Amazon, McDonald’s, Piccadilly Lights: Everything that matters this morning

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

amazon advertising

Amazon’s ad business tops $1bn

Amazon is now generating more than $1bn from advertising as its investment in new ad technology such as programmatic and hiring staff to work on its ad products pays off. Amazon’s “other” revenue, which is mostly ad sales but also includes its credit card business, saw revenues rise 58% year on year to $1.12bn in its third quarter. And growth is accelerating, up from 53% in Q2.

Speaking on a conference call with analysts following its results yesterday, Amazon CFO Brian Olsavsky said: “We’re very pleased with the advertising business. Our goal here is to be helpful to consumers and help them make better shopping and selection choices. We’ll also provide targeted recommendations, so making it helpful for customers rather than intrusive.”

READ MORE: Amazon reveals how it thinks about advertising

While Amazon’s ad business is growing rapidly, it is still some way behind the biggest players in the digital space – Google and Amazon. Google’s parent company Alphabet, which also reported results last night, saw ad sales for the quarter rise to $24bn on the back of strong growth in mobile. Facebook’s second quarter ad sales were $9bn.

McDonald’s reviews $2bn global media account

McDonald’s is undertaking its first global media review in more than a decade as it looks to find ways to more efficiently spend its roughly $2bn account. Currently, Omnicom’s media agency OMD handles most of its media work and McDonald’s says its relationship with the agency “remains strong”.

Last year, McDonald’s consolidated its creative agencies with Omnicom in the US under its ‘one agency’ structure. However, it is looking to do the opposite with media, moving away from a single global media agency to work with a small number of media agencies worldwide.

“We are looking at ways to make our marketing dollars work harder, whether that be through more efficient media spending or finding more effective ways to connect with consumers,” says Bob Rupczynski, McDonald’s vice president of global media and customer relationship management.

The move comes as McDonald’s ups its focus on digital marketing and tech innovations. It has been focused on new services including mobile ordering and delivery that give the company more access to data. It is likely McDonald’s will want to look at how it can better target customers as part of the review.

The Piccadilly Lights are switched back on

Piccadilly Lights
The Piccadilly Lights, owned by Landsec, are switched back on after 9 months’ major renovation

The Piccadilly Lights have been switched back on after a nine-month renovation that replaced the original patchwork of screens with a Europe’s largest 4K LED digital screen. The screen also includes new technology so it can react to external factors such as the weather to enable brands to display more relevant content.

The first ad to appear was a fundraising campaign for Barnado’s, where members of the public paid to appear on the new screen. Coca-Cola, Samsung, Hyundai, L’Oreal Paris, eBay, Hunter and Stella McCartney are the brands currently advertising on the screens.

Twitter sees the positives as user numbers and video ad revenues grow

Twitter reported better-than-expected earnings as it saw momentum in user growth and video advertising revenues. The company is now expecting to turn its first ever quarterly profit in Q4, estimating adjusted profits will come in at between $220m and $240m. In Q3 its losses were $21m, narrowing than the $103m loss a year earlier as it focuses on cutting costs.

Revenues was down 4% to $590m but Twitter says it is seeing strong growth in video advertising, where it is now focusing, as well as direct response ads. And while advertising still makes up the majority of its business, it is diversifying into new businesses such as data licensing and spoke on a conference call with analysts about the possibilities for monetising services it owns, such as Hootsuite.

User growth was also up, with monthly active users rising 4% to 330 million on the back of what CEO Jack Dorsey said was better use of push notifications and features such as Explore to help people find interesting and relevant content. Twitter will be focusing more attention on personalising the service to drive up user numbers and engagement.

However, Twitter admitted it has been overstating its user numbers for the past three years because it mistakenly included users of some third-party apps in the monthly count. That means it has revised its user numbers over the past three years down by around 2 million, although the company claims this is a small revision.

Hotel booking sites face investigation by competition watchdog

Hotel booking sites are to be probed by the UK’s comptition watchdog over concerns that consumers could be being misled about the best deals. The Competition and Markets Authority (CMA) says it is “concerned about the clarity, accuracy and presentation of information on sites”.

