M&S, Sky Mobile, Virgin Media: 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.

M&S uses employee recommendations for in-store campaign

Marks & Spencer is launching a campaign which sees food hall employees reveal their favourite M&S meal.

“My M&S Favourite” launched yesterday across 1,000 UK stores and sees staff donning personalised badges revealing their favourite snack. The campaign will also include recommendations on food shelves.

The launch is a result of M&S’s internal research which finds 90% of customers are more likely to buy something that has been recommended to them.

Sharry Cramond, food marketing director, says: “Our colleagues are really proud of the products we sell and, in an era of personalisation, when nothing matters more to our customers than a friendly recommendation, this gives M&S a real advantage.

“We want to have some fun with customers over the summer with this campaign and we’re kick-starting it by using the influence of our people to get the nation talking about their favourite M&S products.”

Sky Mobile repositions brand with new campaign

Sky Mobile has launched ‘Hello Possible’, a new campaign which sees the brand reposition itself as a place “where the usual rules don’t apply”.

The TV ad, featuring actress Lily James, was directed by Nicolai Fulsig and shows a magical world where everyday lives becomes more magical, featuring things like bubbles that help you fly.

Luke Bradley-Jones, CMO of Sky UK and Ireland says: “Our campaign launches a world of possibilities for our customers, with a fantastic new product offering, most notably ‘Roll’, where customers can roll over their unused data from month to month.”

The campaign will be supported by outdoor and radio.

HSBC reports 4% drop in pre-tax profits

HSBC has reported a 4% drop in pre-tax profit to $4.8bn (£3.5bn) compared with the $5bn posted in the the same period last year, missing analysts’ estimates.

The results are the first announced since John Flint took over as chief executive with the aim of cleaning up HSBC’s image after a series of scandals, including the fact in was reportedly involved in laundering money for Mexican drug cartels.

Flint says: ”Our primary focus is to grow the businesses safely, and we have increased investment to deliver that aim.”

Virgin Media announces hundreds of job losses in UK shake-up

Virgin Media has announced 500 job losses in a shake-up that will see it cut its eight customer service sites to four.

Swansea will be most affected site with the call centre currently employing 800 people, although the company has promised most roles would transfer.

The company will focus its customer operations in Wythenshawe, Sheffield, Birmingham and Stockton.

Chief executive Tom Mockridge says: “As part of this programme we intend to create four regional customer operation hubs while also increasing the flexibility of our customer services resources.”

He added that Virgin Media will be investing £40m in business property over the next three years.

House of Fraser faces forced multi-million pound injection into pension scheme

House of Fraser is facing a multi-million pound injection into its pension scheme in order to secure the support of the Pension Protection Fund (PPF), an industry-backed body that bails out troubled schemes.

House of Fraser has begun talks with the PPF as part of wider appeal to creditors to agree to its company voluntary arrangement (CVA) process, a form of insolvency that must be approved. The department store is already facing closures plus a restructuring. Without the support of the PPF the CVA may fail.

Thursday, 3 May

Cambridge Analytica to shut down

Political consultancy Cambridge Analytica has announced it is shutting down following a “siege of media coverage” that has driven away “virtually all of the company’s customers and suppliers”.

The consultancy at the heart of the Facebook data-sharing scandal claims it has been the victim of “numerous unfounded accusations” relating to the harvesting of data from 87 million Facebook users on behalf of political clients. In a statement Cambridge Analytica alleges that despite engaging in activities it describes as “legal” and a “widely accepted as a standard component of online advertising”, the firm has been unable to clear its name.

The statement also confirmed that parent company SCL Elections is commencing insolvency proceedings.

Cambridge Analytica’s chief executive Alexander Nix was suspended in March after secretly being recorded by Channel 4 News claiming his company helped run Donald Trump’s online election campaign and had the means of discrediting politicians globally.

House of Fraser to close stores putting hundreds of jobs at risk

House of Fraser is being forced to close an unknown number of its 59 UK stores, putting hundreds of jobs at risk, as part of a restructuring deal with new majority shareholder C.banner.

The Chinese retail giant, which also owns Hamleys, has bought a 51% stake in the department store group from Nanjing Cenbest, part of China’s Sanpower conglomerate, which will retain a minority stake. According to reports in The Guardian, the deal means Sanpower and C.banner will co-own the holding company that controls an 89% stake in House of Fraser’s UK business, with Sports Direct boss Mike Ashley controlling the other 11%.

