Artist’s ‘playful riff’ on Charles Saatchi

July 31, 2013

Charles Saatchi – NotCharles Saatchi and Nigella Lawson have just been granted a decree nisi in the  High Court, near finalising their divorce.  We thought to mark the occasion with an item that puts former adman Charlieboy in his rightful context: as a celebrated patron of controversial Art.

A young British artist (who for entirely understandable reasons prefers to remain anonymous) has created a life-size model of Saatchi with a hand outstretched ready to choke anyone who interacts with the piece. The work is entitled ‘Playful Tiff’ – the words Charles used to describe the incident where he lovingly placed his hand around his wife Nigella Lawson’s neck at Scott’s restaurant in London. Viewers of ‘Playful Tiff’ are invited to place their neck in Saatchi’s hand and capture the historic moment with a photo on their mobile phone.
For good measure, and in line with the impish persona Saatchi has used to promote his book, ‘Be The Worst You Can Be’, the model is bright red and comes with a set of horns.
The artwork is on display at the Jealous Gallery at Crouch End in north London.

We suspect this particular exhibit will soon be occupying pride of place in the Saatchi Gallery.

Just choking.

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Fallout from the Publicis/Omnicom merger

July 29, 2013

Richard PinderBy Richard Pinder

When first hearing the Publicis and Omnicom merger rumours you could have been forgiven for thinking it to be some silly season gossip.

But as we know POG is not a passing fancy, it is for real. Hats off to Maurice Levy who has consistently shown his ability to be daring, decisive and dynamic just when people least expect it.

So what drove it? And who are the winners and losers? First, two sets of observations:

The announcement was made in Paris, not New York. The Group will be called the Publicis Omnicom Group, not the Omnicom Publicis Group. The revenues of Publicis Groupe are some way below those of Omnicom Group though their market caps are much closer, but it will be a merger 50/50 owned by the two companies shareholders.
After the dust has settled and the merger is done, the silly co-CEO thing is finished with and the company starts to operate normally, the CEO will be John Wren, from Omnicom, the CFO likely to be Randy Weisenberger from Omnicom, the ticker marker on the NYSE will be OMC and largest market for the combined entity will be the USA.

Once the incredulity subsides, you can see the attraction to Maurice and John. And as the above simple summary shows, you can see the game that is being played by both to get the other to agree to the deal. The former gets to show the French establishment what world class really means, a brilliant retirement gig as non executive Chairman of the world’s number one advertising group and without having to go through with the charade of making good his oft delivered promise to Jean-Yves Naouri to be his successor. The latter, within 30 months, gets to run something nearly double the size of OMC today, in seriously good shape in Digital and Emerging Markets, the number one ad agency of the number one spending client in the world – P&G who had only just taken most of their business from OMC – and all without the pain and risk of taking the long road there.

For Elisabeth Badinter it’s a fabulous end to her tenure as Chair of Publicis – seeing the company her father founded in 1926 become number one globally, as well as securing the very strong valuation on her holding that today’s Publicis stock price provides. For a number of senior managers there will likely be the triggering of various unvested options, stock grants and other goodies, not to mention the special dividends, that will mean good will all round. So, off on the August vacances with a spring in their step? Well not everyone…

For a start there is precious little in the announcement about WHY this is better for clients. We can see it’s better for doing deals with the big media partners, old and new. Scale counts there. But when the bulk of the enterprise’s activity is still about finding, creating and executing inspirational ideas to motivate the world’s population to choose one brand over another brand, there is a point beyond which scale can actually be a disadvantage – talent feels lost, ideas get killed by people who have no idea what the clients’ needs are and everything takes too long and costs too much. Well that’s what a large number of large clients have been telling me this past two years since I left Paris as COO of Publicis Worldwide.

There is also the small matter of the $500m savings mooted in the announcement. Publicis Groupe runs lean. Margins are already industry best. So the chances of finding much of the savings there seem slim. It will be interesting to see how the board of BBDO reacts to the likely loss of their top tier international travel rights, or the agencies of DDB cope with tough bonus rules that tie every unit in the company to the performance of those around them, as happens at Leo Burnett or Publicis today.

As a footnote on the winners and losers, spare a thought for those who fought, lost and thought they had won in the long-running soap opera called Maurice Levy’s succession. Just as the game looked like it would soon be over, the sport got changed and everything was different.

