Burberry, Boots, Nike: 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.

Channel 4

Channel 4 stands to lose millions in dispute over ad rates

Advertisers including Asda and Samsung could stop advertising on Channel 4 at the start of next year in a dispute between the broadcaster and media agency Publicis Media over the cost of buying commercial space across its channels, according to The Guardian.

The advertisers are clients of Publicis Media in the UK, which has disputed the broadcaster’s TV ad price rises despite a decline in its audiences.

The media buying firm spends a significant figure every year on Channel 4 as part of deals struck on behalf of its clients, which also include GlaxoSmithKline and Reckitt Benckiser. It is thought Publicis Groupe accounts for around 17% of Channel 4’s total sales revenue.

If Publicis and Channel 4 do not reach an agreement, the row could result in the withdrawal of big-name advertisers from 1 January, which would cost Channel 4 millions of pounds in lost revenue each week it goes on for.

READ MORE: Channel 4 faces £200m-plus ad blackout over TV audience dispute

Burberry hires former Calvin Klein marketer as CMO

Burberry has appointed Rod Manley as CMO. He joins from Calvin Klein in New York, where he was executive vice-president of influence marketing & communications, prior to which he held senior positions at Giorgio Armani and creative services and media relations firm KCD.

Manley takes over from former CMO Sarah Manley who announced her departure in February after 17 years with the brand, the last eight of which she held the top job. Sarah’s resignation came shortly after one-time chief executive and creative director Christopher Bailey confirmed he would be leaving the business.

In his new role, Manley will lead all marketing, communications and creative media teams from London. He will start on 7 January and report to the group’s CEO Marco Gobbetti.

Gobbetti says: “Rod’s experience and expertise will be invaluable as we continue to strengthen the Burberry brand and position the business for growth.”

Boots sales hit by ‘very weak’ retail conditions

Boots has seen a 7.8% drop in gross profit for the three months to 30 November compared to the same quarter a year ago, despite increasing market share, according to its owner Walgreen Boots Alliance.

Sales for the group’s Retail Pharmacy International division, of which Boots is a part, decreased 5.9% to $2.9bn (£2.3bn) for the quarter, the company’s first of its 2019 financial year.

In the UK, comparable pharmacy sales fell by 3.5%, while comparable retail sales decreased 2.6%.

Walgreen Boots Alliance, which as a group saw sales rise 9.9% to $33.8bn, while operating income grew 6.1% to $1.4bn, has blamed a “very weak retail environment” in the UK for the drop.

This comes as UK retail sales rose more than expected in November, according to the latest data from the Office for National Statistics.

The figures show sales rose 1.4% compared to October 2018, helped by Black Friday promotions and stronger than expected growth of household goods sales.

Nike reports strong Q2 sales in wake of Kaepernick ad

Nike has reported double-digit revenue growth for Q2, beating analysts expectations in its first earnings report since releasing its controversial Colin Kaepernick ad.

Revenues for Nike hit $9.4bn for the three months to 30 November, up 10%, or 14% on a currency-neutral basis. Net income, meanwhile grew 10% to $847m.

Nike’s chairman, president and CEO Mark Parker says the strong results are being driven by its “ambitious digital transformation”.

He adds: “We’re incredibly energised about 2019, with a full innovation pipeline; the most personal, responsive retail experiences in the industry; and a supply chain that’s delivering speed at scale.”

Andy Campion, executive vice-president and CFO, says: “As we continue to invest in digital transformation, we are driving consumer-centric disruption in our industry and unlocking new opportunities for growth.”

DFS joins forces with The Lego Movie 2 for sale campaign

Furniture retailer DFS has partnered with The Lego Movie 2 for its winter sale campaign, which launches today (21 December).

The TV and online ad, created by Krow, features characters from the animated film trying to find a comfy sofa to “save our butts” after they all try and cram onto a double-decker sofa that collapses under their weight.

The Lego characters all head to DFS where they test out various alternatives, with Lego Batman, for example, settling on a sleek, black recliner.

The campaign will run for 11 weeks and coincides with the release of the second Lego movie on 8 February.

DFS’s marketing director Nick Ashworth says the partnership plays on the fact the two brands have the “same commitment to bringing families together”. He adds: “For us, it’s about bringing [families] the ‘joy of comfort’, for Lego it’s about the ‘joy of building’.

Friday, 21 December

unilever

Unilever expands vegetarian brands with acquisition

Unilever has snapped up a vegetarian food brand in a bid to better cater for the growing number of vegetarians and vegans.

