Samsung, Argos & Ralph Lauren: Everything that matters this morning

Marketing Week rounds up all the need-to-know marketing news from around the world.

By Marketing Week Reporters 13 Feb 2017 7:35 am

Samsung vice-chairman arrested for corruption

Samsung vice-chairman Lee Jae-yong has been arrested for paying nearly $40m (£32m) in bribes to the South Korean government in a bid to secure policy favours.

Lee is accused of bribing Choi Soon-sil, a confidante of South Korea’s impeached president Park Geun-Hye, who is alleged to have forced local firms to “donate” $70m (£56m) to not-for-profit foundations of which Samsung is the biggest donor.

The ongoing corruption scandal hits Samsung at a time when the brand is still trying to recover from the global recall of its faulty Galaxy Note 7 smartphone last year.

Argos to pay £2.4m to staff paid under minimum wage

Argos is being forced to pay £2.4m in lost wages to more than 37,000 current and former employees after an HMRC investigation revealed the retailer had paid staff less than the legal minimum wage.

The investigation discovered underpayments of £64 per person dating back to 2014 resulting from the retailer asking staff to attend briefings and carry out security checks outside working hours, for which they weren’t paid. Despite being fined £1.5m by HMRC, Argos will only pay £800,000 after it was awarded a discount for agreeing to pay within 14 days.

Argos joins Debenhams, which has been accused by the Department for Business, Energy and Industrial Strategy of failing to pay nearly £135,000 to 11,858 workers.

Facebook hits back at fake news in new manifesto

Facebook CEO Mark Zuckerberg has expressed his concern about sensationalist reporting in a manifesto discussing anti-globalisation sentiment and the power of social media for good.

In the 6,500 word mission statement, Zuckerberg refers to what he calls “the most discussed concerns” of the past year – achieving a diversity of viewpoints and the accuracy of information (fake news). He expresses his concern surrounding the powerful effects of sensationalism and polarisation that can lead to a “loss of common understanding”.

However, Zuckerberg is keen to reiterate Facebook can be a force for good. “Social media already provides more diverse viewpoints than traditional media ever has. Even if most of our friends are like us, we all know people with different interests, beliefs and backgrounds who expose us to different perspectives.

“Compared with getting our news from the same two or three TV networks or reading the same newspapers with their consistent editorial views, our networks on Facebook show us more diverse content.”

Ralph Lauren appoints first CMO

American fashion retailer Ralph Lauren has appointed its first chief marketing officer, responsible for evolving the brand’s tone of voice, leading the global marketing team and building “cut-through marketing strategies”.

Jonathan Bottomley joins the retailer from Vice Media, where he served as chief strategy officer, following a stint as chief strategy officer and managing partner at Bartle Bogle Hegarty in London.

Starting on 3 April, Bottomley will be joined by Tom Mendenhall in the newly created role of brand president, responsible for Men’s Polo, Purple Label and Double RL. Formerly chief operating officer at Tom Ford, Mendenhall will have oversight of all men’s brand functions and is charged with maximising brand strength to improve sales growth.

SoundCloud expands programmatic advertising

Music-streaming service SoundCloud is expanding programmatic across its global premium audio and video ad inventory.

Advertisers will be able to target the platform’s 175 million monthly listeners through a variety of first-party data and content-level targeting options. Working in partnership with online ad tech firm Rubicon Project, the service will initially launch in the UK, US, Ireland, France, Australia, New Zealand, Canada and Germany.

Thursday, 16 February 2017

Amazon set for fashion foray

Amazon is reportedly gearing up to launch its fashion line in the spring. According to Drapers, it has poached senior design and buying experts from Marks & Spencer and Primark and the fashion line is now in production.

This is just the latest phase in Amazon’s attempts to take a bigger share of the global fashion market. Last year, it launched a photography studio in east London. And earlier this month it promoted its fashion credentials by highlighting that it has sold more than 60 million fashion items since bringing brands such as Dorothy Perkins on board.

Heineken claims to have found the right formula for non-alcoholic beer

Heineken is set to launch a non-alcoholic beer that it claims will be one of the first on the market to actually taste like alcoholic beer. The new variant, Heineken 0.0, is said to have taken the company’s innovation team two years to perfect so that the flavour resembled original Heineken beer as closely as possible.

Jean-François van Boxmeer, Heineken CEO, says: “Non-alcoholic Heineken will be launched in the Netherlands in March and rolled out quite rapidly in Europe soon after. We will give it a try in Europe then see for the rest of the world.”

Verizon cuts Yahoo deal price after hacks

Verizon has finally decided that its purchase of Yahoo will go ahead, albeit at a lower price following hacks that impacted millions of its users. Multiple reports say that the revised deal will now come in at between $250m and $300m less than the original sale. Yahoo shares were up 1% on the news, as investors showed relief that Verizon would not pull out of the acquisiton entirely.