C.banner has agreed to inject £70m into the business, subject to House of Fraser closing an unknown number of its 59 stores and renegotiating rents with its landlords as part of a company voluntary arrangement (CVA) insolvency process. The CVA process is expected to start in June, according to The Guardian.

House of Fraser has already kicked off plans to reduce its floorspace by 30%, with the department store expected to downsize its presence in Plymouth and Wolverhampton.

The department store directly employs 5,000 people, as well as a further 12,500 people who work in concessions for fashion brands such as Levi’s and Ted Baker.

Uber enlists dentists and teachers for ‘relatable’ new campaign

Uber is launching a new online campaign focusing on subjects customers want to know more about, from the ride hailing app’s safety features to how surge pricing works.

The ‘Makes Sense’ campaign will feature seven films on important topics for consumers, as identified through market research. The films will show people in “relatable professions” explaining a particular feature of the Uber app. In one film a dentist explains the driver licensing process, while in another a teacher explains how you can share your trip with friends using Uber’s GPS technology.

Another film focuses on a restaurant diner explaining who her driver is before she meets him, because she has used Uber’s driver profile feature. The feature gives customers access to the driver’s name, picture, rating and the car make, model, colour and private hire licence number.

The films will go live on social media, online display channels and video-on-demand on 7 May.

TSB boss relinquishes £2m bonus

TSB chief executive Paul Pester is to relinquish his £2m “integration bonus” in the wake of an IT crisis, which has seen as 1.9 million of the bank’s online customers unable to properly access their accounts.

To date the bank has received 40,000 complaints after millions of customer accounts were moved to the new Proteus IT system, the integration of which was intended to provide TSB with £100m in annual savings.

During a session giving evidence to the Treasury Select Committee yesterday (2 May) Conservative MP Nicky Morgan accused Pester of being “extraordinarily complacent”.

Pester told the select committee that if there was one decision he could change in his life it would be the decision to go ahead with the migration to Proteus, stating that it was a “terrible decision for our bank, for our customers and for me personally”.

He does, however, argue that billions of customer records have been migrated correctly and that 95% of customers are now able to log into the bank’s mobile app and website without problems.

Spotify shares slip despite rising revenue

Shares in Spotify have fallen by 9% after the streaming giant’s first report as a public company saw its subscriber outlook fall just short of analyst expectations.

According to Reuters, investors expressed concern that discounts were compromising the company’s average revenue per user, which fell to €4.72 (£4.16) in the first quarter of 2018 from highs of €6.84 (£6.02) at the end of 2015.

It is thought that Spotify is discounting its premium subscriptions with cheaper family and student plans, and extending the length of free-trial plans intended to convert ad supported customers into paying subscribers.

Spotify expects its number of paid subscriptions to reach between 79 million and 83 million in the second quarter, despite analyst’s forecasts of 81.79 million. The streaming giant had 170 million active monthly users at the end of March, up 30% on the same period last year, 75 million of whom are paying subscribers, a rise of 45% on 2017.

For the full year 2018 Spotify expects to hit between 198 million and 208 million monthly active users.

Spotify reported first-quarter revenue of €1.139bn (£1bn), up 26% from a year earlier. The company expects revenue during the second quarter to reach between €1.1bn and €1.3bn, a rise of 10% to 29% year-on-year.

Wednesday, 2 May

Facebook releases ‘clear history’ tool that will make it harder for brands to target ads

Facebook is planning to release a ‘clear history’ tool that allows users to wipe their data from the social network. In a Facebook post ahead of the company’s f8 develop conference, CEO Mark Zuckerberg outlined the tool, which will work in a similar way to when users clear their history or cookies from their internet browser.

Once the update is rolled out, users will be able to see information about the apps and websites they have interacted with and clear this information. There will also be a setting that allows users to turn off having this information stored on Facebook in the first place.

However, the new tool is likely to impact Facebook’s core business model because it means brands won’t be able to use as much personal data to target online ads. Zuckerberg point out this would be detrimental to users’ experience of the site because they might have to sign back in all the time and the site will constantly have to relearn people’s preferences.

The update comes in response to the recent Cambridge Analytica data scandal, when a third-party app was found to have misused data from millions of Facebook users. Zuckerberg said the new tool is something privacy advocates have been asking for and it will work them to “make sure we get it right”.