The FMCG giant says the purchase of The Vegetarian Butcher “fits with our strategy to expand our portfolio into plant-based foods that are healthier and have a lower environmental impact”. The purchase price has not been disclosed.

The Vegetarian Butcher was founded in 2007 by Jaap Korteweg, a Dutch meat farmer who became a vegetarian. Products include “chickburgers” and “nochicken” nuggets. The company’s products are already sold in more than 4,000 outlets in 17 countries including Waitrose.

Nitin Paranjpe, president of foods and refreshment at Unilever, says: “The Vegetarian Butcher is a brand with a clear mission, many loyal ambassadors, a good following on social media and a strong position in the market. The brand will fit in well within our portfolio of ‘brands with purpose’, which have a positive social impact, are better positioned to meet the needs of consumers and are growing faster.”

READ MORE: Unilever buys meat-free food company The Vegetarian Butcher

Sky partners with Virgin Radio to make new Chris Evans Breakfast show ad-free

Virgin Radio has signed up Sky to sponsor the Chris Evans Breakfast show, which launches on 21 January 2019, in a move that will see the commercial radio station air a show without ad breaks.

Instead, Sky’s sponsorship will provide investment to create branded content, competitions and events. The move means people that have become accustomed to listening to Evans on Radio 2 without ad breaks will be able to do the same when he makes the move to commercial radio. Sky and Virgin Radio are both ultimately owned by News UK (although this will change when Comcast completes its acquisition of Sky).

Chris Evans says: “So much has changed in broadcasting since I was last at Virgin Radio that now, thanks to Sky, we can do the show without ad breaks. I’m even more excited about starting in the New Year!”

Virgin Radio is currently digital only but will launch on Sky+ and Sky Q on 7 January.

Stephen van Rooyen, CEO UK & Ireland, Sky, adds: “The Chris Evans Breakfast Show on Virgin Radio will bring audiences something completely new, bold and fresh – everything we love at Sky. We’re excited to create an innovative radio first with Chris and Virgin Radio, and bring Sky customers even more of the entertainment they love when Virgin Radio launches across Sky from 7 January.”

Budweiser to brew beer solely using solar power from 2020

Budweiser beer will be brewed in Britain using solar power from 2020 following a 15-year deal signed by brewer Anheuser-Busch InBev (AB InBev) and renewable power developer Lightsource BP.

Lightsource BP will develop and operate 100 megawatts (MW) of solar projects to generate enough electricity for AB InBev’s breweries.

Jason Warner, zone president for Europe at AB InBev, says: “This deal is about driving positive change in what people buy in their weekly shop, order in the pub or drink with friends. We want to build a movement towards celebrating and growing renewable electricity, and are asking our consumers, customers, colleagues, business partners and fellow companies to join us – we are making our 100% renewable electricity symbol available for any brands who share these values.”

The initiative is part of the company’s sustainability goals, which include purchasing all electricity from renewable sources by 2025.

Unilever and Virgin pledge support for disability inclusion

Virgin Group founder Sir Richard Branson and Unilever’s outgoing CEO Paul Polman are among the global business leaders who have committed to take accountability for disability inclusion by joining the campaign #valuable.

#Valuable is intended to rally business leaders around the world to recognise the value and worth of disabled people around the world.

Caroline Casey, founder of #valuable, says: “Disability inclusion is an issue that has been pushed to the sidelines of business for far too long”.

Currently one in seven people across the world live with some form of disability but #valuable says businesses are ignoring disabled people.

Virgin Media has decided to partner with disability equality charity Scope to support a million disabled people to get and stay in work by the end of 2020. It has also committed to making its workplaces, practices and policies to ensure they work better for disabled employees and customers.

Meanwhile, on 24 January 2019, Polman will co-host a press conference with #valuable’s Casey on ‘The Accessibility Revolution’ to talk about the ambitions of the #valuable campaign.

Polman adds: “Creating a more inclusive world for the 1.3 billion people in the world with a disability is not just the right thing to do, it also makes a lot of business sense”.

Snapchat restores Big Ben for Christmas travellers

Snapchat is launching a Christmas filter today that will restore Big Ben for those visiting Westminster.

The London landmark is currently under construction but the app has created a virtual clock-tower for one of its filters which is powered by location-based and 3D mapping AR technology.

The animated clock is meant to reflect every detail, displaying the accurate time and chiming every hour.

The filter will be available for several months with different creatives the first of which is a snow globe which will house the clock tower with the words ‘Happy Holidays’ on it.

“We are thrilled to unwrap Big Ben for our Snapchat community in London,” says Eitan Pilipski, vice president of Snap’s camera platform. “This holiday, we wanted to showcase the imaginative power of Snap’s Augmented Reality experiences by deconstructing the scaffolding around Big Ben – at least for a few special moments.”

