Burberry, Apple, EasyJet: 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.

Apple becomes world’s first trillion-dollar company

Apple has become the world’s first US-listed trillion-dollar public company as a rise in its share price pushed it past the landmark valuation.

The tech giant reached the historic milestone a day after posting strong financial results, which saw its stock value rise by 9%.

It’s been 42 years since Apple was founded in a garage by Steve Jobs and Steve Wozniak in 1976, with the introduction of the iPhone and a new chief executive Tim Cook catapulting the company.

The new valuation means Apple’s stock market value is more than a third the size of the UK economy and larger than the economies of Turkey and Switzerland.

Burberry’s chief creative officer unveils new logo

View this post on Instagram

The #ThomasBurberryMonogram August 2018

A post shared by Burberry (@burberry) on Aug 2, 2018 at 4:57am PDT

Burberry has revealed a brand new logo and monogram as part of a major rebrand under Riccardo Tisci, the fashion house’s new chief creative officer.

Tisci revealed the designs on his personal Instagram account. The preview of the new monogram shows interlocking ‘TB’ initials on a honeyed background.

The designer’s social posts gave an insight into the background behind the rebrand, showing a series of emails between Tisci and graphic designer Peter Saville, which explain how the logo is inspired by founder Thomas Burbery.

The Italian designer left his role at Givenchy in February 2017 and is currently preparing to show off his new direction for the brand during London Fashion Week in September.

Three and easyJet launch ‘swagger’ campaign to celebrate partnership

Three is launching a new campaign to celebrate its partnership with easyJet.

The mobile provider’s TV spot, created by agencies W+K London and The Mill, encourages consumers to “travel with Swagger” and features Giraffamingo, a cartoon giraffe/flamingo mix, ‘swaggering’ through the airport.

The partnership means UK Three users are able to upgrade to easyJet handsfree for free for their outbound journey. Perks from easyJet handsfree include preferential boarding and being one of the first to collect bags on arrival.

The campaign also includes store rebrands and interactive retail activations, including in the Manchester Arndale store which has been given a 10 metre long plane kitted out with with flashing landing and tail lights.

Shadi Halliwell, Three UK CMO, says: “Our new partnership with easyJet is an innovative collaboration between mobile and travel and who better to bring this to life for our customers than the popular Giraffamingo. This campaign is a further extension of our Go Roam offering and extends the benefits of being with Three way beyond our 71 worldwide destinations.”

Amazon reveals lowest UK tax bill in years despite profits

Amazon has declared its lowest UK corporation tax bill in five years, paying £4.6m in the UK last year, down from £7.4m in 2016, its accounts reveal.

It was revealed that Amazon’s biggest UK firm, Amazon UK Services, saw its corporation tax fall by 36%, despite declaring a £72m profit.

Amazon UK says it pays all the tax it is required to “in the UK and every country where we operate”.

A spokesperson explains: “Corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment.”

Npower fined £2m for missing meter deadline

Energy giant Npower has been fined £2.4m for failing to meet the deadline for installing advanced meters to business customers, Ofgem has said.

The UK energy supplier failed to install the advanced electricity meters at roughly 4,000 locations – failing to meet the April 2014 deadline. Plus, it wrongly installed around 200 traditional meters.

The government’s scheme to roll out advanced meters to firms began in 2009, with Ofgem declaring that Npower’s mistakes meant customers missed out on the opportunity to receive better information about their energy consumption.

Rob Salter-Church, Ofgem interim executive director for consumers and markets, says: “Npower is paying the price for failing to meet its obligations and letting down its business customers.”

Thursday 2 August

Tesla reports biggest quarterly loss despite increase in car sales

Sales of more than 40,000 electric cars helped to boost Tesla’s revenue by 43% year on year to $4bn in the third quarter of 2018.

However, the Elon Musk-owned business made a loss of $717m in the quarter – more than double a year ago and the worst quarterly loss on record.

Despite this, the $430m it burned in cash over the three months was less than investors were expecting and stock was up more than 10% at one point in after-hours trading.

Musk describes the results as a “mind-blowing leap forward” and says he remains confident the business will make a profit in the second half of the year. “Our goal is to be profitable and cash-flow positive for every quarter going forward,” he adds.

