Facebook, Missguided, Tesco: 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.

Facebook’s UK political ad rules come into force

Facebook has begun to enforce tighter political advertising rules in the UK after a three week delay.

Now, anyone placing political ads on Facebook must verify their identity and location, as well as prove who is paying for the advert. This covers adverts about candidates, elections, referenda and political causes.

Under the new rules, anyone buying an advert must prove their identity by submitting ID, which needs to be verified by a third party. They also have to prove they have a UK address by responding to a code sent in the post and all such political ads will be kept on public record for several years.

The enforcement of the new rules, which were initially scheduled to take effect on 7 November, was delayed after Business Insider exposed flaws in the system by buying an advert called “Paid for by Cambridge Analytica”.

Missguided chief customer officer departs after just eight months

Missguided chief customer officer Kenyatte Nelson has left the fast fashion business after just eight months.

A note seen by fashion business title Drapers suggests that Nelson’s departure is related to Missguided CEO Nitin Passi’s actions over the past 12 months in “simplifying the business, getting back on track and getting back in control”.

Nelson, who it is understood will not be replaced, joined Missguided in March from his role as group marketing director at pure-play online retailer Shop Direct, where he worked for three years. Prior to that Nelson spent 13 years at Procter & Gamble in various marketing roles, primarily focused on the FMCG giant’s haircare business.

Speaking to Marketing Week in August, Nelson that one of his top priorities was bringing “true, customer-centric thinking” to Missguided, as well as building awareness and making sure the brand had a clear point of difference against rivals Asos, Boohoo and Pretty Little Thing.

He also hoped to help the fast fashion retailer achieve profitable growth after the business made a pre-tax loss of £1.6m in 2017, despite sales being up 75%.

Nelson is the latest in a line of executives to depart the business this year, including CEO of online Gareth Jones, who also left the company after eight months, head of ecommerce Mark Leach and chief technology officer John Allen.

Tesco and VW to roll out free electric car charging

Tesco is teaming up with Volkswagen (VW) to roll out free charging points for electric cars at its supermarkets next year. The plan is to install around 2,500 charging bays at 627 stores by 2020.

Tesco’s plans would dwarf the number of electric vehicle charging points already currently available at rivals Asda, Sainsbury’s and Morrisons.

A standard 7kW charger will be offered for free, although drivers will able to pay for a faster service. While the length of time it takes to fully charge the battery depends on the type of car, VW has stated that customers will be able to leave their cars to charge while they shop, which is enough time for a “substantial” free charge.

By 2020, the German carmaker intends to offer an electric version of all its models, two of which are currently available on the UK market – the e-Golf and the e-Up.

Monzo under fire for loaning customers money to buy its shares

Monzo has been criticised for allowing customers to borrow money and potentially fall into debt in order to buy shares in the business.

The mobile-only bank, which is the fastest growing bank in Britain for new current accounts, is aiming to raise £20m in crowdfunding through website Crowdcube and its own mobile phone app.

However, The Times reports that details in the prospectus for the capital raising show Monzo allows eligible customers to go overdrawn by up to £1,000 in order to buy its shares.

As Monzo’s shares are not listed on a stock exchange they are untradeable, meaning customers would not be able to sell the shares to pay off their overdraft.

Speaking to the newspaper, Roger Gewolb, chairman of not-for-profit campaign group the Campaign for Fair Finance, said it not a good idea to borrow money to buy shares, unless you are a professional trader. The Times reports that, according to messages on the bank’s online community forum, many investors appear to be novices.

One of Britain’s only “unicorns” – a privately owned tech-enabled company valued at more than $1bn – Monzo has 1.2 million customers and is signing up 105,000 each month for its current account.

Nintendo relaxes rules for vloggers on ad revenue

Nintendo has relaxed the rules for gaming vloggers who share their gameplay on sites like Twitch and YouTube.

Whereas previously the Japanese games giant had restricted what vloggers were allowed to share online and claimed a chunk of advertising revenue from YouTubers, the new rules mean gamers will be allowed to earn ad revenue from their videos using approved schemes such as YouTube’s Partner Program and the Twitch Partner Program.

