Apple, Under Armour, Alibaba: Everything that matters this morning

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

https://www.youtube.com/watch?v=mW6hFttt_KE

Apple shares hit record high following 19% profit boost

Pre-sales for the iPhone X, which is released today (3 November), coupled with a 19% rise in profits and have resulted in Apple’s share price hitting a record high. The company is now worth more than $868bn, meaning it is one step closer to becoming the world’s first trillion-dollar company.

Sales of its flagship iPhone contributed to more than half of the $52.6bn it earned during the last quarter. Apple sold 46.7m iPhones during the period, generating revenues of $28.5m.

Services are now its fastest growing area of business, with the App Store, iTunes, Apple Pay and iCloud generating an all-time high of $8.5bn over the past three months and a total of $27.8bn for the 12 months to 1 July. Sales were also up in China, its second largest market.

Apple CEO Tim Cook, said: “I have to say I couldn’t be more excited by Apple’s future. This was our biggest year ever in most parts of the world.”

READ MORE: Apple shares hit record high as iPhone X pre-sales fuel 19% rise in profits

Under Armour CMO exits

The global CMO of Under Armour has left the company as part of a management shake-up, following a disappointing third quarter that saw revenues drop 5%, its first quarterly revenue slump since going public in 2005.

Andrew Donkin joined the sportswear brand from Amazon just over a year ago, and leaves alongside Pam Catlett, senior vice-president and general manager of women’s and youth at Under Armour.

As spokeswoman told AdAge the company had “mutually agreed to part ways ” with two executives.

READ MORE: Under Armour CMO exits as revenue falls

John Lewis’s Craig Inglis to become The Marketing Society chair

John Lewis customer director Craig Inglis has been appointed chair of The Marketing Society, effective January 2018. He takes over from Stephen Maher CEO of MBA and will lead the organisation’s new board of marketers.

New board members include Paul Graham, CMO, Versace; Adrian Last, EVP/global marketing director at ITV; Michele Oliver, vice-president of marketing, Mars; and Tash Whitmey, CEO at Havas Helia.

They join Nishma Robb, head of marketing, Google; Nigel Vaz, CEO of Publicis.Sapient EMEA and APAC and global president DigitasLBi; Julian Boulding, owner, thenetworkone; Stephanie Brimacombe, group CMO, VCCP; and Dominic Grounsell, managing director, Nielson Financial Services.

Inglis says: These are exciting times at The Marketing Society as Gemma [Greaves, CEO] and her team forge ahead their global expansion and the brave agenda. Stephen will be a very tough act to follow, but I’m looking forward to working with the new board. I know together we can achieve great things.”

Greaves adds: “We now have a balanced mix of clients, agencies and media owners who will be helping us deliver our purpose of inspiring bolder marketing leadership and achieve our vision of being the leading global network for senior marketers.”

 

Alibaba revenues jump 61%

Chinese e-commerce giant Alibaba has seen a 61% rise in revenues for the three months to September, compared to the same quarter last year, beating market expectations.

Revenues hit 55.1bn yuan ($8.3bn; £6.4bn), fuelled by its online retail business. Alibaba is expanding into other areas, however, following investment in supermarkets and stores.

“We are seeing the early results from our efforts to integrate online and offline with our new retail strategy,” Alibaba chief executive Daniel Zhang said in a statement, calling it an “outstanding” quarter.

READ MORE: Alibaba revenues surge 61% on online shopping

Study finds marketers lack confidence in marketing

While 74% of marketers feel their sector is stable or in growth just 3% strongly believe marketing can protect their business from market changes and competitor innovations, according to a new study of 100 UK CMOs, suggesting a lack of confidence in marketing.

The research by creative agency Cubo, which was run by The Centre for Brand Analysis (TCBA), is designed to look at the role marketing can play in protecting businesses against the threat of innovation from rivals, such as new products, services, pricing, marketing and retail.

It reveals 71% of marketers feel investment in marketing offers less than a 20% contribution to protecting their business against market changes, compared to other areas such as new technology, product development or internal culture.

One hundred UK CFOs were also surveyed as part of the research, and from their perspective ‘brand’ ranks as the least important area for investment when it comes to protecting their business from market changes, followed by ‘marketing’, when compared to things such as new technology.