“One thing I learned from my experience testifying in Congress is that I didn’t have clear enough answers to some of the questions about data. We’re working to make sure these controls are clear, and we will have more to come soon,” he added.

Also at f8, Facebook revealed plans to move into online dating with a feature that enables users to make their profile visible to people who aren’t their friends but have also opted into the feature. Facebook will then match people based on the data it holds on them, with messaging happening in a dedicated box.

There were also updates to Instagram and WhatsApp. Instagram is getting voice chat and a new filter to sift out bullying comments, while WhatsApp is getting a redesign that gets rid of the camera and games tabs to give it a cleaner design and introduces translation.

Snapchat redesign hits user growth and ad revenues

Snapchat’s controversial redesign has made it less popular with users, with growth decelerating and its parent company Snap warning growth and revenue could slow further in the second quarter.

Snapchat added just four million new users in the first three months of 2018, around half the number forecast. Shares in Snap fell by 17% on the news as shareholders aired concerns over its ability to generate ad revenues in the face of slower user growth following the January redesign.

Revenue was up by 50% year on year to $230.7m (£170m), but this was below analyst expectations. Snap said the redesign “disrupted user behaviour” leading to “apprehension” among advertisers but said it would stick with it as it focuses on long-term growth.

“The redesign lays the foundation for the future of both our communication products and our media platform, and we look forward to doubling down on both,” chief executive Evan Spiegel said on a conference call with analysts last night.

RBS to shut 162 branches in latest move away from high street banking

RBS is to close 162 branches across England and Wales as part of a deal with the European Union aimed at increasing competition. The EU had demanded RBS sell 300 branches as a condition of its taxpayer bailout in 2009. It resurrected the Williams & Glyn name for the branches it put up for sales but was unable to find a buyer.

The closures will lead to the loss of nearly 800 jobs and have raised fresh concerns that rural communities will be left without access to a local bank branch. Banks have been shutting down branches for years as people head online to do their banking, but the decision has been criticised by both consumers and politicians.

But RBS points out that the number of branch transactions has fallen by 30% since 2014, while mobile transactions are up 74%. The latest closures mean RBS will have around 859 branches remaining, 1,000 fewer than at the end of 2014.

YouTube stars being paid to encourage students to cheat

YouTube stars are being paid to advertise websites that allow students to cheat on their exams and essays, according to a BBC investigation. It found that more than 250 channels are promoting EduBirdie, a site based in Ukraine where students can buy essays rather than writing them themselves.

The endorsements of the site are being made by influencers with thousands of followers, and the videos have been watched millions of times. The ads appear in videos covering a range of subjects, including pranks, music, dating and gaming.

Essay writing services are not illegal, but students are not allowed to pass off someone else’s work as their own and, if found out, penalties can be severe. Sam Gyimah, England’s universities ministers, says he is shocked by the nature of the videos and called on YouTube to act. YouTube has said it has clear guidelines around what should and should not be promoted through endorsements and that it would be working to educate its stars on not promoting dishonest behaviour.

A YouTube spokesman told the BBC: “YouTube creators may include paid endorsements as part of their content only if the product or service they are endorsing complies with our advertising policies.

“We will be working with creators going forward so they better understand that in video promotions must not promote dishonest activity.”

Apple posts best second quarter results as iPhone sales surprise

Apple has reported its best ever second quarter results as iPhone sales held up despite concerns over demand for the high-end iPhone X. Revenue was up 16% year on year to $61.1bn (£45bn) as Apple sold 52.2 million iPhones in the first three months of the year. There has been concern that the high price tag for the iPhone X had muted demand, but CEO Tim Cook said it been its most popular device.

Cook added: “It’s one of those things like when a team wins the Super Bowl, maybe you want them to win by a few more points. But it’s a Super Bowl winner and that’s how we feel about it.”

Elsewhere, revenues from its services business (made up of services including iCloud, the App Store and Apple Music) topped $9.1bn. And Cook also highlighted strong growth in wearables.

Disney signs deal with Twitter to stream live shows

Disney is to start creating live shows especially for Twitter causing the social network’s shares to spike 4.5% yesterday (30 April).

The two companies have entered an agreement to create content and offer advertising opportunities specifically for Twitter, with more details about the shows expected to be released by Twitter and ESPN, which is owned by The Walt Disney Company, at advertiser presentations this week in New York.

