Havas, Netflix, Aldi: Everything that matters this morning

We round-up all the marketing news that matters this morning.

Vivendi makes move to merge with Havas in €2.4bn deal

French tycoon Vincent Bollore took the first step in his attempt to merge media giant Vivendi and advertising company Havas, two groups he controls through his family-run conglomerate.

Vivendi said it was making an offer to buy Group Bollore’s 60% stake in advertising group Havas for €9.25 a share, a premium of 8.8% over Wednesday’s closing price, in a €2.36bn deal.

The combined entity would represent more than €13bn in annual revenues and add a new business to the Vivendi group.

Aldi plans to open up to eight stores in some UK towns

Aldi has an ambitious plan to have a store for every 30,000 people in the UK, as it says it could open up to eight stores in some towns. This could equate to 2,600 stores, which would quadruple the discounter’s size.

“If you look at the population, we think not only could we have a store in every town and city, but for every 25,000 to 30,000 people,” says Matthew Barnes, the UK and Ireland chief executive at Aldi.

The figures exceed Aldi’s targets to reach 1,000 stores by 2022. Barnes says the total could be closer to 1,300 by that date but said there could be “more potential than that”.

Netflix is creating 400 new jobs in Europe

Netflix is planning to create 400 new jobs in Europe by 2018 and has promised more original content.

The jobs will be located at a new customer hub opening in Amsterdam, which will initially start with 170 people.

Netflix has already doubled its workforce in the country, where its headquarters for Europe the Middle East and Africa are located, since the start of 2016.

“We are delighted to announce the creation of jobs in Europe and the opening of our new customer service hub in Amsterdam, as well as two new European original series,” says Netflix co-founder and chief executive Reed Hastings.

Hyundai and Kia forced to recall 240,000 cars

Hyundai and Kia have been ordered to recall 240,000 cars after an ex-Hyundai employee raised concern about defects to 12 car models.

It is the first time the South Korean government has issued a compulsory vehicle recall.

However, Hyundai and Kia have refused to act voluntarily, saying any problems which do exist do not compromise safety.

The calls will add to the 1.5 million cars that Hyundai and Kia offered to fix last month in South Korea and the US over possible engine stalling.

Thailand threatens Facebook with legal action over anti-monarchy posts

Thailand has threatened Facebook with legal action unless it removes 131 pages it considers illegal by 10am Tuesday (16 May) morning.

The pages include posts it says are critical towards the monarchy.

“If even a single illicit page remains, we will immediately discuss what legal steps to take against Facebook Thailand,” Takorn Tantasith, secretary-general of the National Broadcasting and Telecommunications Commission, tells reporters.

“Every person must comply with Thai laws, and strictly follow rulings by local courts.”

Thursday 11th May

Snap shares tumble 20% after disappointing growth

Shares in Snap, the parent company of Snapchat, fell 20% after disappointing growth in the first three months of 2017.

The first results posted since Snap’s IPO in March – the biggest in the US since 2014 – saw the company’s net loss reach $2.2bn (£1.7bn), due largely to costs associated with the IPO. Snap’s adjusted loss of $188.2m (£145.3m) was $10m (£7.7m) higher than expected.

Compared to the last three months of 2016, the number of daily active Snapchat users rose by 5% to 166 million, two million fewer than expected. This figure is, however, 36% higher than the same period last year.

Snap chief executive Evan Spiegel attributed the low level of daily active users to the fact Snapchat does not “bug” them with constant notifications and updates.

While revenue did rise 286% to $150m (£115.8m), Snap again missed forecasts by $9m (£6.9m).

Snap’s IPO in March valued the company at $28bn (£21.6bn), with stocks soaring 44% on the first day of trading.

Pret plots New York IPO

Pret A Manger is considering listing on the New York stock exchange as it plots further US expansion.

Clive Schlee, chief executive of Pret A Manger’s private equity owner Bridgepoint, described New York as a “wonderful Pret market”, where he could easily see the chain opening as many shops as in London.

Currently 329 of Pret A Manger’s 444 outlets are in the UK, where it opened 31 new stores last year. The US is the coffee chain’s second biggest market, where Pret A Manger opened nine new stores in 2016, taking its total to 74.

Transatlantic expansion could prove a savvy move for Pret A Manger, as it looks to claim a greater share of the $41bn (£32bn) US coffee shop market.

Diageo to challenge £107m tax bill

Drinks giant Diageo is to challenge a £107m demand for tax and interest made by HMRC as part of the Government’s “Google tax” crackdown on multinationals.

The dispute centres on profits that moved between the UK and the Netherlands, where Diageo employs 220 people.

In a statement Diageo said it did not believe that it “falls within the scope of the new diverted profits tax regime”. The company plans to pay the amount in full and then work to resolve the issue with HMRC over the coming year. The matter is not, however, expected to be resolved until the third quarter of 2018.

The so called “Google tax” crackdown on multinational companies comes after HMRC successfully forced Google to pay £130m in back taxes last year.