Thursday, 2 November

Facebook ad revenue reaches $10bn

Facebook’s advertising revenue rose to in excess of $10bn (£7.5bn) in the third quarter of 2017, driving profits up 80% year-on-year to $4.7bn (£3.5bn).

Total ad revenue rose 47% year-on-year thanks to the platform’s more than six million active advertisers, many of whom are small and medium-sized businesses. Going forward Facebook expects ad prices to increase, although the pace of expansion has been slowing.

The number of Facebook’s active users continues to rise, up 16% year-on-year to 2.07bn in the three months to the end of September.

CEO Mark Zuckerberg did, however, explain that recent investments in improving the platform’s security would “impact” profitability. Some 10,000 people currently work on enhancing Facebook’s safety and security, a number expected to double by the end of 2018. The company also confirmed plans to tighten standards for its advertising, especially around content that touches on political issues.

This comes after figures emerged this week showing 150 million people were exposed to Russian fake news propaganda via Facebook during the 2016 US election.

READ MORE: Facebook ad revenue tops $10bn

Estée Lauder benefits from millennial boost

Estée Lauder

Sales at Estée Lauder rose 14% to $3.3bn (£2.5bn) in the three months to the end of September, as the make-up mega group enjoyed a boost from millennial shoppers.

Growth was attributed to the acquisitions of millennial focused brands Too Faced and Becca Cosmetics, both of which have strong tie-ups with social media influencers. These two brands alone contributed 4 percentage points to the company’s growth.

Estée Lauder has also signed celebrities such as Kendall Jenner and popular YouTube vloggers in a further bid to woo millennials.

The world’s second largest cosmetics company also believes growing demand from China, Hong Kong and the wider online market helped shares reach a record high, up 12% to $124.80.

Estée Lauder expects second quarter sales of between $3.63bn (£2.7bn) and $3.69bn (£2.8bn), ahead of analysts’ average estimate of $3.56bn (£2.68bn).

READ MORE: Estee Lauder shares hit record high on millennial boost

BBC warns of £500m threat posed by Netflix and Amazon

The BBC warns spending on British television programmes will fall by £500m a year over the next decade if streaming giants like Amazon, Apple and Netflix continue to grow their share of our viewing habits.

According to BBC director-general Tony Hall, more than a fifth of funding for original homegrown programming will disappear as the advertising market declines. While Netflix’s The Crown was made in the UK and Amazon spent millions on The Grand Tour, the growth of streaming services has not increased spending on British productions.

According to reports in The Telegraph, Lord Hall expects investment decisions to focus increasingly on “a narrow range of very expensive, very high-end content” that will attract large global audiences. It is for this reason he claims British content is under “serious threat.”

However, going forward the BBC’s commercial production arm BBC Studios plans to compete for commissions from Netflix and Amazon, as well as UK broadcasters.

READ MORE: BBC warns over £500m threat to British TV from Netflix and Amazon

AOP aims to clean up digital media with Ad Quality Charter

The Association for Online Publishing (AOP) has launched an Ad Quality Charter aimed at raising digital media standards by creating a transparent, fraud-free and high-quality ecosystem.

The charter aims to provide assessment and verification measures that will create better quality media for advertisers and agencies, while also delivering valuable experiences for audiences and enabling publishers to secure their assets.

To improve brand safety, the charter recommends publishers to be independently verified through the Digital Trading Standards Group (DTSG) Good Practice Principles and use accredited content verification (CV) tools to screen 100% of impressions.

Publishers are also being encouraged to uphold the minimum Media Rating Council standards – 50% of display ads viewable for one second and two seconds for video – or exceed them by ensuring 100% of display and native ads are viewable for one second (two seconds for video). Alternatively, as part of the charter publishers are advised to deliver bespoke viewability metrics as defined by advertisers or agencies.

Snap expands conversion tracking with Pixel feature

The Telegraph

Snap is launching a new feature that allows conversion tracking across online environments owned by a brand or publisher, whether that be on mobile, tablet or desktop.

Pixel allows marketers to measure the revenue, performance, growth and acquisition driven by Snapchat across devices, spanning website visits, purchases and sign-ups.

