PODCAST: NATPE Explores the Many Sides of Consumer-Created Content / Issues That Worried Many at the Conference

By Hoag Levins / Published: January 22, 2007

 

NEW YORK (AdAge.com) -- A buzzword as well as a headache pressing ever more painfully on broadcast and cable TV networks, consumer-created content is rapidly rising as potentially as sweeping and transformative a force as the initial emergence of the internet itself.

 

As this podcast indicates, the issues surrounding consumer-created video were high on the minds of attendees and speakers such as Wired magazine editor in chief Chris Anderson at last week's National Association of Television Programming Executives (NATPE) conference in Las Vegas.

 

xxxxxxxx

 

Showdown Looms in Congress Over Drug Advertising on TV

By MILT FREUDENHEIM / Published: January 22, 2007

 

Direct-to-consumer pharmaceutical advertising campaigns, such as this 2005 television commercial for Enbrel from Amgen, are being scrutinized by the Food and Drug Administration over the claims they make.

 

Drug advertising aimed at consumers, a fast-growing category that reached $4.5 billion last year, will face hard scrutiny in the new Congress, according to industry critics in both the House and Senate.

 

The government was displeased with claims in a 2005 AstraZeneca Crestor commercial in 2005. The consumer ads will be on the griddle early in this session at hearings on the user fees that manufacturers pay to speed the reviewing of new drugs by the Food and Drug Administration. The user fee law will die in the fall unless Congress acts to renew it.

 

The pharmaceutical industry, which often gets what it asks for from Congress and the executive branch, seeks to renew the law and add a new set of user fees that would be pay salaries for additional F.D.A. employees to evaluate all consumer drug ads, before they are shown on television.

 

Both the industry and its critics agree that there should be a pause before the advertising starts — to allow time for doctors to learn about a new drug. The companies want the delay to be left up to them, but critics say the F.D.A. should require a wait of up to two years. Criticism of direct-to-consumer advertising has intensified since 2004, after Merck withdrew Vioxx, a heavily advertised painkiller, after a clinical trial showed that it sharply increased the risk of heart attacks and strokes.

 

“From the beginning , everyone, including the company, agreed that not everybody ought to be getting Vioxx,” said Helen Darling, president of the National Business Group on Health, an organization of large employers. “But the ads implied there was a widespread need for it.”

 

Spending on consumer drug advertising, meanwhile, has been growing robustly, from $1.1 billion in 1997 to $4.2 billion in 2005, according to a recent report to Congress by the Government Accountability Office. In the first nine months of 2006, spending rose 8.4 percent to $3.29 billion, on track toward $4.5 billion for the year, according to TNS Media Intelligence, an advertising research firm.

 

Spending on the ads faltered in 2005 after soaring 27 percent in 2004, before Vioxx was withdrawn, said David Kweskin, a senior executive at the firm. “Now they are in a catch-up phase.”

 

Two independent government watchdog groups sharply criticized consumer drug advertising recently, and a separate survey Jan. 9 commissioned by the PricewaterhouseCoopers accounting and consulting firm indicated that skepticism is widespread among the public, too. Only 1 in 10 consumers said the direct-to-consumer, or D.T.C., ads could provide useful information to a large audience, the survey said. (Consumer drug advertising is not permitted in most of the world, except New Zealand and the United States.)

 

The pharmaceutical industry itself acknowledges having an image problem.

 

“It would be naïve to not acknowledge the fact that D.T.C. advertising is also a lightening-rod in the health care debate in this country,” said Billy Tauzin, the former congressman who is now president and chief executive of the Pharmaceutical Research and Manufacturers of America, in a speech to venture capitalists last spring. There is “one great problem” that the manufacturers face, he said: “in a word, it is trust.”

 

“While individual patients find the information useful in discussions with their physicians,” he added in his speech, “patients, physicians and consumers generally express unhappiness with D.T.C. advertising.”

 

Mr. Tauzin’s organization issued voluntary guidelines for consumer ads, which took effect last year. Under the guidelines, the companies have promised to hold off on consumer advertising of a new medicine for an unspecified “appropriate” period. That would allow time to tell doctors about risks and benefits, before television and Web site viewers see an ad and demand a prescription.