It will also be fascinating to see what WPP do about this. They have got used to being the world’s largest and Sir Martin is rarely quiet for long on any topic, let alone one so close to home. Bookies will surely be giving poor odds on a shotgun WPP/IPG or WPP/Havas union.

And me? Well as client choice reduces, the need for new global alternatives will continue to increase. It’s why we started The House Worldwide and it’s why we think it will  be increasingly relevant to clients who want to get back to a world where the client and the brand are more important than the agent promoting it, and where the money is better off going to the talent than to the accountants counting it.

Bigger and smaller, that’s the future of the ad network game.

Richard Pinder is co-founder and CEO of The House International. He was formerly the head of Publicis Worldwide.

 


Starcom CEO’s link with Tremor Video IPO raises conflict of interest issue

May 29, 2013

Laura DesmondYou can gauge the ebullience of equity markets these days from the number of obscure digital media companies with dodgy profit and loss accounts that are confidently seeking an IPO (or listing on the stock exchange as it is more commonly known). They’ve never had it so good… since 1999.

Right now video ad networks – companies that provide a digital video platform for the big marketing services groups serving their ads online –  are flavour of the month. The “space” is currently dominated by Google’s YouTube and Hulu (which you may also have heard of). But video industry experts expect YuMe and Adapt.tv (which you won’t have done, unless you’re in the biz) to declare their hand.

In fact one of them already has: Tremor Video, a big video ad network that has long been eyeing a public listing, announced its IPO a few days ago. It’s typical of the breed. Last year the company lost $16.4m on revenue of $105.2m, the previous year $21m on revenue of $90.3m. But hey, what’s a big red hole when margins are improving and losses decreasing? The stock market is not about today, it’s about tomorrow: and Tremor is selling a great tomorrow, about $86m-worth of it, it hopes, on the NYSE. Already Tremor runs ads on over 500 websites and mobile apps: that figure can be expected to increase exponentially with all the publicity attending a flotation.

So far, so dull. But don’t nod off, because things are about to become considerably more interesting. Tremor has lots of admirers in the business. One of them is Starcom MediaVest Group, owned by Publicis Groupe – which is nearly, but not quite, the world’s largest media buyer. So, a friend worth having you might say. In fact, SMG likes Tremor so much that its business accounts for nearly 20% of the video ad network’s revenue, so I’m told . What that says about PG’s in-house alternative Vivaki I’m not quite sure; maybe things aren’t working out there as well as they should be. But it’s one hell of a vote of confidence in Tremor.

And perhaps that’s as it should be. Except… my eye was caught by a further disturbing detail in the S-1 – a simple IPO pathfinder document filed with the SEC. One of Tremor’s principal directors is Laura Desmond. Not, by any chance that same Laura Desmond (pictured) who has been global CEO of SMG since 2008? I fear it may be the self-same. If so, she’s a very provident – and lucky – woman. Because a small fortune is coming her way very soon. Desmond (that’s Tremor Desmond) was only one of two Tremor board directors to get paid last year: she received a full grant of nearly $300,000 in share options, plus another $175,000-worth which can be vested in equal amounts every month over the next four years. Quite a tidy sum, you’ll agree. But that’s not the full measure of it. The options, I’m told, have been awarded in nominal 2012 terms – at about $1 per share. And should the IPO striking price be $10 per share? Imagine – $3m, or thereabouts.

Enough, certainly, to pay for that sailing trip round the world which the other Ms Desmond has been promising herself for some years.

UPDATE  4/7/2013: Tremor Video’s IPO got off to a rocky start last Thursday, and Laura Desmond may not collect quite so much as she hoped when passing “Go”. The flotation price was $10 per share (as predicted above), below hopeful initial forecasts of $11-13. However, the stock has since spiralled down to a tad under $8. Ms Desmond need feel little despondency, however. There is still a tidy package coming her way. By my calculations (based on the S1 012 Director compensation table), she has already vested over 35% of her 175,000 stock options. Meaning she can cash them in at any time. The rest she must accrue at the vesting rate of 1/48 a month until January 19th 2016. No doubt she would be wise to wait a while until crystallising her nest-egg. At $10 per share, the options would be worth – hardly rocket science – $1.75m. She may – we don’t know this for certain – have to pay the strike price of $3.34 per share, which would reduce her total haul to about $1.2m. Still enough for that ocean cruise, though….

