VW, British Airways, Just Eat: Everything that matters this morning

Good morning and welcome to Marketing Week’s round-up of the news that matters in the marketing world today.

VW

VW shakes up business and leadership team as it looks to move on from emissions scandal

Volkswagen has made VW brand chief Herbert Diess its new chief executive as part of a wider overhaul that will see the company’s multiple brands reorganised into three divisions and its truck business possibly spun off.

The overhaul marks the biggest changes at the company since it became a multi-car conglomerate that includes car marques Ducati, Bentley, Audi, Skoda, Porsche and namesake Volkswagen. It will see Volkswagen divide into six new business areas plus a portfolio for China as it looks to decentralise responsibility and improve efficiency.

Its car brands will fall into three categories: volume, premium and super premium. The heads of those categories will take on more company-wide responsibilities, with Olive Blume, who was head of Porsche, overseeing the organisation.

Analysts have welcomed the move: “Diess is a man of action, he is the most plausible choice at VW to lead the group into the next phase of its transformation,” says Nord LB analyst Frank Schwope.

READ MORE: VW names new boss to steer sweeping overhaul

British Airways considers bid for rival Norwegian

British Airways-owner IAG has taken nearly a 5% stake in Norwegian as it looks to buy the budget carrier and create one of the world’s biggest airlines. IAG, which also owns Aer Lingus, Iberia, and Vueling, now has a 4.61% stake in the Scandinavian carrier, calling it an “attractive investment”.

“The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer,” IAG says in statement to the market. “No such discussions have taken place to date, [and] no decision has been taken to make an offer at this time and there is no certainty that any such decision will be made.”

READ MORE: British Airways-owner IAG swoops on rival airline Norwegian

YouTube to stop third-party serving in May, ahead of GDPR

YouTube

YouTube is set to shut third-party access to ad service and pixel tracking globally as it looks to ensure it complies with incoming EU privacy regulations set to come into force on 25 May.

According to a memo seen by AdExchanger, YouTube will stop supporting third-party ad serving on reserved buys in Europe from 21 May, with the possibility to extend this worldwide. It will also limit third-party pixel tracking and re-evalulation certification of third-party vendors to ensure all its partners are GDPR compliant as well.

However, there are concerns Google is using GDPR as a means of favouring its own tech over those of third parties. Google denies this is the case.

READ MORE: YouTube to stop supporting third-party ad serving in EU in May, citing GDPR

The National Lottery returns to Saturday night TV

The National Lottery is set to return to Saturday night TV as part of a new commercial deal with ITV. The new format will see the Lotto results announced during programmes such as Britain’s Got Talent and will feature a range of wraparounds aimed at explaining the good causes National Lottery money is invested in.

The move comes after a strategic review at The National Lottery runner Camelot found that the lottery needed to do a better job of making its purpose more relevant and visible. It is hoped the tie-up with ITV will do that by bringing the message to the millions that watch primetime Saturday night TV.

Hayley Stringfellow, head of brand marketing at Camelot, says: “People play The National Lottery to win life-changing prizes, but they sometimes forget that they also raise around £30 million every week for UK Good Causes. This partnership will deliver a range of exciting and engaging ways to shine a light on the difference National Lottery players make to the UK.”

Just Eat puts focus on sustainability as it encourages restaurant partners to become more ‘eco-friendly’

Just Eat is looking to encourage its restaurant partners to become more sustainable, through a partnership with Eskuta that will offer them a 45% discount on electric scooters used for food deliveries. The hope is the scooters will help reduce carbon emissions in cities, with the vehicles able to run for 50 miles on an eight-hour charge. They should help cut down on noise pollution, as well as save takeaway businesses money because they are cheaper to run than the petrol version.

Graham Corfield, UK managing director of Just Eat, says: “With more delivery drivers on the roads than ever before, we recognise that we have a role to play in finding ways to reduce the carbon emissions that result from food delivery. This partnership with Esukta is another step towards tackling the impact that takeaways can have on our planet and we look forward to continuing our work with our restaurant partners and suppliers to support innovation across the industry.”