The investigation will look into areas such as hidden charges, how search results are displayed and whether that is impacted by the commission hotels pay to be on the sites, and the discounts claimed. While the watchdog has written to the industry, where major players include Expedia and Booking.com, it is also seeking evidence from hotels and consumers.

READ MORE: Hotel booking sites probed by consumer watchdog

Thursday, 16 October

New hire signals Apple’s intent in TV content

Apple has given one of the clearest signs yet of its intention to ramp up commissioning of original TV programmes, with the hire of former BBC and Channel 4 executive Jay Hunt. Hunt was in the running to become Channel 4’s next CEO following David Abraham’s departure, but lost out on the role, and will now take the role of creative director, Europe, worldwide video at Apple. She was responsible for BBC programmes such as Sherlock, and signing up the Great British Bake Off for Channel 4.

Apple has a reported $1bn budget available for commissioning new TV content, which suggests it is plotting a major move to rival Netflix and Amazon Prime, as well as traditional broadcasters. Apple has already hired two former Sony Pictures Television executives as chief content officers.

READ MORE: Apple hires top UK TV executive to help boost video content

Mental health costing 300,000 jobs a year

The need for marketers to end the stigma of mental health in the workplace has never been greater, after a new report commissioned by prime minister Theresa May found that 300,000 people are forced to leave their jobs each year as a result of mental health problems, costing the economy £99bn. Some 15% of people show symptoms of a mental health condition.

The report lists 40 recommendations for addressing mental health in the workplace, as well as setting out a framework of “core standards”. These include developing mental health awareness among employees, encouraging open conversations about mental health and the support available, and providing good working conditions and a healthy work-life balance.

The report follows efforts by The Marketing Society and campaign group Time for Change to set up an initiative specific to the marketing industry, tackling the same issues.

READ MORE: Mental health problems are forcing thousands in UK out of work

Demand for new cars drops due to Brexit

The car industry has announced disappointing new numbers for the month of September, claiming that a 14% drop in consumer demand for new cars was responsible for a 4% drop in production. The Society of Motor Manufacturers and Traders (SMMT) also says uncertainty over government plans to improve air quality also had an impact on new diesels.

According to SMMT chief executive Mike Hawes: “With UK car manufacturing falling for a fifth month this year, it’s clear that declining consumer and business confidence is affecting domestic demand and hence production volumes.

“Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought.”

READ MORE: UK car manufacturing falls in September

Nearly a million more people listening to radio

Though it often doesn’t grab much media attention in contrast to digital channels today, radio is quietly growing its user base in the UK, according to the latest quarterly Rajar figures. Nearly a million more people in the UK listened to the radio in the third quarter of September compared with the same quarter in 2016, giving it a reach of 90.1% of the population – also up by one percentage point year on year to give the highest Q3 measure since 2011. Listeners tune in for 21.3 hours per week on average.

The share of digital radio – comprising DAB, online/app and digital TV listening – is unsurprisingly growing, approaching half of all radio use at 48.8%. More than six out of 10 people now use digital radio once a week.

Rajar also looked at social media engagement, and found 42% of 15- to 24-year-olds get social updates about favourite radio programmes or presenters, and 31% of adults.

Amazon to deliver inside people’s homes

Amazon’s conveyer belt of new products continues to turn relentlessly, as it has announced a new service that uses cameras and smart locks to let delivery people access a customer’s home. Amazon Key will let Amazon couriers open a customer’s door and place a package inside, while the connected camera monitors them to ensure delivery is made securely and as planned.

Amazon vice president of delivery technology Peter Larsen told Reuters the technology is “not an experiment” but a “core part of the Amazon shopping experience from this point forward”. Amazon Key is currently available in a small number of US cities for $249.99 (£189).

READ MORE: Amazon is selling smart cameras that let couriers deliver packages inside your home

Wednesday, 25 October

Lexus quits partnership with The Weinstein Company

Car brand Lexus has terminated its partnership with The Weinstein Company following the allegations that co-founder and CEO Harvey Weinstein sexually harassed or assaulted a number of women including Gwyneth Paltrow and Angelina Jolie.