One PPS. Some readers of my original article made the fair point that there is nothing untoward in SMG representing such a large proportion of Tremor’s revenue: it is, after all, one of the world’s largest media buyers. Up to a point, Lord Copper. Pretty precisely, SMG accounted for 17.8% of Tremor’s revenue in 2012. On the above rationale, you would expect GroupM, which is even bigger than SMG, to account for an equivalent portion of that revenue. It does not. As far as I can make out, it spent only $7.5m through Tremor during the same period, a tiny amount by comparison, and has only one major client with them, AT&T. Could be a coincidence, of course. On the other hand, investors should be on their guard that Tremor does not screw up its special relationship with SMG.


Press regulation: it ain’t over until the press barons sign up to it

March 18, 2013

Rupert MurdochOh Frabjous Day! Callooh! Callay! they chortled in their joy! The political class seems intoxicated with having finally, excruciatingly, achieved cross-party consensus on regulating the press.

Everyone, it appears, is a winner. Dave has gambled – with losing a vote in the House of Commons, and implicit in it a momentous amount of face – and won a few, paltry concessions on statutory regulation that can only be appreciated in their full complexity by a nit-picking lawyer. Ed, jubilant, with parliamentary plaudits ringing in his ears, has got what he always claimed he wanted: a Royal Charter backed by statutory regulation. And Nick’s just happy to be on the winning side (whichever that is, exactly).

But, resonant of the Cypriot banking crisis rumbling in the background, parliamentary accord in principle may be only the first, relatively easy, step in what promises to be an agonisingly long process.

Amid universal self-congratulation within the first three estates, what has been forgotten is the most important issue of all: the assent of the fourth. An eerie silence has settled over the land as the press barons – the mighty Murdochs, Rothermeres and Barclays – weigh up their options.

This is not the endgame they had in mind at all. The merest hint of statutory sacrament is abhorrent. And their objections to it are by no means groundless. Being men of the world, none expected to get away with a light slap on the wrist this time round (in other words, the moribund Press Complaints Commission being given a new set of falsies). What they have been served up, however, is enough to cause apoplexy.

Granted, the new press council will be self-regulatory in a manner of speaking: for instance, editors will still play a principal role in drawing up their own code of conduct. But the fact that this code is to be enshrined in law (however statute-lite) means – horror of horrors – the Street of Shame will for the very first time have to abide by it.

And there is worse. Newspapers are being expected to pay for this new regulatory body with their own hard-earned (and declining) advertising and circulation revenues. Yet they will be able to exercise no veto over those sitting in judgement upon them.

Now what is the point of self-regulation if you can’t game the system?

All sorts of humiliations beckon. For a start, there will be front-page retractions of a size and proportion equivalent to the original trumped-up story; in other words, no more “See page 94, bottom para, far right”. And then, if the press recuses? “Arbitrary” fines whose eye-watering size might actually get noticed by shareholders, and hit the owners where it really hurts – in the bank account.

Luckily, there are a few time-honoured principles that can be trundled out to muddy the waters, promote dissension and avert the awful day of reckoning. A very good one is our old friend Juvenal’s Quis custodiet custodes ipsos? – which might be loosely translated as: who will watch over the watchdog itself? A question that near two thousand years of repeated interrogation has failed to satisfactorily answer.

Juvenal’s oblique point, as far as I can make out, was that the powerful invariably stuff organs of governance with officials who are like-minded, obligated, compromised or compliant – leading to all manner of corruption and tyranny. A fine contemporary example would be the PCC, the illustrious members of whose committee quite recently included Tina Weaver – former editor of the Sunday People – who is now helping police with their inquiries into phone-hacking.

However much fog surrounds the future workings of the new press regulatory body, one thing is beacon-clear: the regulator will no longer be guided by the wisdom of serving newspaper editors with an axe to grind. But if not editors, then who? That is the question. Friends of politicians? The Good and the Wise from the upper house? Well-meaning but naive members of the judiciary, like Brian Hutton who was walked all over by the Blair government? Former senior civil servants who, like most lawyers, are instinctively inimicable to the whole concept of “unauthorised” leaks of information into the public domain? The publicly-wronged but narrowly-focused, like the McCanns, Dowlers, John Prescott and, er, Hugh Grant?

