Tesla, RBS, Schweppes: 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.

Tesla sued for fraud

Elon Musk and Tesla have been sued by the Securities and Exchange Commission (SEC) for fraud.

The US financial regulator says the claims Musk made in August about having “funding secured” to take Tesla private were “false and misleading”.

“According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a ‘standard premium’ in going-private transaction,” the SEC explains in its lawsuit.

“This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price’.”

Musk says the action by the SEC is “unjustified” and leaves him “saddened and disappointed”.

“I have always taken action in the best interests of truth, transparency and investors,” he adds. “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

RBS unveils plans for standalone digital bank

RBS is planning to create a standalone digital bank that will only be accessible on mobile devices.

According to anonymous sources speaking to Sky, the bank is aiming to move one million NatWest customers to the platform, called Bó, as the competition from the likes of mobile-only bank Monzo intensifies.

Bó, which means “to live” in Danish, will be headed up by RBS’s former chief operating officer Mark Bailie and is due to go live in 2019.

“As part of the bank’s wider investment in digital and innovation, RBS is working on a range of projects to better serve our customers in the era of digital and open banking,” an RBS spokesperson says.

“One of the projects we are looking at is building a separate, digital-only bank for personal customers.”

Regulators launch new guide for social influencers

The Committees of Advertising Practice (CAP) – the body that writes and maintains the UK Advertising Codes – has launched a guide to help social influencers stick to the rules by making clear when their posts are ads.

‘The Influencer’s Guide’, developed in collaboration with the Competition and Markets Authority (CMA), comes as influencers continue to land themselves in hot water for failing to make clear when posts are ads.

Over the last few years, posts from a number of social media stars including Made in Chelsea’s Louise Thompson and Millie Macintosh and Geordie Shore’s Marnie Simpson have been banned by the Advertising Standards Authority (ASA) for breaching guidelines.

“Responsible influencer marketing involves being upfront and clear with the audience, so people are not confused or misled and know when they’re being advertised to,” explains Shahriar Coupal, director of CAP.

“The relationship between influencers and their followers relies on trust and authenticity, so transparency is in the interests of all parties. This guide on the standards will help influencers and brands stick to the rules by being upfront with their followers.”

Schweppes launches biggest campaign for London Cocktail Week

Schweppes is set to take over London landmarks to mark the launch of its biggest campaign to date for London Cocktail Week.

The takeover includes the Coca Cola London Eye, which will be turned yellow and the capsules transformed to take riders on an ‘immersive journey’ back in time where they will learn about the history of the brand.

The localised ad campaign has been developed to celebrate the brand’s heritage and will kick off with a bespoke large format out-of-home site on Brick Lane next to the Cocktail Week village, as well as the Piccadilly Sign.

“Schweppes is an iconic brand with a strong British heritage and long and impressive history, and our campaign for London Cocktail Week this year truly reflects that,” says marketing manager Rosalind Brown.

“This is our biggest London campaign to date and we’ve worked hard to create bespoke, tailored ads and content which will really capture the imagination of Londoners.”

Following the introduction of a new premium range and significant marketing investment, Schweppes says it has seen 21% value growth this year.

M&S and Breast Cancer Now partner to raise money for research

Marks & Spencer and the UK’s largest breast cancer charity, Breast Cancer Now, have joined forces for Breast Cancer Awareness Month for the fourth consecutive year in an ongoing effort to raise £13m over five years to help prevent 9,000 cases of breast cancer a year by 2025.

The campaign will feature five women who have been affected by breast cancer and those who have supported them.

Over the course of the month, M&S will also donate 20% of sales from a selection of M&S pink lingerie and sleepwear to Breast Cancer Now.

“We know that this partnership and cause matter deeply to our customers and colleagues, which is why, this October, we are asking everyone to help us fund over 5,000 hours of research time – research that will help us prevent cases of breast cancer in the future,” says Laura Charles, lingerie director at M&S.