By the end of 2017 Snap Pixel will also be able to support more sophisticated targeting by creating custom audiences based on the way Snapchat’s users engage with a brand’s sites. Snap will then be able to build a reachable audience of Snapchat users who have completed an action such as a page view, adding an item to the cart or a purchase, and then expand that reach by creating a lookalike audience.

Additional features set to launch over the coming months include custom audience creation and real-time optimisation technology.

Wednesday, 1 November

Burberry’s Christopher Bailey set to leave

Christopher Bailey, Burberry’s chief creative officer and one of the architects of its transformation into a modern luxury fashion brand, is to leave the company next year after more thann 17 years. Bailey started as a designer but had a hugely successful relationship with former CEO Angela Ahrendts, with her driivng the business and him the design. When she left for Apple in 2014, he took on the dual role of CEO and chief creative officer.

However, there were concerns over how successful one person could be taking on both roles, and in July he was succeeded as CEO by Marco Gobbetti. No explanation was given for Bailey’s departure, although he says he is looking forward to “new creative projects”.

Gobbetti says: “Burberry has undergone an incredible transformation since 2001 and Christopher has been instrumental to the company’s success in that period. While I am sad not to have the opportunity to partner with him for longer, the legacy he leaves and the exceptional talent we have at Burberry give me enormous confidence in our future.

“We have a clear vision for the next chapter to accelerate the growth and success of the Burberry brand and I am excited about the opportunity ahead for our teams, our partners and our shareholders.”

Just Eat delivers sales growth as Hungryhouse acquisition gets go-ahead

Just Eat

Just Eat’s revenues soared 47% year on year to £138.6m in the three months to the end of September, just weeks after it got the provisional go-ahead to buy UK rival Hungryhouse. The company says it received 43.1 million orders in the period, up 29% and helped by the acquisition of SkipTheDishes in Canada, while in the UK orders were up 22% to 26.2 million.

Just Eat has a dual strategy for growth – attempting to attract new users to the service while also buying up rivals. In the UK, it is hoping to buy Hungryhouse, but the deal was referred to the Competitoin and Market Authorities over concerns it could lead to worse terms for the restaurants that use such services.

Just Eat’s new chief executive Peter Plumb says: “The Just Eat team has once again delivered another period of strong growth.

“As I get to know the company, it is great to see the UK business in good health and positive momentum across our international markets, particularly in Canada where SkipTheDishes [is] driving excellent results.”

READ MORE: Just Eat delivers soaring sales ahead of Hungryhouse acquisition

Next expects sales to be down in crucial Christmas quarter

Next expects its fourth quarter sales to be down by around 0.3% year on year as tough comparitives and a “volatile” trading environment impact sales. The retailer says that in the third quarter, full price sales were highly dependent on the seasonality of the weather, with sales up in August and September when the weather was cooler than average and down in October when the weather was warm for the time year.

Next is seen as something of a bellwether for the UK high street after years of outperformance. And while it has admitted to its own struggles to get its ranges right, a poor performance in the fourth quarter would not bode well for the retail industry as a whole.

Full-price sales were up 1.3% during the third quarter, with online seeing a 13.2% increase, enough to offset a 7.7% decline at its stores.

READ MORE: Next trading statement

Uber looks to shake up ad strategy as it hunts for new agencies

uber

Uber is reportedly looking for a new global creative agency and reviewing how it buys media, just months after new marketing boss Bozoma Saint John joined.

According to a report in AdAge, while Uber is happy with its North Amercian creative output, it wants to shift its strategy globally.And the decision to examine how it buys media comes after Uber filed a lawsuit agsinst Fetch Media, claiming it billed Uber for “fake” online ads, which Fetch denies.

The move comes after a wave of damaging allegations of sexual harrassment and company culture at Uber, which eventually forced former CEO Travis Kalanick out. There are also mounting concerns about its service, brought into sharp relief by the decision in London not to renew its contract, which it is appealing.

Saint John joined Uber from Apple over the summer as it looks to repair its corporate image. Her first big marketing move in the US has been to launch an NBA-themed national ad campaign.

READ MORE: Uber Seeks Global Creative Agency and New Media Partner

Under Armour revenue growth slump as it fails to appeal to the youth market

Under Armour sawrevenues drop 5% year on year in the third quarter to $1.4bn as its once strong appeal among young consumers faded. The company says this demographic contributed to an 8% fall in its apparel business, and its growth falling to just 2% in footwear.