 

Twenty-seven members of the pharmaceutical manufacturers organization have endorsed the guidelines, but it is hard to figure exactly how long the delays in advertising will run. Bristol-Myers Squibb has said that it would delay for 12 months. Johnson & Johnson and Pfizer said they would wait six months. The manufacturers group cannot say how other companies have interpreted the guidelines, a spokesman said.

 

But according to TNS Media Intelligence, the companies have actually been waiting 15 months, on average, since the Vioxx debacle.

 

Critics say that even after F.D.A. approval, the full safety profile of a new drug cannot be known until it has been widely used for a number of years.

 

But the manufacturers’ guidelines have to be voluntary, said Daniel E. Troy, a former chief counsel of the F.D.A., because the Supreme Court has “struck down restrictions on advertising of tobacco, alcohol, gambling and unapproved compounded drugs.”

 

The agency sent 15 warning letters to drug companies regarding ads in 2005 and a total of 22 complaints last year.

 

The F.D.A. told AstraZeneca, for example, to “immediately cease” a “misleading superiority claim” in a 2005 TV commercial. The ad said AstraZeneca’s Crestor was “clearly the best” in a “head to head” test with the three largest-selling cholesterol drugs.

Emily Y. Denney, an AstraZeneca spokeswoman, said that by the time the letter was received, in March 2005, the ads were no longer running. The company defended its message in the advertising as “appropriate.”

 

Another F.D.A. letter told Amgen, a biotechnology company, to stop running commercials for Enbrel, a treatment for the skin disease psoriasis, that the F.D.A. said minimized “serious risks” associated with the drug. Amgen immediately withdrew the commercial.

 

xxxxxxxx

 

Wendy's Taps Publicis Shops for $300 Million Account / Saatchi Takes Creative, MediaVest Gets Buying and Planning Duties

By Brooke Capps and Lisa Sanders

 

Published: January 24, 2007

 

NEW YORK (AdAge.com) -- Wendy's is moving its $300 million creative account from Interpublic Group of Cos.' McCann Erickson to Publicis Groupe's Saatchi & Saatchi, and Saatchi sibling MediaVest will handle media buying and planning responsibilities, the marketer said today.

The fate of the Wendy's account has been hotly speculated for more than a year.

 

The media incumbent was Interpublic's Universal McCann. Wendy's also said MDC Corp.'s Kirshenbaum Bond & Partners will work on designated creative projects.

 

Year of speculation

The fate of the account has been hotly speculated about for more than a year. A number of agencies have met with Ian Rowden, senior VP-chief marketing officer, according to these executives. A Wendy's spokesman couldn't be reached, but Mr. Rowden, contacted by cellphone, refused to comment, saying he was in a meeting.

 

The agencies referred calls to the marketer and a Wendy's spokesman declined comment.

 

According to one executive familiar with situation, Mr. Rowden declined the traditional pitch process in favor of a series of meetings with agencies, in which each agency presented past work and talked a little about ideas for the client. "They picked an agency and not a campaign and that is how you should find an agency," said the executive.

 

Wendy's spent $387 million in measured media in 2005 and $290 million from January through September 2006, according to TNS Media Intelligence. With only national and some cable responsibilities, McCann Erickson and Universal McCann handled about half of that media outlay.

 

Good end after bad start

Wendy's rival and market leader McDonald's today reported record earnings for 2006. Wendy's, the No. 3 fast-food chain (behind Burger King), on Jan. 5 posted improved same-store sales during the fourth quarter of 2006, though last year started out disastrously, with negative same-store sales in the first half. Those results had compounded an already bad situation, as 2005 ended with losses. That poor performance prompted a franchisee revolt, and activist investor Nelson Peltz won seats for himself and two disciples on the company's board. Last April, Chairman-CEO Jack Schuessler was ousted.

 

Kerri Anderson, named CEO-president in November after serving as interim chief for several months, reshuffled management and marketing, trimmed employees and shed assets to cut $100 million in costs.

 

While Wendy's same-store sales have turned positive, executives close to the matter said franchisees remained unhappy with sales, given its long drought and the improved sales at rival burger chains. "How long can you be down," asked one industry observer.

 

Vidal Partnership, an independent agency based in New York, retains duties for Hispanic marketing.

 

Kate MacArthur and Matthew Creamer contributed to this report.

 

Google Video, YouTube to Remain Separate Operations / Search Giant to Have Its Properties 'Play to Their Respective Strengths'

By Abbey Klaassen  / Published: January 25, 2007

 

NEW YORK (AdAge.com) -- Google unveiled the first integration between Google Video and YouTube today, when it announced it was adding YouTube video results to its Google Video search index.

