Amazon, Samsung, ANA: Everything that matters this morning

Catch up on all the most important marketing news from the around the world with our morning round-up.

Samsung Electronics’ CEO quits amid internal ‘crisis’

Kwon Oh-hyun, the CEO and vice chairman of Samsung Electronics, has quit the business citing an “unprecedented crisis inside out.”

The decision is thought to be the result of the August imprisonment of Lee Jae-yong, the de facto head of the Samsung Group, who was found guilty of bribery and embezzlement.

In a statement, Kwon said: “Samsung Electronics is confronted with an unprecedented crisis inside out, I believe that time has now come for the company to start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry.”

The news comes as Samsung Electronics predicts record profits of $12.8bn – a year-on-year rise of 179% – for its third quarter as it was boosted by strong microchip sales.

The CEO of Amazon Studio suspended following sexual harassment claims

Amazon Studio chief Roy Price has been suspended by Amazon amid claims he sexually harassed female TV producer Isa Hackett.

In a piece on The Hollywood Reporter, Hackett, a producer on Amazon’s original TV series The Man in the High Castle, recalls a taxi ride and party where Price sexually harassed her despite repeatedly being told to back off.

Price says she was inspired to come forward after the various allegations were made public against Hollywood producer Harvey Weinstein.

Amazon said in a statement that Price is “on leave of absence effective immediately.“ It said it also plans to “ [review] our options for the projects we have with The Weinstein Co.”

ANA suffers embarrassment as one of its ads appears on Brietbart

The US-based Association of National Advertisers has seen one of its ads unwillingly appear on far-right media site Brietbart.

The trade group, which represents the nation’s largest advertisers, was embarrassingly forced to pull the banner ad from site after being alerted via a Twitter user. The ad touted a new report for marketers on how to simplify agency compensation.

An ANA spokesman told Ad Age that it was “an unintentional result of a programmatic buy and it has been removed.”

It’s an unfortunate turn of events for the ANA, which regularly campaigns for better brand safety and against ads unknowingly appearing in unsavoury places.

Facebook controversially bans artistic ad for showing nudity

The Victorian Women’s Trust has been banned from advertising a tote bag on Facebook.

The Australian not-for-profit organization, which supports women’s rights through research, was promoting the bag as part of a fundraising drive. However, it was told the fact the bag features two nude cartoon women dancing was unacceptable.

The bag’s art was created by artist Frances Cannon, who uses her work to promote self-esteem, positive body image and self-love.

The trust’s manager of strategic communications, Allyson Oliver-Perham, told the Guardian: “I’m just dumbfounded by Facebook’s response to this. The artwork is supposed be really nice and positive, it depicts a celebration of women supporting each other, dancing and coming together. It fits in with the work of the artist, Frances Cannon, whose work promotes body positivity.”

A representative from Facebook apparently told Oliver-Perham: “Your ad was not approved because it violates a number of Facebook’s ad policies.

“We don’t allow adverts that depict nudity, even if it isn’t sexual in nature. This includes the use of nudity for artistic or educational purposes. Adverts like these are sensitive in nature and hence are not allowed.”

HSBC promotes new chief executive from within

Banking giant HSBC has confirmed John Flint will succeed Stuart Gulliver as chief executive.

Flint, who currently heads up the bank’s retail and wealth management divisions, will take up the new position from 21 February next year.

Mark Tucker, chairman of HSBC, said Mr Flint had a “broad and deep banking experience across regions, businesses and functions” as well as “a great understanding and regard for HSBC’s heritage”.

Mr Flint, 49, said he was “humbled by the responsibility and enormously excited” to lead the bank. If he meets all his performance targets, he could earn a maximum of £9.68m a year.

Thursday 12 October

Alibaba ploughs $15 billion into R&D

Alibaba is to invest $15bn in R&D projects in a bid to become a leader in AI.

Speaking at its annual cloud computing conference in Hangzhou, the Chinese e-commerce giant reportedly announced plans to open seven new labs – two in China, with others in Singapore, Moscow, Seattle and in Silicon Valley – as part of its DAMO Academy (discovery, adventure, momentum and outlook).

It is thought that this new wave of research will focus on disruptive technology like the internet of things, data analysis, artificial intelligence and quantum computing. The research project represents the latest stage in Alibaba’s plan to serve two billion customers and create 100 million jobs by 2036.

Gucci pledges to go fur free by 2018

Luxury fashion brand Gucci will go fur-free from 2018 as part of its commitment to sustainability.

