Cossette announces the implementation of an executive retention program and updates on its strategic review process

http://finance.yahoo.com/news/Cossette-announces-the-cnw-1697015310.html?x=0&.v=1
KOS (TSX)QUEBEC CITY, Aug. 27 /CNW Telbec/ - Cossette announces that its Board of Directors, having received a favourable recommendation from its Special Committee with the assistance of its legal advisor and the financial advisor of the Company, has approved (Messrs. Claude Lessard and Pierre Delagrave abstaining) the implementation of a retention program for executives, effective immediately.
The decision to implement a retention program was made in the context of the unsolicited and non-binding proposal by Cosmos Capital to acquire all the shares of the Company not already owned by its members and the decision of the Board of Directors of the Company to publicly and actively solicit proposals from third parties interested in the Company. The retention program is designed to facilitate retention of executives, address their concerns at this time of uncertainty and maintain stability.
The retention program includes customary change of control agreements with executives providing for severance payments in case of a change of control of the Company and the termination of employment of executives under certain specific circumstances. It also includes retention bonuses for executives (except for Messrs. Claude Lessard and Pierre Delagrave) totalling approximately $3,500,000. The retention bonuses will be payable six months after the change of control of the Company. If the Board of Directors ends its strategic review process, it may also decide, depending on the circumstances, to pay the retention bonuses. This program will be rolled out in the next few days.
"The Special Committee is very satisfied with the retention program Cossette is implementing. In the new context like the one Cossette is facing, it is imperative to reassure our clients by retaining our people in order to maintain our high level of service. This measure also constitutes an important factor for maximising value for shareholders", commented Mr. Jean Lavigueur, Chairman of the Special Committee.
Update on Strategic Review Process
Since the August 14th announcement that the Board of Directors of the Company would actively solicit proposals from third parties interested in acquiring the Company, BMO Capital Markets, the financial advisor of the Company, has broadly solicited expressions of interest from third parties in respect of a potential acquisition and has held encouraging dialogues with them. Cossette has executed confidentiality and standstill agreements with a number of these parties and provided them with access to an extensive electronic data room and the opportunity to conduct a thorough due diligence process on the Company.
The Company cautions shareholders that there is no assurance whether the Company will receive a definitive proposal with respect to a potential acquisition as a result of this process. Also, even if a definitive proposal is received, there is no assurance that such a proposal will be recommended by the Special Committee or the Board of Directors or that such a proposal will be implemented.
Cossette Inc. offers a full range of leading-edge communication services to clients of all sizes, including some of the most prestigious brands in the world. A customer-driven organization built around highly specialized business units, Cossette also offers Convergent Communications(TM), a unique working method that brings added value to the client by integrating various services offered by the Group, including strategic planning and research, advertising, media buying and channel planning, sales promotion, direct response, database and direct marketing, customer relationship management, interactive marketing and technology solutions, public relations, organizational communication and change management, sponsorship and alliance marketing, branding and design, ethnic marketing, business-to-business communications (B2B practices) and print and video production. Cossette has approximately 1,485 employees and offices in Quebec City, Montreal, Toronto, Vancouver, Halifax, New York, Irvine, Los Angeles, London and Shanghai.
For further information
Financial Analysts only: Martin Faucher, Vice-President and Chief Financial Officer, (418) 521-3784Investors: Francis Trudeau, Director, Acquisitions and Investor Relations, (514) 282-4633Medias: Sylvie Isabelle, Optimum Public Relations, (418) 521-3184Source: Cossette Inc., www.cossette.com

WPP suffers ‘severe’ drop in profitability

WPP, the world’s largest marketing and communications group by revenues, reported a “severe” fall in first-half profitability and warned that growth was unlikely in 2010.

WPP’s operating margin, a closely-watched metric among analysts, fell to 8 per cent from 13.6 per cent in the first half of last year, below market expectations of about 10 per cent.

“I think we’d have to admit we should have moved quicker” in cutting costs, Sir Martin Sorrell, chief executive, told the Financial Times.

Western Europe is the “toughest region in the world” facing the “slowest growth rate out of the recession”, Sir Martin said. As a result, WPP is focusing on faster-growth markets such as Brazil and China, digital marketing and data services.