House of Fraser deal falls through

House of Fraser’s future hangs in the balance after Chinese company C.banner pulled out of a rescue deal that could have saved the business.

C.banner, which owns Hamley’s toy store, was set to take a majority stake of House of Fraser and invest £70m into the struggling retailer, which would also have seen the closure of 31 of its 59 stores and 6,000 job losses.

However, shares at the Hong Kong-listed company have fallen 70% over the last two months and on Wednesday it issued a profit warning, rendering the deal “impractical and inadvisable”.

House of Fraser says it is in talks with other investors – including Sports Direct founder Mike Ashley – and that it is exploring other options, with an announcement to be made in due course.

If no deal comes through House of Fraser could go into administration within a matter of weeks.

FA signs deal with Mitre

The FA has signed a three-year deal with British football brand, Mitre, which will see the company become the official football supplier across all FA competitions from the start of the 2018/19 season.

The partnership – due to run through to 2020 – will see Mitre Delta Max balls used across The Emirates FA Cup, The SSE Women’s FA Cup, The FA Women’s Super League, The FA Women’s Championship, The Buildbase FA Trophy and The Buildbase FA Vase. The balls will display the respective competition logo, with The Emirates FA Cup and The SSE Women’s FA Cup balls each receiving a creative, bespoke new design.

The first Mitre ball will be used at The FA Community Shield on Sunday, 5 August.

“We seek to maintain the highest of standards across all of our competitions, and it is fitting that we have chosen a manufacturer with a history of excellence as our official football supplier for the next three seasons,” says Mark Bullingham, FA Group commercial and marketing director.

“We look forward to unveiling the first new ball at the Community Shield and to working closely with Mitre to ensure our partnership reaches its full potential.”

Instagram rolls out time limit and ‘mute’ tools

Instagram has launched new tools to help people manage their time on Facebook and Instagram as it looks to “ensure the platforms are safe and supportive places where people can have positive experiences that enhance their lives”.

The first of these is a dashboard of activity, which allows people to view the average time and the daily time they spent on the app in the last week.

The second will let users to set an alert when they’ve exceeded what they think is a good amount of time on the app. Instagram will remind users when they reach that limit every day, but they will be able to continue to use the app after closing out the reminder if they wish to.

The third ‘mute’ feature will allow users to turn off notifications for a set period of time if they want a break from Facebook. They will also be able to mute push notifications for a set duration when they don’t want to be alerted to activity on either platform.

In addition to the new tools, Instagram is collaborating with 100 young ambassadors in an effort to better support its community of young people.

The ambassadors will be set a challenge by Instagram to find creative ways of raising awareness of the tools to help other young people better manage their experience on Instagram.

Civil society organisations, mental health experts and NGOs will also come together with designers and Instagram teen-creators to co-create campaigns that help encourage intentional and balanced use of social media.

1.1 billion hours of radio listened to every week

Some 89% (48.8 million adults over the age of 15) of the UK population tuned into radio stations in the second quarter of 2018, according to the latest figures from Rajar, with total weekly listening hours reaching 1.1 billion.

On average, a listener tuned into 20.8 hours of live radio per week, with 61% of people (34 million) listening via a digital platform such as DAB, DTV, online or through an app. In an average week, digital listening accounts for 510 million hours.

In an average week, 70% of adults listen to the radio at home, 64% in the car or other modes of transport, and 24% at work or ‘elsewhere’.

30% of adult social media users claim to receive updates about their favourite radio station or presenter, with the figure rising to 41% for 15- to 24-year-olds.

Wednesday, 1 August

Tesco Clubcard to offer on-demand vouchers

Tesco is reportedly revamping Clubcard with a new ‘Faster Vouchers’ scheme that will allow members to request vouchers whenever they want, rather than having to wait for a quarterly statement.

Currently, Clubcard customers are sent vouchers to the value of their points every three months. But MoneySavingExpert reports that, from 28 August, the new scheme will allow members to request the total value of their points be turned into vouchers whenever they like to be used either as a printed voucher or on their phone.

Tesco has hinted previously that it is looking at ways to modernise Clubcard, and the changes could help boost engagement with the loyalty scheme. Tesco has declined to comment on the details, but the new scheme is expected to be launched in the next couple of weeks.