“We hope this campaign inspires M&S customers to head in-store or online this October and purchase one of the pink products which donates to Breast Cancer Now. Your support means more research time and together we can make a difference for all those affected by this devastating disease.”

Thursday, 27 September

Channel 4 and BBC 2 rebrand

Channel 4 has rebranded its digital channels and given E4 a refresh as part of plans to incorporate the ‘4’ more prominently and emphasis that all its channels are part of the Channel 4 famly.

The rebrand will unify its digital channel portfolio, which consists of More4, Film4, 4Music, 4Seven and E4, although it will retain their individual brand personalities. The Channel 4 corporate logo will also evolve from its multi-coloured 3D design to a 2D Lambie-Nairn design.

The E4 logo will keep its purple colour but have eight new opticals aimed at “showcasing its mischievous, rebellious personality”. There will also be 19 new on-air idents produced by a diverse mix of talent that include films and animations.

Dan Brooke, chief marketing and communications officer at Channel 4, says: “Whether you’re tuning into The Big Bang Theory on E4 or watching the latest Film 4 feature at the cinema, we want to remind viewers that they are enjoying fantastic content from Channel 4’s portfolio. The E4 rebrand also gives talented emerging filmmakers and animators from across the UK a platform to showcase their superb work.”

Channel 4’s rebrand comes in the same week that the BBC gives BBC 2 a refresh, its first in 25 years. The revamp includes a new logo and idents made up of 16 different animations.

Patrick Holland, controller of BBC Two, says: “We have been working to re-invigorate BBC Two, making it the home of the most urgent documentaries, the most brilliantly crafted dramas, the most mischievous comedies, the most eye opening history and science. The new channel branding reflects this constantly eclectic and stimulating mix of programming and I am so excited to see it help define this next stage of the channel’s evolution.”

Snapchat ad revenues take a hit from move to programmatic

Snapchat’s revenues are expected to grow at a slow pace than previous predicted as its move to programmatic brings down prices.

According to eMarketer, Snapchat will now generate £68.4m in net UK ad revenue, lower than the £104.8m the research firm had predicted in March. The lower projections come as Snapchat increasingly automates the ad buying system, bringing down prices.

“Snap rolled out its programmatic ad platform in June 2017. While the transition to a self-serve format has increased the number of advertisers, it has also resulted in lower ad prices overall,” says eMarketer principal analyst Debra Aho Williamson.

The slower growth means Snap controls 0.5% of the UK digital ad market, slightly up from last year but below the 0.8% previously predicted. Google is the market leader on 39.1%, followed by Facebook on 21.7%.

McDonald’s puts the emphasis on fresh in burger overhaul

McDonald’s will stop putting artificial ingredients in its burgers as it looks to attract more customers that it believes are after fresh food that doesn’t contain a long list of chemicals.

Ingredients including calcium propionate and sodium benzoate found in buns, cheese and the sauce of burgers including the Big Mac and Quarter Pounder with Cheese will be removed from US restaurants. The move comes after McDonald’s in the US started making Quarter Pounders with fresh beef as it attempts to make its burgers appear more healthy and reverse a sales slump in the US.

“From switching to 100% fresh beef* in our quarter-pound burgers, cooked right when ordered, to removing artificial preservatives in our Chicken McNuggets, and committing to cage-free eggs by 2025, we have made significant strides in evolving the quality of our food,” says Chris Kempczinski, McDonald’s US President.

“We know quality choices are important to our customers, and this latest positive change to our classic burgers demonstrates our committed journey to leading with the customer and building a better McDonald’s.”

21st Century Fox to sell stake in Sky to Comcast

21st Century Fox is to sell its stake in Sky to Comcast, ending Rupert Murdoch’s reign at Sky after 30 years.

21st Century Fox says it will accept the cash offer from Comcast for its 39% stake in Sky, selling its shares for £17.28 each. That would value Fox’s stake at around £11.6bn.