As a result gaming vloggers will no longer be asked to register for Nintendo’s revenue-sharing scheme.

According to BBC reports vloggers will be able to share videos where they are gaming using Nintendo software, as long as they include their own creative input or commentary. Uploading raw gameplay videos without any commentary will not be allowed.

Nintendo, which historically has taken a much more restrictive stance on vloggers than rivals Microsoft and Sony, said it had been “humbled” by its fans’ loyalty.

Thursday, 29 November

Ad spend to pass £20bn fuelled by rise in digital

Spending on advertising is to pass £20bn for first time in 2019 despite a decline in traditional media.

Advertising spending in the UK is expected to hit £20.8bn next year, according to a report GroupM. The rise of 4.8% is largely down to advertisers’ spending on digital, with the amount spent on internet advertising growing 8.6% to £12.8bn.

However, traditional media is doing less well with overall ad spend falling 0.7% next year. National newspaper advertising is forecast to fall 9.4%, from £843m this year to £764m in 2019. Both cinema and television advertising is expected to grow by 1% next year to £4.36bn and £187m respectively.

However, radio and OOH will see more substantial growth, with advertising spend forecast to rise 7% to £535m for radio and 2.7% for outdoor to £964m.

Adam Smith, futures director at GroupM, says: “Future Brexit fall-out remains a complete unknown but for now the economy is doing OK. Ad revenue forecasts remain perhaps surprisingly positive, supported by digital commanding a rising share of overall marketing effort from a wider base of marketers large and small. The UK’s fluid media market favours optimism too. Advertisers know they can change spending plans almost at will, with low or no friction,”

Stricter rules for on-screen text in ads as consumers struggle to read small print

Stricter rules are to be introduced around on-screen text after research found consumers struggling to understand small print.

The new rules are a result of a review carried out by the Advertising Standards Authority into how viewers perceive on-screen text. The ASA research highlighted that viewers – in particularly elderly ones – often struggle to read and understand on-screen text in TV ads. The review found some viewers were left confused and disappointed when they discovered the reality of deals.

As a result, the Broadcast Committee of Advertising Practice (BCAP) has updated its guidance to provide greater clarity on the standards expected.

The BCAP Code already requires advertisers to fulfil a number of criteria to ensure that consumers are not misled but from 1 March 2019 rules will become stricter.

In the new year TV advertisers will need to sufficiently emphasise major qualifying information, ensure there is a clear distinction between the on-screen text and the background, choose fonts and text styles that do not stretch or elongate text, and show small print on screen for long enough so that viewers can read it.

Guy Parker, chief executive of the Advertising Standards Authority, says: “Our research has told us that TV viewers can be misled when they struggle to read on-screen text that contains important information. It’s vital that any qualifications are presented clearly and I welcome BCAP’s tough new standards to ensure that happens.”

Shahriar Coupal, director of BCAP, adds: “As an evidence-based regulator, we welcome the ASA’s research. We’ve acted promptly to update our guidance and provide greater clarity on the acceptable presentation of on-screen text in ads, benefitting advertisers and viewers alike.”

FBI and Google take down ad fraud ring

The US Department Of Justice (DoJ) has closed two international ad fraud rings that caused multi-million dollar losses for publishers.

The FBI, in coordination with tech giants like Google, discovered the fake cyber ad ring which was comprised of a crew known as 3ve. The group created false impressions by hijacking data centers and creating their own websites to defraud advertisers.

According to the DoJ, this involved more than 5,000 fake domains and 1,900 computers, raising $7m in revenue from fake advertising. The group also ran a second scheme, which involved them allegedly using malware-infected computers to run automated ad-fraud schemes.

The World Federation of Advertiser’s CEO, Stephan Loerke, says: “It’s hugely encouraging to see the industry unite with international law enforcement to dismantle this sophisticated ad fraud ring. We have to change the risk/reward profile of ad fraud and this is a positive step in that direction.”