 

The company issued a statement to update the status of Google Video and YouTube and said the two services would remain largely independent and "play to their respective strengths." For YouTube, that is remaining the destination for uploading, viewing and sharing videos; for Google Video, that remains search and creating new video technologies.

 

Video search destination

So it would appear Google Video is viewed less as an online video viewing destination and more primarily as a video search destination.

 

Google purchased YouTube for $1.65 billion in early October. The deal closed mid-November but the companies have, until now, stayed relatively mum on whether they would remain entirely independent or work together. Some have even suggested Google should merge Google Video into the more popular and widely known YouTube. It appears the answer to that question lies somewhere in the middle of range of speculation.

 

Google will offer YouTube access to search and monetization platforms -- although the statement didn't indicate what exactly that monetization would look like. Currently, YouTube has sold branded channels and worked with advertisers to sponsor user-generated content contests. It has also worked with TV networks and movie studios to help promote programs and films and offers advertisers the opportunity to buy plum front-page placement. It recently signed a deal with Verizon that offers a subscription mobile service.

 

"Ultimately, we envision most user-generated and premium video content being hosted on YouTube so that it can further enhance the YouTube experience," the statement read. "We also envision YouTube benefiting from future Google Video innovations -- especially those involving video search, monetization and distribution."

 

For Super Bowl Buy, Think Local / With Six Days to Go, Spots Still Available at Affiliates

By Claire Atkinson  / Published: January 25, 2007

 

NEW YORK (AdAge.com) -- With six business days to go until Super Bowl Sunday, the CBS TV Stations group has two to three spots left in each of its local markets for advertisers seeking to take advantage of cheaper local ad buys than coughing up $2.6 million for a national buy.

To get around Anheuser-Busch's beer stranglehold on the Super Bowl in 2005, Heineken found airtime for its ad with Brad Pitt on local affilaites.

 

According to executives on both the sales and buying side of the big game, the priciest 30-second spots are selling for around $300,000, and, not surprisingly, the most expensive local market is Chicago, as the hometown Bears are squaring off against the Indianapolis Colts. Audience levels are expected to be highest those two markets.

 

Good matchup for CBS

The matchup is good news for CBS, which owns its affiliate station in the Chicago market. Julio Marenghi, president-ad sales at the CBS TV Station group, said most new money had come from advertisers that had negotiated a contingency clause that stipulated they would buy time in the game if certain teams reached the final. Otherwise, he said he hasn't experienced a surge of last-minute buys and that he expects local sales will be wrapped up next week.

 

Marketers who can't buy into the big game because of category exclusivity clauses can get around that restriction by doing a local buy. In 2005, Heineken got around Anheuser-Busch's dominance of the beer category on the national level with a huge local spot buy for its ad featuring actor Brad Pitt on local Fox stations. Fox aired the Super Bowl last year.

 

"There are people who wait to see who the teams are to see if [the game is] going to be exciting," said Kathy Crawford, president-local broadcast at MindShare Worldwide.

 

Tough to get around exclusivity

But it might be tougher this year to orchestrate a local buy to get around exclusivity, because CBS owns many of its affiliates in major markets, Ms. Crawford said, and it will likely restrict those stations from selling ads to competitors of marketers that have already bought airtime on a national level.

 

CBS owns stations in Austin, Baltimore, Boston, Chicago, Dallas, Denver, Detroit, Green Bay, Los Angeles, Miami, Minneapolis, New York, Philadelphia, Pittsburgh, Sacramento, Salt Lake City and San Francisco.

 

While a local buy might seem like good value, Ms. Crawford said its important to realize that marketers aren't simply buying an in-game spot from the local affiliate, because affiliates often only allow buys in a package of spots that include pre-game, post-game and possibly other nights in prime-time that week. Marketers need to be prepared to factor that into their buys, she said.

 

Now that the matchup is decided, a number of marketers have chosen to publicize their participation in the game, including Walt Disney Co., InfoUSA's SalesGenie.com, Sprint and Coca-Cola Co. On a national level, CBS said it is 85% sold and is tying up a variety of negotiations.

 

Marketers gauge interest

JoAnn Ross, CBS president-ad sales, said yesterday at a Super Bowl panel, "Like any other event, like the Academy Awards, people want to wait to the last minute to see if they are going to get a discount. What has happened this year is that after our championship game on Sunday, which had one of the biggest ratings in years, there has been a lot of fresh interest."