Facebook deletes accounts that were advertising around the US elections

Facebook has removed 32 pages and accounts from its platfrom and Instagram after it detected “coordinated inauthentic behaviour” before the mid-term elections in the US. The pages were pushing specific political stances and organising events, including a ‘Unite the Right’ rally due to take place in Washington next week.

The accounts had a total of 290,000 followers and used virtual private networks to conceal their locations and internet phone services to hide their identities. They paid third parties to spend around $11,000 on about 150 ads on Facebook and Instagram.

Facebook says it does not have definitive evidence over who is behind the accounts, but that they showed similar behaviour to previous accounts linked with the Internet Research Agency, a Russia-based group with ties to the Kremlin.

Apple results boosted by sales of more expensive iPhones

Apple revenues soared again in the three months to the end of June as more expensive iPhones pushed up its results. Sales of the iPhone were up by just 1% in the quarter to 41.3 million, but the average selling price reached $724, well above the $694 expected as its $999 iPhone X remains its most popular model.

Services revenue from offerings including the App Store, Apple Music and Apple Pay were also a strong point, with revenues up 31% year on year. The division is now on track to reach more than $14bn in revenue by 2020.

Overall, revenues were up 17% year on year to $53.3bn, while profits increased 32% to $11.5bn. Shares jumped more than 3% in after-hours trading, bringing Apple one step closer to being the first company to have a $1 trillion market value.

Kraft Heinz plots packaging overhaul in sustainability push

Kraft Heinz is looking to overhaul its packaging to make it more environmentally friendly as part of a sustainability push. The company says it will make all its packaging recyclable, reusable or compostable by 2025, with plans to partner with experts and industry coalitions to develop alternative materials for its packaging.

The move could mark a major change for some of the world’s most recognisable brands. Currently Heinz ketchup packets, Capri Sun juice pouches and individually wrapped Kraft Singles cheese can’t be easily recycled, but Kraft Heinz is looking at how to change this, Kraft Heinz’s head of global corporate reputation Caroline Krajewski, tells Bloomberg.

“Everything is on the table,” says Krajewski. “We have a tough road ahead of us on certain packaging types, and there are issues where we’ll have to band together with third parties and industry coalitions because no one of us can progress change in that area by ourselves.”

Disney launches ‘one-stop-shop’ for ecommerce

Disney is launching a ‘one-stop-online-shop’ in EMEA as it looks to bring together its licensed brands, as well as Disney Store and Disney Parks products. Launching today in the UK, France, Italy, Spain and Germany, it will focus on fashion and accessories, toys and baby, home, collectibles and a Disney Parks collection. Co-branded items will also appear from brands including Lego, Swarovski and Garmin.

The ecommerce site, called shopDisney, will also offer Disney Store gifts and toys, with an increased focus on personalisation and customisable products. To that end, the company is introducing a new Disney Monogram range in the UK.

Graham Burridge, managing director of Disney Stores Europe, says: “We know people love the Disney brand and we are now giving fans what they want, a virtual Disney department store offering the broadest range of Disney product out there. With a slick look and feel and great functionality, plus new product categories, the new shopDisney site will appeal to new and current fans across all ages, whether you’re three or 73.”

Tuesday, 31 July

Mike Ashley offers House of Fraser new investment deal

Sports Direct founder Mike Ashley has reportedly offered House of Fraser a cash injection to help keep the ailing department store afloat.

Ashley is said to have approached House of Fraser around a month ago, claiming he could “offer something better” than the deal proposed by Chinese department store chain C.banner.

In May C.banner, which owns the toy shop Hamley’s, said it would take a majority stake in the struggling British department store chain, injecting £70m into the business, but only once the store closure and rent reduction rescue plan had been agreed.

Sports Direct already owns an 11.1% stake in House of Fraser, which according to reports on Sky News is in need of £50m to prevent it going under. However, sources close to the department store have denied the chain’s survival is under threat, say BBC reports.

In June, House of Fraser revealed plans to close 31 of its 59 stores as part of a rescue deal that has been approved by creditors, but sparked anger from a group of landlords who are taking the retailer to court claiming any plan where rents are slashed is unfair to them.

