Spotify, Qantas, Marriott: Everything that matters this morning

Marketing Week rounds up all the most important advertising, marketing and digital news.

Spotify

Spotify secures Warner Music deal

Spotify has signed a new licensing deal with Warner Music Group, the last of the three big record labels to make its catalogue available to Spotify’s 140 million users.

The deals with Sony, Universal and Warner mean Spotify is perfectly placed to float on the New York Stock Exchange as early as this year.

Warner Music chief digital officer Ole Obermann said the deal was focused on finding “inventive ways” to reinforce the value of music and create additional benefits for artists, many of whom have been vocal about the small amount of revenue generated from steaming sites.

These measures could include adding a clause allowing the labels to hold back certain songs from Spotify’s non-paying users for a limited period of time in order to increase the royalties for artists.

READ MORE: Spotify signs crucial Warner Music deal

Qantas delivers second highest profit in 97-year history

Qantas

Qantas Airways has posted the second highest profit in its 97-year history, which soared to £860m for the year to the end of June.

Attributed to cost cutting and robust domestic business which helped to offset global competition, the strong result confirms that Qantas’ turnaround programme is complete, according to chief executive Alan Joyce.

Australia’s biggest airline also announced plans to sell non-stop flights from Sydney to London and New York by 2022.

READ MORE: Qantas cruises into second-highest profit on record

Marriott launches Travel Experience Incubator for startups

Marriott is teaming up with Accenture Interactive and Brooklyn-based incubator 1776 to launch a startup incubator focused on improving customers’ travel experiences.

Set to go live on 12 September, the Travel Experience Incubator is a 12 week programme which includes a demo day where the startups pitch their products to a set of judges. So far the programme has received 165 applications from entrepreneurs.

Speaking to AdWeek, global chief commercial officer at Marriott International, Stephanie Linnartz, explained that while the company is open to the possibility of acquiring one of the startups, that is not the main goal.

“We see this incubator as a mutually beneficial experience—we’re providing guidance and mentorship on our customer insights, business model and operations; in turn, we’re learning about the agility and entrepreneurship that is core to every startup.”

READ MORE: Marriott Is Launching a Startups Program to Improve Travel Experiences

Facebook readies video chat device

Facebook is readying the launch of a video chat device, code named Aloha, as part of a raft of new developments set to emerge from its secretive Building 8 division.

Scheduled for release in May 2018, Aloha is expected to feature a large touchscreen, camera and speakers, and boasts the capacity to recognise people’s faces. The team within Building 8 are also reportedly developing an Amazon Echo-style smart speaker, 360-degree camera and futuristic wearables.

Facebook also confirmed Andrew Bosworth, who served as Facebook’s vice president of ads and business platforms for five years, will take on responsibility for the running of Building 8 and Oculus, Facebook’s virtual reality arm.

READ MORE: Facebook is putting a top exec in charge of all hardware and readying an ‘Aloha’ video chat device

Abercrombie & Fitch shares buoyed by demand for Hollister

Shares in American fashion brand Abercrombie & Fitch have jumped by 16% as a result of rising demand for its surfwear sub-brand Hollister.

Hollister’s reported 5% sales growth during the second quarter of the year has largely been attributed to a strong denim collection, innovation across its swimwear lines and an aggressive marketing strategy, which included a teen-focused tie up with Angry Birds maker Rovio on a surfing-themed mobile game.

The improved performance at Hollister will be welcome news for Abercrombie & Fitch, which in May rejected a proposed sale to competitor American Eagle Outfitters, committing to take “aggressive action” in a bid to revitalise the brand.

READ MORE: A&F shares soar as Hollister drives another strong quarter

Thursday, 24 August

Samsung looks to draw a line under exploding Note 7 scandal with new smartphone

Samsung has launched what is probably the most important smartphone in its history as it looks to bounce back from the disaster of last year, when it had to recall its exploding Note 7.

The new Note 8, unveiled at an event in New York yesterday (23 August), aims to re-establish Samsung as the dominant player in the ‘phablet’ category – phones with a bigger screen and longer battery life than normal smartphones. It has a 6.3-inch display and a duel camera, as well as new biometric security features including a fingerprint scanner, facial and iris recognition.

While some brands might have adopted an apologetic tone following the Note 7 scandal, Samsung instead tackled the issue head on, apologising once again but also showing a reel of supportive words from fans of the Note series. And mobile chief D.J. Koh told the Wall Street Journal its engineers were told to push the boundaries and not be afraid of technology.

“We appreciate the relentless passion of the Note community. They’ve been a constant inspiration to us and we designed the new Note for them. From the Infinity Display to the smarter S Pen and the most powerful Dual Camera, the Galaxy Note 8 lets people do things they never thought were possible.”