 

The National Football Conference game on Fox between the Chicago Bears and the New Orleans Saints drew 43.2 million views and a 25.1 rating. The big numbers point to a huge interest in the Feb. 4 Super Bowl. Meanwhile, 46.7 million viewers tuned into CBS to watch Colts make it past their American Football Conference nemesis New England Patriots, the most-watched AFC championship since 1986.

 

"It might be a very intelligent thing for CBS to tell people how well the games did last Sunday," said Aaron Cohen, senior VP-director of national broadcast at Horizon Media.

 

CBS also has plans to involve its star news anchor Katie Couric in its Super Bowl coverage. Ms. Couric, who hosts the "CBS Evening News," will be featured in the pre-game package of events.

 

Xxxxx

PODCAST: NATPE Explores the Many Sides of Consumer-Created Content / Issues That Worried Many at the Conference

By Hoag Levins / Published: January 22, 2007

 

NEW YORK (AdAge.com) -- A buzzword as well as a headache pressing ever more painfully on broadcast and cable TV networks, consumer-created content is rapidly rising as potentially as sweeping and transformative a force as the initial emergence of the internet itself.

 

As this podcast indicates, the issues surrounding consumer-created video were high on the minds of attendees and speakers such as Wired magazine editor in chief Chris Anderson at last week's National Association of Television Programming Executives (NATPE) conference in Las Vegas.

 

xxxxxxxx

 

Showdown Looms in Congress Over Drug Advertising on TV

By MILT FREUDENHEIM / Published: January 22, 2007

 

Direct-to-consumer pharmaceutical advertising campaigns, such as this 2005 television commercial for Enbrel from Amgen, are being scrutinized by the Food and Drug Administration over the claims they make.

 

Drug advertising aimed at consumers, a fast-growing category that reached $4.5 billion last year, will face hard scrutiny in the new Congress, according to industry critics in both the House and Senate.

 

The government was displeased with claims in a 2005 AstraZeneca Crestor commercial in 2005. The consumer ads will be on the griddle early in this session at hearings on the user fees that manufacturers pay to speed the reviewing of new drugs by the Food and Drug Administration. The user fee law will die in the fall unless Congress acts to renew it.

 

The pharmaceutical industry, which often gets what it asks for from Congress and the executive branch, seeks to renew the law and add a new set of user fees that would be pay salaries for additional F.D.A. employees to evaluate all consumer drug ads, before they are shown on television.

 

Both the industry and its critics agree that there should be a pause before the advertising starts — to allow time for doctors to learn about a new drug. The companies want the delay to be left up to them, but critics say the F.D.A. should require a wait of up to two years. Criticism of direct-to-consumer advertising has intensified since 2004, after Merck withdrew Vioxx, a heavily advertised painkiller, after a clinical trial showed that it sharply increased the risk of heart attacks and strokes.

 

“From the beginning , everyone, including the company, agreed that not everybody ought to be getting Vioxx,” said Helen Darling, president of the National Business Group on Health, an organization of large employers. “But the ads implied there was a widespread need for it.”

 

Spending on consumer drug advertising, meanwhile, has been growing robustly, from $1.1 billion in 1997 to $4.2 billion in 2005, according to a recent report to Congress by the Government Accountability Office. In the first nine months of 2006, spending rose 8.4 percent to $3.29 billion, on track toward $4.5 billion for the year, according to TNS Media Intelligence, an advertising research firm.

 

Spending on the ads faltered in 2005 after soaring 27 percent in 2004, before Vioxx was withdrawn, said David Kweskin, a senior executive at the firm. “Now they are in a catch-up phase.”

 

Two independent government watchdog groups sharply criticized consumer drug advertising recently, and a separate survey Jan. 9 commissioned by the PricewaterhouseCoopers accounting and consulting firm indicated that skepticism is widespread among the public, too. Only 1 in 10 consumers said the direct-to-consumer, or D.T.C., ads could provide useful information to a large audience, the survey said. (Consumer drug advertising is not permitted in most of the world, except New Zealand and the United States.)

 

The pharmaceutical industry itself acknowledges having an image problem.

