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[New York] Omnicom Group's BBDO, in a move to cut costs, has placed management of its West Coast operations under its New York office. Long-term BBDO West President Tom Hollerbach is leaving the agency, which has 100 employees in San Francisco and Los Angeles. Peter Sherman, 42, a senior account director in New York, will become managing director of the two shops and report to Andrew Robertson, president-CEO, BBDO Worldwide and president-CEO, BBDO North America, who called the move a "strategy for growth." BBDO already is handling West Coast businesses jointly with other offices. Visa, for example, is handled jointly out of New York and San Francisco and Mitsubishi is handled out of Los Angeles and Atlanta.

Hoover taps TBWA for $56 million account

[Newton, Iowa] Maytag's Hoover vacuum division, in a pitched battle against upstart Dyson, which has been sweeping up market share, has named Omnicom's TBWA/Chiat/Day, Playa del Rey, Calif., as agency for advertising creative following a review. Contenders included incumbent Element 79, Chicago. TNS Media Intelligence put Hoover spending last year at $56 million, but contenders believed the size to be closer to $20 million. Hoover plans to reformulate its brand vision using TBWA's "Disruption" process, along with "breakthrough creative," a Hoover spokeswoman said. Media remains at Universal McCann.

Vanguard taps Fallon for $30 million account

[Tulsa, Okla.] Vanguard Car Rental, parent of National Car Rental and Alamo Rent A Car, on Aug. 12 tapped Fallon Worldwide, Minneapolis, to handle its estimated $30 million account, the marketer confirmed. Fallon beat out WPP Group's Y&R and Omnicom Group's Element 79, both in Chicago. Jerry Dow, chief marketing officer for Vanguard, worked with Fallon during his previous post as worldwide advertising director for United Airlines.

Yahoo to spend $1B on China's

[Sunnyvale, Calif. and Beijing] Getting a foothold in the burgeoning China market, Yahoo last week said it will pay $1 billion in cash for a 40% stake in the leading Chinese e-commerce site The agreement gives Yahoo 35% voting rights, making it the largest investor in the site. Yahoo contributes search to the partnership that has a community of more than 15 million businesses and consumers who pay between $250 and $10,000 per year for Alibaba's services.

Morgan Stanley puts $75M account in review

[New York] Morgan Stanley last week put the creative portion of its $75 million account up for review. The move follows the recent ouster of CEO Philip Purcell and departure of Chief Marketing Officer Phil Raskin. Incumbent Leo Burnett USA, Chicago, was invited to participate but declined.

Slow Coke Zero sales lead to attribute ads

[Atlanta] Two months into its launch, sales of Coca-Cola Zero are lower than expected, prompting Coca-Cola Co. to create a 15-second TV spot to clarify its zero-calorie proposition. The new spot uses the tagline, "Real Coca-Cola taste. Zero calories, no compromise." An earlier image-laden TV spot called "Chilltop" avoided references to the brand's diet attributes. Supermarket share has reached 0.8%, about half Zero's expected levels, according to Morgan Stanley. Coca-Cola said the brand is tracking as expected but will achieve success over time.

Coke readying enhanced Enviga and Sprite 3G

[Atlanta] Coca-Cola already is gearing up enhanced soft drinks including Enviga, a green tea-based carbonated soft drink that speeds metabolism to burn 50 to 100 calories, according to executives close to the marketer. Coke assigned Publicis Groupe's Saatchi & Saatchi, New York, to handle an advertising project for the product made through a joint venture partnership with Nestle. A second brand, Sprite3G, is said to be a taurine-enhanced version of Sprite set for launch in Great Britain in as early as September. Coca-Cola wouldn't confirm plans for either product. Saatchi & Saatchi declined to comment.

Claim: American Media paid sources for silence

[Boca Raton, Fla.] American Media may have actively shielded Arnold Schwarzenegger from charges of "womanizing," allegations which the future California governor said he anticipated when he announced his run for office. The company promised to pay a California woman $20,000 to provide no one but American Media with information on her "interactions" with Mr. Schwarzenegger, The Los Angeles Times reported Aug. 12. The company also paid a friend of the woman $1,000 for a similar agreement. American Media, owner of magazines like the National Enquirer and Men's Fitness, did not solicit any further information from the women, the women told The Times. A spokesman for Mr. Schwarzenegger told the newspaper that he believed that the governor did not know about the deals. An American Media spokesman declined to comment.

FYI ...

CBS will launch a new ad-supported quarterly magazine, called Watch! Advertising will be sold by custom publishing house McMurry Publishing Co. and content will be about CBS shows and celebrity lifestyles.The first cover will feature the stars from the sitcom, "Two and a half Men." ... WPP Group's JWT has acquired Malone Advertising, an Akron, Ohio-based retail marketing agency. ... Cadbury Adams USA, the confection arm of Cadbury Schweppes, has tapped Norma Drew as its top marketing officer. She joins the company from Diageo North America, where she was senior VP-marketing overseeing gins, scotches, relationship marketing and luxury brands. ... Sprint and Nextel Communications, their $36 billion merger having cleared government hurdles, today begins trading on the New York Stock Exchange under the symbol S. ... Incumbent David & Goliath, Los Angeles, has dropped out of the review for Outback Steakhouse, the agency said. ... Carfax, which creates vehicle history reports for buyers of used cars, tapped Interpublic Group of Cos.' Martin Agency, Richmond, Va., for creative duties on its $20 million advertising account without a review. Martin previously handled the business in 1999. Carfax is a subsidiary of R.L. Polk & Co.

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