Wonga, Twitter, WPP: 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.

Mark Read WPP

WPP set to name Mark Read as new boss

WPP is reportedly set to name company insider Mark Read as CEO to replace its founder Sir Martin Sorrell after he unexpectedly stepped down almost five months ago.

WPP has been hunting for a new boss since then, with Read and Andrew Scott running the company on an interim basis. While the advertising group did look externally, a report in the Financial Times says the appointment of Read is expected early next week.

Read has been at WPP, the world’s largest ad group, for years, previously running its digital arm and serving as CEO of Wunderman. He has almost spent 10 years on the company’s board.

Read will need to focus on company culture after Sorrell left following an investigation into his conduct, leadership style and claims he mishandled company funds. He also faces the challenge of returning WPP to growth amid difficult times for the agency holding groups as clients cut back on spend and take more services in-house.

READ MORE: Mark Read to be unveiled as new WPP chief executive next week (£)

Wonga falls into administration

Payday lender Wonga is to file for administration after losing its attempt to turnaround the business. The company says that having assessed all options, administration is the appropriate route for it to take. It had already stopped accepting new loan applications, but customers will be able to continue managing their existing loans.

Wonga’s demise comes after a surge of compensation claims and amid tighter legislation of payday lending. In 2014, the Financial Conduct Authority ordered Wonga to pay £2.6m in compensation to 45,000 customers after finding its debt collection practices were unfair.

Following tighter rules, Wonga’s profits were hit hard, and it posted pre-tax losses of nearly £65m in 2016.

READ MORE: Wonga collapses into administration

Twitter tightens rules around political and ‘issue’ ads

Twitter has tightened its rules around political advertising and “issues” ads as it looks to improve transparency. The new rules, which apply globally not just in the US, refer to ads about an election or clearly identified candidate, or ads that advocate for legislative issues of national importance.

The changes mean advertisers will need to apply for certification, which involves verifying their identity and that they are located in the country where they want to run the ads. Both election and issue ads will now be labelled as such in the Twitter timeline, with users able to click through and learn more about who paid for the ad. They will also be included in Twitter’s ads transparency centre.

In a blog post, Twitter’s vice president of trust and safety Del Harvey and its general manager of revenue product Bruce Falck said the policy could apply to ads around immigration, abortion, healthcare and climate change, with what counts as an ‘issue’ likely to evolve over time.

News organisations can apply for an exemption. Twitter will start enforcing the policy at the end of September.

READ MORE: Twitter announces new policy and certification process for ‘issue ads’

Retailers back ban of sales of energy drinks to children

Retailers have backed a possible ban of the sales of energy drinks to children as the government launches an investigation into whether they should be sold to under-16s.

Most major retailers already ban the sale of energy drinks to children, with the British Retail Consortium saying an outright ban would simply bring legislation in line with them.

“This follows the lead of the major retailers, who have already put voluntary controls in place,” says the BRC’s deputy director of food policy, Andrea Martinez-Inchausti. “Legislation will ensure a consistent and comprehensive approach to preventing sales to children.”

However, not every organisation agrees with the proposed ban. The Institute of Economic Affairs has called it “draconian and unnecessary”.

Campbell Soup plans break-up of business as it looks to turnaround fortunes

Campbell Soup plans to sell its international and fresh refrigerated foods units, and is still considering putting the whole company up for sale as it looks to turnaround its fortunes.

The move comes after activist investor Dan Loeb, whose Third Point has a 5.65% stake, pressed for a sale, calling it the “only justifiable outcome”. Campbell’s interim CEO Keith McLoughlin said he is still “open-minded” about a sale, with the decision to offload its two smaller businesses likely to make it a more attractive takeover target.

“The board concluded that this current plan right now is the best one to maximize value,” McLoughlin told Reuters. “Having said that, the board remains open to alternatives that could create more value for the shareholder.”

Campbell’s, which turns 150 next year, revolutionised the home-cooking industry but has struggled to attract younger consumers. In recent years it has relied on acquisitions and tried to pursue trends such a health and wellbeing, with little success.

READ MORE: Campbell to sell fresh, international units, complete sale an option

Thursday, 30 August

amazon prime

Amazon halts US Open coverage feedback after flood of complaints

Amazon has halted reviews of its US Open coverage after reportedly receiving a deluge of complaints from unimpressed tennis fans.

The company paid $4m to secure rights to broadcast the event via its Prime Video service to UK based viewers over the next five years in a bid to prove it can compete with traditional broadcasters.

However, Amazon – which has successfully streamed NFL matches in the past – has been hit with deluge of complaints about picture quality and sound. Fans are also frustrated at not being about to record matches. According to reports almost 90% of the 650 reviews posted by subscribers to its Prime Video service gave it one or two stars.