Kraft Heinz sees profits triple

Kraft Heinz might have seen revenues fall by 3.7% year on year in its fourth quarter but it is the profit figures most are looking to. And those were up by 200%, to $944m from $284m a year ago. The companny is now expecting to save $1.7bn from its integration programme, put in place after the merger.

“We finished 2016 consistent with our expectations and with good momentum heading into 2017,” saysBernardo Hees, Kraft Heinz CEO. “Looking forward, our objectives and opportunities are clear. But we need to sharpen our focus on profitable sales, and further improve our capabilities and execution to deliver another year of strong, sustainable growth in 2017.”

Facebook takes on LinkedIn with job ads

Facebook is adding yet another string to its bow, allowing companies to post job ads and job seekers to apply for those jobs through the social network. Companies can post jobs for free but will be able to pay to boost their ads so they are seen in more people’s new feeds. The new tools are mainly aimed at small businesses that already use the site for advertising but will take Facebook into direct competition with LinkedIn, now owned by Microsoft.

Snapchat looks to $20bn valuation in IPO

Snap Inc’s IPO looks set to be the biggest tech IPO offering since Alibaba in 2014 and the third biggest in the past decade. According to reports in the Wall Street Journal, the camera company is looking for a valuation of between $19.5bn and $22.5bn when it goes public.

Snap, the company behind Snapchat, is the first US social media company to go public since Twitter. It will be hoping for a better post-IPO performance than Twitter however, which has seen user and revenue growth slow.

Wednesday 15 February

Facebook takes on YouTube with its own TV app

Facebook is rolling out its own TV app, allowing users to watch Facebook videos on TV.

The move could allow it to eventually better compete with the likes of YouTube and traditional television channels for advertising revenue. While the company did not confirm the launch date, it will initially be rolled out across Apple TV, Amazon’s Fire TV and Samsung’s Smart TVs.

The announcement is in line with Facebook’s increasing focus on video.

Jaguar Land Rover reviews global media agency days after terror funding scandal

Jaguar Land Rover has announced it will be reviewing its global media buying and planning, thereby placing Mindshare on notice.

The review was publicly revealed only days after the car maker suspended online advertising after it became embroiled in a terror funding scandal.

However, AdNews understands the review was called a couple of months ago and is a part of a standard procurement procedure the business carries out every few years. Other media agencies have been contacted but its unclear who else is involved.

“This review is in accordance with Jaguar Land Rover’s usual sourcing best practice and reflects the company’s commitment to conduct business in an open and fair way,” Jaguar Land Rover said in a statement.

“Jaguar Land Rover considers its suppliers to be integral to business success. Our supplier relationships help us to develop products that surprise and delight our customers and deliver our brand visions.”

Volkswagen given US court blessing for diesel settlement

Volkswagen has been given an initial blessing by a US court to pay $1.22bn (£0.98m) to fix or buy-back 80,000 cars from the emissions scandal.

The company, which has already agreed a deal covering 475,000 two-litre cars, will receive a final ruling in May.

“This settlement marks an important milestone in Volkswagen’s efforts to make things right in the United States,” said Robert Giuffra, an attorney representing Volkswagen.

US District Judge Charles Breyer, in San Francisco, is due to hold a hearing on 11 May on whether to grant final approval for the Volkswagen deal.

Volkswagen has agreed to spend up to $25bn in the US to settle claims from car owners, environmental regulators, US states and dealers. The US has also charged seven current and former Volkswagen executives with wrongdoing.

PayPal takes a pop at banks with acquisition

PayPal has announced that it will be acquiring TIO for $233m (£187m), which means it might soon not be necessary to have a bank account to make payments using PayPal.

TIO is a bill-payment processing service for people who don’t necessarily use bank accounts for their financial transactions. Consumers can pay their utility and telecom bills through their phone, computer or a self-service kiosk without having to go through a bank.

With this acquisition, PayPal also accesses TIO’s 14 million customer accounts, and a network of agents, including Global Express, ACE Cash Express, and Moneygram.

Dan Schulman, CEO of PayPal, said: “Worldwide, more than two billion people do not have affordable access to basic financial services, making it difficult and expensive for consumers to carry out basic financial tasks, including bill payment. TIO’s digital platform, and physical network of agent locations make paying bills simpler, faster, and more affordable.”

Amazon goes into videoconferencing with app

Amazon has added another string to its services bow with a videoconferencing app called Amazon Chime.

The app can be used on Windows, iOS and Android devices, and boasts noise-cancelling technology.

The new release is Amazon’s latest weapon to compete with the likes of Skype for Business, Cisco’s WebEx and GoToMeeting.

