Volkswagen, Ladbrokes, Ryanair: 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.

Ladbrokes Coral

Ladbrokes Coral owner unconcerned by advertising crackdown

Kenny Alexander, the chief executive of Ladbrokes Coral, says he is “not particularly concerned” about a threatened crackdown on TV gambling adverts.

In April new rules came into force which means gambling companies are banned from showing adverts which encourage people to “bet now” and offer misleading “free money” deals. However, heavy marketing around the World Cup this summer has sparked renewed calls for change.

The boss of the UKs biggest bookmaker, was speaking on GVC’s results call. He said: “If there were any clampdowns on advertising and TV, I don’t think it would impact our business as much as some of our competitors.”

“You’ve got to remember that we have a big retail estate, so we have a huge amount of brand presence… we are not just a pure online operator.”

He added: “Online operators would be a lot more affected… It is not something I am particularly concerned about if it came into place.”

READ MORE: Ladbrokes chief Kenny Alexander brushes off spectre of advertising crackdown

VW to end production of Beetle car 

consumer love flaunt flaws

Volkswagen is ending production of its iconic Beetle model.

The German company said output would end next July after production of celebration models.

Sales in the small car market have declined and in the wake of its diesel emissions scandal and the rise of electric cars the manufacturer has been looking to slim down its range.

Hinrich Woebcken, chief executive of Volkswagen Group of America, says: ”The loss of the Beetle after three generations, over nearly seven decades, will evoke a host of emotions from the Beetle’s many devoted fans.”

The small car was created in 1938 after Adolf Hitler wanted a cheap mass-produced car for the people of Germany. Its popularity grew in the 1960s and 70s with the Herbie movies catapulting the car to fame.

READ MORE: Volkswagen to stop production of iconic Beetle in 2019

RBS boss accused of misleading MP committee

The chief executive of RBS has been accused by MPs of withholding information about an investigation into criminal activity within the bank.

Ross McEwan had told the Treasury Committee, in January that there was not any criminality inside the bank’s now-defunct Global Restructuring Group (GRG).

However in June, the Times reported that the police were investigating allegations about a former employee who bribed business customers in return for overlooking their debts, which McEwan was aware of when he appeared before the committee.

McEwan says he replied to the Committee’s questions in “good faith”  but Tory chair Nicky Morgan has blasted his response which “implies that this [omission of information] was not inadvertent, but because he considered that the criminal allegations and police investigation in question were not related to the subject matter of the committee’s session”.

She says: “The committee is unconvinced by that explanation. It expects clarity and openness from witnesses, and Mr McEwan’s evidence fell short of that standard.

“More generally, the committee is concerned by the pattern of defensiveness, and a failure to acknowledge mistakes, demonstrated by RBS throughout its handling of the GRG affair… If the committee decides to ask Mr McEwan to provide further oral evidence, it will expect him to tell the whole truth, not an edited version to suit him.”

McEwan insists he replied to the committee “in good faith”.

READ MORE: MPs ‘misled’ by RBS boss over police bribe inquiry

Ryanair strike could be biggest yet

ryanair

Ryanair faces a one-day walkout by cabin crew across five countries as unions step up pressure over local contracts.

The proposed strike, on 28 September, will be across Belgium, Italy, the Netherlands, Portugal and Spain and is aimed at pressuring shareholders to address Ryanair’s labour agreements, union officials said on a press conference in Brussels on Thursday.

Ryanair employs staff across Europe under Irish contracts, but some unions want the ability to negotiate terms under the employment laws in their own country.

Yves Lambot, secretary of Belgian union CNE, claimed the strike would be bigger than the two-day walkout by cabin crew in July, which resulted in 600 cancelled flights.

READ MORE: Ryanair cabin crew from five countries plan one-day strike

Thursday, 13 September 

John Lewis and Waitrose rebrands

John Lewis profits drop 99%

The John Lewis Partnership has posted a 99% drop in profits before tax and exceptional items to £1.2m for the first half of the year, which it has blamed on having to price-match the heavy discounts at competitors.