Comcast and 21st Century Fox had been locked in a bidding war for Sky that culminated in Comcast tabling a knockout bid over the weekend that valued Sky at £30bn. The lengthy bidding process, with the UK government launching an investigation into whether Murdoch should be allowed to take full control of Sky, ultimately enabled Comcast to come in with a winning bid.

21st Century Fox says: “We are proud of the role our company has played in building Sky, and of the outstanding value we have delivered for shareholders of 21st Century Fox and Sky, and customers across Europe.”

While Murdoch still controls Fox, he is selling its film and TV assets to Disney, meaning that it is Disney that has been running the takeover and ultimately decided to cash in its share.

Facebook brings ad to Stories as it hits 300 million users

Facebook is rolling out advertising in its Stories feature as it continues to find new ways to monetise its new audience.

The move means that advertisers will be able to pay to appear in the stories feature, a separate feed where users share pictures and videos. Facebook is also planning to roll out advertising in Messenger Stories over the coming weeks.

Facebook claims stories advertising is delivering on business outcomes. In an Ipsos survey commissioned by the social media site, 62% of people said they are more interested in a brand or product after seeing it in a story, while more than half said they make an online purchase after seeing a story, 38% that they talk about the ad and 34% that they went to a store to look for it. Brands including KFC and Kettle Chips have already tried out the feature.

Stories is a growing area on Facebook, with 300 million people now viewing them every day, although that is behind the 400 million that interact with them on Instagram. For advertisers, stories provides a new way to reach consumers, although because of the vertical nature of the content it requires some thought as to the best way to communicate with them.

Wednesday, 26 September

Snapchat and Amazon joins forces to trial visual search

Snapchat has teamed up with Amazon to allow users to search for items on the retailer’s site using its camera.

When users point the camera at an item or barcode it will prompt the app to show a pop-up of that item alongside the price and a link to buy the product or similar ones from Amazon.

Although it hasn’t confirmed an affiliate deal with Amazon, if one is agreed Snapchat stands to generate significant revenue as it could earn a commission every time users purchase the items suggested via Amazon.

Snapchat unveiled its Visual Search feature earlier this year, describing it as a way to differentiate from rivals.

The tie-up with Amazon follows the launch of Instagram’s ‘Shopping’ feature, which allows users to click through to a retailer’s website direct from a post.

Snapchat and Amazon will start testing the function this week and will be “rolling it out slowly”.

Coke ramps up recycling drive to educate consumers during Recycle Week

Coca-Cola is partnering with environmental charity WRAP to encourage more people in the UK to recycle.

It comes off the back of research by Coca-Cola Great Britain, which finds that while 67% of people agree recycling should be something they do as routine, many feel clearer recycling guidelines on packaging (59%) and better information from local councils so they know what is and isn’t recyclable (52%), is needed to make it easier.

It follows research by WRAP, which shows 55% of UK households still put at least one item that could be recycled in the general rubbish.

To help bridge this disconnect between consumer intentions and actions, Coca-Cola will be trying to educate consumers during Recycle Week via its Journey website, with a Recycle Now Recycling Locator to help people understand what can be recycled and where, as well as tips to encourage consumers to recycle more at home.

Earlier this month, Coca-Cola launched a campaign to encourage and reward people for recycling plastic drinks bottles. Alongside a TV spot called ‘Across the Tracks’, the drinks giant launched the #CokeDunks competition on social media, which challenged people to film themselves slam-dunking an empty plastic bottle into a recycling bin.

The campaign culminates this week, with a takeover of the Piccadilly Lights in London and the launch of a Snapchat Lens which challenges people to virtually dunk empty bottles.

Liz Lowe, sustainability manager at Coca-Cola Great Britain, says: “We know people want to recycle, but it’s not always that easy. That’s why we want to remind people to recycle everything they can in the home, whether your soft drinks bottle or your shampoo bottle, so that more can be recovered and recycled into new products.

“At Coca-Cola Great Britain, we have created packaging which is 100% recyclable – from the cap, to the label and bottle. We’ve also set ourselves a goal, that by 2020 all our plastic drinks bottles will contain 50% recycled plastic, up from 25%. We urge other companies to follow our lead and encourage consumers to recycle. By making these changes, we’re one step closer to achieving our global ambition of a #WorldWithoutWaste, which will see our company recycle a bottle or can for every one sold by 2030.”