Programming from other Disney entities including ABC, Disney Channel, Freeform, Disney Digital Network, Walt Disney Studios Motion Pictures, Radio Disney and Marvel are also in the pipeline.

Twitter revealed that more than half its advertising revenue came from video opportunities during its latest earnings report last week.

In addition to Disney, Twitter has signed a flurry of other video deals, including one with Formula One, which will see the @f1 account stream a live post-race show featuring interviews and panel discussions. The first of 10 shows will premiere after the Spanish Grand Prix on 13 May.

WPP to sell stakes worth billions but rules out complete break-up

WPP says it plans to sell its stakes in a range of businesses worth billions of pounds as the advertising group looks to refocus following the shock departure of founder Sir Martin Sorrell last month.

The company has a number of assets that are not part of its core business, including a 9% stake in media brand Vice. Other assets include 15% of digital ad business AppNexus and a holding in software group Globant.

WPP says the book value of these investments is about £2.5bn, but analysts suggest the market value could be closer to £6bn. Some of the proceeds from these deals will go towards paying down the company’s debts.

“There would be a lot of demand for our equity stakes in some of those investments,” says Andrew Scott, who is co-running the group with Mark Read, head of WPP’s Wunderman agency, while a successor to Sorrell is found. “We have tended to not proactively make an exit unless forced by a sale or IPO. Is there an opportune moment to realise value in some of those investments? That will definitely be a focus going forward.”

Scott and Read say they are prepared to sell off underperforming parts of the business but have ruled out a complete break-up following Sorrell’s exit.

WPP’s shares rose by almost 9% after a better-than-expected first quarter, which saw WPP report a 0.1% fall in revenue to £2.94bn, beating analysts’ expectations of a fall of about 1%.

Asda sees sales momentum improve while unpredictable weather stalls market growth generally

Of the big four supermarkets it was Asda that saw the biggest improvement during the 12 weeks to 21 April, with sales up 2.3% year on year, according to the latest retail data from Nielsen.

Its share of the grocery market now stands at 13.9% so if the proposed merger with Sainsbury’s goes ahead the two brands would have a combined market share of 28.8% – beating Tesco’s 27.1% share.

Mike Watkins, Nielsen’s UK head of retailer insight, says: “Both retailers have over half of all households as shoppers every 12 weeks, while over three-quarters also visit Tesco. This illustrates how competitive the retail landscape is, which is why we’re seeing further consolidation within the industry.”

Meanwhile, Sainsbury’s sales grew 0.2% compared to last year, while Tesco’s grew 2.1%.

The discounters again saw the best year-on-year growth, with Aldi up 10.3% compared to Lidl’s 9.3%. Iceland (up 3.6%) saw the biggest growth outside of the discounters.

However, overall sales at the UK’s leading supermarkets grew at their lowest rate for nearly fifteen months, according to Nielsen, which blames the unpredictable weather.

In the four weeks to 21 April, sales rose by 1.2% year on year – the lowest rise since January 2017.

Watkins says: “The unpredictable weather finally started to disrupt grocery spend, particularly compared to last year.”

However, the unusually good weather mid-April did give retailers a significant short-term boost.

“A significant change in the weather can give supermarket sales as big a boost as an important event such as Easter, which is what happened in the week ending 21 April this year. The three days of hot weather helped sales jump 11% year on year. However, this wasn’t enough to offset the previous three weeks of poor weather.”

During the week of unseasonably good weather, shoppers spent £11m on sun care products, nearly three times the amount spent during the same period last year, while ice cream sales doubled to £28m.

Square unveils first UK ad campaign

Square, the payments company founded by Twitter’s Jack Dorsey, is launching its first ad campaign for the UK market to encourage small business owners to accept card payments.

The ‘Square and Fair’ campaign, created by gyro London, features a selection of real-life businesses that already use Square’s technology.

Kevin Burke, CMO at Square, says: “Running your own businesses is more than a job – it’s a way of life. The business owners featured in this campaign pour their heart and soul into their ventures, and we wanted to celebrate that passion and commitment. We also want to show that technology needn’t be expensive or complicated, and can help you run your business more effectively.”

The ad will appear across TV, print, online and social media, alongside press and performance digital media aimed at business owners.

Holland & Barrett sees sales grow despite high street woes

Holland & Barrett is bucking the current high street trend after posting its ninth consecutive year of like-for-like sales growth.