 

“It would be naïve to not acknowledge the fact that D.T.C. advertising is also a lightening-rod in the health care debate in this country,” said Billy Tauzin, the former congressman who is now president and chief executive of the Pharmaceutical Research and Manufacturers of America, in a speech to venture capitalists last spring. There is “one great problem” that the manufacturers face, he said: “in a word, it is trust.”

 

“While individual patients find the information useful in discussions with their physicians,” he added in his speech, “patients, physicians and consumers generally express unhappiness with D.T.C. advertising.”

 

Mr. Tauzin’s organization issued voluntary guidelines for consumer ads, which took effect last year. Under the guidelines, the companies have promised to hold off on consumer advertising of a new medicine for an unspecified “appropriate” period. That would allow time to tell doctors about risks and benefits, before television and Web site viewers see an ad and demand a prescription.

 

Twenty-seven members of the pharmaceutical manufacturers organization have endorsed the guidelines, but it is hard to figure exactly how long the delays in advertising will run. Bristol-Myers Squibb has said that it would delay for 12 months. Johnson & Johnson and Pfizer said they would wait six months. The manufacturers group cannot say how other companies have interpreted the guidelines, a spokesman said.

 

But according to TNS Media Intelligence, the companies have actually been waiting 15 months, on average, since the Vioxx debacle.

 

Critics say that even after F.D.A. approval, the full safety profile of a new drug cannot be known until it has been widely used for a number of years.

 

But the manufacturers’ guidelines have to be voluntary, said Daniel E. Troy, a former chief counsel of the F.D.A., because the Supreme Court has “struck down restrictions on advertising of tobacco, alcohol, gambling and unapproved compounded drugs.”

 

The agency sent 15 warning letters to drug companies regarding ads in 2005 and a total of 22 complaints last year.

 

The F.D.A. told AstraZeneca, for example, to “immediately cease” a “misleading superiority claim” in a 2005 TV commercial. The ad said AstraZeneca’s Crestor was “clearly the best” in a “head to head” test with the three largest-selling cholesterol drugs.

Emily Y. Denney, an AstraZeneca spokeswoman, said that by the time the letter was received, in March 2005, the ads were no longer running. The company defended its message in the advertising as “appropriate.”

 

Another F.D.A. letter told Amgen, a biotechnology company, to stop running commercials for Enbrel, a treatment for the skin disease psoriasis, that the F.D.A. said minimized “serious risks” associated with the drug. Amgen immediately withdrew the commercial.

 

xxxxxxxx

 

YouTube gives Consumers the power to make or Break a Brand ; ON ADVERTISING

Jan 15, 2007 - Independent-London / Author(s): Claire Beale

 

There are people out there who think that truth in advertising is as much of an oxymoron as an honest politician. Really. Ad execs don't come bottom in the honourable profession stakes for nothing; used-car salesmen and estate agents are generally considered more believable.

 

Beauty brand Dove has built an entire market out of exploiting this view. Its "Real Women" campaign has tried to unpick the (lazy) conventions of the beauty ad industry and put the truth back into advertising. It's been a very successful strategy and has won marketing and advertising awards the world over.

 

You've almost certainly seen some of the ads (they're so different that they really stand out: fat women in their undies and proud of it). But there was a US viral released last year which sums up the approach. It shows how a rather ordinary-looking woman undergoes a total (computer-enhanced) transformation in the name of advertising. For anyone who has ever felt even vaguely inadequate when faced with perfect people in glossy ads, the Dove film Evolution on YouTube is required viewing.

 

Anyway, now Dove is going further and throwing its brand name into the thick of the user-generated advertising debate. It's a hot topic amongst marketers generally. A couple of weeks ago, I wrote in this column about how the internet was helping democratise advertising: ads are no longer the preserve of the advertising agency and punters are having a go themselves, making films about brands and posting them on sites like YouTube. Incidentally, someone's made a brilliant spoof of Dove's Evolution, called Anti- Dove Parody, showing a beautiful man guzzling beer and burgers until he becomes a hideous slob.

 

That's user-generated advertising for you.

Some advertisers feel deeply uncomfortable about all of this. Coca-Cola went excruciatingly corporate when its customers started posting films showing bottles of Diet Coke exploding under the influence of a packet of Mentos mints: "Coca-Cola is for drinking, not playing with" summed up Coke's response.