From its spring/summer 2018 collection onwards Gucci will no longer use mink, coyote, raccoon dog, fox, rabbit or any other species specially bred or caught for its fur, and will auction off all of its remaining animal fur items. The proceeds from the sale will go to animal rights organisations Humane Society International and LAV (Lega Anti Vivisezione) in Italy.

Gucci will also become part of the Fur Free Alliance, the international group of organisations that campaigns on animal welfare and promotes alternatives to fur in the fashion.

This move from Gucci follows in the footsteps of Italian fashion house rival Armani, which pledged to go 100% fur free in March 2016.

Facebook unveils world’s “most accessible VR experience”

Facebook is hoping to take virtual reality mainstream with the launch of standalone VR headset, Oculus Go.

Scheduled for release in 2018 and priced at $199 (£151), the Oculus Go device is designed to be the “most accessible VR experience ever”, according to Facebook CEO Mark Zuckerberg.

Whilst acknowledging the slow adoption of VR hardware since launching the first Oculus Rift headset in March 2016, Zuckerberg said Facebook’s goal was to get “one billion people using VR”.

With Oculus Go being pitched as more of a budget VR experience, Facebook is also working on a prototype high-end device that will offer movement-tracking without the need for tethering to a computer, or the placing of sensors around a home – nicknamed Project Santa Cruz.

Coach changes corporate identity to Tapestry

Coach Inc is changing its corporate name to Tapestry Inc in a bid to create a broader umbrella for its high-end brands.

Going forward Tapestry will be the holding company of American luxury brands Coach, Kate Spade and Stuart Weitzman, reports Reuters.

Founded 76 years ago, Coach has built a global reputation as a luxury handbag brand, which in recent years has branched out into shoes, fragrance and accessories.

However, its ambition to move from mono-brand retailer to a house of brands has seen Coach buy up smaller brands, such as US footwear label Stuart Weitzman in 2015 and handbag rival Kate Spade, which it acquired for $2.4bn (£1.8bn) in May.

Amazon expands food delivery offer with Booths partnership

Amazon is expanding its UK food delivery offering through a new deal with upmarket grocer Booths, nicknamed the “Waitrose of the North”.

The deal with Amazon Fresh will make Booths’ range of ready meals, cheese and deli products available in the 302 postcodes across London, Surrey, Hampshire, Bedfordshire and Hertfordshire. Booths currently has physical stores in Lancashire, Cheshire, Cumbria, Yorkshire and Greater Manchester.

Since launching in the UK in June 2016, Amazon Fresh now serves 180,000 items through its wholesale deal with supermarket Morrisons and acquisition of US health food chain Whole Foods in June.

Wednesday, 11 October

Beyoncé fronts #FreedomForGirls campaign

A new campaign promoting the rights and welfare of girls wordlwide, called #FreedomForGirls, launches today (11 October) to mark the International Day of the Girl. Singer Beyoncé acts as the campaign’s ambassador, with her song ‘Freedom’ featuring in a new short film that has launched on YouTube, linked from the Google homepage in 45 countries.

The campaign will push for greater awareness and action around key issues affecting girls globally, as well as aiming to ensure the Global Goals for Sustainable Development are met. #FreedomForGirls follows last year’s #WhatIReallyReallyWant, which marked the 20th anniversary since the Spice Girls’ debut single ‘Wannabe’ by recreating the music video to highlight the same themes.

Equifax almost doubles size estimate of UK hack

Credit reference agency Equifax, which was targeted by hackers in May, has admitted that nearly 700,000 UK customers had sensitive personal data stolen in the breach, despite originally estimating the number was “less than 400,000”. The customers, who are now being contacted and offered free ID protection services, had email addresses, phone numbers, login details or driving licence numbers accessed by the criminals and the company admits they are now at risk.

Over 15 million customer records amassed by the company between 2011 and 2016 were targeted, with 14.5 million potentially having had name and date of birth details compromised, though Equifax states these people are not at significant risk of crime.

The company is also facing legal action in the US where over 140 million records were breached.

Deliveroo: customers would pay for workers’ rights

Deliveroo managing director Dan Warne has told MPs that the company would add £1 to the cost of a meal delivery if it is forced to offer its workers improved employment rights. Speaking to the House of Commons’ Business, Energy and Industrial Strategy select committee, he said consumers would suffer if it had to give paid sickness leave and holiday to its delivery staff, who are currently self-employed.