Samsung’s profit falls amid downturn in flagship smartphone sales

Samsung has experienced its first profit drop for seven quarters as a decline in its smartphone business impacted group performance.

The South Korean company reported a net profit of 11.04 trillion won (£7.5bn) for the second quarter of the year, down 5.5% on the previous quarter. Meanwhile revenue for the period fell 4% year on year to 58.5 trillin won (£39.9bn).

The downturn was partly due to lower than expected sales of Samsung’s flagship Galaxy S9 smartphone, resulting in a 34% fall in operating profit for the mobile division.

Samsung warns the mobile market will remain challenging in the second half of the year as competitors launch new models. The group is next month planning to unveil its premium Galaxy Note 9 smartphone.

Overall, Samsung says it is positive about its outlook due to the ongoing strength of its microchip business. Operating profit in its semiconductor business reached 11.6 trillion won (£7.9bn) for the second quarter, up from 8 trillion won (£5.4bn) a year earlier.

Dixons Carphone admits 10 million customer accounts were breached

Dixons Carphone has admitted that 10 million records containing personal data may have been accessed in a data breach that hit the company in 2017. This is a significant increase from the 1.2 million figure announced when the breach was initially uncovered in June.

The company explains that while there is evidence that some data has left its systems, these records do not contain payment card or bank account details and there is no evidence of any fraud. The compromised data does, however, include names, addresses and email addresses.

Alex Baldock, who took over as Dixons Carphone chief executive in April, says the company is “disappointed in having fallen short” and “very sorry” for any distress caused to customers.

To protect data going forward, the company says it has added new security measures, invested in cyber security and has been working with cyber security experts.

UK ad spend surges to £5.7bn

UK advertising spend rose by 5.9% year on year to reach £5.7bn in the first quarter of 2018, representing the 19th consecutive quarter of growth.

According to Advertising Association/WARC Expenditure Report data, this figure is twice the rate of GDP growth and 1.3 percentage points higher than predicted.

The analysis shows that the first quarter of 2018 was the strongest first quarter for ad spend in three years, with print display ad revenue for national newspapers rising for the first time in seven years. Radio advertising recorded its strongest growth in four years of 12.5%, followed by online (10.8%), out-of-home (5.3%) and TV (5%).

Search now accounts for almost £3 in every £10 spent on advertising in the UK, up 1.8 percentage points on last year. The investment in display advertising, which accounts for just under two-thirds of all UK ad spend, rose by 4.7%. Excluding direct mail, spend on display formats rose 6% during the first quarter of 2018, the strongest sector of growth since the final quarter of 2015.

Ad spend is now expected to grow by 4.8% for the full year in 2018 and by 4.5% next year, which if correct would result in investment of over £24bn in 2019 and mark a decade of continuous growth.

Advertising Association chief executive Stephen Woodford adds that if the government can secure a “good outcome from the Brexit negotiations” and introduce what he describes as a “business-friendly immigration policy”, then he expects to see sustained UK market growth and continued export success for advertising.

Pret A Manger creative director departs after a decade

Pret A Manger creative director James Cannell is leaving the sandwich chain after 10 years. He will go on to “pursue other interests and support other brands”, while continuing to help Pret A Manger with some creative consultancy.

Cannell is credited with guiding Pret’s creative work across all its global markets, including the UK, US and Asia. He developed Pret’s tone of voice and use of ingredient imagery in its visual identity, introducing the brand to Paris, Shanghai, Dubai and Copenhagen.

During Cannell’s decade at the company Pret A Manger has grown to a chain of more than 500 restaurants in nine countries.

“Pret is a remarkable business and helping the brand to sing all around the world has been a joy,” says Cannell. “The business has an amazing future ahead. I’m very excited to see where the award-winning team of quite brilliant creatives and marketers take it next.”

Pret A Manger does not plan to replace Cannell, saying it has a strong team of creatives in place already.

Monday 30 July

Thomas Cook to stop selling tickets to SeaWorld over animal welfare concerns

Thomas Cook is to stop selling tickets to SeaWorld, Florida, and Loro Parque in Tenerife after concerns were raised over animal welfare.