Pret under fire for failing to label allergens

Pret A Manger has been accused of not properly labelling products for allergens despite complaints, which resulted in a girl’s death, while in the US the sandwich maker is being sued for claiming its products are “natural”.

Pret failed to label certain products as containing sesame seeds despite nine allergic reaction cases being brought to its attention, an inquest has heard.

A 15-year-old girl died after suffering an allergic reaction to an “artisan” baguette she bought at Heathrow Airport in July 2016. She later collapsed on the flight, suffered a cardiac arrest and died.

Six of the allergy incidents related to Pret’s artisan baguettes, according to the company’s log, and although the firm says its allergy policy has since been changed, the girl’s father claims there was no warning on the fridge the day his daughter died.

Meanwhile, Pret is being sued in the US over “deceptive” marketing that describes bread and other baked goods as “natural” despite allegedly being found to contain a pesticide thought to cause cancer.

BMW issues profit warning

BMW has issued a profit warning, blaming new emissions controls, the higher cost of dealing with faults and a difficult market.

The upmarket car maker says both its revenues and profits will take a hit, and it will not meet its profit margin of 8-10% for the first time in eight years. The news has seen BMW’s share price drop 5%, its biggest fall in two years.

BMW says the introduction of the Worldwide Harmonised Light Vehicle Test Procedure (WLVTP) in September has been a major factor in the downgrade. It was introduced as a result of the Volkswagen emissions scandal of 2015 and is a new testing regime for vehicle emissions.

However, it has created a backlog of vehicles waiting to be tested to WLTP standards, which has led to “significant supply distortions” for BMW in European markets and “unexpected intense competition”.

Manufacturers can now not sell cars until they have been tested to the new standard, but while BMW says it was prepared for the shift, it claims rival brands have been rushing cars to market to avoid the new emissions control, resulting in heavy discounting.

Stars join forces to Stand Up To Cancer

https://www.youtube.com/watch?v=ml1VAwSOtTQ&feature=youtu.be

A host of celebrities, including actors Liam Neeson, Michelle Dockery, Jodie Comer, Lesley Manville, and O-T Fagbenle have collaborated with cancer patients and survivors for a new film to mark the return of Stand Up To Cancer, a joint national fundraising campaign from Cancer Research UK and Channel 4.

Shot by Ridley Scott Associates, the film sees each participant share their story.

Liam Neeson says: “The reality is that one in two people will be diagnosed with cancer in our lifetime. By acting now, we’ve got a far better chance of beating this disease in the future. That’s why we’ve got to keep raising money to support the research that will save lives.”

To date, the Stand Up To Cancer campaign has raised more than £38m, which has funded 35 trials and projects.

Tuesday, 25 September

Next sales up 4.5% after summer heatwave boost

Next saw a 4.5% boost to full-price sales during the half year to 31 July compared to the same period last year. This figure exceeds the 1% growth advised in January and the 2.2% growth expected back in May.

In a statement, the brand explained it feared that there was a “high risk” any sales gained in July “would be offset by losses in August”. However, as the company did “not experience any material loss of sales in August or early September” the brand is raising its guidance for full year profit before tax by £10m to £727m.

Next claims that its “over-performance” during the first half of the year was “flattered by the unusually warm summer” and for this reason the company remains cautious in its outlook for the rest of the year.

Due to the volatility in the UK retail market, Next expects its in-store sales, which account for just under half of its turnover, to continue to be challenging. Total retail sales fell by 6.9% to £925.1m, while operating profit dropped by 23% to £73.2m.

While the retail stores are under pressure, the revenue generated by Next’s online business rose by 16.8% to £892.3m and profit increased by 21.2% to £163.3m.

