Alphabet, Barclays, United: Everything that matters this morning

We round-up all the latest marketing news you need to know this morning.

Alphabet calls its Q1 performance ‘terrific’

Alphabet, the holding company name for Google, has seen shares jump over 5% as it hailed its Q1 numbers as “terrific”.

Revenues jumped from $20.3bn (£15.8bn) to $24.8bn, with revenues rising 22% year on year. Operating income, meanwhile, was $6.6bn, up from $5.3bn in Q1 of 2016.

Larry Page, the CEO of Alphabet, says Google’s decision to create Alphabet as a holding company for Google had ultimately helped investors. “The new structure has helped entrepreneurs build and run companies with the autonomy and speed they need.

“In general we are taking a patient approach to investing our capital. We’re not going to invest if we don’t see great opportunities and we feel like our track record for picking some important efforts long before others is pretty good.”

Facebook says new Messenger eliminates the risk of dodgy comments for brands

Facebook says the second iteration of its Messenger app will allow brands to have one-on-one interactions with customers. This, it says, could help resolve problems around dodgy public comments appearing on brand pages on social platforms.

Speaking at a launch in Sydney, Stan Chudnovsky, Facebook’s VP of product for Messenger, explained: “Messenger definitely creates an opportunity where you can go into one-on-one conversation and express whatever you are trying to express. It’s private and contained and assuming brands address that really quick, it will work well.

“It definitely one of the reasons why businesses are flocking to the channel, because it gives them an opportunity to address it before it comes public.”

New features of Messenger 2.0 include a discovery engine, chat extensions, games and enhanced artificial intelligence.

United Airlines reaches settlement with passenger who was dragged off plane

David Dao, the doctor who was infamously dragged off a United Airlines jet earlier this month, has reached a settlement with the airline for an undisclosed amount, according to his lawyers.

The episode had stoked the fears and frustrations of airplane passengers worldwide and became a PR disaster for United. However, on Thursday, both the airline brand and Dao said they hoped now could mark the end of the ordeal.

“[United Airlines CEO Oscar] Munoz said he was going to do the right thing, and he has,” Thomas A. Demetrio, one of Dao’s lawyers, said of Oscar Munoz, United’s chief executive. “In addition, United has taken full responsibility for what happened on Flight 3411, without attempting to blame others, including the City of Chicago. For this acceptance of corporate accountability, United is to be applauded.”

Something tells us Dao will be flying first class from now on.

Barclays ‘optimistic’ as profits surge to £1.68bn

Barclays has recorded a strong start to the new year, with its profits more than doubling in the first quarter.

The banking brand said group pre-tax profit rose to £1.68bn in the three months to March 31, up from £793m in the same period last year.

Chief executive Jes Staley, who has recently been offloading unwanted businesses to focus on UK and US operations, said the bank has nearly completed its overhaul.

“This has been another quarter of strong progress towards the completion of the restructuring of Barclays. Group profit before tax more than doubled compared to the first quarter of 2016, and our core businesses continued to perform very well.”

RBS shapes turnaround as it bounces back from £968m loss

In other banking news, the Royal Bank of Scotland made a profit of £259m in the first three months of 2017, up from a staggering £968m loss in the same period last year.

After stripping out restructuring costs, the core operating business made a profit of £1.3bn, up from £1.02bn. RBS says its cost-cutting plan was ahead of schedule and claims that it has already stripped out 37% of the £750m cuts it proposed for this year.

The three-month profit is the first RBS – which is now majority-owned by the government after being bailed out – has made since Q3 of 2015.

Thursday, 27 April 2017

Ikea takes humorous swipe at Balenciaga

Ikea has launched a playful comeback after luxury fashion brand Balenciaga unveiled its latest tote bag, which bears an uncanny resemblance to the Swedish retailer’s infamous blue Frakta shopper.

The two bags are similar in colour, shape and style – even down to the double loop detail on the handle – yet with the designer version priced at $2,150 (£1,365) compared to 40p, Ikea has issued a tongue-in-cheek guide to ensure people can tell the two apart.

Advice includes “Shake it. If it rustles, it’s the real deal” and “Are you able to fold it to the size of a small purse? If the answer is yes, congratulations.”

United looks to claw back trust by offering customers $10,000 on overbooked flights

United Airlines will now offer passengers up to $10,000 (£7,700) to give up their seat if a flight is overbooked as it again looks to step up customer experience.

It is the latest measure taken by the airline to improve repair brand trust following the incident, which saw a 69-year-old passenger be violently removed from one of its planes as the airline needed his seat for a crew member.