The travel giant made the call after 90% of its customers revealed they were concerned about animal welfare. It is understood the firm will cease selling tickets to the two parks as of next summer.

However, chief executive at Thomas Cook, Peter Frankhauser says the decision was not taken lightly.

“When so many of our customers are so clear in their view, I could not allow our business to ignore them,” he says.

“I am clear about the kind of business that we want to be. That’s why we introduced our animal welfare policy 18 months ago, and that’s why we’ve taken this decision today.”

He acknowledges that while the parks had met standards and improved the living conditions of the killer whales, evidence provided by animal activists over the last 12 months played a big part in the decision.

In 2013, parks faced intense backlash for keeping orcas in captivity following the release of a Netflix documentary, Blackfish.

Amazon secures £600m public sector supply deal

Amazon has secured the right to supply everything from staplers to plasters to the public sector, which incorporates schools, emergency services, local government and social care.

The online retail giant signed a five-year deal with Yorkshire Purchasing Organisation (YPO), a procurement body owned by local authorities. It marks the first time Amazon has signed such a deal within the UK.

As part of the Yorkshire deal, which incorporates 13 local authorities, everything the public sector needs to operate will be made centrally available on a new Amazon site.

Amazon’s new dedicated site will be run through its business division and replace a more complex system which originally featured dozens of different suppliers. Its sales are anticipated to be worth £600m.

While it’s the first time a deal like this has been struck in the UK, similar processes are already in place across the US. However, they’ve faced heavy criticism over concerns it takes business away from local suppliers.

Contraceptive app under investigation by ASA

Contraceptive app Natural Cycles is under investigation by the Advertising Standards Authority (ASA) over a paid Facebook advert.

The Swedish app claims to be an effective method of contraception, but three women have come forward to complain that they’ve fallen pregnant while using the app, according to an ASA spokesperson.

Natural Cycles’ paid advertising on Facebook describes the app as highly accurate contraception that has been clinically tested. However, the ASA spokesperson says the claim would require robust substantiation.

Meanwhile a spokesperson from Natural Cycles says the investigation is related to an ad from last year.

“We are in contact with the ASA and, since the investigation is ongoing, it would not be appropriate for us to speculate on the outcome,” the spokesperson adds.

Natural Cycles advertises itself as a natural form of birth control for women concerned about taking hormones. Women can track their cycle by recording their temperature via the app at the same time each morning. The app then monitors the results to determine when they’re ovulating before advising the user of whether its safe or unsafe to have unprotected sex.

Lidl to build thousands of homes amid plans for more store openings

Lidl reportedly plans to build 3,000 homes and a school in its latest attempt to secure planning permission for new London-based stores.

As part of the proposal – which is expected to be completed by next year – a primary school in Richmond will be given a new space spanning two floors above a new Lidl store.

The discounter plans to open 50 new stores across London with property experts suggesting Lidl’s plans stem from difficulties in gaining planning permission for new stores, but pledging to build new homes can help convince councils to give them a permit.

The Guardian reports that Lidl plans to build some of the homes itself while others will be spearheaded by developers. It will also focus on creating affordable properties.

Lidl’s UK managing director Christian Härtnagel says: “We’re proud that our stores are increasingly helping to pave the way for mixed-use developments, which in turn are supporting important initiatives. It continues to mean a great deal to us that we are able to support many of the communities that we’re a part of by providing added value above and beyond affordable food.”

BT loses right to broadcast NBA and UFC

BT has lost the rights to broadcast NBA and UFC after it abandoned a bidding contest, with a spokesperson for the telecommunications company suggesting BT won’t bid anymore than “the rights are worth to us” before noting “everything is expendable”.

A report in the Financial Times claims BT will continue to broadcast NBA and UFC until October and December respectively. The company spends about £1bn a year on sports rights but the loss means its channels will showcase fewer popular sports after also losing the rights to the Italian Serie A football.

A spokesperson for the firm says it will focus on gaining subscribers through “investing in more broadcast innovations” and that long-term deals are in place for sports such as football, rugby and boxing.

BT has come under fire for spending its money on rights to big sporting competitions such as Premier League games rather than improving its broadband speed and coverage.