 

No such po-faced behaviour from Dove, though. Dove "wants you to create its next great television ad" for its cream-oil range; and proclaims ,"it's easier to create your own ad than you think," (which raises some interesting questions about how much Dove pays its ad agency Ogilvy for its work). Dove will then screen the best user-generated entry in an ad-break during the Oscars.

 

This is a really smart strategy: not only does it give Dove credentials amongst the YouTube generation, but it also creates a high-profile, PR-laden and extremely cost-effective ad campaign. And the entries will no doubt throw up some interesting consumer insights, too.

 

This is modern marketing in the digital age and allows Dove to play the user-generated game with all the kudos that brings without ceding control. Where it all leaves the ad agency creative department, though, is another thing altogether.

 

TALKING ABOUT truth in advertising, if you're cynical enough to believe this is a deeply cynical industry, check out a couple of films on YouTube. One old, one new, this is ad-land at its most cynical, superficial and hilarious. The first, Truth in Advertising, is a few years old now, and particularly North American. It's about the making of an ad, from briefing to the director's cut, and everyone in it talks, well... the truth.

 

So the marketing director says: "I like making decisions on multi- million dollar campaigns by basing it on what my peabrained, disinterested wife thinks about it"; the creative team admits, "we're two untalented hacks riding on the success of a campaign we lucked into four years ago".

 

This film takes dialogue that has run through the heads of a million ad execs around the world, and speaks it. It's made by the Canadian commercials production company Avion Films, so you have to think they know what they're talking about.

 

Now there's a new film out by a British team on a similar theme. This one's called Truth in Ad Sales and the viral has spent the last week going through adland like a batch of dodgy oysters.

 

It's a shameless, paler rip-off of the original, set this time in adland's media world, and it employs the same tell-the-truth device (media buyer to pa: "I'm going to tell you I DJ at the weekends, when really I queue up outside Chinawhite begging to be let in, before I get a night bus home to my mum's for a quick wank and a Horlicks."). Again, the film has been made by a team of people who work in the industry, and it's in this week's top 10 comedy films on YouTube. This time the client is a nappy-rash cream, Kiddi Care, and the hapless media agency comes up with a strategy that sees Kiddi Care sponsor an extreme sports show.

 

The strapline is genius: "Feel the rush, cure the rash."

 

Both these films enshrine universal truths about people in the business. And they're not a bad introduction to adland's worst practices and what your colleagues really think of you.

 

REGULAR READERS will remember last week's story of the Asda review: a creative pitch called by the supermarket giant's new marketing director Rick Bendel, who joined the company from its ad agency Publicis last autumn.

 

Bendel was the man responsible - to a greater or lesser extent, depending on who you believe - for Asda's advertising at Publicis. His decision to review seemed like a kick at his own advertising strategy.

 

Anyway, last week Bendel sealed the drama by snatching the entire [pound]44 million account from his old agency, which had held the business for 17 years. The winner is Fallon, Campaign's Agency of the Year, and apparently Fallon has come up with a stunning new strategy for Asda (expect the death of the arse-slapping "Asda- price" routine).

 

You can't fault Bendel's choice of agency. Fallon is on a high - this is the agency responsible for the Sony Bravia ads that have swept creative awards and caught people's imagination. But the power- play is fascinating.

 

As you might expect, Publicis insiders reckon it's Bendel's fault that Asda's ads have ranged from forgettable to excruciating, and he's now under pressure to deliver something stunning. If he had decided to stick with Publicis and turn the strategy around, the question would be why Publicis never managed to deliver great work while he was there. What is also true, though, is that Bendel knows where Publicis's weak points are and what the agency is capable of, or not.

 

By appointing Fallon, Bendel is making a clean break of it and, as I said, Fallon is a trophy agency right now. But Fallon could do worse than have a quiet word with their Publicis Groupe cousins, Bartle Bogle Hegarty. BBH had the Asda business in the 1980s and it nearly broke the agency: retail clients are notoriously difficult to handle and often culturally opposed to the ethos of a great creative agency.

 

If Fallon can deliver what Bendel's after and still retain its hot-shop credentials, then this could be a persuasive early bid for the Agency of the Year accolade once again.

 

Claire Beale is editor of 'Campaign'

 

BEALE'S BEST IN SHOW: NHS ANTI-SMOKING CAMPAIGN

 

New year's resolutions are a time-honoured tradition. Giving them up within a fortnight is another. This ad from Miles Calcraft Briginshaw Duffy hopes to persuade people to give up smoking by underlining the strength of nicotine's physical hold over its addicts. Giant fish hooks snare unsuspecting smokers and lure them to the nearest packet of fags.