The airline says this is just one of “10 substantial changes to how it flies, serves and respects its customers”, which are the result of a “thorough examination of its policies and procedures, and commitment to take action, in the wake of the forced removal of a customer aboard United Express Flight 3411”.

United CEO Oscar Munoz explains: “Every customer deserves to be treated with the highest levels of service and the deepest sense of dignity and respect. Two weeks ago, we failed to meet that standard and we profoundly apologise. However, actions speak louder than words. Today, we are taking concrete, meaningful action to make things right and ensure nothing like this ever happens again.”

He goes on to admit the brand’s “policies got in the way of our values and procedures interfered in doing what’s right” but suggests this is a “turning point for all of us at United and it signals a culture shift toward becoming a better, more customer-focused airline”.

United has been severely criticised for its handling of the situation and Munoz in particular was slammed for its reaction following the incident. Marketing Week columnist Mark Ritson said he made a mockery of the word ‘leadership’.

Marketing Week has taken a closer look at how brands can bounce back from disaster in light of recent events.

Drug giants threaten to boycott UK unless NHS funding increase

Some of the world’s biggest pharmaceutical companies, including GSK, AstraZeneca, Pfizer and Novartis, are planning to abandon the UK unless the NHS receives an additional £20bn a year.

The Association of the British Pharmaceutical Industry (ABPI), which represents these companies, has demanded an increase in health spending from 9.9% to 11% of GDP in its election campaign requests.

ABPI president Lisa Anson, told The Times that the financial squeeze on the NHS threatened the whole of Britain’s £30bn life sciences sector as firms would reconsider working in the UK.

Spotify buys blockchain startup to improve royalty payments

Music streaming service Spotify has acquired Mediachain, a startup that uses blockchain technology to verify ownership of work such as music and images.|

Spotify, which acquired the firm for an undisclosed sum, says: “The Mediachain team will join our New York City offices and help further Spotify’s journey towards a more fair, transparent and rewarding music industry for creators and rights owners.”

The brand adds that this type of movement is “critical to the health of the music industry”.

Mediachain founder Jesse Walden claims in a blog post that the music industry is suffering as it has no central database of music that can be used to ensure royalty payments.

“A music blockchain would be a single place to publish all information about who made what song, without having to trust a third-party organisation,” he says.

Blockchain in its simplest form is a digital ledger that enables organisations to record data in a highly secure way that is both fully verifiable and decentralised. It has the potential to offer marketers a wealth of opportunities, from ad delivery verification to the safe storage of data.

Google tweaks search to tackle fake news

Google has introduced a number of changes to its algorithm to make it harder for people to “game” the system, according to a blog post from the company.

These changes include updates in its algorithm to improve its search ranking, finding easier ways for people to provide direct feedback and offering greater transparency around how search works.

In the blog post, vice-president of engineering Ben Gomes, says: “Today, in a world where tens of thousands of pages are coming online every minute of every day, there are new ways that people try to game the system. The most high profile of these issues is the phenomenon of ‘fake news’, where content on the web has contributed to the spread of blatantly misleading, low quality, offensive or downright false information.

“While this problem is different from issues in the past, our goal remains the same – to provide people with access to relevant information from the most reliable sources available. And while we may not always get it right, we’re making good progress in tackling the problem. But in order to have long-term and impactful changes, more structural changes in search are needed.”

Wednesday, 26 April 2017

Apple looks to recreate ‘town squares’ with store redesigns

Apple has unveiled the biggest redesigns of its stores in 15 years as it looks to offer educational sessions and hands-on training and turn them into “town squares”. The changes include the launch of ‘Today at Apple’, which offers hands-on training programmes in topics ranging from photo and video to music, coding, art and design.

“At the heart of every Apple Store is the desire to educate and inspire the communities we serve,” says Angela Ahrendts, Apple’s senior vice president of Retail. “‘Today at Apple’ is one of the ways we’re evolving our experience to better serve local customers and entrepreneurs.

“We’re creating a modern-day town square, where everyone is welcome in a space where the best of Apple comes together to connect with one another, discover a new passion, or take their skill to the next level. We think it will be a fun and enlightening experience for everyone who joins.”

The redesign will also the introduction of meeting rooms, conference centres and ‘living trees’ in some stores, while in some cases the Genius Bar will be rebranded as the ‘Genius Grove’.

McDonald’s to bring food delivery to the UK in June

McDonald’s is planning to roll out its delivery service in the UK in June as it looks to grab a share of the fast-growing food delivery market. UK CEO Paul Pomroy tells The Telegraph a trial should be up and running shortly.