Sir Charlie Mayfield, chairman of the John Lewis Partnership, says: “The pressure on gross margin has predominantly been from our commitment to maintain price competitiveness. This reflects our decision not to pass on to our customers all cost price inflation from a weaker exchange rate and from our Never Knowingly Undersold promise, where we have seen an unprecedented level of price matching as other retailers have discounted heavily.”

Profits at John Lewis & Partners were also impacted by the costs of new shops and investment in IT, as well as lower property profits compared to last year.

Reported pre-tax profits for the group fell by 81% to £6m.

Apple unveils three new iPhones

Apple unveiled three new iPhone X models yesterday alongside an upgraded smartwatch, which now features a host of health-related functions.

All three handsets are more powerful than the original model and while the iPhone XS has the same size screen as the original model (14.7cm), the iPhone XR has a 15.5cm screen but is lower quality, and the iPhone XS Max has a 16.5cm display.

The XS Max will range in price from £1,099 to £1,449 depending on storage, making it Apple’s most expensive handset to date.

The XS will be the same price as the original X at £999 to £1,349, while the XR will be £749-£899.

The new Apple Watch Series 4, includes a host of new features but is similar in size to its predecessors. It can display electrocardiogram heart waveforms for the first time thanks to new sensors in its back and crown to allow owners to check if their heart has an irregular rhythm. It will also warn wearers if their heart is beating abnormally fast or slow.

Plus, if users fall over and remain immobile for longer than a minute, it will send the emergency services an alert including the user’s location, and can also contact chosen friends or family.

The app providing these functions had been given ‘De Novo’ clearance by the Food and Drug Administration (FDA), meaning it can be legally marketed as a product able to provide health reading safely as part of a new category of product.

READ MORE: Apple iPhone XS unveiled alongside fall-detecting Watch

Uber rebrands for the second time in two years

Uber had unveiled another rebrand just days after ushering in its first global chief marketing officer.

The new logo features a custom-made typeface called Uber Move and new colours, which it hopes reflects the brand’s transition from “San Francisco startup to a global company”.

The rebrand began nine months ago, and while a total overhaul wasn’t initially on the table given the business only rebranded in 2016, Peter Markatos, Uber’s executive director of brand, says after hours of research and discussion with riders and drivers, the team decided it was necessary as consumers didn’t always associate the symbol it unveiled two years ago with Uber, which was causing confusion.

“As we expand our reach into our other markets and modalities, it’s super important that it’s very clear that when you’re getting into an Uber car or on an Uber scooter, you know that is an Uber product,” he tells AdWeek. “We weren’t achieving that with our current system.”

“It doesn’t make sense to build more equity into something that people don’t understand,” Markatos adds.

Former Coca-Cola marketer Rebecca Messina joined Uber as global CMO earlier this week.

READ MORE: Get an Exclusive Look at Uber’s New Brand Revamp

Morrisons sales growth hits nine-year high

Morrisons has posted a 6.3% rise in like-for-like sales for the first half of the year, representing its best quarterly sales growth in almost a decade.

The supermarket chain’s profits before tax fell 29% to £142m for the six months to 5 August, however, driven down by costs of £51m. Without these one-off payments, Morrison’s underlying pre-tax profit rose 9% to £193m.

CEO David Potts says: “Strong growth, including our best quarterly like-for-like sales for nearly a decade, together with another special dividend for our shareholders, shows how new Morrisons can keep improving for all stakeholders.

“Morrisons continues to become broader, stronger and a more popular and
accessible brand, and I am confident that our exceptional team of food makers and shopkeepers can keep driving the turnaround at pace.”

McDonald’s workers plan strike over sexual harassment

Workers at multiple McDonald’s restaurants in the US are set to stage a one-day strike to force the business to do more to protect staff against sexual harassment at work.

The strike, which has been approved by committees of female employees at dozens of McDonald’s restaurants, is planned for 18 September and will impact outlets across 10 US cities.

Among the organisers are a number of women who filed complaints with the Equal Employment Opportunity Commission in May, alleging sexual harassment had taken place at some franchise restaurants.

It is the first strike to take place across multiple states at the same time since the rise of the #MeToo movement.