Who, in short, can – hand on heart – present themselves as an uncompromised and objective judge in the court of press ethics?

Without the compliance of the three aforementioned proprietors, whose newspapers account for the vast majority of national readership, these new Leveson-spawned regulations are going to go nowhere. Should they choose to prevaricate, Murdoch & Co will have ample opportunity to rail against disguised censorship. Real, or imagined.


Police arrest four, including Tina Weaver and serving Mirror Group editor

March 14, 2013

Tina WeaverWhatever took them so long? Plod has finally pounced on four miscreant Mirror Group journalists in a dawn raid conducted by the Weeting (phone hacking) team. And what a haul it has proved to be.

The four include the first serving editor to be arrested: James Scott of the Sunday People. Better known is one of the Street of Shame’s favourite hackettes, Tina Weaver – former editor of the Sunday People. The other two are Mark Thomas, former editor of the Sunday Mirror; and Nick Buckley, current deputy editor of the Sunday Mirror.

Senior Trinity Mirror Group management – notably chief executive Sly Bailey and her successor, ex-HMVite Simon Fox – have long been in denial about a phone-hacking scandal within Mirror group portals. A denial which, though oft repeated over the past two years – notably during the Leveson Inquiry – seems to have deceived no one but themselves.

Over 18 months ago, Louise Mensch – a former MP who sat on the House of Commons media select committee – openly taunted Piers Morgan – once editor of the Daily Mirror, but now the fabulously remunerated host of CNN’s prime-time talk show – with complicity in a phone-hacking scandal involving Ulrika Jonsson’s affair with former England football manager Sven Goran Eriksson. Morgan furiously rebutted the accusation, but was reduced to fuming impotence by parliamentary privilege – the one thing protecting Mensch from being on the receiving end of a colossally expensive and probably indefensible libel suit. Later, she did make a mealy-mouthed apology. Sort of.

Few doubted that Mensch was on to something: it seemed highly improbable that Mirror tabloids were entirely immune to the hacking contagion that had reduced Rupert Murdoch’s News International to its knees. What was lacking was context and a basis in fact.

Piers MorganWe now have that, at least in outline form. And it should be said straight away that the facts do not in any way implicate Morgan. The statement from the Metropolitan Police makes this quite clear: “It is believed [the conspiracy] mainly concerned the Sunday Mirror newspaper and at this stage the primary focus is on the years 2003 and 2004.”  True, that does not exclude Morgan by date (he was editor of the daily title from 1995 to 2004), but there has been no mention of – still less arrests of former employees at – the Daily Mirror so far.

Nevertheless, I imagine Morgan will be anxiously reaching for his lawyers, lest the net spreads further.

Ironically, Trinity Mirror has just reported better than expected results, showing Fox’s cost-cutting measures are doing their work. How much damage the arrests – and those likely to follow in their wake – will do to TMG’s share price remains to be seen.

UPDATE 19/3/2013: Morgan’s insomnia will not have been improved by the news that Richard Wallace, a former Daily Mirror editor (and long-term partner of Weaver), has also been questioned by the Weeting team.


Supermarkets should remember the consequences of the Perrier scandal

February 18, 2013

Malcolm WalkerDuring the early part of 1990, health officials in North Carolina, USA, made an alarming discovery. Some Perrier bottled mineral water, whose purity was so legendary they had used it to benchmark other water supplies, was found to be contaminated with minute traces of benzene.

Benzene is a natural component of crude oil. Ingested in sufficient quantities, it can cause cancer in humans. Of course, there was no question of that happening in North Carolina. As a Federal Food and Drug Administration official drily observed at the time: “At these levels there is no immediate hazard. Over many years, if you consumed about 16 fluid ounces a day, your lifetime risk of cancer might increase by one in a million, which we consider a negligible risk.”

But no one was listening to the FDA’s voice of reason. Panic broke out all over the USA – and not just there. Perrier, at that time world leader in the mineral water category, was obliged to withdraw its entire global inventory of 160 million bottles. Brand integrity was further compromised by the discovery that the “natural” bubbles in the bottled potion were actually added back later. Perrier never fully recovered: it lost its leadership and became just another branded mineral water, albeit still a famous French one. Commercially, the crisis was if anything even more disastrous. The independent Perrier bottled water company was, within two years, sold to Nestlé.