The luxury car marque, owned by Toyota, did sponsor TV shows including Project Runway, which is produced by the firm.

“Lexus has chosen to terminate its agreements with The Weinstein Company that saw the luxury automaker working with the film studio on certain film and television projects,” a spokeswoman told Reuters.

READ MORE: Toyota’s Lexus will end partnership with The Weinstein Co

Geordie Shore star caught up in first Snapchat ad breach ruling

Two Snapchat posts by a reality TV star have been found to break UK ad rules against “hidden” advertising on social media, in the first case of its kind on the social network.

Marnie Simpson, who stars in MTV show Geordie Shore uploaded images of two products – dental brand Diamond Whites and her own coloured contact lense range ‘iSpyEyes by Marnie Simpson’ – on 20 June this year but neither were identified as ads.

The Advertising Standards Authority (ASA) normally orders social media posts of this kind to be deleted or amended, but no action has been ordered given Snapchat posts are automatically deleted after 24 hours.

The two brands in question have agreed to ensure #ad is used in all future advertising posts.

READ MORE: Geordie Shore’s Marnie Simpson broke ad rules on Snapchat

Twitter launches transparency centre for political ads

Twitter is prepping the launch of a transparency centre, with stricter rules for ads, particularly political ads, following revelations that Russia used social media to influence the 2016 US presidential election.

“We’re announcing steps to dramatically increase transparency for all ads on Twitter, including political ads and issue-based ads. We will also be improving controls for our customers and adopting stricter advertising policies,” said Twitter’s Bruce Falck, GM revenue product and engineering, in a blog post.

The transparency centre will offer “everyone visibility into who is advertising on Twitter, details behind those ads, and tools to share your feedback” with the social network.

Through the transparency centre people will be able to see all ads that are currently running on Twitter, including ‘Promoted-Only’ ads, how long ads have been running, ad creative associated with those campaigns and ads targeted to them, as well as personalised information on which ads they are eligible to receive based on targeting.

People can also report inappropriate ads or give negative feedback for every ad running on Twitter. “This feedback will help us more quickly remove inappropriate ads from Twitter, and show you more relevant ads in your timeline,” added Falck.

These updates will be made in the US first before being rolled out globally.

Premier Inn growth slows but expansion continues

Premier Inn owner Whitbread is eyeing further growth for the hotel chain, with CEO Alison Brittain stating it will open 1,000 new rooms in two years, the equivalent of “an entire hotel chain”, she said.

Brittain said she was pleased with how the brand had performed during the first six months of the year given it kept occupancy levels above 80% in the regions and at 85% in London, despite its ongoing expansion programme.

However, when looking at the chain’s reduced rate of revenue per available room – a key industry performance metric known as RevPAR – the story is not quite so positive.

On a like-for-like basis Premier Inn’s RevPAR was up 1.8%, down from 3.1% in the first quarter. The half year figure also compares to 3.5% for the wider midscale and economy market, with Premier Inn lagging both regionally and in London. This is partly to blame for Whitbread shares falling more than 4% to £37.73 following the update.

The high occupancy rate coupled with a 2.8% rise in average room rates saw Premier Inn’s statutory pre-tax profits rise more than a quarter to £295m.

Whitbread’s Costa Coffee chain, meanwhile, reported like-for-like sales growth of just 0.6% during the same period but pre-tax profits fell 9.8% to £59m.

READ MORE: Premier Inn delivers the goods for Whitbread as Costa Coffee cools

Instagram introduces split screen live videos for two

Instagram has introduced the ability for users to add a friend to live videos.

The social network admits “it can be intimidating” to create videos alone so will now give users the option of inviting a anyone who is watching while broadcasting to join the video via the new ‘Add’ icon on the bottom right.

Both parties will be shown via a split screen. The guest can be removed by the person who started the video at any time and another added. The guest can also leave whenever they choose.

Tuesday, 24 October

Facebook tests separating commercial posts from personal news in News Feed

The social media giant says it is testing the idea of dividing its News Feed in two, separating commercial posts from personal news in a move that could lead some businesses to increase advertising.