 

It's a powerful image, though not as gruesome as some anti- smoking campaigns. It lacks the impact of ads featuring real-life cancer victims or the ones that show how nicotine clogs arteries.

 

Apparently, the average smoker feeds their habit with about 5,000 cigarettes a year, a phenomenal amount and a fact that, I suspect, most smokers are in denial about. Although this ad might not be as gruesome as its predecessors, for anyone whose new year's resolution is wavering, it's a strong reminder of the physical as well as psychological battle you need to wage against the addiction.

 

xxxx

 

Fed-up Agencies Quit Punching the Clock / Following in Crispin's Footsteps, Shops Charge for Ideas Instead of Time

By Lisa Sanders and Alice Z. Cuneo / Published: January 22, 2007

 

NEW YORK (AdAge.com) -- Crispin Porter & Bogusky's bold deal with Haggar, struck last year, in which the agency took an equity stake as part of its compensation, stood out as a rare exception from the sad status quo of agencies selling ideas as if they were pork bellies to be traded by the ton. "We're in the intellectual-property business," Crispin's Jeff Hicks said at the time. "We don't sell time."

Rob Siltanen, chairman-chief creative officer, Siltanen & Partners, owns the rights to the wee wisecracker Baby Bob.

 

Agencies have long rued compensation arrangements that see them sized up by the number of man-hours they commit to solving a marketer's problems rather than by the success of their solutions. And, as consumer-empowering technologies such as DVRs put a premium on agencies' ability to produce engaging content, they've created an increasing number of entertainment properties, but they very rarely get to own them. Now, finally, that is starting to change, and others are adopting a Crispin approach, according to experts involved in crafting agency-advertiser compensation contracts.

 

Innovation reaches critical mass

"The discussion is beginning to shift from 'What does it cost to generate work and services a client wants?' to 'What is the value of the services and materials the agency is creating for the client?"' said Ronald Urbach, partner, Davis & Gilbert. "Innovation is reaching a critical mass."

 

Like Crispin, Anomaly, the New York-based boutique started by ex-TBWA executive Carl Johnson, eschews time sheets and instead gets paid for a variety of activities. "We price ourselves on the subjective theory of value," said partner Jason Deland. "That allows us to structure more varied, entrepreneurial compensation agreements." With client Virgin America, for instance, Anomaly is helping design an in-flight entertainment system that will contain content and be commerce-enabled. The company will get a percentage of the revenue from the system's sales.

 

Missed opportunities

One of the sorrier catalysts, from the perspective of older general-market agencies, is a long list of missed revenue opportunities. Goodby, Silverstein & Partners, San Francisco, which developed the "Got Milk?" campaign in 1993, reaped no extra benefits from the millions of dollars in licensing fees and royalties generated after the campaign's launch. McCann Erickson created the concept for client Staples' plastic Easy Button, a $4.99 gadget that's sold more than 1 million units since its launch in January 2005, but received no financial reward beyond its original fees.

 

"We certainly hope the agency will develop alternative revenue sources for our clients," said Harold Sogard, partner and general manager at Goodby. However, he said, when creative produced for a marketer goes beyond its original intention of selling a product or service, new language in some of the agency's contracts calls for "some sort of royalty" to be paid.

 

Rob Siltanen, chairman-chief creative officer, Siltanen & Partners, is well-known as the inventor of Baby Bob, a talking baby with the mouth of a wisecracking old man, for client Freeinternet.com. When the dot-com went out of business, Mr. Siltanen exchanged rights to the character for the money owed the agency. He then took Baby Bob to CBS, which used the character for a short time; later, Quizno's used Baby Bob to hawk its sandwiches. Mr. Siltanen won't reveal how much he's made by hanging onto character rights but said, "It's been very lucrative."

 

Content creation

Agencies' moves into content creation -- such as Bartle Bogle Hegarty, New York's co-production last year of an MTV special that's set to become a TV show -- is another factor for rethinking traditional labor-based compensation models. Agencies might share syndication revenue or retain rights to creative content. When Crispin created a video game for Burger King, it was paid a fee in addition to what it is paid to create advertising, one executive said, although the agency does not receive a percentage of sales. A Crispin spokeswoman declined to comment.