Europe’s largest health food chain posted revenue growth of 7.1% to £656m in the year to 30 September , with like-for-like sales up 4.5% and online sales rising 23.6%, as consumers’ interest in healthier options continues to rise.

Despite a number of retailers having to close their doors this year, Holland & Barrett described activity last year as “satisfactory” and as a result it will continue to expand its portfolio “where strategically appropriate”.

Monday, 30 April

YouTube to sell ads on live TV

YouTube will begin selling its ads through live television stream in a bid to target specific consumers, compete with traditional TV and give advertisers more gateways to reach viewers.

According to reports YouTube has two minutes of local ad inventory per hour that it can sell on each TV network but has so far allowed those networks to sell the two minutes themselves.

However, YouTube is reportedly set to sell the time itself as part of its Google preferred package with the video hosting giant predicted to make an announcement this Thursday (3 May).

The move comes after new research revealed seven out of 10 US viewers watch YouTube on a TV screen.

It is understood YouTube will produce content for advertisers based on their demographic buy or affinity buy which could include YouTube TV – meaning they can’t specify that they want to buy the live stream as part of their package.

Currently, brands can only target specifically to desktop, mobile and tablets.

Halifax follows the ‘Yellow Brick Road’ in new campaign

Halifax has taken a trip along the Yellow Brick Road as part of its new TV campaign, ‘There’s No Place Like Home’.

Created by Adam&EveDBB, the bank’s advert is set in the magical land of Oz and features favourites such as Dorothy and Toto from the 1939 film making their way to the Emerald City.

However, The Wizard of Oz has gone out leaving Halifax colleague Greg responsible for helping the Scarecrow, Cowardly Lion and Tin Man find their dream home, or in Dorothy’s case, find her way home.

The advert was filmed in a TV studio before being superimposed on to original film footage during post-production. The ad first aired on Friday (27 April) on Channel 4 and will also feature in the national campaign across branches, outdoor and online.

Twitter caught up in Cambridge Analytica scandal

Social media giant Twitter has been caught up in the Cambridge Analytica scandal for reportedly selling data to the Cambridge University academic who collected the information of millions of Facebook users’ without their knowledge.

Twitter claims no private data was accessed.

It is understood Aleksandr Kogan, the man who helped a political consultancy to psychologically profile and target voters, bought the data in 2015 before the scandal came to light.

Dr Kogan allegedly bought tweets, location data, usernames and profile pictures through his company Global Science Research (GSR).

Twitter said it had banned GSR and Cambridge Analytica from buying data or running adverts on the website and that no private data had been accessed.

“Twitter has also made the policy decision to off-board advertising from all accounts owned and operated by Cambridge Analytica. This decision is based on our determination that Cambridge Analytica operates using a business model that inherently conflicts with acceptable Twitter Ads business practices,” a Twitter spokesperson says.

“Cambridge Analytica may remain an organic user on our platform, in accordance with the Twitter Rules.”

Manchester City unveils new children’s app

Manchester City has unveiled its maiden children’s app in a bid to attract young fans to the game.

The app is aimed at six- to 12-year-olds and designed to take users behind the scenes at the City Football Academy. It also features games and football themed quizzes in a “safe and easy to use mobile app and online portal”, according to the club.

Available to download on smartphone and tablet via the iTunes App Store and Google Play, this new offering also includes polls, as well as fun click-games featuring mascots, Moonbeam and Moonchester.

“I think the Man City Kids app is a great way for kids to have fun and engage with the sport from an early age,” says Man City captain Vincent Kompany.

“We love meeting our young fans and this app offers fans the chance to share some really fun experiences with us, as well as see behind the scenes at the club.”

Asia drives quarterly earnings growth at HSBC and Standard Chartered

Two of the UK’s major lenders, HSBC and Standard Chartered, are predicted to experience climbing profits thanks to economic growth in Asia.

A number of big British banks have experienced impressive profits during the first quarter with HSBC expected to report a profit of £5.5bn, according to data collected by S&P Global Market Intelligence.

Experts say HSBC will deliver a strong quarter on Friday (4 May), on the back of growth in Hong Kong and Asia.

Additionally, Standard Chartered is set to reveal its first-quarter results on Wednesday (2 May), with analysts predicting revenues of $3.95bn, its highest quarterly figure since the second quarter of 2015.