McDonald’s has defended its efforts to protect staff against harassment in an email to the Associated Press, stating it has “policies, procedures and training in place that are specifically designed to prevent sexual harassment at our company and company-owned restaurants, and we firmly believe that our franchisees share this commitment”.

READ MORE: McDonald’s workers set to strike over sexual harassment

Harrods, Harvey Nichols and Fortnum & Mason join forces to celebrate female empowerment

Harrods, Harvey Nichols and Fortnum & Mason are uniting in support of the Mayor of London’s #BehindEveryGreatCity campaign, with window displays celebrating female empowerment to mark 100 years since women got the vote.

As part of the collaboration, which has been set up in partnership with the British Fashion Council as part of London Fashion Week, each department store will unveil windows depicting the suffragette movement and the campaigning that took place in the capital.

Each display features smashed glass to represent the fact that the windows at each department store were smashed by the suffragettes in 1912 protests, which aimed to show the government was more concerned with protecting buildings than women.

Dr Helen Pankhurst, the granddaughter of Emmeline Pankhurst, leader of the British Suffragette movement, will unveil the display at Harvey Nichols.

The year-long #BehindEveryGreatCity campaign aims celebrate the progress made by women over the past 100 years and push forward gender equality in the capital.

Wednesday, 12 September

Tesco

Tesco to unveil discount chain Jack’s next week

Tesco is expected to unveil its discount chain Jack’s next week as the UK’s biggest supermarket looks to directly compete with Aldi and Lidl. The first store, name after Tesco founder Jack Cohen, will be revealed by the supermarket in Chatteris, Cambridgeshire, next Wednesday (19 September).

Journalists have been invited to an event hosted by Tesco’s CEO Dave Lewis and while details of the event were not given, the Guardian visited the Chatteris store yesterday and says a Jack’s sign was over the door while branding was also visible inside.

The launch of Jack’s comes as the German discounters continue to grow their market share, with Aldi and Lidl between them now accounting for around 13% of the grocery market in the UK, according to Kantar Worldpanel, compared to 9% four years ago.

Nike issues rallying cry to women in new campaign

Nike is issuing a rallying cry to women, telling them to “make the world listen” in a campaign that comes on the back of outcry over Serena Williams’ treatment in the US open.

The ad, created by Wieden+Kennedy, features glimpses of Williams, who is at the centre of a racism and sexism storm following her loss in the US Open final and subsequent depiction in a cartoon in an Australian newspaper. Nike sponsors Williams and has featured her extensively in its new campaign to mark 30 years of its ‘Just Do It’ tagline.

The ad, shown prior to the current furore, highlights female determination and how women can break down barriers in sport. Alongside Williams, it also features boxer Tayla Harris and footballer Samantha Kerr. It will run across Asia Pacific.

READ MORE: Nike issues rallying cry to women featuring Serena Williams

Vodafone broadband ads banned over ‘misleading’ speed claims

Vodafone broadband ads have been banned for “misleading” customers about speeds, and bill reductions if those speeds aren’t met.

The TV and radio ads show actor Martin Freeman struggling to play an online video game because his internet keeps dropping out. His opponent in the game tells him to “just get Vodafone”, while on-screen text then states that Vodafone will “guarantee your home broadband speeds” or offer money off until the issue is fixed. Vodafone’s website also offers the same deal, claiming its ‘Ultimate Speed Guarantee’ means customers get the best broadband speeds available or a discount.

However, the Advertising Standards Authority (ASA) upheld numerous complaints, including from BT, over where the claims could be substantiated. In its ruling, it says consumers would likely interpret the ads to mean Vodafone could guarantee minimum speeds that are fast enough to avoid issues such as buffering but that experiencing buffering and lower speeds might not qualify them for the discount.

Investors criticise Unilever plans to restructure

Investor have criticised Unilever’s plans to move its headquarters to the Netherlands as part of plans to simplify its corporate structure. The FMCG company wants to scrap its dual UK-Dutch strategy as part of an overhaul of its strategy after the failed hostile takeover by Kraft Heinz and as part of plans to make it more agile.