Similarly, Uber head of policy Andrew Byrne said the ride-haliling app would lose “tens of millions” by converting its 50,000 self-employed drivers into employees entitled to minimum wage and statutory benefits. Uber is currently appealing a court ruling that found its drivers should be treated as employees, with a decision due before Christmas that could affect many brands using the ‘gig economy’ business model.

Uber lost its licence to operate in London last month, after Transport for London said it had not satisfied public safety concerns.

Energy price cap ‘hurts consumers’

It is perhaps no surprise that the head of an energy firm should complain about restrictions on the amount it can charge customers, but E.ON’s UK CEO Michael Lewis also claims it would be bad for the public, since it would put off new entrants to the market and limit consumers’ incentive to switch providers.

“We are actually in a situation where the market is working quite well. We have 60 competitors. We have high levels of switching … A cap will actually dampen competition, reduce engagement and take us backwards,” he told the Guardian.

Recent years have seen smaller brands such as Ovo Energy and First Utility take on the ‘big six’ with competitive pricing and a service-focused customer offering. The government is set to put forward legislation tomorrow (12 October) to cap the price of standard variable tariffs, but Lewis argued the government should instead invest in rolling out smart meters so customers get a better understanding of how much they pay.

Co-op set to buy Nisa

The Nisa brand of convenience stores has recommended that its shopkeepers accept a £143m offer from The Co-operative Group to acquire all of its 3,200 UK stores. Under the terms of the deal, which must still go to a vote of members, the Nisa brand would continue, but members would choose whether to sell to Co-op or become franchisees. Co-op would allow shopkeepers to choose their own ranges of products but offer better buying power through Co-op branded goods.

Co-op Food CEOJo Whitfield says the buyout would be a “win-win for two member-led, community-focused organisations, and in the process create a distinctive footprint within the growing UK convenience retail sector”.

Sainsbury’s had originally agreed a deal to buy Nisa, buy decided in August not to follow through with it.

Tuesday, 10 October

Google finds Russia-backed ads on YouTube, Gmail and search

Google has found ads bought by Russian operatives across a number of its services including YouTube, Gmail and search. A report by Reuters claims the ads were part of a broader attempt by Russia to meddle in the US presidential election last year. Ads have also been found on Facebook and Twitter.

While the Google ads don’t appear to be from the same Kremlin-affiliated entity that bought ads on other sites, the suggestion is that they may indicated a broader attempt by Russia to spread disinformation online.

Separately, Microsoft has also said it is looking into whether Russians bought US election ads on its platforms.

Companies that focus on wellbeing are more profitable, claims report

Businesses in the FTSE 100 that use words and phrases such as ‘mental health’ and ‘wellbeing’ more than twice in their annual reports are more than three times as profitable as those that didn’t, according to research by London startup Soma Analytics.

It found that firms that use the phrases two times or less had profits of £563bn on average, while those that mentioned the words three times or more had average profits of £1.4 trillion.

“One might argue that the more a company holds itself publicly accountable for the wellbeing of its employees, the more they invest in it,” the report explains. “This could lead to more productive employees with fewer days off work and more engagement with their company, ultimately leading to better financial returns.”

Lloyds topped the report, mentioning mental health 13 times, following by Royal Mail on 10 times. A number of firms, including British Airways owner IAG, didn’t mention either word at all.

Ikea to start selling on third-party websites

Ikea is shifting its online strategy, expanding beyond selling products just on its own website to work with third parites. Torbjörn Lööf, chief executive of Inter Ikea, would not say which retailers it would be working with, but Amazon, Alibaba and eBay are expected to account for 40% of all ecommerce sales by 2020.

“[This] is the biggest development in how consumers meet Ikea since the concept was founded,” he tells the Financial Times.

The move comes as visitors to Ikea’s vast out-of-town outlets fall and amid a more general shift away from stores to ecommerce. Ikea will be hoping the strategy shift will help it navigate the new retail landscape in which companies such as Sears and Toys ‘R’ Us have struggled.

P&G readies for battle with Peltz

Procter & Gamble is hoping to stop activist investor Nelson Peltz getting a seat on its board in a vote today. P&G fears Peltz, who runs hedge fund Trian Partners, wants to make major changes at the company including a possible breakup.

Peltz has long been critical of P&G’s leadership for overseeing what he sees as years of slow growth and in some sectors declining market share. But P&G stands behind its strategy and is warning shareholders not to vote to give _eltz a board seat.