Instagram co-founders resign to explore ‘creativity’

Instagram co-founders Kevin Systrom and Mike Krieger have resigned from the Facebook-owned company to explore their “curiosity and creativity again”.

This is despite reports that the pair are leaving the social media giant due to growing tensions with Facebook founder Mark Zuckerberg over the direction in which the company is moving.

Facebook bought Instagram in 2012 for $1bn and the social media site has rapidly become the group’s fastest growing product with more than one billion active monthly users. However, more effort has been poured into monetising the platform, which has four million fewer monthly global advertisers than Facebook. This effort includes adding a shopping element to the Instagram Stories function in June.

In a statement, Instagram CEO Systrom said he and Krieger were grateful for the last eight years at Instagram and six years with the Facebook team, adding that “building new things requires that we step back, understand what inspires us and match that with what the world needs; that’s what we plan to do.”

Zuckerberg also released a public statement, saying he had learnt a lot from working with Systrom and Krieger for the past six years and was “looking forward to seeing what they build next”.

The Instagram founders join WhatsApp chief executive and co-founder Jan Koum, who quit the Facebook-owned messaging app in April over disagreements about privacy and encryption. Facebook acquired WhatsApp in 2014 for $19bn.

Shazam to go ad-free after Apple acquisition

Apple has completed its $400m acquisition of Shazam, which will see the music-matching app become ad-free for the first time.

In a statement, Apple confirmed that “the app will soon offer its experience ad-free for all users so everyone can enjoy the best of Shazam without interruption”.

Shazam allows users to identify a song by listening to a fragment of the music and matching it with a tune in its database. Founded in 1999, the app has been downloaded more than a billion times and currently has 150 million monthly active users who click on the app to identify 20 million songs a day.

Apple may be happy to sacrifice the adverts on Shazam in order to drive subscriptions for its Apple Music service. Fortune reports that the acquisition could add 7.5 million subscribers to Apple’s music streaming service, according to suggestions made by Shazam investor DL Capital.

Currently, when Shazam identifies a song users are presented with a large button to buy or play the song on Apple Music, although there are options to stream it on Spotify and Deezer. The option to use Google Play has been removed.

Michael Kors on verge of $2bn Versace acquisition

Michael Kors is poised to seal a $2bn acquisition of the Italian fashion giant Versace. Donatella Versace, sister of the label’s late founder Gianni Versace, group vice president and artistic director, is expected to confirm the deal today at an all-staff meeting.

The Versace family currently own 80% of the fashion house after selling a 20% stake in the business to the US private equity group Blackstone for €210m in 2014. Reuters reports that the family will retain a minority stake and some creative control, while Blackstone will sell its entire stake in the company.

According to Versace chief executive Jonathan Akeroyd, the brand is expected to achieve sales of more than €1bn in 2018, up from €686m in 2016, which are the latest available figures.

The high-profile addition of Versace to the group is a major move for the growing Michael Kors brand, which in July last year acquired luxury shoe label Jimmy Choo for £900m.

Amazon made “two approaches” with a view to acquiring Deliveroo

Amazon reportedly made “two preliminary approaches” to Deliveroo, with a view to acquiring the food delivery business.

The Telegraph reports that Amazon held two sets of early stage discussions with Deliveroo with a view to an acquisition, with one meeting taking place two years ago and the second just nine months ago. It is understood the approaches were “exploratory and have not progressed”.

This news comes after it was revealed last week that Deliveroo is in early talks with ride hailing app Uber, the owner of food delivery rival UberEats, over a possible $2bn acquisition.

However, a source close to Deliveroo told The Telegraph that the approach from Uber might encourage Amazon to revive its interest, as if the two companies joined forces their combined volumes “could be disruptive.”

The scale of the Amazon Restaurants business, launched in 2016, lags behind both Deliveroo and UberEats. The service started out offering free one-hour restaurant deliveries to its Amazon Prime subscribers in London, with more than 180 restaurants having signed up for the launch.

Monday 24 September

Co-op to replace single-use plastic bags with biodegradable alternative

Co-op is planning to switch single-use plastic bags with compostable bags in more than half of its stores, replacing 60 million plastic carriers.