WPP’s failure to cut costs fast enough to cope with the recession has reopened questions about how easy it is to manage large marketing holding groups.
Groups such as Omnicom, Publicis, Interpublic and WPP are all comprised of many small agencies, with varying degrees of integration and co-ordination by their parent. Even when bosses such as Sir Martin Sorrell foresee revenue contractions ahead, subsidiary agencies are not always responsive to demands to cut staff and other overheads.
“It’s not like GM saying they are going to shut down a factory or a line. They can make a decision based on macro-economic factors quite easily,” says Anthony de Larrinaga, media analyst at Jefferies. “[Advertising] is not a homogeneous business, it’s a people-based business. It’s difficult to micromanage tens of thousands of staff.”
Budgets are typically set by canvassing individual agency chiefs, who may be misled or flattered by ebullient clients. WPP said on Wednesday that as recently as last November it was budgeting for flat revenues in 2009.
After missing budgets for each of the first five months of 2009, only in June were costs brought into line with revenues.
“With the benefit of hindsight,” said Sir Martin, “you would have taken out more cost in the fourth quarter of 2008.
The higher costs and longer timescales of cutting jobs in western Europe, compared with the rest of the world, was also a significant factor in higher-than-expected severance costs, he said.

http://www.ft.com/cms/s/0/5c776f08-9265-11de-b63b-00144feabdc0.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058

Exhibition industry continues slide, according to CEIR Index

The exhibition industry experienced an overall decline of 10.9% in the second quarter compared with the same period last year, according to the Center for Exhibition Industry Research's annual CEIR Index.
CEIR blamed the decline on the continuing recession. The second quarter results did, however, mark a 0.7% increase in performance compared with this year's first quarter.
The CEIR Index measures attendance, net square feet, revenue and number of exhibiting companies.
http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090807/FREE/908079996/1078/newsletter011

Wildfire Acquires Keystone Marketing

http://promomagazine.com/eventmarketing/news/wildfire-acquires-keystone-marketing-0818/
The deal expands Wildfire’s event marketing services and adds a number of high profile clients to its roster, including AAA, Kraft Foods Global and The Hershey Co. Both companies are located in Winston-Salem, NC.
The Keystone office and 13 of its employees have integrated into Wildfire, which has 40 employees. The principle of Keystone, Roger Bear, is retiring after 20 years at the helm. Candy Borreson, Beth Meadlock and Mike Peeler who made up the Keystone marketing leadership team remain on as leaders in the integrated firm.
Keystone specializes in field marketing, promotions event activation, strategic planning, licensing and trade relations. It has a deep history in motorsports and golf having worked in the past with the U.S. Army, Jim Beam Brands, AAA Motor Clubs, Pfizer and Stacker among other clients, the companies said.
Wildfire’s clients include, Hanesbrands Inc., Lowes Home Improvement, Microban, BB&T, Dewey’s Bakery and Salem Baking Co. and Universal Furniture, as well as recently added clients Wake Forest University Athletics and Noble’s Grille.

Multicultural Agencies Unite

http://www.adweek.com/aw/content_display/news/agency/e3i2e9044066d727a1a3b3a7ea74dba18f7

Two independent ad shops, Miami-based MGSComm and New York-based Reynardus & Moya, have merged, creating what they say is one of the largest minority-owned communications firms in the U.S.

MGSComm is the surviving entity and will expand to 90 employees with more than $100 million in annual billings.

The agencies offer both multicultural and general-market services with clients including Wyeth, Pfizer, Schering-Plough, Southeast Toyota Distributors, Scion, Publix Super Markets, BB&T, Tiffany & Co. and Extenda (the trade authority of Andalucia, Spain), among others. MGSComm also handles both general-market and Hispanic duties for the Florida Lottery, Florida Power & Light and the Mexico Tourism Board.

Forrester Rates Digital Shops

http://www.adweek.com/aw/content_display/news/digital/e3i111888fc4afd5a6a8ec052dd4d77d228 OgilvyInteractive, Sapient Interactive, R/GA, VML, Wunderman, Razorfish and Organic scored best and were named category "leaders" by Forrester.