“We will start with a delivery service from the right number of sites that gives us scale,” Mr Pomroy explains. “I expect we will take a similar approach to the way we rolled out our app, starting small, learning quickly and scaling up very quickly.”

McDonald’s will not carry out the delivery itself, instead using a third party. That could mean a service such as Uber Eats or Deliveroo is brought on board to offer the service.

LVMH takes full control of Christian Dior

The luxury goods giant LVMH is to take full control of Christian Dior in a complex €12bn (£10bn) deal. Under the acquisition, the Arnault family, which owns a controlling stake in LVMH, will buy the 25% of Christian Dior it does not already own. It will then sell the company to LMVH.

LVMH already owns Christian Dior perfumes and beauty. This deal will bring the whole brand, including fashion, under one roof for the first time since the 1960s.

Bernaud Arnault, France’s richest man and CEO of LVMH, says the deal represents an “important milestone” and demonstrates his family’s commitment to LVMH. LVMH is the world’s largest luxury group and was formed through the merger of fashion house Louis Vuitton with champagne and cognac company Moet Hennessey.

Facebook under pressure after man livestreams killing

Facebook is coming under renewed pressure to stop violent, objectionable or illegal content being broadcast on the social network after a Thai man livestreamed the killing of his baby. The footage was available for 24 hours before Facebook took it down. Other users also uploaded the footage to YouTube, where it has also since been taken down.

Facebook is already reviewing its policies after a spate of objectionable content including a killing in the US and sexual assault were broadcast using Facebook Live.

A Facebook spokesperson says: “This is an appalling incident and our hearts go out to the family of the victim. There is absolutely no place for content of this kind on Facebook and it has now been removed.”

US to cut corporate tax in bid to boost growth

US President Donald Trump is expected to unveil plans to cut corporate tax today as he looks to increase investment in the country and boost growth.

Cutting corporation tax was one of his key pledges during his election campaign. Currently, corporation tax in the US is 35% but the President is thought to be considering a drop to 15%.

The aim is to boost growth by increasing investment. However, critics worry that it will made reducing the budget deficit much harder.

Tuesday 25 April

LinkedIn rolls out enhanced targeting

LinkedIn is rolling out new enhanced targeting capabilities that allow marketers to combine the site’s professional data with their own first-party data.

Available for all LinkedIn advertising products, including sponsored content and sponsored InMail, the Matched Audiences service is made up of three elements – website targeting, account targeting and contact targeting.

Website targeting enables marketers to target audiences based on their website visitors, while the account targeting element allows users to upload a list of company names and match them against the approximately 12 million company pages on LinkedIn.

Lastly, the contact targeting option allows marketers to upload email addresses directly to LinkedIn, or via platforms like Marketo or Oracle.

LinkedIn reports that during a six month trial involving 370 advertisers and over 2,000 active campaigns, Matched Audiences drove a 30% increase in the click-through rate through website targeting, 32% rise in post-click conversion using account targeting and 37% increase in click-throughs with the contact targeting service.

Jimmy Choo seeks buyer

British luxury shoe brand Jimmy Choo has announced it is seeking a buyer.

Valued at £700m, the business is expected to attract serious attention from luxury rivals in China, the Middle East and Russia.

Jimmy Choo’s main shareholder JAB Holdings, which holds a 68% stake in the business, confirmed it is also prepared to offload Swiss premium shoe and handbag brand Bally.

Over the past two years Jimmy Choo has been forced to weather stagnation in the luxury market, seeing its growth slow to 2% in 2016, down from 7% in 2015 and 12% in 2014, according to HSBC figures.

However, news of a possible sale pushed Jimmy Choo’s shares to a record high on 24 April, closing up 10.68% in London.

Peugeot embroiled in diesel emissions probe

Peugeot and Citroen have been placed under investigation following allegations their parent company PSA Group cheated diesel emissions tests.

The group, which is 14% owned by the French government, denies fitting its engines with cheating software. However, in 2016 an initial investigation found five PSA Group diesel vehicles emitting significantly higher nitrogen oxide in motorway conditions.

This investigation follows in the wake of the Volkswagen emissions scandal, which culminated in the German car firm paying out £2.2bn in compensation after admitting to fitting 11 million diesel cars with software to manipulate their emissions.

PSA Group is on track to become Europe’s second biggest car marker following its £1.9bn acquisition of the European arm of General Motors in March, which includes Vauxhall in the UK.