The test, which is occurring in six smaller countries, offers two user feeds: one feed focused on friends and family and a second dedicated to the pages that the customer has liked.

The change could force those who run pages, everyone from news outlets to musicians to sports teams, to pay to run advertisements if they want to be seen in the feed that is for friends and family.

The test is taking place in Bolivia, Cambodia, Guatemala, Serbia, Slovakia and Sri Lanka, and is likely to go on for months, Adam Mosseri, the Facebook executive in charge of the News Feed, said in a blog post.

This move is likely to be received badly by publishers, which now might have to pay in order to be seen.

READ MORE: Facebook tests splitting News Feed into two

London buses get digital overhaul with geotargeting

London buses have seen their advertising capabilities upgraded with new digital screens – and Google is the first advertiser to try it out.

The buses feature premium digital screens which allow for geotargeting, so the adverts or copy on the side of the bus can change to be relevant to shops or landmarks it passes.

This, Exterion Media says, allows brands to launch more “targeted, efficient and accountable campaigns”.

As the inaugural advertiser, Google has initiated a three-month campaign for its latest Pixel devices – which, incidentally, have been hit with complaints over the quality of its screens.

“This is a huge moment for bus advertising; the product delivers stature, movement, scale, dynamism and geo-targeting – offering a whole new dimension to broadcast and narrowcast through this hugely attractive channel,” Dave King, MD at Exterion Media, says.

Sainsbury’s moves into premium menswear with suit range

Sainsbury’s is looking to convince male shoppers to pick up a suit during their weekly supermarket shop, as it launches a new premium range of suits with its fashion brand Tu.

Two ranges Tu Formal and Tu Premium will launch online and in 250 stores across the UK with the former using materials sourced from Britain, including tweed from mills in Yorkshire and Scotland.

The move comes as sales of its menswear grew 13% on last year, its fastest growing category. Sales across the supermarket’s clothing business grew by 4% last year.

“Menswear is the fastest growing area of Tu clothing and, having had a fantastic response to our premium womenswear launch, we wanted men to have a similar choice of high quality, on trend styles at fantastic value,” said Sainsbury’s commercial director James Brown.

READ MORE: Sainsbury’s suits up: Supermarket to sell smart mens clothing range

Netflix doubles down on original shows with £1.2bn investment

Netflix is raising another $1.6bn (£1.2bn) from investors to finance new shows and possibly make acquisitions.

The video streaming service plans to spend up to $8bn on content next year to compete with fast-growing rivals. Netflix plans to release 80 films next year, but some analysts are wary about its cash burn and debt interest costs.

The company’s latest debt fundraising is its largest so far, and the fourth time in three years it has raised more than $1bn by issuing bonds.

Netflix has spent heavily on original programming such as The Crown, Stranger Things and House of Cards.

READ MORE: Netflix to raise another $1.6bn to finance new films and shows

Fitbit launches rival to Apple Pay

Fitbit is launching its own payment system today, but it will only be initially available to customers of the tiny challenger bank Staring Bank, which gained its banking licence this year.

Fitbit Pay is available on the new Fitbit Ionic, the company’s first smartwatch, which went on sale in the UK on October 1.

The payments system links the user’s wearable smartwatch to their Starling Bank account, allowing them to pay with contactless on their wrist, similar to Apple Pay which was launched on the Apple Watch in 2015.

Fitbit Pay will only be available for the small number of Starling Bank customers, which only opened its app beyond a handful of staff and product testers in March, compared to the millions of potential customers who could use Apple Pay on its UK launch.

READ MORE: Fitbit Pay arrives in the UK with tiny challenger bank Starling

Monday 23 October

Evening Standard forced to apologise after Solange controversy

London’s Evening Standard newspaper has been forced to apologise after it airbrushed singer Solange Knowles’ hair for a cover shoot for the ES Magazine.

The singer, whose empowering songs include Don’t Touch My Hair, a song about the cultural legacy of black women’s hair, had a crown of braids digitally removed from the photo shoot.

Knowles called out the publication on social media, posting a picture of the original, unaltered image on Instagram with the caption “dtmh” – an abbreviation of the song above. Many fans of the singer, who is Beyonce’s sister, have also accused the paper of racism.