Forrester praised OgilvyInteractive's breadth of services and ability to run integrated campaigns using Ogilvy's broader resources. Sapient's tech prowess was noted, and R/GA was cited for having a clear mission as the "agency for the digital age" and excelling in new technologies and trends.

VML was praised for its strength in an array of areas -- it garnered the highest scores in "current offering" -- while Razorfish's suite of digital services and emerging-media capabilities won plaudits. The strength of Wunderman's Zaaz in analytics garnered praise; and Forrester cited Organic's analytics and positioning as a "total experience" marketing advisor to clients.

Forrester's evaluation included a second rung of "strong performers." They are: Rapp, Draftfcb, Rosetta and AKQA. Corcoran said AKQA was hurt by not having a strong analytics offering compared to its peers and not faring as well in client evaluations.

Cosmos threatens to walk from Cossette offer

http://www.marketingmag.ca/english/news/agency/article.jsp?content=20090807_162216_7256
Cosmos Capital Inc. has threatened to abandon its bid to purchase Cossette Inc. unless it’s given access to the communication company’s books.

The group lead by former Cossette partners decried the senior management team’s “lackadaisical response” to its July 20 offer, which values the firm at $82.7 million. It set an Aug. 17 ultimatum to gain initial access to the company’s dataroom to conduct due diligence.
“In the event that we are not, we will reassess our price and interest in the transaction,” it wrote in a letter to a special Cossette board committee created to review the offer.

Notwithstanding Cossette’s poor operating and financial performance of late, Cosmos said it is willing to reaffirm its price if it is granted such access.

Cosmos Capital, headed by a former Cossette president Francois Duffar and former Cossette vice-president Georges Morin, has offered $4.95 cash per share, a 52% premium to the July 17 closing price for Cossette shares.

The shares have since risen to $5.15 on the Toronto Stock Exchange.

Publicis to buy Microsoft's Razorfish

http://www.theglobeandmail.com/globe-investor/publicis-to-buy-microsofts-razorfish/article1246146/ the transaction is being valued at $530-million (U.S.), expected to be provided in a combination of cash and 6.5 million Publicis Groupe treasury shares. As part of the agreement, Publicis, whose clients include Ford Motor Co., Best Buy Co. and McDonald's Corp., will purchase ad dollars over a five-year term across Microsoft's digital properties.

Razorfish will continue to operate under its brand name and be part of VivaKi, the new Publicis Groupe entity created in June 2008 to reflect independent operations of Digitas, Starcom MediaVest Group, Denuo and ZenithOptimedia. Razorfish's management team, led by CEO Bob Lord, will remain unchanged.

Mr. Levy added that when the transaction is completed, about 25 percent of the company's annual revenue will come from digital communications. The deal is expected to close during the fourth quarter of 2009.

Connelly Partners Acquires Mindfire

http://www.adweek.com/aw/content_display/news/agency/e3idb676dc68387c3ad4495d5ffc4b32950

According to Connelly, absorbing Boston-based Mindfire allows the agency to gain added scope, services and resources along with seasoned interactive talent. Plus, bulking up when many of is competitors are scaling back should better position Connelly in the post-recession marketplace. The desire to get up to speed in search-engine marketing, one of Mindfire's areas of expertise, was a key motivation for doing the deal.

Connelly ranks among New England's larger independent ad shops, working for the Massachusetts Office of Travel and Tourism, Papa Gino's, BJ's Wholesale Club, Bertucci's and D'Angelo.

LB2 acquires Ketchum Directory Advertising

LB2 Group has acquired Ketchum Directory Advertising from Omnicom Group.
Financial terms of the deal were not disclosed.
Ketchum Directory Advertising provides print and online directory advertising, as well as search marketing. LB2 said the acquisition will help it provide its clients with more efficient and cost-effective marketing programs.

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http://www.btobonline.com/apps/pbcs.dll/article?AID=/20090717/FREE/907179994/1078/newsletter011

Marketing database company Alterian has acquired social media monitoring company Techrigy.
According to Alterian, the acquisition of Pittsford, N.Y.-based Techrigy will provide marketers with an ability to monitor brand reputation, identify key influencers in social networks, launch competitive analysis and market research, support loyalty initiatives and engage directly with customers online.
Alterian acquired Techirgy in exchange for $4.1 million worth of Alterian shares and $900,000 worth of shareholder loans.