However, the move has been linked with Brexit because it involves a large British company moving its headquarters out of the UK. The proposal, which is subject to shareholder approval in votes on 25 and 26 October, would see Unilever shares trade in the Netherlands from 24 December and be excluded from the FTSE.

According to the Financial Times, there are concerns among shareholders that the move will force them to sell shares without getting a premium associated with a takeover and while accruing tax costs.

READ MORE: Unilever’s Dutch relocation details anger UK investors (£)

Social media overtakes programmatic as least trusted digital ad channel

Social media has overtaken programmatic as the least trusted digital ad channel among marketers and media agency execs in Australia, according to a new study.

The research, commissioned by the Audited Media Association of Australia, asked which digital channels need more oversight to build industry trust. And for the first time social media came out on top on 63%, compared to 56% for programmatic and 45% for online video.

The study also highlights wider issues in the industry, with 60% of respondents saying they had had a negative experience with digital advertising, such as misreported metrics, brand safety issues and ad fraud. Of those impacted, 70% of marketers said it resulted in wasted ad dollars.

This has eroded trust, with just 12% confident about digital advertising and 34% saying they have neutral or low trust. Lack of awareness and complacency continue to hold the industry back from more robust self-regulation.

READ MORE: Social media overtakes programmatic as least trusted digital channel – AMAA study

Tuesday, 11 September

Uber appoints first global CMO

Uber

Uber has appointed its first global chief marketing officer as it continues to reposition its brand following a number of high-profile departures.

Rebecca Messina joins the ride hailing app from beverage company Beam Suntory, where she has been serving as senior vice president and CMO since April 2016. Prior to that, Messina spent 21 years in marketing at Coca-Cola, most recently as senior vice president of marketing and innovation for ventures and emerging brands.

Uber still has work to do to convince customers it has moved on from the sexual harassment and discrimination scandals that have dogged the company in recent years and caused the resignation last year of its co-founder and chief executive, Travis Kalanick.

A fresh blow came in June when chief brand officer Bozoma Saint John, who had been charged with improving Uber’s morale, left the company after a year to become CMO at marketing and media holding company Endeavour.

In the US alone it is estimated Uber has spent $42.6m on its ‘Moving Forward’ TV campaign that began airing in May. The adverts seek to show the company is going in a new direction that is better for riders and drivers.

Here in the UK, Uber launched its ‘Makes Sense’ campaign in May, a series of seven films showing people in “relatable professions” from dentists to teachers explaining new features of the Uber app.

Speaking to the Wall Street Journal, Messina says Uber is doing “the right thing” in terms of its marketing strategy, in particular putting “humble” chief executive Dara Khosrowshahi at the heart of its ads in the US.

READ MORE: Uber Hires Its First Global Marketing Chief

Debenhams seeks to calm investors after calling in KPMG

Debenhams is seeking to reassure investors over its financial future, after rumours circled yesterday the retailer was considering insolvency processes following its appointment of consultancy KPMG.

The department store’s shares plunged 16% after it confirmed it had appointed KPMG to help “improve its performance”, forcing chief executive Sergio Bucher to release a statement suggesting that profit would slip to £33m, from a previous guidance of £35m to £40m.

Bucher acknowledged that the market environment “remains challenging”, but that having cut costs and refinanced, the company was “well equipped to navigate these market conditions and take advantage of any trading opportunities that emerge”.

The Guardian reports that Debenhams hired KPMG to help it examine potential ways it could restructure, which may include a company voluntary arrangement (CVA). This is an insolvency process that allows retailers to close stores or cut rents and has recently been used by House of Fraser to save its business.

Debenhams also hopes to make £250m from the sale of its Danish chain Magasin du Nord, which has six stores including a 124-year-old flagship in Copenhagen city centre.

READ MORE: Debenhams battles to calm investors amid store closure rumours

JD Sports bucks the high street trend with 19% profit surge

JD-Sports-

JD Sports continues to buck the high street downturn as its profit before tax rose 19% to £122m during the first half of 2018.

The sports fashion company saw its revenue increase to £1.8bn in the 26 weeks to 4 August, up from £1.4bn during the same period in 2017. Operating profit soared by 20% to £123m.