Thomas Cook to focus on ‘where it can make a difference’ as results disappoint

Thomas Cook is hoping to learn the lessons of a difficult 2018 as profits tumbled amid a very promotional holiday market in part caused by the hot weather in Europe over the summer.

While group revenue was up 6% on a like-for-like basis to £9.6bn, profit at its tour operator business was down £88m, impacted by discounting in the ‘lates’ market, particularly in the UK. However, there were positives with sales of holidays to own-brand hotels up 15%.

Own-brand hotel growth is an area of strategic important for Thomas Cook and it plans to open at least 20 new hotels in 2019 and has set up a £150m growth fund. It will also be integrating Expedia technology and driving innovative ancillary services to boost growth.

“2018 was a disappointing year for Thomas Cook, despite achieving some important milestones in our strategy for transforming the business,” says CEO Peter Fankhauser.

“Looking ahead, we must learn the lessons from 2018 and go into the new year focused on where we can make a difference to customers in our core holiday offering. We will put particular attention on addressing the performance in our UK tour operator where the challenges of transformation in a competitive environment remain significant.”

Wednesday, 28 November

Uber’s attempts to buy Deliveroo stall over valuation

Uber’s attempt to buy food delivery service Deliveroo have stalled because of differences over valuation. According to the Financial Times, the two companies are “miles apart”, with Uber’s recent offering valuing Deliveroo at less than $2bn, while Deliveroo believes its value is closer to $4bn.

Uber has been looking to acquire or invest in Deliveroo as it looks to take a bigger share of the food delivery market and expand its Uber Eats business. While the two sides are still in talks, interest has reportedly cooled due to the significant gap in valuation.

Separately, Uber has been fined £385,000 for allowing hackers to steal data, including full names, addresses and phone numbers, on 2.7 million UK customers in a 2016 attack. The Information Commissioner’s Office said the data had been stolen thanks to “avoidable data security flaws” and that Uber had done nothing to alert those affected.

Uber has also been fined €600,000 (£530,000) in Holland over the same breach, which impacted 174,000 Dutch consumers. Uber says it has now changed how it handles data and employed a chief privacy officer and a head of data protection.

“We’ve made a number of technical improvements to the security of our systems both in the immediate wake of the incident as well as in the years since,” says Uber. “We’re pleased to close this chapter on the data incident from 2016.”

Inflation returns to the British high street

Shop prices were 0.1% higher year on year in November, marking only the third month of inflation in the last five years and an improvement on the 0.2% fall experienced in October, according to figures from the British Retail Consortium (BRC).

However, non-food prices continue to fall, down by 0.8% in November although this is the lowest rate of deflation since March 2013. Clothing and electricals keep prices in deflationary territory, with all other non-food sectors experiencing price rises.

In food, inflation accelerated to 1.6% year on year, up from 1.3% in October. Fresh food prices were up 1.2%, while ambient food price growth accelerated to 2.1%. However, the BRC is not expecting sustained food price inflation and the numbers point to “great value” on offer for shoppers over Christmas.

Helen Dickinson, the BRC’s chief executive, says: “As we approach the Christmas season, the good news for consumers is that prices have remained almost unchanged in November. Furthermore, falls in the price of clothes and electrical goods will be a welcome bonus as the public prepare to do their Christmas present shopping.

“However, the low inflation presents a more difficult picture for retailers that are facing weak consumer demand and uncertainty surrounding Brexit. If the Government wishes to rebuild business confidence, they must work fast to ensure we get a transition period that gives retailers and their suppliers time to adapt to business outside the EU.”

Unilever in exclusive talks to buy Horlicks

GlaxoSmithKline has entered into exclusive negotiations to sell its nutrition business, which includes the prized Horlicks malt drink brand, to Unilever, according to the Financial Times. Unilever beat a rival bid from Nestle, while Coca-Cola’s interest cooled.

The acquisition would strengthen Unilever’s position in India, where Horlicks is hugely popular. GSK’s Indian business is worth roughly $3bn, suggesting any deal would be higher than this.