It is understood Amazon has since stopped allowing viewers to review its service and instead they will be met with a message reading: “This product currently has limitations on submitting reviews. There can be a number of reasons for this, including unusual reviewing activity.”

“We are working with customers to address specific issues – we listen to all customer feedback and are always working to improve all aspects of our service,” a spokesperson for Amazon UK says.

REA MORE: Amazon suspends reviews of US Open coverage

Facebook to rival YouTube with launch of global video service

facebook

Facebook has rolled out its on-demand video streaming service, ‘Facebook Watch’, which could challenge the likes of YouTube, Netflix and Amazon Prime for viewership figures.

The service, which is already available in the US, will allow users to choose from a range of shows and will be made available to those in the UK, Ireland, Australia and New Zealand. Reports suggest they will also be able to view clips saved from their News Feeds.

The social networking giant is likely to spend £1.55bn to produce content for Facebook Watch and will allow all content creators to feature ad breaks if they hit certain metrics. So for now only select publishers have been given rights.

For instance, to sign up for the “Ad Breaks” service, content creators will need to have either 10,000 followers or generate more than 30,000 one-minute views per month.

The revenue split will be 55% to the creators and 45% to Facebook.

READ MORE: Facebook Watch video service launches world wide

Boots launches ‘faceless’ beauty campaign

Boots is challenging norms within the beauty industry through its new campaign which aims to highlight how products make consumers feel rather than focusing on aesthetics and appearance.

Throughout the ‘faceless’ spot the camera focuses on the body through movement with the intention of highlighting how make up and skincare products make people feel while celebrating that these products aren’t just about physical appearance. 

The campaign features lifestyle influencer Em Ford of ‘My Pale Skin’, journalist/dancer and amputee Kat Hawkins and male vogue dancer Busola Peters. Each of their faces aren’t seen until the very end of the video. 

Boots says the ‘It’s not just how it makes you look, it’s how it makes you feel’ campaign brings to light the stories of real people, triggering a conversation around contemporary beauty and individuality.

“Our vision for this campaign was to show beauty at its best – as positive and inclusionary,” marketing director for Boots UK and Ireland Helen Normoyle says.

The campaign, produced alongside Ogilvy UK, will appear across TV and social media.

Dyson reveals plans for UK testing site

Dyson has revealed plans for a 10-mile test track in Wiltshire where its new electric cars will be trialled, as part of the company’s wider plan to start selling the futuristic vehicles from 2021.

The company bought the disused airfield at Hullavington two years ago, with site renovations costing Dyson £84m while the next phase of the airfield’s development is likely to require an investment of about £200m.

Another three buildings will be opening over the next three months opening up an additional 15,000sqm of testing space as the company looks to make Hullavington a “world-class vehicle testing campus”.

“We are now firmly focused on the next stage of our automotive project strengthening our credentials as a global research and development organisation,” Dyson’s chief executive Jim Rowen says.

Details about the electric car are yet to be revealed, however, it’s thought to have some driverless features and won’t look like a traditional vehicle.

READ MORE: Dyson gears up for electric car testing

UK children face energy drink ban

Red Bull

People under the age of 18 in the UK could be banned from purchasing energy drinks such as Red Bull and Monster as the government cracksdown over fears they detrimental to their health.

The UK government says it plans to make it illegal to sell energy drinks to children, though they are unsure at what age the ban should apply to, giving 16 and under 18 as options.

It is believed the restrictions will apply to drinks with more than 150mg of caffeine per litre – which would include popular brands such as Red Bull, Monster and Relentless.

Ministers say they worry young people in the UK are reportedly consuming more of the high-caffeine, sugar-loaded drinks than children in other parts of Europe.

Energy drinks often contain more sugar than soft drinks and have been linked to obesity and other health issues. Though the main justification for the ban is the high level of caffeine in the energy drinks.

A public consultation on how to implement the proposed ban will be unveiled at Downing Street today (30 August). Prime Minister Theresa May says the consultation will aligned with the government’s childhood obesity strategy.

READ MORE: Government to ban sale of energy drinks to children in England.

Leicester City FC signs multi-year partnership with Chang Beer

Former Premier League champion Leicester City FC has signed a three-year partnership with Chang Beer, meaning the global beer brand will be made available to drink on match days at King Power Stadium.

As part of the exclusive partnership kiosks will be rebranded with the Chang logo.

It is understood the partnership from recent Chang Sensory Trail events, held across the UK, which celebrated the beer brand’s passion for craftsmanship through food, art and music.

Native to Thailand, Chang has been a decade-long sponsor of Thailand’s national football team while also sponsoring a number of teams within the nation’s premier league competition.

