earn a bigger bonus by looking like a skilled trader. Skilled he was not, or at least not at reading the markets. Four of Kerviel's managers were also dismissed. SocGen hopes to restore its weakened capital base by calling for additional cash from its existing shareholders. However most analysts feel that it could now become a takeover target for one of France's other major banks, or even an external bidder.

Another unexpected victim of market turbulence was UK pubs and restaurants group Mitchells & Butlers. The company was forced to admit to a £274m loss on financial gambles associated with a failed deal. At the end of 2006, the group agreed terms to transfer its property portfolio into a joint venture with developer Robert Tchenguiz. However that arrangement later fell through because the mid-2007 credit squeeze prevented the partners from raising sufficient third-party backing to fund the deal. Rather than close out the hedges they had placed on their risk immediately, M&B gambled that stock markets would improve and thereby reduce their exposure. Instead the markets fell even further, increasing M&B's losses almost fivefold and wiping out more than two years of growth. The group is expected to fall prey to a stronger trade buyer. 

Cheer up, guys! There was also plenty of good financial news to offset the bad. As the annual reporting season got into full swing, several companies reported excellent performance, especially in the IT, telecoms and general consumer products sectors. One of the best sets of results came from Nokia, whose share of the mobile handsets market has continued to soar. For 4Q of 2007, Nokia's market share reached a record high of 40%, as much and more as all three of its closest competitors combined. Net sales for 2007 jumped by an astonishing E10bn to E51bn. Among other companies reporting strong performance were Microsoft, Xerox, Fiat, AT&T and Kimberly-Clark.

French food group Danone has pledged to mount a vigorous defence against a class action law suit launched by an opportunistic American legal firm, supposedly "on behalf of tens of thousands of consumers". The suit alleges that "deceptive" marketing by Danone's US subsidiary, The Dannon Company, has enabled the company "to sell hundreds of millions of dollars worth of ordinary yogurt at inflated prices to responsible, health conscious consumers.” In particular, the suit says that even Danone's own research contradicts its claims that the probiotic elements in its Activia and DanActive yogurts have “clinically and scientifically proven” health benefits. Danone categorically refutes the allegations, stating that the stated benefits of Activia "are completely supported by peer-reviewed science and are in accordance with all laws and regulations. Dannon’s advertising has always been and will continue to be absolutely truthful."

Altria, the conglomerate whose principal remaining subsidiary is the global tobacco giant Philip Morris, confirmed plans to split that business in two and spin off the larger and faster-growing international division as a separate company, possibly as soon as March this year. 

In other deals, Diageo expanded its wine portfolio with the acquisition of Rosenblum Cellars, one of America's leading producers of zinfandel. The price tag was $105m. Diageo is the #2 marketer of premium wine in North America, behind Constellation Brands. European electrical retailer Kesa agreed to sell its second-string French chain BUT, primarily a furniture store, to a private equity consortium. Kesa's main businesses are Darty in France and Comet in the UK. British publishing group Pearson sold its 50% shareholding in FT Deutschland, the German version of the Financial Times newspaper, to partner Gruner + Jahr. The Bertelsmann subsidiary will continue to use the FT brand and content under license. 

Gap confirmed plans to launch its upscale Banana Republic clothing brand in the UK during 2008. The first store will open in London's Oxford Street in March.

In the news this past week: Agencies

WPP CEO Martin Sorrell and Publicis Group CEO Maurice Levy spent some of their spare time at the World Economic Summit in Davos trading insults. Last week, Publicis announced a strategic alliance with Google, a company which Sorrell has already identified as a potential future enemy of the advertising industry. This week, in an interview with Reuters, Sorrell dismissed the tie-up as lacking substance. "Next time I meet with (Google CEO) Eric Schmidt," he said, "I think we'll send out a press release. This morning I met with Maurice Levy, does this mean we're putting together a joint venture? What Publicis is doing represents a little bit of a concern that they didn't get the technology right. I think Maurice is acknowledging a bit of an Achilles heel when it comes to technology." Levy was quick to respond in kind: "I'm sorry Martin said that - it's really cheap, but it's probably the result of his lack of understanding of technology. He's a financier, I'm an engineer, and you can see the difference. I'm pleased with what we have done, and I'm sorry that my dear friend has not understood it." Miaow.

Amanda Walsh, who became CEO of Lowe London in October 2006, will leave the agency in February. She will not be replaced; instead her role will be split between executive creative director Ed Morris and chief strategy officer Rebecca Morgan. Network chairman Tony Wright also works out of the London office. Coincidentally, her erstwhile US counterpart Nancy Hill was also in the news this week. Hill joined Lowe's New York office as CEO in June 2006 and also left the company after just over a year. She has now been named as the first ever female president of the AAAA, the US advertising association known as the 4As, replacing long-time incumbent Burtch Drake.

British interactive media agency i-level was reported by Campaign to be in discussion with several possible strategic partners. The group has until now made much of its independent status, but began talks at the end of the last year with selected financial and strategic partners, with a view to offering one of them a minority stake in the business. Carat and Isobar parent Aegis is said to the front runner to clinch the deal, although i-level is also reported to have received offers from creative agency AKQA as well as private equity investors.

Look who's making a comeback. After several years on the industry sick list, Initiative is showing signs of renewed vigour. Just to prove that its recent win of Hyundai/Kia's US media wasn't a one-off fluke, the Interpublic network this week successfully captured the media business for Cadbury Schweppes' US soft drinks division, beating incumbent Mediaedge:CIA. Billings are around $150m annually. In other assignments, Sanders/Wingo was awarded African-American marketing duties on the Chevrolet account. However the incumbent, Carol H Williams, didn't go home empty-handed, picking up new assignments for Saab and Saturn as well as a renewal of the accounts it already managed for Buick and Hummer. Mother expanded its presence on the Miller Brewing roster for a new craft beers collection. Creative boutique Droga5 captured one of the biggest prizes in Australian advertising with the win of Victoria Bitter (or VB) for Foster's Group. Also down under, M&C Saatchi and MPG retained creative and media respectively for telecoms company Optus. For all other appointments, subscribers can access the full Adbrands Account Assignments database here. 

In the news this past week: Media

Barry Diller's plans to break-up his IAC/InterActiveCorp group into five separate businesses may be coming unstuck as a result of opposition from media investor John Malone. The two men have been allies for more than a decade, and through his Liberty Media vehicle Malone has long been the single biggest shareholder in the IAC roll-up, which at its peak in 2005 contained the Expedia travel business as well as search engine Ask.com, dating service Match.com, mortgage service LendingTree, Ticketmaster and the Home Shopping Network. Malone signed off on the separation of Expedia in 2005, but Diller's latest break-up plans threaten to reduce the value of Malone's shares. Coming on top of the group's already lacklustre stock performance, this has caused a severe rift in the relationship between the two tycoons. Malone is attempting to block Diller's break-up plans, and this has led to an exchange of law suits. Malone's legal submission accuses Diller of attempting to mount a "corporate coup", and calls for his removal as well as that of his various supporters on the IAC board. Diller has responded that the lawsuit is "preposterous" and accused Liberty Media of having "gone off the deep end".

As was widely expected, UK satellite broadcaster Sky was ordered to reduce its shareholding in the country's main terrestrial network ITV from around 18% to less than 7.5%. Sky acquired the shares in 2006, mainly to block an attempt by Richard Branson and Virgin Media to mount a full takeover of ITV. However ITV's shares have fallen substantially in value since then, with the result that Sky could now face a loss of £250m on the disposal. 

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Simon Tesler
Publisher, Adbrands