During the first half of 2018 JD Sports continued to roll out stores internationally, opening 18 new stores in mainland Europe and 21 in Asia Pacific, including its first presence in South Korea and Singapore.

The company is also targeting expansion into the US market following its acquisition in June of American sportswear retailer Finish Line for £430m.

Executive chairman Peter Cowgill described the group as continuing to make “excellent progress”, noting the company’s investment in developing a “dynamic multichannel proposition” as the reason for its strong position.

He said the company’s current success also demonstrated that its multi-brand multichannel premium offer has “resilient profitability in its core UK and Ireland market, with capacity for continued growth across an increasing number of international markets”.

Mondelēz stockpiling ingredients in case of no-deal Brexit

Mondelēz is stockpiling ingredients, finished confectionery and biscuits in case of a no-deal Brexit.

Hubert Weber, president of Mondelēz Europe which owns Cadbury, said that while the company would prefer a “good deal that allows the free flow of products” as that would mean a smaller impact on UK consumers, the business is also preparing for a hard Brexit by stockpiling ingredients and finished products.

Weber explained that the continency plan was necessary given that the “UK is not self-sufficient” in terms of producing food ingredients.

As reported in The Times, the Mondelēz Europe president said he wished Britain was “at a different stage [in negotiations with the European Union]” and hoped that a deal could be agreed by next year. The alternative, said Weber, was British shoppers facing higher prices and fewer choices.

Europe is Mondelēz’s biggest division, accounting for 40% of revenue last year of more than $25bn (£19.2bn). The company plans to expand in Europe with new products for “snacking occasions” and continue to reduce sugar across its range, with the 30% less sugar Cadbury Dairy Milk chocolate bar set to launch next year.

READ MORE: Cadbury owner stockpiles ingredients in case of a hard Brexit

M&S unveils Holly Willoughby as new brand ambassador

Holly-Marks and Spencer

Marks & Spencer (M&S) has unveiled This Morning host Holly Willoughby as its latest brand ambassador.

A curation of ‘Holly’s Must-Haves’ from the autumn collection will launch online and in selected stores on the 27 September, with additional edits scheduled for October and into 2019.

M&S describes Willoughby has a long-standing brand fan who has also emerged as a style influencer and has the ability to “generate excitement with her sartorial choices”.

The retailer must be hoping the appointment of Willoughby, who last week was named as the new co-host of ITV’s I’m a Celebrity, will help arrest the continued decline of its fashion business. M&S is expected to close 100 stores over the next four years, with seven stores slated for imminent closure, in a bid to save £350m by 2021.

READ MORE: Holly Willoughby unveiled as new face of M&S fashion campaign

Monday, 10 September

Jamie Oliver partners with Tesco to make healthy eating easier

Chef Jamie Oliver is partnering with Tesco in a push by the supermarket to help its customers make healthier choices.

As part of the partnership, Oliver will front Tesco’s ‘Helpful little swaps’ in store, which shows customers healthier alternatives that offer reduced levels of sugar, salt and fat, as well as being more affordable for customers. According to the supermarket giant, a basket of helpful little swaps will cost 12% less than a regular basket.

Jamie will also support Tesco’s work to help colleagues and customers cook great value, healthier meals from scratch with a series of healthier recipes and cooking tips available in Tesco stores and online.

The partnership follows a recent survey of more than 2,000 people that revealed seven out of 10 families say supermarkets should do more to help people make healthier choices, with almost 70% also saying they would like more practical advice and inspiration on healthier alternatives.

Oliver says: “I’m incredibly excited to be collaborating with Britain’s biggest and most progressive supermarket. Over the past few years, under new leadership, Tesco has consistently raised the bar when it comes to so many important initiatives: from food waste, to leading on industry reformulation and helping kids eat more fruit with its brilliant Free Fruit for Kids in-store programme.”

Google urged to stop Viagogo advertising

Google has been urged to stop accepting ad payments from online ticketing firm Viagogo amid concerns consumers are purchasing sports, music and theatre tickets through the site that may be invalid.

The Football Association (FA), a trade body for UK Music and a number of MPs have signed an open letter asking the online search giant to quit taking money from the ticketing company in order for it to be placed at the top of its search rankings.