Geoff Tirrell, Change Beer general manager, says: “Following the success of our recent events in London, Birmingham, Manchester and Edinburgh, this is the next step in establishing Chang as the leading Thai beer in the UK. It makes us incredibly proud to be serving our quality beer to the fans of former Premier League champions, Leicester City. We would like to wish Leicester City continued success in the years to come.”

Parent company ThaiBev produces more than 15 billion litres of beer every year which are distributed to 50 countries across the globe and has seen a 130% sales increase in the last five years.

Wednesday, 29 August

pernod ricard

Pernod Ricard credits rise in profit to ‘consistent strategy implementation’

Drinks giant Pernod Ricard has posted a profit of €2.4bn (£2.1bn) for its 2018 financial year, after seeing organic growth of 6.3% fuelled by a strong performance in China and India.

Sales for the year totalled €9bn (£8.2bn), with organic sales growth up 6% compared to 3.6% the previous year thanks to “consistent strategy implementation”.

The company credits strong sales growth from its Martell (+14%) and Jameson (+14%) brands, improved performance across its Scotch portfolio, which was up 3% and return to growth for Chivas (+5%).

Absolut vodka has also had a good year, growing 2% overall thanks to success outside of the USA (+6%), despite the USA still being in decline.

Innovation has also contributed significantly to topline growth, the firm says.

Aston Martin confirms £5bn flotation

Aston Martin

Luxury car maker Aston Martin has confirmed it plans to float on the London Stock Exchange in a deal that is likely to value the brand at £5bn.

The company is expected to sell approximately £1bn worth of shares when it launches its initial public offering (IPO), in a move CEO Andy Palmer describes as “a key milestone” in the company’s history.

Aston Martin is aiming to publish a prospectus including full details of the share sale on 20 September.

READ MORE: Aston Martin unveils London Stock Exchange flotation

EasyJet launches campaign to encourage more girls to become pilots

EasyJet is launching a national campaign to encourage more girls to become airline pilots.

The campaign, which was created by agency Taylor Herring, reinacts scenes from Hollywood movie Catch Me If You Can.

The short video, called Catch Up, If You Can, sees a nine-year-old girl playing Leonardo DiCaprio’s character in the film and is designed to make girls of a similar age realise that being a pilot it not just a job for men, and to encourage more to consider it as a career option.

It is part of the airline’s Amy Johnson Initiative, which launched in 2015 to help balance the gender divide. The initiative has been credited for helping to increase female pilot numbers at easyJet, which have grown from 6% in 2015 to 13% in 2017. EasyJet has set a target for 20% of new pilots joining the airline to be women by 2020 at a time when only 5% of all pilots globally are female, according to figures from the International Society of Women Airline Pilots.

Chris Browne, easyJet’s chief operations officer, says: “It is clear from our research that changing perceptions and ambitions for women starts in school. We wanted to create an entertaining but thought provoking take on this famous movie scene, to inspire more girls to pursue this rewarding career.

“We hope that our campaign inspires a new generation of pilots, challenges gender stereotyping and encourages more women to take to the skies.”

Amazon is UK’s most reputable retailer, while Sports Direct comes last

amazon prime

Amazon has been named the most reputable UK retailer by a consumer poll, while Sports Direct has come out bottom.

The Reputation Institute’s 2018 Retail RepTrak sees Amazon gain 8.3 points, a significant improvement on last year, with consumers voting it as the top retailer across products and service, innovation, leadership, and performance.

The ranking is based on 5,175 individual ratings from the informed UK public and an assessment of 50 nominated companies.

Boots, John Lewis, Co-op and Ikea make up the rest of the top five, while Debenhams, Sotheby’s, Waitrose, Tiffany & Co and eBay take spots six to 10.

Stephen Hahn-Griffiths, chief reputation officer at Reputation Institute, says: “Amazon’s combination of selection, value, personalisation, and no hassle customer service is a winning formula.

However, the retailer recently fell foul of the Advertising Standards Authority for “misleading” customers in the run up to Christmas after around 270 people complained about its ‘guaranteed next-day delivery’ offer, which is something it will have to address if it wants to keep its top position going forward.

At the other end of the spectrum, Sports Direct is the UK’s least reputable retailer, after performing worst on four measures including workplace, governance, citizenship and leadership. The retailer posted a 73% decline in profits in July to just £78m.

Natural Cycles ad banned after ‘highly accurate’ claim ruled misleading

An ad for contraception brand Natural Cycles has been banned by the ad watchdog for claiming it is “highly accurate” and “provided a clinically tested alternative to other birth control methods”.

The Swedish app claims to be an effective method of contraception, but requires “considerably more user input than most forms on contraception”, the Advertising Standards Authority finds, with users needing to take and input body temperature measurements several times a week and record when intercourse had taken place.

Research shows 91.7% of users did not become pregnant over the course of 13 cycles based on typical use of the app. The ASA noted that the reporting of intercourse was low with only 32% of cycles inputting such data, and that only 9.6% of cycles were considered as perfect-use, where the app had been used precisely as instructed.