 

Even agencies that remain focused on old-media advertising are benefiting from the move away from cost-plus or labor-based agreements.

 

Brad Brinegar, chairman-CEO of McKinney, Raleigh, N.C., is a big believer that agencies should be paid for the value they create and has been developing new compensation forms for several years. With one client, in addition to a base fee, McKinney took 50,000 stock options in the company.

 

"They were growing sales and profits regularly; our assumption is that we could increase their price-to-earnings ratio," he said. With another, McKinney aligned its financial objectives with those of the client's chief marketing officer so the agency's bonus was "based on the same criteria as his," Mr. Brinegar said.

 

Long-running ads

Consider the value to a client of a campaign that's run over a decade, such as MasterCard's "Priceless," created by McCann. "We're pushing more and more" for contract provisions that entitle agencies to additional payment if creative is used beyond a certain amount of time, said Rick Kurnit, attorney, Frankfurt Kurnit Klein & Selz.

 

Another area under discussion: If an account leaves an agency but the campaign created by the shop continues, should the agency continue to be paid? "Perhaps the work can be used in one geographic territory, such as the U.S., but if it goes global, a new agreement is necessary," said Mr. Urbach, who advocates approaching client-agency compensation agreements like prenuptial agreements: "Instead of deciding it later, decide it now."

 

xxxxxxx

 

TBWA Drops Out of Sprint Creative Review / Agency Was Telecom's Incumbent for Consumer Advertising

By Brooke Capps and Alice Z. Cuneo / Published: January 22, 2007

 

NEW YORK (AdAge.com) -- Omnicom Group's TBWA/Chiat/Day, New York, said it has dropped out of the Sprint creative advertising account review.

Sprint's other incumbent, Publicis & Hal Riney, is still in the review.

 

Publicis & Hal Riney, San Francisco, Sprint's longtime agency for general advertising and the incumbent on the marketer's business-to-business account, has said it will participate in the pitch. TBWA handled Sprint's consumer advertising.

 

Sprint executives did not return calls and e-mails seeking comment by deadline.

 

'Strategic decision'

In a statement released today, TBWA said, "This was a strategic decision made with a clear understanding of Sprint's challenged business situation, and how we can best help them going forward. We remain very committed to Sprint as a partner for the remaining aspects of service including retail and the marketing services assignments we have through Tequila."

 

The No. 3 telecom company, which spends $1.6 billion in marketing, cited a need for "fresh thinking" when it called the account into review earlier this month.

 

Meetings with yet undetermined agencies are taking place this week.

 

Xxxx

 

BELLWETHER SET FAIR FOR 2007 UK ADVERTISING GROWTH

 

The Q4 2006 Bellwether Report, the quarterly survey of marketing spend, published by the UK's Institute of Practitioners in Advertising and researched by NTC Economics, reveals a stabilisation of marketing budgets.

 

Contrasting with the sharp downgrades seen earlier in the year this reflects improving business conditions. In fact, budget setting across the whole marketing spectrum will be the most buoyant in seven years for 2007-08.

 

Total marketing budgets were revised down in Q4, but only very marginally. However, the internet saw by far the strongest upward revision, with the sharpest gain since the first quarter of 2000. Although traditional media still holds the lion's share of marketing spend, the internet is now estimated to account for 5% of all marketing budgets.

 

Highlights of the Q4 2006 report include:

Despite the improved performance in the second half of the year, 2006 is likely to have seen the weakest growth in marketing communications since 2002.

In Q4, 17% of companies reported increased total marketing budgets while 18% reported a decrease, so only a marginal net decline.

 

Although traditional advertising continued to lose share of total marketing spend the overall reduction was slight. 18% of companies reported a downward revision but 15% reported an increase.

 

Internet marketing budgets out performed all other sectors in Q4, with a net balance of 31.5% of companies reporting an increase across all business sectors.

 

Direct marketing was the only main category of marketing (i.e. excluding the internet) to see a rise in budgets in Q4, with a net balance of 4.1% of companies reporting an increase. Upward budget revisions were linked to new campaigns to meet business expansion as well as a shift in strategy towards direct marketing.

 

By sector, increases to budgets were most widely reported in IT and computing, travel, entertainment, and the financial services. Budget cuts were most widely reported in FMCG, industrial and utilities and the autos sector.

 

Non-traditional marketing, including the internet and sponsorship is so far showing the strongest growth in future spend,