The focus on delivery vehicles is the latest attempt by Just Eat to improve its sustainability credentials amid greater scrutiny on business by both consumers and the government. Last month, Just Eat launched a major drive to reduce the use of plastic in takeaways, including a trial that adds a pre-ticked box to the app and website to nudge customer to opt out of receiving excess plastic.

Thursday, 12 April

Investors prep $25bn global shake-up for FIFA

Japan’s SoftBank is one of a number of global investors looking to work with FIFA to expand the remit of international football as part of a $25bn plan, creating a wealth of new sponsorship opportunities.

The group, which also includes investors from China, Saudi Arabia, the US and the United Arab Emirates (UAE), according to the Financial Times, want to extend the Club World Cup tournament, which is currently played by seven top teams globally and was last year hosted by the UAE. It has been suggested the Club World Cup will be played every four years by the top 24 club level teams, starting in 2021.

A new international league competition for national teams has also been proposed, which would take place every two years.

FIFA will have a 51 % stake in a joint venture, with the investors guaranteeing revenues of at least $25bn.

“This whole idea is that world football is not just about Europe,” a source told the FT. “Football is the biggest social event in the world with 3 billion followers, but it doesn’t have a global community besides the World Cup.”

READ MORE: SoftBank teams with investors for $25bn Fifa shake-up plan (£)

BA scraps free baggage on cheap long-haul flights

British Airway is trialling a basic economy fare for some long-haul flights, which only includes hand luggage and doesn’t give passengers the opportunity to choose their seat.

The move sees BA follow in the footsteps of rival airlines like Norwegian and Virgin, which have also introduced no-frills ticket options to appeal to price-sensitive customers.

BA is trialling the stripped back fare on 10 routes: Austin, Boston, Delhi, Denver, Dubai, Hong Kong, Oakland (in the San Francisco Bay area), Philadelphia, Punta Cana and Singapore.

Tests bookings carried out by The Independent show passengers opting for the ‘economy basic’ fare stand to save around £100. A flight from Heathrow to Singapore in November, for example, comes up a £460 return for the basic fare, while the standard economy fare is £112 more expensive.

READ MORE: British Airways ends free baggage allowance for cheapest long-haul tickets

Facebook ad spend grows despite privacy scandal

facebook

Ad spend on Facebook grew by 62% year on year during the first quarter of 2018, despite the Cambridge Analytica privacy scandal, according to 4C Insights’ Q1 State of Media report. It even increased during the weeks immediately after the news broke, with week-on-week rises of 7% recorded on 17 March and 15% on 24 March.

Looking at social platforms more widely, the greatest growth was seen by Snapchat, with ad spend increasing 234% during the period, while Instagram saw year-on-year growth of 136%.

Advertisers were particularly interested in using digital platforms to engage audiences around big global events such as the Six Nations and Winter Olympics, which helped to push overall ad spend up by 65% compared to the same period last year.

The results of the study are based on an analysis of nearly $250m in ad spend, from a representative sample of more than 1,000 individual brands using 4C’s software platform.

House of Fraser turns to luxury Chinese brands

House of Fraser is looking to boost high street sales by selling “premium Chinese brands” as part of an effort by its Chinese parent company to change consumers’ perceptions of goods made in China and support Beijing’s trillion-dollar trade plan.

Sanpower, which bought House of Fraser for £480m deal in 2014, says it wants to use the retailer’s reputation to help persuade UK shoppers to buy luxury Chinese goods such as lingerie and electrical appliances.

“The traditional image associated with ‘Made in China’ is changing,” says Simon Pickering, House of Fraser’s UK director of global product sourcing.

“Increasing numbers of high-quality Chinese products are becoming popular with British and European consumers. Once these products enter House of Fraser’s sales channel, they will be able to access Europe and the greater global market, given quality and credit endorsement from House of Fraser.”

House of Fraser is reportedly in emergency funding talks with specialist lenders as it looks to battle increasingly difficult trading conditions on the high street.

READ MORE: House of Fraser to push luxury Chinese products in the UK

ASA issues new rules on misleading delivery charges

Advertisers will have to honour delivery claims under new under new rules issued today by the Committees of Advertising Practice, which is part of the Advertising Standards Authority (ASA) regulatory system.