Meredith Takes Stake In Mobile Marketing Firm

http://directmag.com/mobile/news/meredith-mobile-hyperfactory-0722/
Meredith Corp. has taken a stake in The Hyperfactory, an independent mobile specialist. The value of the stake was not disclosed.
Mobile is becoming a vital ingredient in integrated marketing campaigns, giving consumers access to brands at key decision points in the purchasing cycle for awareness, consideration and calls to action,” said Wendy Riches, EVP, Meredith Publishing Group, in a statement. who oversees Meredith Integrated Marketing. “The Hyperfactory is the ideal partner for us to help us better serve our partners who are recognizing and seeking to capitalize on this trend.”
The investment enhances the services and capabilities of Meredith Integrated Marketing, the business-to-business unit Riches oversees which provides leading corporations and brands with custom print and online communications for their customers. The investment will not have a material effect on Meredith’s financial performance in fiscal 2010, according to a statement.
Hyperfactory, which was founded in 2001, offers creative initiatives through mobile channels.
“Joining forces with The Hyperfactory provides Meredith Integrated Marketing with access to the fast-growing mobile category and complements our recent acquisitions in the digital marketing space,” says Jack Griffin, president of the Meredith Publishing Group, in a statement. “The Hyperfactory’s capabilities fall directly in line with our strategic goals and present significant opportunities for our business-to-business engagements.”
Since 2006, Meredith Integrated Marketing has added interactive marketing services firms O’Grady Meyers and Genex; viral marketing leader New Media Strategies; healthcare marketing communications specialists Big Communications; and database strategy and analytics experts Directive.

AMP Agency Buys Rock Coast Media

http://promomagazine.com/interactivemarketing/news/amp-buys-rock-coast-media-0728/
Experiential marketing agency AMP Agency, has acquired Rock Coast Media, Inc., an interactive marketing agency focusing on search engine marketing and optimization and social media strategy.

Rock Coast Media's staff of 10, that had been based in Newburyport, MA, has joined AMP Agency's Boston-based office. Anderson, who operated out of San Francisco, will remain there operating an AMP office, AMP spokesperson Jodi Smith said.

Publicis Is in Lead to Acquire Razorfish

French advertising company Publicis Groupe is in the lead to buy Microsoft Corp.'s digital ad agency, Razorfish, according to people familiar with the matter.
At least two of the world's largest advertising holding companies have made bids for Razorfish, including Japan's largest advertising firm, Dentsu, the people said. Microsoft has told Dentsu that it is entering into due diligence with another bidder, according to one of the people. There is no deal yet.
Publicis bid between $500 million and $600 million for Razorfish, and Dentsu made a higher offer, according to people familiar with the bidding http://online.wsj.com/article/SB124951418129209169.html

Ad CEOs Say Downturn's Bottom Appears at Hand

http://online.wsj.com/article/SB124834599050475447.html?mod=dist_smartbrief
Global ad Omnicom Group Inc. and Publicis Groupe SA reported significant declines in revenue and profit but indicated a bottom may be at hand in the global advertising downturn.
"We don't see a recovery, but we feel we've hit the troughs," said John Wren, chief executive of Omnicom. He added that it will take a couple of quarters to cycle through the current downturn, and a couple more before growth comes.
"We believe the worst is behind us," said Publicis Chief Executive Maurice Lévy. "All figures should be less in decline in the third quarter than in the second quarter."
"The revenue decline in the second quarter was slightly greater than we had anticipated," said Omnicom's Mr. Wren, who also pointed to pressure on the company's events, sports-marketing and recruitment businesses.
Both CEOs were cautiously optimistic about the rest of 2009 and 2010. Mr. Wren said he expects "modest" growth going into 2010, helped by the increase in new accounts up for grabs. Over the past few weeks, the new-business pipeline on Madison Avenue has begun to heat up, with big advertisers like Unilever, Bayer AG and Wendy's, a unit of Wendy's/Arby's Group Inc., placing their accounts in review.

