Planet Media Special

LONDON - Media Week rounds up the big stories of the past two weeks, which have seen major account wins, high street casualties and further cutbacks across the industry.

Planet Media Special
Planet Media Special

The futures of several major UK businesses were thrown into doubt over the festive and New Year period, in turn raising alarm at some of their respective media agencies. Perhaps the biggest of the Christmas business casualties was music retailer Zavvi, formerly Virgin Megastores, which called in the administrator on Christmas Eve. The7Stars picked up the media planning and buying account - worth £6.4m in the year to 31 October - in August. Zavvi has not yet made any changes to its media arrangements.

Just days before Christmas, Whittard of Chelsea announced it had called in the administrator. However, its media agency Feather Brooksbank will be relieved the business was subsequently rescued by EPIC Private Equity. It is business as usual with Whittard as far as the Aegis agency is concerned.

And this week it emerged that Mosaic, the company behind a string of high-street fashion names, such as Oasis, Warehouse, Principles and Coast, is in talks with lenders to secure its future. The news has placed media agency Cream UK on alert, although it has not been advised of any potential changes in its media arrangements. Cream handles media for Mosaic's Oasis (£47,000), Karen Millen (£104,000) and Coast (£38,000).

Also this week, Waterford Wedgwood - which spent £448,000 on media in the year to 31 October - called in the administrator. Media Planning Group is now on alert although no changes are thought imminent.

Meanwhile, another high-street brand, albeit one with a relatively lower media spend, went into administration. On New Year's Eve, Adams Childrenswear - which handles media in-house and spent £21,000 on media in the year to 31 October - has called in the administrator.

Today, the last remaining Woolworths stores will close, effectively stripping ZenithOptimedia of its £17.9m media account.

Note: all media spend data supplied by Nielsen Media Research

According to reports, Aegis chairman John Napier lined up Merrill Lynch to review its business in a move that could see it spin off its market research arm Synovate or forge closer ties with Vincent Bolloré, its largest shareholder. It has been reported that Napier was behind the ousting of Aegis chief executive Robert Lerwill in November. Lerwill had always resisted the break-up of the company and did not welcome attempts by Bolloré, chairman of French advertising group Havas, to appoint his own directors to the Aegis board. Bolloré owns almost 30% of Aegis and is tipped by many to launch a takeover of Aegis in the coming months.

Carat was awarded the consolidated £38m media planning and buying account for Santander, after winning a final pitch against Universal McCann and Arena BLM. The brief combines the media duties for Abbey with those of Alliance & Leicester and the savings arm of Bradford & Bingley, both acquired by Santander in the past six months. MediaCom North, the regional agency that previously handled media for Bradford & Bingley, was not invited to pitch. Carat originally won the Abbey media account in November 2005.

Rounding the year off in style, Carat snatched the consolidated €400m EMEA Kellogg media account from Mindshare. According to Nielsen Media Research, the UK part of the account was worth £72m in 2007 alone. WPP's Mindshare had held the business for eight years, although Carat did take part in a pitch for the business three years ago after which Mindshare retained the brief.

Fiat, the Italian car manufacturer, is set to realign its £150m European media business into WPP-owned agencies, a move that could see the £10m UK account currently handled by Publicis Groupe's Starcom move into the newly formed Maxus (formerly BJK&E). The decision to switch all European media planning and buying activities into WPP agencies comes less than four years after WPP took a 49% stake in the in-house Fiat Media Centre in Italy.

ITV has asked its production companies to cut by 20% the amount they charge the broadcaster for some of its shows, as the ad downturn bites. Production companies are said to be getting nervous about their future as ITV wants more cut-price shows. ITV sources said it remains committed to a £1bn-a-year production budget - but that it is determined to get more for its money.

MTV said it is to axe up to 80 UK-based staff as part of parent Viacom's plans to slash 850 posts worldwide and save at least $200m (£137m) globally. MTV, operator of channels such as MTV One and Paramount Comedy Channel, employs 750 staff in its Camden and Oxford Street offices, in both MTV Networks UK and MTV Networks International.

Websites could be given government-approved age ratings to prevent children accessing inappropriate material, culture secretary Andy Burnham suggested. He said the Government is considering the need for "child safe" websites to curb access to offensive material.

Following a period of due diligence, BSkyB's proposed acquisition of Tiscali UK fell through. According to reports, sources said BSkyB was not willing to pay the mooted £450m, with the price it was offering closer to £350m. An acquisition of Tiscali UK by BSkyB would have doubled the satellite pay-TV broadcaster's broadband footprint to 3.6 million customers.

ITV is preparing to slash the value of its social networking arm Friends Reunited. A review by John Cresswell, ITV's chief operating officer, is thought to conclude that the business is worth less than when the company bought it in December 2005 for an initial £120m. The price then rose to £175m after Friends Reunited's management team met certain performance conditions following the sale.

YouTube suffered a blow after Warner Music pulled hundreds of thousands of its videos from the video-sharing site. The move came after talks over the amount YouTube pays Warner for its videos collapsed.

The world's largest mobile phone company, Nokia, launched the N97 that it dubbed the "world's most advanced mobile computer" as it looks to take on Apple's iPhone and the BlackBerry Storm. The new handset, which observers hope will boost mobile advertising, combines a 3.5-inch touch-screen with a slide-out Qwerty keyboard.

Lenders to Mecom, the newspaper publisher run by former Mirror Group chief David Montgomery, have drafted in PricewaterhouseCoopers to undertake a review amid growing concerns about the operation's future. The embattled media empire secured a two-month stay of execution from lenders as it tries to renegotiate its debts amid rising concern about its future. It is now in talks to sell off a string of assets across Europe.

The UK could switch from analogue to digital radio as early as 2017, a government-led body has concluded. Issuing its final report into the future of UK digital radio, the Digital Radio Working Group (DRWG), established by the Government in November 2007, renewed its commitment to Digital Audio Broadcasting (DAB) as the primary vehicle for digital radio. It also set out a path for migration to digital, identifying the criteria that would need to be met for it to happen and when it might occur.

The board of Informa, the B2B publisher, ordered management to review its business to reduce its debt to less than £1bn. A sale of various assets could now take place. As of its half-yearly results in July, its net debt stood at £1.22bn.

Mobile phone companies and broadband suppliers, such as Vodafone and Virgin Media, will be asked for the first time to share with BT the cost of providing basic phone services, including public pay phones, under plans being considered by communications minister Lord Carter. In his Digital Britain report to be revealed later this month, Carter is expected to scrap requirements for BT to run a phone line into every home in the country. Instead, he is likely to oblige the industry as a whole to provide a basic broadband service to every citizen who wants one - using either fixed line or mobile technology.

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