McDonald’s launches first ever packaging collaboration as it ties up with Julien Macdonald

McDonald’s has paired up with fashion design Julien Maconald on its first packaging collaboration in the UK. Macdonald has designed a luxe burger box for the fast food chain’s ‘Signature Collection’ its range of gourmet burgers. It features crystal detailing, embellishment and bespoke digital print.

The Signature Collection has so far only been on trial in a select few restaurants, but McDonald’s now plans to roll it out to more than 900 before the end of the year. The Macdonald boxes will be limited to a run of 1,000 at a small number of showcase events.

Emily Somers, vice president of marketing at McDonald’s, says: “This is our first ever UK packaging collaboration, it’s a brave and exciting move and it’s like nothing we’ve ever done before. To partner with such an iconic designer as Julien Macdonald is fantastic, and his beautifully designed star-studded box complements The Signature Collection perfectly and is a great way to mark our nationwide launch of The Signature Collection.”

Channel 4 needs 3 million viewers for Bake Off to break even

Channel 4’s outgoing creative chief Jay Hunt has said the broadcaster needs to attract at least 3 million viewers per episode to make enough money from advertising to break even on the £75m it paid for the rights to the show. Speaking at the Edinburgh International TV Festival, she said Channel 4 would be “delighted” with 5 million viewers. That is significantly below the numbers the show regularly drew on the BBC and its peak of 14.8 million during last year’s final.

“If it gets five, six, seven [million] I would be absolutely delighted,” Hunt said. “This show breaks even at around 3 million, so anything north of that would be fantastic.”

According to the Guardian, Channel 4 averages 1 million viewers on a Tuesday night. Bake Off returns to screens on Tuesday (29 August).

READ MORE: Bake Off needs 3 million viewers to break even, Channel 4 says

Uber revenues grow despite crises

Uber’s business saw continued growth in the second quarter despite a wave of scandals and the departure of CEO Travis Kalanick. Gross bookings more than doubled year on year to $8.7bn, while net revenue was up 119% to $1.75bn and the number of trips increased by 150%.

Uber still isn’t profit making, but losses before interest and tax narrowed to $645m, against $708m in the prior quarter. The figures suggest customers were not convinced to go elsewhere despite allegations of sexual harrassment at the company and a a ‘Delete Uber’ campaign that ran after Kalanick joined US President Donald Trump’s advisory council.

READ MORE: Crises fail to knock Uber revenues off coursE (£)

Amazon gets approval for Whole Foods acquisition

Amazon’s $13.7bn acquisition of Whole Foods moved a few steps closer as it received approval from the US Federal Trade Commission and Whole Foods shareholders for the deal. The FTC said that following an investigation, it found the purchase would not “substantially lessen competition”, nor did it “constitute an unfair method of competition”.

Separately, Whole Foods held a shareholder meeting at which investors voted to wave through the acquisition. Shareholders will receive $42 for every share, a sizeable premium on its current trading price.

READ MORE: FTC approves Amazon’s $13.7 billion Whole Foods acquisition

Wednesday, 23 August

WPP blames client spend for lower growth

WPP, the world’s largest advertising group, has warned that its growth will be lower than expected this year after a difficult second quarter.

Client spend was down during the period, particularly within the FMCG and packaged goods sector, meaning it will only increase revenues and net sales by between 0% and 1% in 2017

The group, run by Sir Martin Sorrell, saw revenues hit £7.4bn in the six months to 30 June, an increase of 1.9% on the previous year at constant currency rates. But net like-for-like sales missed analyst expectations to shrink 0.5% on the previous year.

First half profit before tax was £779m, up 52.4% on the same period last year.

READ MORE: WPP warns on growth as companies slim down ad spending (£)

Walmart partners with Google to take on Amazon

US retail giant Walmart is teaming up with Google to enable customers to shop for products via its online marketplace Google Express – the first time it has allowed its products to be sold online in the US from anywhere other than its own website.

The deal will also enable shoppers to reorder items they have previously purchased via Google’s voice-controlled speaker – Google Home – its rival to Amazon’s Echo.

Customers can also shop using the tech giant’s AI-powered Google Assistant on their smartphone. Walmart customers will be able to link their accounts to Google, enabling it to learn shopping behaviour to better predict what they might want in the future.

READ MORE: Google and Walmart Partner With Eye on Amazon

GVC’s second Ladbrokes Coral takeover bid fails

Ladbrokes Coral

Online gambling group GVC Holdings made a second takeover bid for UK bookmaker Ladbrokes Coral, but talks have again broken down.

The offer is thought to have been worth as much as £3.6bn and would have created one of the world’s largest betting companies.

GVC, which owns brands including Foxy Bingo and bwin, first approached Ladbrokes about a merger last year while it was in the process of completing its £2.2bn deal with Coral.