The enforcement notice applies to advertised delivery restrictions and surcharges and is applicable to all relevant advertisers in the UK who will have until 31 May 2018 to comply.

Consumers in parts of the UK, such as Scotland, Northern Ireland, Anglesey and the Isle of Wight, are often subject to additional charges to have goods delivered, but the ASA says some online retailers are failing to make these surcharges clear and upfront in their advertising.

The action comes after a number of ASA rulings have banned ads for misleading parcel delivery and surcharge practices. The ad watchdog has also worked with the UK Consumer Protection Partnership to develop the regulation and to tackle misleading claims around parcel deliveries.

Guy Parker, chief executive of the ASA, says: “Companies must honour the delivery claims they’re making or stop making them. It’s simply not fair to mislead people about whether parcels can be delivered to them, or how much it will cost.”

Wednesday, 11 April

Tesco marks ninth consecutive quarter of sales growth

Supermarket giant Tesco has released its preliminary results for 2017-18, reporting a 2.3% rise in group sales to £51.9bn. Like-for-like sales also increased by 2.2%, marking the ninth consecutive quarter of growth.

Group operating profit before exceptional items was up 28.4% to £1.6bn, while retail operating cash flow was also up 21.7% to £2.8bn.

“We have further improved profitability, with group operating margin reaching 3% in the second half. We are generating significant levels of cash and net debt is down by almost £6bn over the last three years. All of this puts us firmly on track to deliver our medium-term ambitions and create long-term value for every stakeholder in Tesco,” says chief executive Dave Lewis.

Millions of households to be hit by British gas price hike

Millions of UK households could be hit with increased energy bills after British Gas revealed plans to implement a 5.5% price hike. The company says rising costs in the wholesale market and Government policy are to blame for the increase.

The price hike will impact customers of its dual tariff by an average of 5.5%, which is roughly £60 a year.

The gas and electricity supplier says it was “reluctant” to enforce a hike claiming “all government policy costs should be paid for in a fairer way such as through general taxation”.

“We fully understand that any price increase adds extra pressure on customers’ household bills. The Government’s energy policies are important but they are also pushing up customers’ bills,” says Mark Hodges, chief executive of Centrica.

The price hike will come into force on 29 May.

READ MORE: British Gas dual fuel bills to rise by 5.5% – hitting 4 million customers

ASOS reports 27% rise in retail sales

Asos is celebrating another “strong” trading period, reporting a 27% increase in sales for the six months to 28 February.

International retail sales were also up 31%, with the online retail giant reporting it now has 16.5 million active users – up 17%. UK retail sales were up 22%.

“These results show strong trading at the same time as we are making substantial investment in our future. Our customer engagement is going from strength to strength and we’ve achieved more than a billion site visits for the first time,” says Asos chief executive officer Nick Beighton.

Beighton adds that Asos is accelerating investment in the company’s distribution and logistics, therefore “laying the foundation” for £4bn in net sales.

“(This is a) further step in building Asos into the world’s number one destination for fashion loving 20-somethings,” he adds.

Total orders placed reached 29.9 million, which is up 28% year on year. First-half site visits exceeded one billion for the first time.

High street store openings hit lowest rate in seven years

Shoppers retailers retail

The number of stores opening on UK high streets has plummeted to its lowest rate in seven years in what is likely an indication of the rise in online retailers.

New high street store openings fell 10% to 4,083 in 2017, down from 4,534 in 2016. Research group The Local Data Company (for PwC) studied 500 British town centres to get the results, which also revealed clothing and shoe stores closed at the fastest rate.

However the number of beauty salons, ice cream parlours and coffee shops increased.

Lisa Hooker from PwC says 2017 was a “tough” year for retailers thanks to the rise in digital offerings, particularly in the fashion industry.

“Store closures are less driven by the market environment and more by bigger structural changes, as customers increasingly expect to interact with their service providers online or via apps,” she says.

She also highlights the importance of the British high street, noting that more than 4,000 new clothing stores still opened last year despite 700 closing their doors.

READ MORE: High street stores opening at lowest rate in seven years 

Nike buys computer vision firm Invertex

Nike is buying Israeli-based computer vision firm Invertex in a bid to strengthen its digital technology and talent as part of its Consumer Direct Offense.