Wikipedia launches site to fight fake news

Wikipedia’s co-founder Jimmy Wales is to launch a news service combing the work of professional journalists and volunteers in a bid to fight the spread of fake news.

Offering “factual and neutral” articles, the Wikitribune site will be ad free and free to view. Writers will be required to cite sources for each fact and the public will be encouraged to edit articles to maintain accuracy, although pieces can only go live once approved by a staff member or trusted community volunteer.

Speaking to the BBC, Wales argued that the current advertising model had forced most media outlets to “chase clicks”, which was impacting on standards.

The website will instead rely on monthly supporters, who will fund the core paid staff of between 10 and 20 journalists.

Canadian coffee chain targets UK

Canadian coffee chain Tim Hortons is to make its European debut in the UK with the opening of its first outlet in Glasgow next month.

A household name in Canada, Tim Hortons will open on Glasgow’s Argyle Street in May, with further coffee shops planned in other city centre locations nationwide.

Despite being relatively unheard of outside its native Canada, the Tim Hortons chain dominates the home market, claiming eight out of every 10 cups sold across the country.

Monday 24 April

United Airlines to link executive pay to customer experience

Oscar Munoz United Airlines — United Airlines CEO Oscar Munoz

United Airlines has revealed plans to tie its executive pay structure to customer satisfaction levels as it seeks to rebuild its reputation following a recent PR disaster.

Two weeks ago footage emerged of a passenger being violently dragged off a United plane for refusing to give up his seat on the over-booked flight.

United has faced heavy criticism for its handling of the incident, particularly after its CEO Oscar Munoz failed to clearly apologise and take full responsibility in his first public statement. He described the passenger in question, David Dao, as “disruptive and belligerent” and only later issued a full apology.

In a filing to the US Securities and Exchange Commission, United said it was changing its remuneration policy in a bid to ensure no repeat of such incidents.

It said: “United’s management and the board take recent events extremely seriously and are in the process of developing targeted compensation programme design adjustments to ensure that employees’ incentive opportunities for 2017 are directly and meaningfully tied to progress in improving the customer experience.”

Furthermore, the airline said a prior agreement with Munoz to become chairman of the board in 2018 had been cancelled.

Woolworths brand could be set for high street return

The former commercial and marketing director of Woolworths is in talks to bring the brand back to UK high streets.

Tony Page said in an interview with Daily Star Online that he had approached Shop Direct about buying the brand back. The retail chain went into administration in 2008 with debts of £400m, resulting in the closure of 800 stores.

“I am still emotionally attached to it,” he said. “I still think it has got a role in the future.”

Shop Direct ran Woolworths as an online retail site after acquiring the brand but wound it down in 2015 and moved customers to its Very brand.

Page recently left his role as CEO of discount department store Tofs.

Five Guys plots further European expansion

US burger brand Five Guys is planning further expansion in Europe, including 20 new restaurant openings in the UK this year, the Telegraph reports.

The chain’s UK chief executive John Eckbert revealed talks are underway with the US parent company about extending its presence beyond the five European countries in which it currently operates: the UK, France, Germany, Spain and Portugal.

“We think Scandinavia, Austria, Switzerland and Italy would be logical places to go,” he said.

Five Guys, which had 59 UK outlets at the end of last year, has also identified a further 75 UK sites that it wants to open over the long-term. The UK business is a joint venture between the US business and the funder of Carphone Warehouse Charles Dunstone.

Online retail M&A activity reaches five-year high

Mergers and acquisitions in the online retail sector are at a five-year high, according to new research by law firm RPC.

The study shows that eight deals involving online retail businesses closed in 2016 compared to only three in 2012, City AM reports.

Recent deals include Halfords’ £18m acquisition of online bicycle retailer Tredz and the £13m acquisition of World of Books by private equity firm Bridges Venture.

M&A activity is on the rise as traditional retailers seek to grow their online presence and online retailers aim to expand their market share.

RPC partner Karen Hendy said: “The online retail sector is growing at a very fast pace, and we expect M&A activity will continue to rise.”

Sharp economic slowdown predicted

Economists expect official figures to show a sharp slowdown in economic growth during the first three months of this year.

Growth reached 0.7% in the final quarter of last year but is predicted to fall to 0.4% between January and March 2017, the Guardian reports.

The impact of inflation following the Brexit vote is likely to be a core factor behind the slowdown as disposable incomes take a hit from rising prices.

Real wages fell in February for the first time in two and a half years and consumer confidence has also dipped.

The Office for National Statistics is due to publish its initial GDP figure for the first quarter on Friday (28 April).