Skechers cleared over complaint its ad ‘objectified women’

A Skechers ad that featured men distracted by Kelly Brook walking down the street has been cleared by the ad regulator after complaints that it “objectified women”.

The TV ad featured Brook walking along a pavement wearing a jumper, jeans and a pair of Skechers. She says: “I like my clothes form fitting, but not my shoes. That is why I wear Skechers knitted footwear. So I look and feel my best. People tend to notice things like that.” In the same shot, a man carrying a box of oranges was distracted by Brook and crashed into a colleague, while a male cyclist passed the TV presenter and looks back at her.

Three people complained, questioning whether the ad was offensive because it objectified women. However, the Advertising Standards Authority did not uphold the complaints, explaining that there was nothing revealing about her clothing nor sexualised or objectifying about her behaviour.

Advertisers making it harder to get best agency deal, says new report

US advertisers are likely failing to get the best deal from media agency partners because of a failure on their part to clearly define what they are looking for or share details of the selection process, according to a report by media consultancy ID Comms.

The study, based on qual and quant research carried out with media agency leaders in the US, found that the most important factors for media agencies in decieding whether to prioritise a pitch and how much time and money they spend on it is the clarity of the pitch process. This aspect was scored on average 4.26 by respondents, where five is extremely important and one is not very important.

Agency respondents also believe that a transparent pitch brief benefits marketers because they will get more strategically focused ideas, scored on average 4.45. It will also lead to benefits such as better quality agency talent working on the pitch and the account (4.43) and a high level of engagement from the wider agency team (4.43).

“Pitches are a big drain on the resources of a media agency, which is often managing multiple reviews simultaneously. While agencies have gotten better in recent years at prioritising the pitches they compete for and being more focused with their resources, more discipline on the advertiser side would enable agencies to be more strategic and do better work,” says Tom Denford, North America CEO at ID Comms.

Tuesday, 27 November

GambleAware targets football in new ad

GambleAware is looking to raise awareness around the relationship between football and gambling in a new social media initiative, #CanWeHaveOurBallBack.

Marking the first time the charity has made an ad talking about gambling within a specific sport, the film depicts young football fans losing their ball, only to find it again later with thousands of others on top of a betting shop.

The campaign has been developed with agency And Rising to encourage football fans to reflect on why they love the game and what role betting plays in an environment where almost 60% of clubs in England’s top two divisions have gambling logos on their shirts.

It comes as new financial analysis from Regulus Partners reveals the total spend by gambling companies on marketing has increased by 56% since 2014 to £1.5bn.

Meanwhile, separate analysis from the Gambling Commission found that more than 50,000 under-17s have gambling problems and that two-thirds of children say they have seen gambling ads on TV.

WPP to merge JWT and Wunderman

WPP is merging global ad agency J. Walter Thompson and digital agency Wunderman to form a new creative, data and technology agency, Wunderman Thompson.

The latest move from new CEO Mark Read comes as he looks to streamline the business; the organisation will be positioned as a provider of end-to-end solutions – through creative, data, commerce, consulting and technology services – at a global scale.

Wunderman Thompson, which Read describes as a “formidable combination”, will be led by Wunderman’s current global CEO Mel Edwards, while JWT’s CEO Tamara Ingram will become chairman.

“Clients want greater simplicity from their partners and this development, like others at WPP, is designed to reshape our company around their needs,” Read says.

“It’s great news for our clients that we can combine the best of JWT and Wunderman in a single agency, and it’s great news for WPP as it allows us to compete more effectively in the sectors with the most significant opportunities for future growth.”

The new agency will be fully operational early next year with more than 20,000 employees across 90 markets.

Amazon calls time on UK takeaway service

Amazon is closing its restaurant delivery service in London after two years as it faces growing competition from the likes of Deliveroo and Uber Eats.

The takeaway service, which was available through Amazon’s Prime Now app, will come to an end on 3 December.

“We are closing Amazon Restaurants in the UK,” An Amazon spokesperson says in an email to customers. “We would like to thank all of out customers and merchants, and delivery partners for their support.”