Microsoft kills off Windows Phone

Microsoft is to stop making new feature and smartphones that run its Windows Phone operating system, putting an end to a 17-year attempt to offer a competitors to Apple and Google in the mobile phone market. In a post on Twitter, Microsoft head of Windows Joe Belfiore says Microsoft will continue to support the hardware and software but is not planning any new updates.

“Of course we’ll continue to support the platform.. bug fixes, security updates, etc. But building new features [and hardware] aren’t the focus,” he says.

The major issues for Windows Phone has been the lack of apps, with developers unwilling to invest in the platform because of its low user numbers and consumers not wanting to buy into the ecosystem because of the lack of apps.

Monday, 9 October

Dove admits it ‘missed the mark’ with ‘racist’ ad

Dove has hit the headlines for the wrong reasons again after posting a Facebook ad depicting a black woman turning into a white woman.

The brand was accused of racism and has since removed the ad and apologised, admitting that it “missed the mark”.

The ad shows a black woman wearing a t-shirt to match her skin tone. As she removes the t-shirt she turns into a white woman wearing a white t-shirt, supposedly after using Dove body lotion.

The ad has been compared to Victorian soap ads which showed black people being scrubbed clean to reveal a white body.

I cannot conceive of how anyone at Dove thought this ad was acceptable. This is literally how Victorian soap was advertised by Unilever… pic.twitter.com/m9HH7BVXts

— Hannah Rose Woods (@hannahrosewoods) October 8, 2017

After removing the ad, the Unilever brand tweeted: “An image we recently posted on Facebook missed the mark in representing women of colour thoughtfully. We deeply regret the offence it caused.”

Dove received criticism earlier this year after releasing a range of bottles depicting different body shapes, which backfired.

Mastercard pushes digital wallet in latest TV campaign

Mastercard is launching its first major TV campaign to promote the use of its digital wallet Masterpass today (9 October).

The business has “invested heavily” in the campaign as Masterpass represents the “future of our business” according to head of marketing in the UK, Ireland, Nordics and Baltics, Nicola Grant.

The campaign is designed to build understanding and awareness of the digial product, which allows users to store payment information, including card details from Mastercard and competitor payment networks, as well as delivery information, all in one location.

Created by McCann London, the campaign will also feature on digital, outdoor and social channels. The second phase of the campaign, which will kick off on 23 October, will see consumers being retargeted with retailer incentives to encourage them to use the system.

Grant says: “Masterpass represents the future of our business and this is why we are investing heavily in such a significant campaign. We are scaling the digital payments side of our business, and Masterpass is at the core of this.

“For consumers it means never having to pass their card details on to retailers. It is secure, simple and convenient and that is the message we want to convey.”

Airbnb paid less than £200,000 in UK tax last year

Airbnb paid just £188,000 in UK corporation tax last year despite earning £657m in rental payments for property owners.

The commissions the company earns in the UK are booked by its Irish subsidiary, but it also has two UK subsidiaries – one made a pre-tax profit of £960,000 so paid £188,000 in UK corporation tax (£8,000 lower than in 2015), but the other didn’t incur UK corporation tax as deductions resulted in a loss.

Airbnb said in a statement: “We follow the rules and pay all the tax we owe… Our UK office provides marketing services and pays all applicable taxes, including VAT. The Airbnb model is unique and boosted the UK economy by £3.46bn last year alone.”

Pret eyes further expansion

Pret A Manger has recorded a 39% rise in pre-tax profit across its European, US and Hong Kong divisions to £75.5m thanks to a focus on healthy and dairy-free products.

The brand opened 31 new stores in the UK during the period, including a vegetarian only shop in London’s Soho, taking its total up to 329. Following a successful year Pret now has plans for further expansion at home and abroad in the pipeline.

Honda vows to keep UK factory despite Brexit uncertainty

Honda has said it is “committed” to making and selling cars at its Swindon factory despite the uncertain economy following Brexit and a drop in profits at the facility.

The car marque’s UK subsidiary saw profits slide 21% for the year to 31 March, partly due to the weaker pound.

Its European arm, meanwhile, is due to post a rise of more than 100% for the same period thanks to increased sales volumes, exports to the US and the strengthening of the euro against the pound.

However, the group said it remains “committed” to manufacturing and selling cars in the UK. It invested £200m in the Swindon factory last year, making the site its global hub for the new five-door Civic, making it less reliant on the European market.

The Japanese group also has a base in Wiltshire, which it has pumped £2.2bn into since opening in 1985.