There are also concerns those who may be directed to the site are being re-sold tickets at extortionate prices despite them being on sale for face value elsewhere.

The letter reads: “One of the world’s most trusted brands – Google – is being paid to actively promote one of the least trusted. We understand that Viagogo is a valuable client to Google, spending considerable sums each year on paid search advertising. However, we urge you to protect consumers who daily put their trust in Google, and act now to restrict Viagogo’s ability to pay for prominence.”

Additionally, reports suggest Google may be breaching its own guidelines, which imply companies who purchase prominence in search results via Google’s pay-per-click AdWords service must adhere to local laws.

READ MORE: Google under pressure to refuse payment for Viagogo advertising

M&S launches its biggest ever social media campaign

Marks and Spencer (M&S) has unveiled its new digital food campaign, which will be its biggest ever on social media.

The campaign features celebrities Amanda Holden, Rochelle Humes, Paddy McGuinness and Emma Willis, who will be called in to review the latest food from M&S while choosing their favourite dishes from a host of new products on offer each month. The 12-part series will also see the four celebrities tasting and testing a range of different meals.

Sharry Cramond, marketing director at M&S food, says: “This is our biggest ever social media campaign and a game changer in our marketing strategy. Our customers share food favourites with family and friends on social media and this campaign will inspire them to try our new ranges and directly engage with our celebrity food fans.”

The campaign marks the first time M&S has used Instagram TV, as well as the first time social-first video content has been produced and used in its marketing.

John Lewis Partnership makes close to 2,000 redundancies in last year

John Lewis and Waitrose rebrands

The John Lewis Partnership has made more than 1,800 people redundant during the year to the end of June, three times more than the previous year.

According to the Guardian, 1,838 John Lewis staff had been made redundant in the past year, up 289% year on year.

The news comes after John Lewis and Waitrose revealed their new visual identities as part of their rebrands to add ‘& Partners’ to their names. The pair say this is more than a cosmetic fix and are hoping to galvanise in the face of job cuts and declining bonuses.

The company, which has 83,000 staff, says it has created new jobs including 600 positions at its new Westfield store in White City, meaning there are now about 700 fewer employees across the group than a year ago.

READ MORE: John Lewis Partnership made 1,800 redundancies in the last year

Aero reveals how it gets its bubbles after unveiling first campaign in six years

Aero has revealed how its chocolate bubbles are made after unveiling its first campaign in six years.

Produced by creative agency J.Walter Thompson, the spot titled ‘Bubbleophone’ features brass instruments pumping music into the chocolate to create Aero’s famous bubbly bubbles. Rather than relying on special effects, the bubbling ‘chocolate’ was captured by camera in a bid to better reflect the care and craft that goes into making each Aero bar.

The brass-based track was inspired by the big band music of the 1930s and composed by SoHo Music, while the film was directed by Chris Cairns – better known for having directed campaigns for Coca-Cola, Swatch and Pizza Hut.

Rachael Brown, senior brand manager at Aero owner Nestlé, says: “(This is) a wonderfully simple idea that perfectly conveys the light and bubbly quality of Aero chocolate. Having not advertised this iconic bar in some time, this is perfectly celebratory and delicious.”

The campaign will run across TV, social media and in cinema.

Debenhams calls in advisors to help navigate challenges

Debenhams new campaign

Struggling department store chain Debenhams has called in advisors from KPMG to help draw up a potential plan and restructure to help it overcome challenges faced by the high street.

Reports suggest KPMG is considering a number of potential options, including an alleged company voluntary arrangement (CVA). However, it is believed the retailer is in talks about a number of potential options.

The news comes just days after Marketing Week spoke to Debenhams about its plans to come out fighting with a new brand identity. The move marked the first time in nearly 20 years that the department store has redesigned its logo, putting what it describes as a “modern and approachable twist” on the Debenhams branding.

It also follows a difficult for months for the chain which has seen its fortunes rapidly decline. For instance, Debenhams is predicted to have a £320m of debt by the end of the year.

READ MORE: Debenhams brings in top company doctors as fears for its fortune worsen

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