The service first launched in Seattle in September 2015 before coming to the UK the following year. Prime customers could order food from more than 200 restaurants across the city within an hour for a minimum order of £15, which Amazon later added a £1.99 flat fee on top of.

Disney launches charity partnership with eBay

Disney UK is collaborating with eBay and YouTube gaming vlogger DanTDM to raise money for Make A Wish UK and mark the launch of its new film, Ralph Breaks the Internet.

Running from today until 4 December, the deal includes the sale of t-shirts and posters featuring DanTDM as an animated ‘Netizen’ (citizen of the net) in the style of the film, for which he also voices the character ‘eBoy’.

Four bundles will also be auctioned on eBay, including a Nintendo Switch, a replica ‘Sugar Rush’ steering wheel which features in the film, one of 10 gaming chairs specifically designed for Dan and some of his merchandise.

All proceeds will go to Make A Wish, with Disney and eBay donating an extra £10,000 and £5,000 respectively as well.

“The world that Ralph and Vanellope explore in Ralph Breaks the Internet is the perfect backdrop to the campaign, as it is the home of online shopping and influencers,” says Disney CMO Anna Hill.

“The combination of Dan’s online community and eBay’s tools is a huge boost to our fundraising efforts.”

People still don’t trust businesses with their data

There has been minimal change to the number of consumers receiving unwanted calls and emails, despite the introduction of GDPR in May, according to new research from the Chartered Institute of Marketing (CIM).

Four in ten (42%) consumers surveyed said they had received communications from businesses they had not given permission to contact them in the six months since the new data rules came into force. This is only a marginal decrease compared to the 48% in the six months before GDPR.

This is the first major consumer study, conducted through analysis of periods before and after GDPR took effect, to assess its impact with consumers.

Only a quarter of people (24%) believe that businesses treat people’s personal data in an honest and transparent way, only slightly higher than the 18% when GDPR took effect.

Trust is highest among the younger generations; 33% of 18- to 24-year-olds and 34% of 24- to 35-year-old olds trust businesses with their data, compared with only 17% of over-55s.

Meanwhile, 50% of people surveyed believe that the introduction of GDPR has made them more likely to unsubscribe, rather than simply ignore communications from businesses or consciously not opt in at all.

Chris Daly, chief executive of the CIM, says the research raises serious questions about GDPR’s impact on consumer confidence.

“Data provides marketers with vital consumer insights. Its exchange also benefits consumers, who receive more relevant, even personalised, information but while advantages may be clear, trust in business to deliver, is not,” Daly says.

“GDPR has done well in empowering consumers to ask the right questions about their data use. The opportunity still remains for marketers to answer these, and to prove the benefit of data collection.”

Monday, 26 November

Tech giants face criticism over Transparency International report

Amazon, Facebook and Google are facing harsh criticism following the release of the Transparency International report, which ranks companies regarding their transparency standards.

The index covers 104 businesses, many of which meet with Government. It assesses businesses on how transparent they are in their political engagement – this includes key areas such as donations to political parties, lobbying of those in power, the revolving door, public commitment to ethical behaviour and the overall transparency of this information.

The report found Facebook and Amazon were viewed as among the worst performing firms in the ‘responsible lobbying’ category, with the findings suggesting both had published only a very minimal or no coherent lobbying position.

Additionally Google reviewed the lowest score of the ‘FAANG’ companies – Facebook, Apple, Amazon, Netflix and Google – in regard to the revolving door between its workforce and politics, and enforcing “cooling-off periods” for former public officials.

The report found nearly three quarters of the 104 companies investigated are failing to adequately disclose how they engage with politicians. Just one company received the highest grade while on average companies were ranked ‘E’ – representing poor standards in transparency.

Almost four out of five companies were found to have poor standards in disclosing their lobbying and nearly all ranked poorly for controls on the revolving door. Companies generally scored better for their controls on political donations with 60% achieving at least a C grade.

Kathryn Higgs, director of the business integrity programme at Transparency International, says: “Making information about lobbying more accessible allows both government and business to be held accountable for how they engage with one another. Today we are launching Open Access, an online tool that enables the public to easily understand who ministers are meeting with, when and for what purpose. This is a step towards bringing lobbying in Westminster out of the shadows.”