I think you know where I’m leading with this. Fast-forward 23 years, to a full-page ad that appeared in yesterday’s national newspapers. It was inserted by Malcolm Walker, founder and chief executive of  leading UK food retailer Iceland. Its purpose was to divert responsibility for the horse meat scandal now engulfing our supermarkets by pointing the finger of blame at cheapskate procurement in local government, the National Health Service – and its equally unscrupulous counterpart in the catering industry – which has connived at bringing down processed food costs to their lowest possible denominator. Doubtless, judging from the ensuing squawks of indignation, the Iceland boss has a point – though how exactly his tirade exonerates the supermarkets from their own ruthless manipulation of supplier lines is not entirely clear. However, Walker does not stop there. Having scored some points on behalf of his sector, he then goes on to trash it by adopting a “holier than thou” approach:

“Iceland does not sell cheap food. We sell high-quality own label frozen food that is good value. We do not sell – and never sold – ‘white pack’ economy products.” Unlike, he carefully does not add, Tesco and Asda. And, just to ram the point home, he goes on to claim that “no horse meat has ever been found in an Iceland product”.

Well, almost none. At the bottom of the ad there is a mealy-mouthed admission that 0.1% of equine DNA was indeed found in two Iceland Quarter Pound burgers. But these don’t count, because the test, carried out by the Food Safety Authority of Ireland, was not an “accredited” one, and the discovered traces of horse were “well below the current accepted threshold level” of 1%. So, yaboo sucks to any critics.

Nice one, Malcolm. You’ve managed to spread, or at least smear, the blame far and wide, and thrown into the processor just a hint of xenophobia. Ireland, Romania, France – these horse-eating monkeys, they’re not like us – not to be trusted, whatever their professions of rigorously adhering to EU-wide standards. But, leaving aside the lowly populism of his message, Walker, in waxing eloquent about the infinitesimal amount of contamination in his own burgers, has committed a revealing tactical blunder.

Perrier logoThe current food scandal is not about parts per billion contaminants found in horse meat; it’s about trust in the brand. Just like the benzene found in Perrier all those years ago, consumers would have to ingest an awful lot of horse burger infected with “bute” equine painkiller (over 500 250 gram ones, to be precise) before experiencing any appreciable side effect. But that won’t prevent them passing summary judgement on those august brands – at the head of the supply chain – that have allowed this scandal to happen: namely the UK grocery multiples.

Possibly with devastating consequences for future sales.

One interesting aspect of this scandal is that its ramifications have now moved on from cheap lines of processed meat – in short, “poor people” – to ready-made meals. In the other words, the sort of thing consumed by affluent and articulate members of the middle-class. That’s bad news even for elite purveyors, such as Waitrose and M&S.

In all probability there’s nothing to worry about. But that’s not the point, is it? My local butcher tells me business has gone gang-busters over the past couple of weeks. And for good reason. In the past, there was a perception (false, as it happens, in many cases) that local businesses could not match supermarket fresh meat prices. Now, understandably, people seem a lot more concerned about local provenance. If you must have lasagne, it’s as well to see the meat being minced while you wait, rather than trusting the word of some supermarket about the integrity of its supply line.


Richard III gets a brand makeover

February 5, 2013

Richard IIIRichard III, the marketing angle? Incredible as it may seem, there is one – and Mediapost claims to have detected it.

The spectacular discovery of the last Plantagenet monarch’s remains under a Leicestershire car-park has been derided in some academic quarters as a stunt that offers little new insight into the historical record (unlike, for example, the discovery of Troy).

Not so. Instead of a cripple “Cheated of feature by dissembling nature, Deformed, unfinish’d, sent before my time, Into this breathing world, scarce half made up, And that so lamely and unfashionable, That dogs bark at me as I halt by them” we have been presented with incontrovertible evidence of a fit, 32-year old man, at 5ft 8in tall for his era but for a curvature of spine that set his right shoulder above his left, and possessed – according to the reconstruction of his skull – of a personable, sensitive appearance ill at odds with the psychopathic villain of Shakespeare’s imagination.

How much, then, was the Tudor “brand makeover” of Richard a carefully fabricated lie designed to cement the succeeding dynasty’s undoubtedly shaky claim to the crown of England?