Under Armour has been one of the main beneficiaries of the ‘athleisure’ trend, buthaving cited its yourth business as a point of strength in its previous two quarters, in Q3 it was listed as a weakness.

The company says it now expects full-year revenue to be up by just low single digits, down from the between 9% and 11% growth it predicted three months ago. Profits are also taking a hit as Under Armour is forced to discount to clear inventory and as a result of restructuring. Operating income is now expected to be between $0m and $10m, down from $160m to $180m it was previously predicting.

READ MORE: Under Armour suddenly has a huge Gen Z problem

Tuesday, 31 October

UK advertisers increase ad spend amid economic uncertainty

The UK might still be facing uncertainty surrounding Brexit, but advertisers seem eager to spend their way through it. New figures show that UK advertising expenditure grew 3.7% to £10.8bn during the first six months of 2017, the largest H1 total of any year since monitoring began in 1982.

The latest AA/Warc Expenditure Report data, published today (31 October), has led to an upgraded forecast for 2017 of 3.1% growth, which indicates annual spend in excess of £22bn.

Perhaps unsurprisingly, the overall market growth is driven by increased spend on digital advertising. Digital, which is defined as internet and digital out of home, accounted for 54% of all advertising spend in the first half of the year – some £5.8bn of the £10.8bn total.

“Spend on advertising is showing strong resilience, at a time of real uncertainty for UK business. The upgrade of our 2017 forecast by a further one percent, the equivalent of an additional investment of £190M, should be seen as a cautious indicator for continued growth in the UK economy,” says Stephen Woodford, chief executive at the Advertising Association.

Ryanair revenues increase despite pilot controversy

Ryanair’s earnings for the first half of this year shot up 11%, despite having to cancel flights for around 700,000 passengers due to a pilot shortage.

Net income in the first six months of this year rose to €1.29bn from €1.17bn euros a year earlier, Dublin-based Ryanair said. It stood by its forecast for full-year profit in the range of €1.4bn to €1.45bn – a record high – even after paying out €25m on refunds and €40 euros for extra staffing costs. Key brand metrics such purchase intent and reputation have taken a beating, however.

“These strong results reinforce the robust nature of Ryanair’s low fare, pan-European growth model even during a period which suffered a material failure in our pilot rostering function,” CEO Michael O’Leary said in the earnings statement. He pledged to review pilot rotas, bases and pay as the company seeks a permanent settlement to the crisis.

READ MORE: Ryanair profit gains as strong prices offset pilot-crisis impact

YouTube overhauls ad algorithm again following brand safety scandal

YouTube is tweaking the way it chooses which videos will have adverts shown with them. The update comes after YouTube made changes to the way videos were monetised, to stop ads appearing alongside extremist content.

The initial changes led to complaints from some popular vloggers, saying it made it hard for them to earn money as their videos were not classified as family friendly. The improved algorithm should mean more videos were deemed suitable for ads, YouTube said.

In a blog, the company said it had taken information from the appeals made over the past few months to update its algorithm so it correctly classified more videos.

“As a result, there will be a 30% reduction in the number of videos receiving limited ads as they move to being fully monetised,” said YouTube. “In other words, millions more videos will become fully monetised.”

READ MORE: YouTube tweaks advertising algorithm

Lyle’s Syrup named Great British Bake Off’s ‘winning’ sponsor

Tonight will see one of three contestants crowned the winner of the Great British Bake Off. This series had a set of headline sponsors for the first ever, after the programme was bought by Channel 4.

And it seems that Lyle’s Golden Syrup has been the real winner this series, with Dr. Oetker lagging behind. Hitwise data shows searches for the syrup brand have increased 46% since the show began. Meanwhile, Dr Oekter searches saw a mere 13% increase.

The show has proven successful for Channel 4 so far. The first episode of the Great British Bake Off peaked at 7.7 million viewers, well above the numbers Channel 4 needs to make it a commercial success.

Samsung boasts record profit despite adversity

Samsung Electronics logged a record profit of £7.6bn in the July to September period, its best for any quarter.

The world’s biggest memory chip and smartphone maker had its chief jailed in August for bribery and faced a recall of its flagship Galaxy Note 7 device.