Apple to appear in US top court over ‘monopoly abuse’ case

Apple will appear in the US Supreme Court today in a bid to stop a group of iPhone owners from suing the tech-giant for monopoly abuse.

The owners of the Apple products claim the company has broken federal antitrust laws by monopolising the market for iPhone apps and causing consumers to pay more than they should.

The customers won the right to launch legal action against the tech firm last year, however Apple is now set to appeal the decision in the Supreme Court.

Apple argues it’s only acting as an agent for developers who sell to consumers via the App Store, not a distributor. The company adds that siding with the consumers would “threaten the burgeoning field of ecommerce”.

The Financial Review reports that Apple makes billions each year by taking a 30% cut of apps sold through the App Store which are created by developers.

Additionally, Apple’s app revenues grew by about a third last year to $38.5bn.

Dolce & Gabbana founders issue apology over ‘racist’ ad

Dolce and Gabbana’s founders have issued an apology over an advert that aired in China, eventually leading to the postponement of its Shanghai Fashion Show.

The advert was intended to promote the upcoming fashion show and featured two women of Chinese descent trying to eat Italian food with chopsticks. One of the women attempts to eat cannoli but fails, while a voice over can be heard asking: “Is it too big for you?”

Chinese consumers since took to social media to hit back at the Italian Fashion house.

As a result, their products were pulled from the nation’s lucrative ecommerce platforms and models are threatening to boycott the Shanghai show in protest.

Domenico Dolce and Stefano Gabbana have since issued a Chinese-subtitled video apology that was posted to Weibo – China’s version of Twitter – where they have more than one million followers.

“Our families always taught us to respect different cultures across the world and because of this we want to ask for your forgiveness if we have made mistakes in interpreting yours,” Dolce says.

Gabbana adds: “We want to say sorry to all Chinese across the world, of which there are many, and we are taking this apology and message very seriously.”

The furore could be considered a setback for the brand considering Chinese buyers account for 30% of spending on luxury goods.

Walsh and Branson lock horns over struggling Flybe

Renowned airline bosses Willie Walsh and Richard Branson are set to lock horns in a bidding war for struggling airline Flybe.

Branson, owner of the Virgin Airline Group, indicated interest in the regional airline late last week after it put itself up for sale. However Walsh, chief executive of the International Airlines Group (IAG), is also vying to take control of Flybe but is picked as the favourite to takeover, the Sunday Times reports.

A Virgin Atlantic spokesperson said: “Virgin Atlantic has a trading and codeshare relationship and confirms that it is reviewing its options in respect of Flybe, which range from enhanced commercial arrangements to a possible offer for Flybe.

“Virgin Atlantic emphasises that there can be no certainty that an offer will be made nor as to the terms of any offer.”

The likely sale of the low-cost carrier comes after profits fell by 54% in the six months to the end of September.

This is not the first time Walsh and Branson have faced off either. In 2012, Walsh made a £1m bet with Branson that Virgin Atlantic would not exist in five years’ time.

Report suggests Brexit could cost UK £100bn a year by 2030

The Brexit deal could cost the UK more than £100bn a year come 2030, according to a report by the National Institute of Economic and Social Research (NIESR) which was commissioned by the People’s Vote.

According to the study, GDP would also shrink by about 3.9% annually and the government’s preferred outcome – to leave the EU in March 2019 and enter a transition period until December 2020 before moving to a free trade agreement – would lead to a huge reduction in trade and investment, BCC reports.

The report, which was modelled against a range of Brexit scenarios, found that by 2030 – which would mark a decade outside the EU – total trade between the UK and EU will plummet by 46%, GDP per head would fall by 3% a year, amounting to an average cost per person of £1,090 annually.

Foreign direct investment would fall by 21% and tax revenue would decline by between 1.5% and 2%, the equivalent of £18bn to £23bn over the period.

Even if the UK were to remain in a customs union beyond the transition period it would still mean a hit of £70bn a year, the report claims.