The biodegradable bags have already been trialled in 22 Co-op stores and will be rolled out in another 1,400 across England, Scotland and Wales first, before making their way to all 2,600 premises.

They will cost 5p and will double up as a compostable bag for food waste.

“The price of food wrapped in plastic has become too much to swallow and, from today, the Co-op will phase out any packaging which cannot be reused,” says Jo Whitfield, retail chief executive of the Co-op.

“The first step to remove single-use plastic will be to launch compostable carrier bags in our stores. They are a simple but ingenious way to provide an environmentally friendly alternative to plastic shopping bags.”

“Greedy landlords” blamed for latest House of Fraser closures

Sports Direct tycoon Mike Ashley, who bought House of Fraser out of administration for £90m last month, has blamed “greedy landlords” for the closure of three of its stores in Edinburgh, Hull and Swindon.

A fourth store in Bath is also currently at risk; however, 15 of the stores that faced potential closure will now remain open.

“I am disappointed that in my opinion a small number of greedy landlords still refuse to be reasonable,” Ashley said on Sunday.

“We’ve showed what we can achieve on the British high street when we work together with landlords.

“I would like to thank those landlords who have helped us to rescue approximately 3,500 jobs at the stores we have saved to date.

“I am calling on everybody to pull together, including landlords and local authorities in order to help to save as many House of Fraser stores and jobs as possible on the great British high street.”

Comcast wins Sky bid

US cable giant Comcast has outbid Rupert Murdoch’s Fox to take full control of Sky with a £30bn offer.

Fox was looking to take over the remaining 61% of Sky it does not already own, however Comcast’s bid blew it out of the water on Saturday following a seven-hour blind auction set by the City of London Takeover Panel.

Sky has recommended its shareholders accept the bid.

“As part of a broader Comcast we believe we will be able to continue to grow and strengthen our position as Europe’s leading direct to consumer media company,” says Sky chief executive, Jeremy Darroch.

“Today’s outcome is down to the hard work of tens of thousands of people who have built and developed this business together over the last 30 years. Sky has never stood still, and with Comcast our momentum will only increase.”

Brian Roberts, chairman and chief executive of Comcast, says: “Sky is a wonderful company with a great platform, tremendous brand, and accomplished management team.

“This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.

“We now encourage Sky shareholders to accept our offer, which we look forward to completing before the end of October 2018.”

Porsche commits to diesel-free future

In the wake of the VW emissions scandal, Porsche is set to stop making diesel cars and instead focus on petrol, electric and hybrid engines.

Parent company Volkswagen hit the headlines in 2015 after admitting it had cheated emissions tests for diesel engines, resulting in a €1bn (£900m) fine earlier this year.

While Porsche does not build its own diesel engines, the German car manufacturer’s chief executive Oliver Blume says its image has suffered and that the diesel crisis caused “a lot of trouble”.

“It is and will remain an important propulsion technology,” Blume says. “We as a sports car manufacturer, however, for whom diesel has always played a secondary role, have come to the conclusion that we would like our future to be diesel-free. Petrol engines are well suited for sporty driving.”

Search and social to drive 67% of ad spend growth by 2020

Two thirds of all the growth in global advertising expenditure between 2017 and 2020 will come from paid search and social media ads as brands invest more in SEO as they develop strategies for voice search.

According to Zenith’s latest ad forecasts, total spending will increase from $86bn to $109bn on paid search, and from $48bn to $76bn on social media. Paid search will grow by $22bn over this period, while social media will grow by $28bn, making it the single biggest contributor to growth.

“Better use of AI and integration with retail is driving continued strong growth in paid search,” says Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence.

“As voice search becomes more important, though, brands will need to focus more on content and SEO to secure first-place organic results for their most important keywords.”

In the UK, economic growth has picked up this year and demand from advertisers has been stronger than expected, with the forecast for ad spend growth rising to 2.4%, up from 0.7% in the last forecast.