The fact is, back in the 1480s anyone who was anyone – well, nearly anyone – was a bastard. The Princes in the Tower were bastards (or so Richard persuaded Parliament on acceding to the throne in 1483); Henry, Duke of Richmond – the victor of Bosworth Field – was most certainly a bastard, tracing his ancestry to King Edward III via the bar sinister on both sides of the family; and so – according to some – was Richard’s elder brother Edward IV: the son of an English archer rather than the 2nd Duke of York – though, understandably enough, no one was prepared to openly address the matter during the charismatic, 6ft 4in warrior’s lifetime.

In a country riven by a generation of civil war, legitimacy was a necessary though not sufficient qualification for long-term kingship. And Richard, unlike most other contenders to the throne during that period, had an unimpeachable claim to it. However, the paramount requirement in that anarchic and bloody era was ruthless leadership, on and off the battlefield. Edward IV had it, but his predecessor – mad, incompetent but very legitimate Henry VI – did not. Result: civil implosion and the Wars of the Roses. That was the thing about the Medieval state. Weak leadership was not simply a failing in a king, but a mortal sin: because sooner or later it plunged the country into internecine strife (note the reigns of Stephen, John, Henry III, Edward II and Richard II).

Henry VI eventually paid for his incompetence with his life – he was starved to death in 1471, probably on the orders of an exasperated Edward IV. Twelve years later, a similar succession crisis seemed to be shaping up when Edward himself died prematurely, at 40. The plan was that Edward’s son – known to history as Edward V – would succeed him. But Edward was only 12 and the substitute sibling, his brother Richard Duke of York, considerably younger. Either way, they would be puppets in the hands of the Nevilles, Stanleys, Woodvilles, de la Poles and Percys – the aristocratic “cousins” who were the powers behind the throne at that time. Another round of civil war loomed. Forseeing this, Edward had made Richard, then Duke of Gloucester, their protector. Richard had proved himself very competent, on and off the battlefield. A surprisingly enlightened administrator who in effect already ruled in the north of the country, he had also proved his martial valour at the decisive battles of Barnet and Tewkesbury (1471) which had ensured a Yorkist was put back on the throne. Later, Richard played a leading role in pacifying Scotland. Edward had every reason to be grateful. Most of all, he trusted Richard implicitly. What could possibly go wrong?

In placing the two princes in the protective “custody” of the Tower of London (then simply another royal palace) and subsequently disbarring them from the succession, Richard may have acted out of cruel necessity, or naked ambition. Conceivably both. Did he really believe the princes were illegitimate? We don’t know. Did he have suspicions that his own brother was illegitimate? We don’t know. Was his own dynasty likely to be strengthened by, in some way, disposing of potential rivals who might provide a rallying point for disputing his own position? Yes, it was. At that time, he had a son, also Edward (in those days they were all Edward, Richard or Henry, it seems), who died the subsequent Henry VIIyear, 1484. Did the Princes die in 1483 (thus effectively excluding the Duke of Richmond, later Henry VII (left), as their murderer – he was in France at the time, and in no position to gain access to the Tower)? Almost certainly – nothing more is heard of them after the summer of that year. What’s more Richard, though he denied killing them, failed to provide the living evidence that would have discredited any such claims. Did he, or his agent the Duke of Buckingham/ Sir James Tyrrell, do the heinous deed? Beyond reasonable doubt, no. On the balance of probability, yes. Did Richard have any defensible argument for doing what he probably did? Raison d’état, maybe. Pretenders purporting to be the young Duke of York were to cause Henry VII endless trouble during the earlier part of his reign.

Richard has been set up in history as the Arch-Infanticide. In reality, what use is it judging him by the standards of our own time? His code of conduct was not identifiably worse than that of his predecessor – himself a regicide – or his successor, a consummate Machiavellian who discreetly saw off many an opponent at the gallows. That’s what monarchs did then – if they wanted to survive. Richard’s misfortune was to be betrayed on the field of battle – by an ally connected through marriage to the other side. Even his enemies conceded he fought courageously to the end.

If the Battle of Bosworth had gone the other way – and it very nearly did – we can be tolerably sure we would not now be obsessing about the fate of the Princes in the Tower. To the victor the spoils.


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