Yet its net profits soared 148% on the same period a year ago, thanks to strong demand for its memory chips and a recovery in smartphone sales with the roll-out of the new generation Galaxy Note 8.

The figures come only two weeks after chief executive Kwon Oh-Hyun resigned, saying the firm was facing an “unprecedented crisis” and its current profitability was “merely a fruit of decisions and investment made in the past”.

READ MORE: Samsung makes record profit of $109m a day as chip demand soars

Monday, 30 October

uber

Uber hires banking vet as UK chair in bid to restore reputation

Few industries know more about reputational damage than the financial sector and Uber is hoping the creator of M&S Bank can help it to restore its damaged brand reputation in the UK.

The ride-hailing app has hired Laurel Powers-Freeling, who set up M&S Bank and is also a former director of the Court of the Bank of England, as its new UK chairman.

Uber’s interim UK CEO Tom Elvridge said: “With this new position Laurel will help us with the next phase of changes we want to make to our UK business. As our new global CEO has said, we’re determined to learn from the mistakes of the past and make things right.”

Transport for London are currently in deep discussions with Uber, with the latter desperately trying to repair relations after TfL accused it of being unfit to hold a license in London.

Powers-Freeling added: “Uber is transforming how people get around and as a business it is also undergoing an important period of change. I look forward to working with the UK business to help them manage and implement that change.”

READ MORE: Uber hires former bank boss Laurel Powers-Freeling as UK chair

Jigsaw confirms it is looking for a buyer

Jigsaw has admitted it is looking for a buyer amid troubling times for high street retail.

Controlling shareholder and Jigsaw co-founder John Robinson has appointed KPMG to gauge the interest of prospective buyers, with a spokesman for the brand confirming there had already been “a number of approaches” for people looking to buy a majority stake.

The spokesman said: “No sale process has been activated but we continue to have conversations with interested parties.”

Recent figures from the Confederation of British Industry (CBI) revealed retail sales in the year to October had dropped at their fastest rate since the height of the financial crisis and this is expected to have fuelled Jigsaw’s decision.

READ MORE: 

Facebook denies making ads by listening to user conversations

Facebook

Many people believe Facebook personalises ads by listening to people’s voices through the microphone on their devices. However, an executive for the social media giant has denied this is the case.

PJ Vogt, the presenter of a tech podcast called Reply All, tweeted after a co-worker got an ad saying, “So you popped the question!” minutes after he proposed, despite not telling anyone it had happened.

However, Rob Goldman, the tech giant’s vice-president of ads, categorically denied this was tied to any kind of surveillance and said it was a coincidence.

Goldman tweeted back: “I run ads product at Facebook. We don’t – and have never – used your microphone for ads on Facebook or Instagram. Just not true.”

Something tells us this won’t stop the conspiracy theories from spreading.

READ MORE: Facebook denies ‘listening’ to conversations

Twitter admits it overstated monthly active user growth

Over the last three years, Twitter has admitted it has mis-stated user counts of its monthly average users by incorrectly including users of some third-party apps.

In a letter to shareholders, Twitter said: “We discovered that since the fourth quarter of 2014 we had included users of certain third-party applications as Twitter monthly active users (MAUs) that should not have been considered MAUs.

“These third-party applications used Digits, a software development kit of our now-divested Fabric platform, that allowed third-party applications to send authentication messages via SMS through our systems, which did not relate to activity on the Twitter platform. We have now corrected this.”

In the third quarter, Twitter added four million additional MAUs  and grew daily average users (DAUs) by 14% – a big jump on the second quarter. However, this no longer looks like it was the case.

READ MORE: Twitter corrects inflated user numbers; stats wrong for three years

HSBC impresses with quarterly profits rise

HSBC has reported a 448% rise to £3.5bn in pre-tax profits for the three months to the end of September.

In its previous quarter the banking giant had been hit by a one-off loss of $1.7bn from the sale of its Brazilian unit.

According to HSBC’s chief executive Stuart Gulliver the latest results met market expectations and were helped by cost-cutting and a focus on Asia. He said: “Our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong and the Pearl River Delta.”

HSBC’s shares were up more than 1% in afternoon trading in Hong Kong following the earnings update.

READ MORE: HSBC Q3 profits up five-fold to $4.6 bn on booming Asia

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