Lack of blockbusters and ad slump hits 21st Century Fox

Profits at 21st Century Fox fell 5% to $799m (£617.7m) during the first three months of 2017, hit by flat cable advertising and less successful film releases.

Despite revenue increasing 5% to $7.56bn (£6.18bn), due in large part to demand for advertising slots during February’s Superbowl, 21st Century Fox failed to release a big box office hit during the quarter.

The business was also affected by advertisers pulling spend from its Fox News channel in April amid allegations of sexual harassment, which led to the sacking of high profile presenter Bill O’Reilly last month.

21st Century Fox is still awaiting to see if its proposed £11.6bn takeover of Sky, of which it already owns a 39% stake, will be successful with UK regulators.

US fast food chain Wingstop eyes 100 UK stores

US fast food chain Wingstop is planning to open 100 stores across the UK in a bid to crack the European market.

The fried chicken specialist, which has over 1,000 stores worldwide, will open its first UK store at the end of 2017, as part of a 12 year roll out plan.

Having identified the UK as a “high chicken consumption market”, Wingstop president Larry Kruguer told CNBC that despite being “challenging”, Britain was an “open market” that would benefit from the chain’s small footprint and labour force. He also confirmed prices for chicken would be lower than in the US due to there being less demand.

Wednesday 10 May

Snapchat to publish its first earnings report

Snap Inc. is scheduled to report its first quarterly earnings as a public company today, thereby giving investors the chance to dig deeper into the operation.

Analysts expect the company to report revenues of $158.3m (£122m), a 308% year-on-year rise, according to Factset. And the market is anticipating daily active users – a key metric for Snap – to rise to 170 million from 158 million the quarter before.

John Lewis profits suffer £36m dent after breaching wage rules

John Lewis Partnership has been forced to restate its profits for last year to the tune of £36m after admitting that it has breached minimum wage rules.

Thousands of workers could now be set for a windfall after the retailer, which runs John Lewis department stores and Waitrose food shops, admitted the payroll error affected all staff who had been paid by the hour over the past six years.

John Lewis said that the problem arose because of its “pay averaging” practice which smooths out income to ensure staff receive the same monthly salary, regardless of how many hours they work each month.

Disney grapples with ESPN subscriber losses

Profits at Walt Disney jumped 11% to $2.4bn in the first three months of 2017, bolstered by attendance at its theme parks and resorts. But the media giant’s revenue gains were more muted, up 3% year-on-year to at $13.3bn (£10.3bn).

It also saw subscriber losses at its sports television network ESPN, as it has begun to feel the pressure from online television and viewer demands for cheaper cable packages.

CEO Bob Iger said the firm is now focusing on its mobile audience, aiming for an increasingly customised experience that allows fans to focus on news about their favourite teams. The company plans to sell ESPN-branded streaming directly to viewers by the end of the calendar year.

Its television networks, which include ABC, Disney and the sports-focused ESPN, are the biggest earners, together accounting for more than 40% of the firm’s total revenue in the last financial year.

‘Investors should have a bigger say over executive pay’

Investors should be given a bigger say over executive pay to help rebuild trust in business, the Institute of Directors (IoD) has said.

The IoD is calling for pay strategies to be rethought, if they are rejected by 30% of shareholders. Remuneration should then be put to a fresh vote, it said.

“There is still a pressing need to rebuild public trust in big business, to work in the long-term interests of investors and employees, rather than the short-term interests of managers,” said Oliver Parry, head of corporate governance at the IoD.

In November last year the government outlined its plans to make companies justify high levels of executive pay. Among the measures under consideration were pay ratios, which would show the gap in earnings between the chief executive and an average employee.

‘UK workers to be hit by pay squeeze’

British workers will see their disposable incomes shrinking this year as a result of rising inflation that will peak at 3.4%, an economic thinktank has warned.

The National Institute of Economic and Social Research said that wage rises would be capped at only 2.7% on average, leaving workers to face the largest real-terms cut in their takehome pay since early 2014.

The warning follows the controversy over rising energy bills and inflation-busting increases in council tax that have already hit household budgets ahead of the general election.

Tuesday 9 May

Dove introduce new bottles to celebrate body-diverse beauty

Dove is introducing a set of limited edition Body Wash bottles that come in various shapes and sizes as a ‘celebration’ of body-diverse beauty. The bottles were created by Ogilvy London.

“Every woman’s version of beauty is different, and if you ask us, these differences are there to be celebrated,” says Dove.

“That’s what real beauty is all about—the unique things that set us apart from each other and make us one of a kind. We’ve championed this version of beauty for the past 60 years, and celebrated diverse women in our groundbreaking real beauty campaigns. But we wanted to bring this to life through our products, too.”

Apple passes $800bn valuation – and analyst suggests it could hit $1trn

Apple’s share valuation passed $153 for the first time ever, giving the company a record market cap of $800bn. But US broker Drexel Hamilton expects Apple to go still higher.

He estimates Apple will break the $1trn valuation mark within a year, as he lifted its target share price from $185 to $202.

Facebook employs ex-political aides to help campaigns target voters

Facebook has given roles to former senior Conservative and Labour campaign officials in a bid to step up its attempts to build its influence as a political tool.