“Given the very low level of perfect-use by users of the app and the significant difference between the effectiveness of the app when in perfect- and in typical-use, we considered that it would be misleading to base an accuracy claim on the perfect-use results and that the relevant data was the level of effectiveness seen in typical-use,” the ASA states in its report. “Whilst we considered the evidence demonstrated the app could be effective as a method of birth control, we considered that it was misleading to describe it as “highly accurate”.

As a result, the ad, which originally appeared on Facebook last year, must not appear again in its current form.

Tuesday, 28 August

Netflix hires former Facebook executive to lead global communications

Netflix has hired former Facebook executive Rachel Whetstone as its chief communications officer, putting her in charge of communications across 190 countries as it looks to expand internationally.

More than 90% of the company’s new customers hail from outside the US, according to its most recent quarter, so its biggest challenges in terms of growth and potential regulation are likely to come from overseas.

Whetstone has experience working on global tech companies including as the former head of policy at Uber and Google. She joined Facebook in September last year to run communications for WhatsApp, Instagram and Facebook Messenger.

Netflix chief executive Reed Hastings says: “Rachel is a proven communications leader and a strong addition to the Netflix team. Her deep knowledge and international expertise will be invaluable as we bring Netflix and its expanding line-up of original content to an increasingly global audience.”

Whetstone adds: “I’m so excited to be joining Netflix and be part of this amazing company’s story.”

READ MORE: Netflix hires top Facebook communications executive ahead of international expansion

TSB appoints new chief marketing officer in management reshuffle

TSB

TSB has announced the appointment of Pete Markey as its new chief marketing officer.

His appointment comes after TSB’s current chief marketing officer, Nigel Gilbert announced his retirement for the end of September.

Markey is currently the banks marketing director and and has previously worked at Aviva, the Post Office and British Gas. He is a fellow of the Marketing Society and is also an alumni of its Fellowship Programme, and a mentor for the Academy’s scholarship programme.

Other appointments include Alison Straszewski as treasurer and earlier this month George Gordon as communications and corporate affairs director.

Paul Pester, chief executive officer at TSB, says: “I’m delighted to welcome Alison, Pete and George to the leadership team at TSB and look forward to working with them.”

Toyota to invest $500m in Uber driverless car deal

Toyota is to invest $500m (£387m) in Uber to expand a partnership to jointly develop self-driving cars.

The firm says this would involve the “mass-production” of autonomous vehicles that would be deployed on Uber’s ride sharing network. But didn’t rule out the possibility of the cars being owned and operated by third-party fleet managers.

It is being viewed as a way for both firms to catch up with rivals in the competitive driverless car market. 

Shigeki Tomoyama, executive vice-president of Toyota Motor Corporation, says: “This agreement and investment marks an important milestone in our transformation to a mobility company as we help provide a path for safe and secure expansion of mobility services like ride-sharing.”

READ MORE: Toyota Investing $500 Million in Uber in Driverless-Car Pact

Food price hike caused by extreme weather

Food prices are expected to rise by 5% because of the impact of the extreme weather, economists have warned.

Extreme weather such as the ‘Beast from the East’ and this summer’s long heatwave are both expected to cause a £7.15 hike in monthly household food bills, according to the Centre for Economics and Business Research (Cebr).

It says domestic food production has been hit by weather extremes that have put “particular stress on farming costs and yields”.

Between March and July, the wholesale “farm gate” prices of some staples rocketed by up to 80%, say economists, who used European Commission figures to make their calculations.

A farm gate price is the price of the product available at the farm, excluding any separately billed transport or delivery charge. The price of wheat for bread rose by a fifth, strawberries by 28% and lettuce by 61%.

Cebr said: “Summer 2018 has been one of the warmest in living memory, with above average temperatures recorded since April and dry spells lasting more than 50 days in parts of the country. While this has made Britain’s weather more conducive to barbecuing, it looks set to raise the price of the food on the grill and the drink in hand.”

READ MORE: Food prices ‘to rise 5%’ because of extreme weather

Uber to focus on bikes in US

Uber

Uber says it plans to focus more on its electric scooter and bike business, and less on cars, despite the fact it could hurt profits.

The company’s CEO Dara Khosrowshahi told the Financial Times that shorter journeys will become more popular in the future and that big city consumers will prefer individual rides encouraging the firm to invest in a number of bike firms.

He explains: “Short-term financially, maybe it’s not a win for us, but strategically long term we think that is exactly where we want to head.”

Uber’s electric bike sharing company, Jump, is already available in some US cities, including New York and Washington, and are soon launching in Berlin.

£ READ MORE: Uber plans shift from cars to bikes for shorter trips

View more on these topics

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here