Discussions are thought to have stalled because of a disagreement over the value of the companies and uncertainty ahead of the UK government’s review into the gambling sector, which is due to be published this autumn.

READ MORE: GVC fails in fresh bid for Ladbrokes Coral

Samsung rolls out Bixby voice assistant in 200 countries

Samsung has finally rolled out its equivalent of Apple’s Siri and Google Assistant; it was originally supposed to launch in April but delays pushed that date back.

Bixby is now live in 200 countries and is initially available in two languages: US English and South Korean.

The voice-controlled digital assistant is already pre-installed on Samsung phones as they run the Android operating system.

Samsung’s latest device, the Galaxy Note 8, is due to be launched today (23 August).

READ MORE: Samsung’s Bixby rolled out in 200 countries

Ford eyes deal to boost electric car sales in China

Ford is exploring a joint venture with Chinese electric car maker Anhui Zotye Automobile Co to create a new line of electric vehicles for the market.

Car manufacturers in China face new rules to help lower emissions as the Chinese government looks to reduce pollution.

China represents a big opportunity for electric car sales – it already has more electric cars on the road than any other country – and Ford expects sales of all-electric cars in China to reach four million by 2025.

“Electric vehicles will be a big part of the future in China and Ford wants to lead in delivering great solutions to customers,” says Peter Fleet, vice president and president for Ford Asia Pacific.

READ MORE: Ford eyes deal with Chinese electric carmaker

Tuesday, 22 August

Apple collaborates with Barclays so Siri can transfer money

Apple collaborates with Barclays so Siri can transfer money

Siri, Apple’s virtual assistant for the iPhone, can now transfer money. Thanks to a collaboration with Barclays, UK customers can simply use their voice to transfer cash.

By telling Siri who they want to transfer money to, the iPhone will allow them to seal the deal by just tapping their finger to authenticate via Apple’s Touch ID technology.

Barclays, which is the first UK bank to use Siri in this way, said the technology ensures security as well as getting rid of the faff of remembering passcodes when having to log-in to its app.

“Barclays has a long history of introducing innovative new products and services to give our customers choice in how they bank,” said Barclays’ head of customer experience and channels Raheel Ahmed.

“The introduction of Siri payments to mobile banking customers is another step forward, giving flexibility and greater choice for all our customers.”

READ MORE: “Hey Siri” – Now you can use Apple’s iPhone virtual assistant to transfer money with Barclays using just your voice

Johnson & Johnson faces $417m fine

Johnson & Johnson has been ordered to pay out $417m (£323.4m) in damages to a woman who says she developed terminal ovarian cancer after using its baby powder.

A Californian jury ruled that the FMCG giant didn’t adequately warn her about the cancer risks from using its talc-based products from a young age. However, the firm now plans to appeal the verdict.

“We will appeal today’s verdict because we are guided by the science,” Carol Goodrich, spokesperson for Johnson & Johnson Consumer Inc, said in a statement. Goodrich claims any evidence of a link between talc use and cancer is inconclusive at best.

This isn’t the first time Johnson & Johnson has been ordered to pay out damages to female cancer sufferers. It has lost four out of five previous cases against women who claim they’ve developed cancer from its talc products and so far paid out a total of $300m.

READ MORE: Johnson & Johnson faces $417m payout in latest talc case

Channel 4 defends decision to air controversial new ISIS drama

Channel 4 has come under fire for airing a four-part drama about a group of young Britons who are recruited by terrorist group ISIS.

The State (pictured above), which began airing on Sunday (20 August) night with an audience of 1.4 million, has been blamed for “glorifying ISIS” and being like a “Nazi propaganda film” by the Daily Mail. Its air date, meanwhile, coincided with the recent terror attacks in Barcelona and Marseille.

However, Charlie Winter, a senior research fellow at the international centre for the study of radicalisation (ICSR) at King’s College London, defended the show. “It has clearly been extremely well researched. If it provokes a conversation – a more nuanced, less emotional conversation – then I think that’s a good thing.”

Meanwhile, Channel 4 said: “The State is based on extensive factual research and offers an unflinching insight into the horrific actions of ISIS, which we believe is an important subject to confront and explore.”

READ MORE: Channel 4 defends Isis drama The State after criticism

Ford offers trade-ins for cars that are over seven years old

Ford mustang
Consumers might want to trade in their old cars for the much newer Ford Mustang model

In a bid to cut emissions, Ford is launching an incentive for UK consumers to trade-in cars that are over seven years old in a scheme that will last until the end of the year.

Consumers who take part in the scheme will be offered a £2,000 discount towards a new Ford model. Unlike similar schemes by BMW, Ford will accept petrol as well as diesel cars.