To use the service, all users will first have to download the app. It will then call all of the participants when a meeting starts, allowing users to join the call with a push of a button in the app – and no PIN is required to access the room.

And, those who are running behind can tap a ‘running late’ button to automatically notify everyone in the meeting.

Tuesday, 14 February 2017

Unilever launches first co-working space for startups

Unilever has set up its first co-working space to allow startup businesses to develop new projects and innovations alongside the FMCG giant’s brands. Called Level3, the 22,000 sq ft workspace is built within Unilever’s regional headquarters in Singapore and will form part of the company’s wider startup incubator programme, Unilever Foundry.

To date, 15 international and local startups have already established themselves at Level3, including Adludio, ConnectedLife and Datacraft.

Disney drops YouTube star over anti-Semitic posts

Disney has severed ties with YouTube’s highest paid star PewDiePie after he posted videos containing anti-Semitic messages. The Swedish vlogger — real name Felix Kjellberg — has 53 million YouTube subscribers and had worked on content projects with Disney’s MakerStudios.

However, an investigation by the Wall Street Journal uncovered a series of videos featuring anti-Semitic messages, including one in which Kjellberg had paid a Sri Lanka-based group of men to hold up a sign that read “Death to All Jews”.

A Disney spokesperson says: “Although Felix has created a following by being provocative and irreverent, he clearly went too far in this case and the resulting videos are inappropriate.”

Facebook expands live sports streaming

Facebook has agreed a deal with Univision Communications that will see it stream 46 live games from Mexico’s top soccer league. The streams, which are only available to US users, add to Facebook’s growing roster of live sports content.

Last year, the social network attracted 3.7 million viewers with a Wayne Rooney-sponsored charity match between English Premier League teams Everton and Manchester United, according to Bloomberg. Other tech giants such as Amazon and Twitter have also moved into live sports broadcaster in a bid to attract viewers.

Car prices up 5% since Brexit vote

The average price of a car has surged by 5.2% since the Brexit vote last June, new research shows. Data compiled by What Car? magazine found that price rises were down to the fall in the value of sterling following the referendum and a reduction in the use of discounts.

According to the research, the price of some larger people-carriers has soared by as much as 12.3%, but some luxury cars had actually fallen in price. The figures come ahead of the latest UK Consumer Prices Index (CPI) today, which is expected to reach 1.9% in the year to January.

Rolls-Royce posts largest loss in its history

British car maker Rolls-Royce has recorded the biggest loss in its history due to the impact of both Brexit and corruption charges. The company posted a £4.6bn statutory pre-tax loss for 2016, making it one of the biggest corporate losses in British history.

The loss was in large part due to the steep value in the value of sterling following Brexit, as Rolls-Royce announced a £4.4bn writedown on the value of financial hedges that it used to protect itself against currency fluctuations. In addition, the company paid out £700m to settle bribery and corruption charges.

Monday, 13 February 2017

Shoppers left short-changed over Tesco’s expired offers

A BBC investigation finds that Tesco customers are being short-changed by promotions that have expired but are still advertised on the shelves. The undercover reporter reveals that shoppers were overcharged at two-thirds of the stores visited during the investigation.

Facebook agrees to external audit of ad data

Facebook will commit to an external audit of its advertising data following errors in reporting its metrics. In a blog this weekend the social media giant said: “We are committing to an audit by the Media Rating Council (MRC) to verify the accuracy of the information we deliver to our partners.”

Facebook admitted it had made errors last year creating a growing concern from marketers, including Procter & Gamble’s chief brand officer Marc Pritchard, over the general accuracy of measurement of digital advertising.

But Facebook’s ad revenue growth shows little sign of being impacted despite concerns from marketers over its metrics.

MPs say private firms should face scrutiny to avoid another BHS

MPs suggest that private firms should face the same rules as publicly listed companies in regards to corporate governance to prevent another collapse similar to retail chain BHS, according to the BBC.

M&S looks to Next’s transformation boss for fashion turn around

Sky News reports that former Next boss, Christos Angelides, is being considered for a top job at M&S under chief executive Steve Rowe. Angelides is credited with Next’s success, serving as group product director from 1998 to 2014.

But he was unsuccessful in turning around the US brand Abercrombie & Fitch, leaving in 2015 after being paid a reported $18 million for 14 months work. He is currently on the board at another struggling retailer, French Connection.

Are companies doing enough about fake emails?

Billions of scam emails are still reaching consumer inboxes, according to The Telegraph. Branded communications from Apple, Amazon have been joined by emails from other trusted institutions such as banks, charities and government departments.

A top cyber-crime expert believes businesses have a corporate responsibility to prevent these emails and are failing to take “basic” precautions on behalf of customers.