With Media Savings in Hand, RB to Boost Spending in Promotions

http://adage.com/article?article_id=138201
Reckitt Benckiser -- or RB as it's re-branding itself -- had been virtually the only publicly traded package-goods player to maintain its advertising-to-sales ratio amid the recession. Now it's joining peers in plowing claimed savings from media rates into more promotion spending.

We have spent our money on other touchpoints with consumers [last quarter] which are either cheaper or they don't fall into the same financial line as marketing spending," Mr. De Groot said. "It's a slight change on the [profit and loss] line, but it's in line with our strategy of the past 10 years," which he said was to focus on innovation and the company's power brands.
Part of the media shift includes increased use of online video and print. "We're not reacting after one or two months of data" to the stepped-up use of online video ads, he said, though he said early results look favorable at least for some brands.
Promotion also is on the rise in part because competition, consumers and retailers are moving that way. Retailers, with an interest in preserving their own same-store sales numbers, are pushing for more as an alternative to lower list prices as both volume and commodity costs fall. Overall, unit volume was down across RB's categories 3% to 5% last quarter, Mr. De Groot said, and promotion is one way all players are looking to get it into positive territory again. "There's a reluctance to bring the prices back to where they were before on all sides," Mr. De Groot said. "That means you're trying to convince consumers in a different way."
Higher-priced initiatives launched earlier in the year are faring well, Mr. De Groot said, including Airwick's iMotion motion-activated air freshener, which helped RB increase sales and share in a discretionary category hard hit by recession, he said, and the company's new Finish Quantum laundry tabs.

VSS 2009 report

IN 2009, communications spending is likely to show a 1 percent decline for the year, the first notable decline in at least four decades. In five years, advertising spending in magazines will finally have rebounded after five years of decline — but at $9.8 billion, it will still be nowhere near the $12.9 billion it was in 2008. And by 2013, the video game market will be almost the size of the shrinking newspaper industry.

Advertising, as is clear by now, is contracting. Spending dropped 2.9 percent in 2008, to $210 billion. For 2009, Veronis Suhler expects advertising to end up declining 7.6 percent, with a 1 percent decline to follow in 2010. Advertising will again grow in 2011, the firm projects.
The segments where advertising will decline most rapidly in 2009, according to the firm’s estimates, are newspapers (down 18.7 percent, to $35.5 billion); consumer magazines (down 14.8 percent, to $11 billion); radio (down 11.7 percent, to $15.8 billion); and broadcast television (down 10.1 percent, to $43.0 billion). Veronis Suhler expects a few sectors to increase their advertising dollars this year, including mobile (up 18.1 percent, to $1.3 billion) and the Internet (up 9.2 percent, to $23.8 billion).

Still, advertising is a decreasingly important part of the communications sector, compared with the other overall categories Veronis Suhler looks at — marketing services, consumer and products and information sold to businesses.

“What’s really stark is that advertising, which not so long ago was the biggest part of the overall pie, is now the smallest part of the pie and is shrinking at a pretty good clip,” said James P. Rutherfurd, executive vice president and managing director of the firm.

In the report, Veronis Suhler breaks down the expected performance of the elements of each area of marketing and communications. Some of the fastest-growing ones are creative strategies that have lately gained favor among marketers. They include paid product placement, with a compound annual growth rate from 2008 to 2013 of 17.6 percent; e-mail marketing and in-game advertisements (both 18.5 percent); mobile advertising outside of texting (33 percent); paid interactive television gaming (38.7 percent); mobile advertising and content tied to broadcast television (35.5 percent); mobile gaming and advertising (46.2 percent); and Internet and mobile home video downloads (34.4 percent).

http://www.nytimes.com/2009/08/04/business/media/04adco.html?_r=1

Cyberplex Inc. Proposes Acquisition of Burst Media Corporation for Pounds Sterling 0.12 Per Share

http://finance.yahoo.com/news/Cyberplex-Inc-Proposes-iw-3287367747.html?x=0&.v=1
Proposed transaction valued at approximately $16.5 million (USD) in cash; provides 81.3 percent premium to current trading price for Burst shareholders; Board of Directors of Burst rejects proposal