According to the Guardian, Facebook’s recruits have inside knowledge of how the major parties’ general election campaigns are likely to work. They include a former Downing Street adviser to David Cameron, a former aide to Ed Balls and a social media expert who worked with the Conservatives’ election strategist Lynton Crosby.

Instagram launches campaign to promote mental health awareness

Yesterday (8 May), Instagram launched its #HereForYou campaign to promote mental health awareness for mental health awareness month.

The campaign helps users find resources and support online and offline for how to get help with preventing and recovering from mental illnesses.

The one-minute spot features Instagram users talking about their past struggles with eating disorders, depression and suicidal thoughts and features three regular people.

Citymapper is launching a bus service in London

Public transport app Citymapper is launching a free bus service in London, a first step towards running its own transport services.

The app, which is currently used by commuters to find their quickest way around cities, will test the “smart bus” service Tuesday May 9 and Wednesday May 10. It will offer users a free ride and stop at existing bus stops.

Monday 8 May

Facebook launches campaign to combat fake news

Facebook is taking steps to help combat fake news during the UK general election, including a print campaign sharing 10 tips on how to spot it.

Users are advised to look out for “catchy headlines in all caps with exclamation marks” and for “phoney lookalike URLs” among other things.

As part of its fight against the spread of false information it will also delete tens of thousands of questionable accounts, as well as launch a fact-checking initiative. Furthermore, it will stop promoting posts that show signs of being implausible.

The moves follow growing pressure on Facebook over fake news. A spokesperson told The Guardian: “With these changes, we expect we will also reduce the spread of material generated through inauthentic activity, including spam, misinformation, or other deceptive content that is often shared by creators of fake accounts.”

A BBC Panorama investigation to be shown this evening (8 May) claims the social network played a decisive role in both the US election and Britain’s EU referendum last year.

TfL signs global licensing deal

Transport for London (TfL) has signed its first global licensing deal, in a bid to generate an additional £100m a year.

Items will include designer chairs featuring seat patterns found on the London Underground, tea towels emblazoned with the Tube map and lamps that take inspiration from bus headlights. It will also create its own fashion brand and limited edition Scrabble sets.

“We have been chuntering along quite happily for a number of years and built a great foundation in the UK,” said David Ellis, head of intellectual property development for TfL. “Since slightly before the London 2012 Olympics, there has been an energy behind London. We are now hoping to really drive this internationally. It is time to push the brand in key territories across the global market.”

One of these markets is Japan where the business has already tested the water. Last year TfL opened a pop-up shop in a Tokyo station, which sold items including a trainer made in partnership with Nike that features the font used in all London Underground maps, signs, logos and leaflets. China, North America and countries in mainland Europe are also in its sights.

In the past, TfL has partnered with online furniture business Made.com, games maker Mattel and Kirkby Design, which made cushions using a retro seat design.

Arla Food launches campaign urging consumers to ‘Eat Monday for Breakfast’

Dairy business Arla Foods has launched a new brand campaign telling consumers to ‘Eat Monday for Breakfast’, which follows on from its ‘Choose Goodness’ activity last year.

The campaign, which highlights the “natural goodness” in its products such as Skyr yogurt and Cravendale milk, includes 30-second ads running on catch-up TV and on sites including YouTube.

It will be supported by digital outdoor ads targeting commuters on their way to work, as well as three videos featuring comedian Nick Helm to run across HuffPost.

Each brand in the Arla portfolio will be creating additional content and providing tips to help people take on mornings.

Stuart Ibberson, senior director, marketing, at Arla Foods UK, said: “As part of our UK Strategy 2020 plan, we have ambitions to make Arla a household brand, encourage healthier food choices and highlight the nutritional qualities of dairy products. By continuing to focus on the most important meal of the day, we believe we can achieve these aims.”

Australian e-cig companies fined for false marketing claims

In a world first, three e-cigarette companies in Australia have been fined for making false claims in their marketing about the presence of harmful carcinogens in their products.

The Federal Court of Australia imposed the fines on three online retailers – The Joystick Company, Social-Lites and Elusion Australia. Each of their CEOs and directors has been ordered to pay penalties for breaching consumer law following action taken by the Australian Competition and Consumer Commission (ACCC).

ACCC acting chair Delia Rickard said: “Consumers were led to believe by this conduct that when using these e-cigarette products, they would not be exposed to the harmful chemicals found in ordinary cigarettes. In fact, they were exposed to the same chemicals, including a known carcinogen that has no safe level of exposure.”

UK firms eye growth through M&A deals

More than half of UK businesses are expected to look for mergers and acquisitions (M&A) over the next year, a 3% rise compared to six months ago.

EY’s 16th Global Capital Confidence Barometer also shows that greater significance is being put on non-organic growth, particularly from joint ventures and alliances. Almost a quarter believe this type of activity will lead to growth compared to just 13% six years ago.

There has also been an 11% drop in the number of businesses expecting their growth to come from organic sources since October last year.

The report also suggests that the UK is the third most attractive destination for M&A deals, behind