Nike says its team will be focusing on ground-breaking innovations to help the sportswear giant serve its millions of members across the world.

“The acquisition of Invertex will deepen our bench of digital talent and further our capabilities in computer vision and artificial intelligence as we create the most compelling Nike Consumer Experience at every touchpoint,” Nike’s chief digital officer, Adam Sussman, says.

Terms of the deal were not disclosed, but Nike says the purchase of the computer vision firm and its staff would help it deliver innovations to the market.

A spokesperson from Invertex says its looking forward to working with Nike.

READ MORE: Nike acquires computer vision firm Invertex

Tuesday, 10 April

Electoral Commission targets unregistered voters with beer mats

With the local elections taking place next month, almost a million beer mats have been distributed by the Electoral Commission to more than 900 pubs and bars across England in an effort to get people to register to vote.

The ‘Got 5?’ campaign is encouraging anyone who isn’t registered – which includes a third of under 34s – to go online at gov.uk/register-to-vote whilst they wait in the pub for their mates and register before the deadline at midnight on 17 April.

It is the first time the Commission has advertised on beer mats.

“In May 151 local authorities in England, including all London boroughs, are holding elections so it’s vital people register before the deadline next week,” says Emma Hartley, the Commission’s head of campaigns.

“We’re keen to see people using the time that may otherwise be wasted, like waiting for friends at the pub, to go online and complete a form in five minutes. It’s quick, simple and really important.”

Apple to donate portion of new iPhone proceeds to HIV/AIDS charity

Apple has launched its new generation of the iPhone, of which a portion of the proceeds will go directly to Global Fund HIV/AIDS grants that provide testing, counselling, treatment and prevention programmes with a specific focus on eliminating transmission of the virus from mothers to their babies.

The special edition (PRODUCT)RED iPhone 8 and 8 Plus will be available to order online in select countries and regions today (10 April) and in stores from Friday 13 April starting at £699.

“The more than $160 million Apple has donated in the last 11 years today equates to more than 800 million days of lifesaving ARV medication that prevents the transmission of HIV from mothers to their babies,” says (RED) CEO Deborah Dugan.

“We’re honoured that Apple has dedicated its resources to our purpose, and can’t wait to see customers bring our mission to life through the purchase of iPhone 8 and iPhone 8 Plus (PRODUCT)RED Special Edition.”

Remington unveils new ‘Legends’ campaign

Global haircare and male grooming brand Remington has launched a £600k marketing campaign which will tie in with a number of the UK’s biggest upcoming sporting events including boxing, horse racing, football and tennis.

Looking to reach 72% of men aged 18-40 over the next five months, Remington Legends will run a host of videos, tutorials, competitions and male styling inspiration across digital and social platforms, alongside experiences supported by on- and offline shopper marketing.

“The campaign is something totally different and new for both Remington and the category – we look forward to seeing the campaign grow and evolve through the different creative assets,” says Nicole Wedderburn, brand manager for Remington Men.

“We’re continuing to step in a new direction and show our confidence and attitude as a brand, and the Remington Legends campaign showcases that perfectly. We are proud of our reputation as leaders in innovation and won’t disappoint with new products launching in 2018 and beyond.”

In 2017 the shave and groom markets were worth a combined total of £157m in the UK.

LVMH Q1 revenue up 10%

LVMH Moët Hennessy Louis Vuitton recorded revenue of 10.9bn Euros for the first quarter of 2018 – a 10% year-on-year increase, while organic growth was up 13%.

Wines & Spirits organic growth was up 10% YoY, while Fashion & Leather Goods was up 16%, Perfume & Cosmetics up 17% and Watches & Jewellery up 20%.

LVMH said despite unfavourable exchange rates and geopolitical uncertainties, it will continue to focus its efforts on developing its brands, “maintaining strict control over costs and targeting its investments on the quality, excellence and innovation of its products and their distribution.”

READ MORE: Organic revenue growth of 13% in first quarter 2018

Uber buys US electric bike company

Uber

Uber has agreed to pay more than $100m in cash and stock to buy electric-bicycle provider Jump Bikes – a New York-based company that allows riders to rent ‘pedal assist’ bikes via an online platform.