However, the paper has now offered an “unreserved apology” to Knowles, saying the image was changed only for “layout purposes”.

It said in a statement: “We were delighted to have the chance to interview the wonderful Solange Knowles and photograph her for this week’s edition of ES.

“It is therefore a matter of great regret that the finished cover artwork caused concern and offence.

“The decision to amend the photograph was taken for layout purposes, but plainly we made the wrong call and we have offered our unreserved apologies to Solange.”

READ MORE: Evening Standard sorry for airbrushing out Solange Knowles’ braids

Google finally launches ‘Pay With Google’

Google claims to have eased the purchasing process for Android devices having today launched the hotly-anticipated ‘Pay With Google’ service.

There’s no longer any need to enter multiple lines of payment details in online forms, with platforms such as Google Play, YouTube and Chrome now remembering preferred credit or debit cards in order to facilitate instant checkouts.

It’s still early days for ‘Pay with Google’ and at launch it can only be used at 15 places including brands such as Papa Johns, Just Eat and StubHub. Google says it doesn’t charge any transaction fee for use of ‘Pay with Google’ and it requires “only a few lines of code” to implement so expect more brands to implement it very soon.

READ MORE: ‘Pay with Google’ arrives to speed up checkout

Aldi and Lidl’s expansion dwarfs ‘big four’ plans

Lidl

New figures have put into perspective the rapid rate of expansion of discounters Aldi and Lidl.

The pair have already filed 90 planning applications for new UK stores this year (44 for Lidl and 46 for Aldi), according to new figures from Barbour ABI. In comparison, the big four supermarkets (Tesco, Sainsbury’s, Asda and Morrisons) have filed a combined total of just 11 applications for new stores.

“The rise of Aldi and Lidl continues to be evidenced through our planning application statistics,” Michael Dall, lead economist at Barbour ABI, told The Telegraph.

“Despite improving financial results for Tesco in particular, it is the discount retailers that are continuing to dominate the retail construction market.”

The big four are currently more interested in opening convenience sites and investing in online than adding costly bigger stores to their already large estates. Aldi plans to hit 1,000 shops by 2022 while Lidl has a £1.45bn expansion plan for the UK, which will see it open 60 new shops a year for the foreseeable future.

READ MORE: Aldi and Lidl press on with expansion despite Big Four shake-up

Freesat launches new campaign after impressive conversion rates

Subscription-free satellite TV service Freesat has launched its Autumn advertising campaign today (23 October) as it aims to build on the impressive results from launching its ‘Unbelievably Good’ brand positioning last year.

A new 30-second TV spot features three scenes dramatising real customers’ tales of the satisfaction they feel and the things they’ve achieved now they’ve gotten rid of their contracts and monthly subscriptions.

In its full year 2016-17 results, Freesat said sales of set-top box and TV sales were up 90% on the previous financial year. It claims its free satellite TV service is now the primary TV service in two million UK homes and these numbers are thanks to the ‘Unbelievably Good’ brand positioning.

Research shows gambling ads dominate football matches

A whopping 95% of TV ad breaks during live UK football matches feature at least one gambling advert, according to the BBC.

Its research looked at 25 games involving British teams broadcast so far this season from the build-up through to the post-match chat on channels such as BT Sport, Sky Sports and ITV. In these matches there were a total of 1,324 commercials and sponsorship indents, and of these, 272 were for gambling, which works out to roughly one in five ads.

This rate rose even more in particular matches. For example, during Everton’s Europa League match with Apollon Limassol, which was broadcast on BT Sport in September, 40% of all the ads and sponsorship indents were for betting.

UK gambling firms spent £150m on TV advertising last year and according to Matt Zarb-Cousin, from the Campaign for Fairer Gambling, there is a genuine concern over the subsequent impact on children.

“We are concerned about the effects of children and young people being exposed to gambling advertising due to the pre-watershed exemption for live sporting events,” he said. “The government has an opportunity to address this in the forthcoming review.”

READ MORE: Gambling adverts ‘in 95% of matches’

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