All of the part-exchanged vehicles will be permanently scrapped, which will have an “immediate positive effect on air quality. Ford shares society’s concerns over air quality,” said Andy Barratt, chairman and managing director of Ford of Britain.

“Removing generations of the most polluting vehicles will have the most immediate positive effect on air quality, and this Ford scrappage scheme aims to do just that.”

And by combining the scrappage incentive with other standard offers, Barratt claims customers could receive up to £4,000 off a Ford car or £7,000 off the cost of a Ford van.

READ MORE: Scrappy Days – Ford introduces toxic petrol and diesel scrappage scheme – and YOU could net £7,000 off a new model

UK government considers internet ombudsman to deal with online hate crimes

Facebook

Ministers in the UK are considering creating an internet ombudsman to deal with online hate crimes.

And, according to the Guardian, the government is pressing ahead with proposals for a levy on social media companies such as Facebook, which will mean they have to help pay for the ombudsman and its policing of online offences.

The UK would be following the lead of France and Australia, with each country currently creating an agency to act as an independent body to mediate between members of the public and social media firms.

The internet ombudsman’s role would be to help lessen violent threats and illegal online material. Final recommendations for an internet ombudsman are being drafted by Matt Hancock, the minister of state for digital and culture, with some movement expected by October.

READ MORE: UK considers internet ombudsman to deal with abuse complaints

Monday 21 August

FTSE leaders unprepared for hacks and GDPR

dataAmong the UK’s 350 biggest companies, 10% of boards have no plans in place to respond to cyber attacks, while just 6% say their business is completely ready for the new data laws being brought in next May under the EU’s General Data Protection Regulation (GDPR).

The government’s annual Cyber Governance Health Check, which questioned 105 of the FTSE 350’s members, also worryingly found that only 31% of boards receive comprehensive information on cyber risk and 68% have received no training in the area whatsoever. That’s despite the fact that, for the first time in the report’s history, a majority of company boards now understand the risks and consequences of a large-scale data loss.

The findings follow a number of surveys indicating a lack of GDPR preparedness among marketers, although not to the degree found among senior leadership in this report. Customers and investors will have to hope that compliance has been well delegated to specialists within businesses. The AA, Virgin Media and Guardian Soulmates have all suffered data security issues in 2017.

Operators urge 4G auction despite 5G battles

Mobile operators including O2 and BT-owned rival EE have pushed for the telecoms regulator Ofcom to organise a quick sale of rights to the radio spectrum that would immediately expand 4G mobile data coverage in the UK. That’s despite court cases over the sale of 5G frequencies. Ofcom had originally planned to auction both sets of rights together.

EE yesterday said it plans to go to the High Court to fight restrictions imposed on the frequencies it will be able to buy in the 5G auction, countering an attempt by competitor Three to tighten those restrictions.

Brands including Nokia and Samsung have already announced an intention to launch products and services for 5G networks, which will offer much faster mobile broadband download speeds and shorter lag times.

READ MORE: Brands shouldn’t ignore 4G opportunities in the rush to get on the 5G bandwagon

Can Co-op Bank’s ethical values survive rescue deal?

Co-op Bank’s shareholders will today vote on whether to accept £700m of funding from hedge funds to rescue the loss-making brand, which has been in dire financial straits since it came close to collapse in 2013. The Co-operative Group would be left with just a 1% holding in the company, which is leading many to speculate whether the bank would retain the ethical principles of The Co-op.

When the deal was originally announced at the end of June, Co-op Bank, which will become a standalone business, said the brand name and its ethical principles would both continue.

The bank set out to reinforce its ethical credentials in a campaign in March 2016, but despite putting itself up for sale in February 2017, it failed to find an outright buyer.

READ MORE: Co-op: Brits tired of brand’s making false ethical claims

Compare The Market owner mulls September float, reports say

BGL Group, which owns comparison site Compare The Market, could be set to float on the stock market as early as September, according to sources speaking to the Telegraph. That is when the business announces its full-year results.

The company has been planning an IPO since last year without committing to a timeline, having been valued at £2bn. It could still wait until its next set of reports in 2018, the Telegraph adds.

70% of marketing workplaces have ‘silly’ rules

Do you have to ask your boss to go to the toilet? Or to chat to a colleague? Are you banned from straying more than 20 metres from the office on your lunch break? If you answered ‘no’ to the above, apparently you’re one of the lucky ones, as 70% of workplaces within the marketing sector have one or more “silly” rules in place, according to a survey by CV-Library, with these just some of the more extreme examples.

Other rules mentioned by respondents include only wearing clothes in the brand colours, not drinking water and not being allowed to say the word ‘hello’ to a customer. Marketing tops the list of sectors that enforce bizarre office rules, the poll of 1,000 people found, although two thirds of marketers say they would disobey rules they deem silly.

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