“We’re committed to bringing together multiple modes of transportation within the Uber app – so that you can choose the fastest or most affordable way to get where you’re going, whether that’s in an Uber, on a bike, on the subway, or more,” said Uber chief Dara Khosrowshahi.

Jump Bikes was founded in 2008 and has bike-sharing schemes in 40 cities across six countries.

As well as being ‘pedal assist’ – meaning their batteries only come to life once the rider starts pedalling – the bikes are also dockless and do not need to be returned to a specific place. They can be located and unlocked via users’ smartphones.

READ MORE: Uber to buy electric bicycle-sharing firm Jump

Monday, 9 April

Mothercare

Mothercare faces store closures in fight for survival

Mothercare is considering closures, making it the latest high street chain to struggle amid challenges in the retail sector.

The baby clothes retailer is considering entering into a company voluntary arrangement (CVA) – a form of insolvency aimed at protecting a businesses, according to The Sunday Times.

If the CVA goes ahead, Mothercare is looking to close a third of its 143 branches in the UK plus renegotiate rent prices for remaining stores.

The company dramatically parted ways with boss Mark Newton-Jones last week after a slump in sales, with former Tesco executive David Wood taking over as part of a last-ditch rescue attempt.

Sainsbury’s is understood to be considering a potential takeover after watching the struggling chain, Press Association revealed last week.

£ READ MORE: Mothercare to close stores as it struggles on the high street

Deutsche Bank fires chief executive after continued losses

Deutsche Bank has sacked its chief executive John Cryan after three years due to clashes in the board room and repeated losses.

Cryan’s contract was due to run until 2020 but he will now leave at the end of the month with Christian Sewing, the head of its retail arm, taking over immediately.

“We need a new execution dynamic in the leadership of our bank,” Deutsche Bank chairman Paul Achleitner says: “The board had decided to part company with Mr Cryan after just three years following a “comprehensive analysis.

“We need a new execution dynamic in the leadership of our bank”.

READ MORE: Deutsche Bank boss John Cryan sacked after years of losses

Royal Mail CEO Moya Greene could leave this year

Royal Mail chief executive Moya Greene could be close to stepping down. Sky News reports that Rico Back, the CEO of Royal Mail parcels delivery arm General Logistics Systems (GLS), is being discussed as Greene’s replacement as soon as this year.

The timing of Greene’s departure remains unclear but a source close to the board suggested that an announcement could be made before Royal Mail reports its full-year results on 17 May 2018.

Greene has been with Royal Mail since 2010 and led the service through its controversial privatisation in 2013. She is also a director of easyJet and Rio Tinto.

READ MORE: Royal Mail to deliver parcels boss Back as Greene’s successor

Australian Homebase boss on whistle-stop tour after warning it might quit UK

The chairman of Homebase’s owner Wesfarmers is flying to the UK this week amid growing concerns about the DIY chain.

The Australian boss Michael Chaney is visiting stores along with Marks and Spencer chair Archie Norman.

In February, Wesfarmers said it was considering quitting the UK after the company faced severe losses.

Perth-based Wesfarmers bought Homebase for £340m two years ago but the deal has not gone well after customers failed to respond to an overhaul which included renaming stores to the well-known Australian brand of Bunnings.

READ MORE: Homebase’s Australian boss flies in to tour troubled DIY chain

Facebook to notify 87 million victims of the data breach scandal

facebook

Facebook has pledged to contact the 87 million users who might have had their data compromised.

Starting Monday, all those affected by the Cambridge Analytica scandal will receive an explanatory message on their news feeds.

The company say 70 million US residents are affected, plus over a million each in the Philippines, Indonesia and the UK.

Facebook will also be sending out a notice to all users titled ‘Protecting Your Information’ with a link to see which apps they have shared information with and an option to turn off third-party sharing.

Facebook has been dealing with the consequences of its biggest scandal to date after a whistleblower revealed data firm Cambridge Analytica had been using information to help political parties target users.

READ MORE: Facebook to contact 87 million users affected by data breach

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