Wednesday, 19 December

Barclays fined $15m for whistleblowingbreach

Barclays has been hit with a $15m (£12m) fine by a US regulator after its chief executive attempted to unmask a whistleblower.

The New York State Department of Financial Services (DFS) ruled the bank had broken banking law for failing to follow whistleblowing procedures when letters were sent about a senior member of staff boss Jes Staley had recruited, questioning their fitness and qualifications to work at the bank.

“Whistleblowers are vital to uncovering and addressing intentional wrongdoing,” says Maria Vullo, New York department of financial services superintendent.

“DFS’s thorough investigation uncovered actions at the top that exposed the bank to risk and created an atmosphere in which employees might doubt that it was safe to escalate issues of concern to the bank.”

Vullo adds: “Several members of senior management failed to follow or apply whistle-blowing policies and procedures in a manner that protected the chief executive and the bank itself.”

Barclays confirmed the fine in a market statement, saying it has further agreed to undertake “additional reporting and remediation undertakings” in respect of its whistleblowing programme.

Earlier this year, Staley was fined £642,430 by the UK’s financial watchdogs for “failing to act with due skill, care and diligence” over the anonymous letter.

READ MORE: Barclays hit with $15m fine over attempts to unmask whistleblower

GSK and Pfizer to merge consumer divisions

Pharmaceutical giants GlaxoSmithKline and Pfizer have unveiled plans for a joint venture that will see their consumer healthcare businesses merge.

Expected to take effect in the second half of 2019 – subject to regulatory approval – the new group will go by the name of GSK Consumer Healthcare and is expected to have combined sales of £9.8bn.

GSK will own 68% of the merged business, including its own painkiller Panadol as well as Phizer’s Advil.

“Through the combination of GSK and Pfizer’s consumer healthcare businesses, we will create substantial further value for shareholders,” says GSK chief executive Emma Walmsley.

“Ultimately, our goal is to create two exceptional, UK-based global companies, with appropriate capital structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers.”

READ MORE: GSK and Pfizer to merge consumer divisions

Cadburys Peter Rabbit promo escapes ad ban

A website for a Cadburys Peter Rabbit promotion seen earlier this year has escaped the hammer of the UK ad regulator after the Children’s Food Campaign (Sustain) complained it was for a product that was high in fat, salt or sugar and aimed at children.

The group also challenged whether it was targeted through its content directly at pre-school or primary school children and included licensed characters popular with children.

Cadburys owner Mondelēz argued the promotional product packs in which coupons were found included Cadburys’ Easter range, which had an appeal to families and not just children. It then supplied details of the traffic to the web page broken down into age bands, the youngest of which was for 18- to 24-year-olds.

While the Advertising Standards Authority (ASA) considered it to be an HFSS product ad – all Cadburys products are – the watchdog ruled it was not specifically aimed at children and therefore not in breach of the code.

FA and Twitter strike FA Cup highlights deal

The Football Association and Twitter have joined forces to deliver FA Cup highlights directly to Twitter users across the globe.

Fans outside the UK in more than 10 worldwide markets will be able to register to receive in-game clips via a Twitter direct message bot from Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur fixtures from the third round of the competition onwards.

Users will also receive an @mention notification within minutes of the action taking place. Highlights clips will be a maximum of 30 seconds long, with users receiving up to four clips per half.

Further two-minute clips will be delivered from midnight, followed up by an extended 10-minute package from midday the day after.

Georgina Lewis, head of marketing at the FA, says worldwide interest in the Emirates FA Cup is greater than ever and the partnership is “vital to ensure the competition remains at the forefront of fan engagement”.

“This approach fits within our overriding strategy to be innovative in delivering experiences in line with how modern fans are consuming sports media and want to engage with the competition in the future,” she adds.

14.9 million Brits to splash £1.65bn on last-minute Christmas shopping

With just one week to go until Christmas, 14.9 million shoppers are expected to spend £1.65bn buying last-minute festive purchases on ‘Super Saturday’ – the last Saturday before Christmas – equating to £2.38m spent per minute.

Falling on 22 December, Super Saturday is set to be one of the busiest and most successful high street shopping days before Christmas, according to research by VoucherCodes.co.uk and the Centre of Retail Research (CRR), with 10.1 million shoppers hitting stores to spend a total of £1.38bn.

Online sales will peak the day before on ‘Frenzied Friday’, with £321m being rung through online tills, as 7.2 million shoppers seek out last-minute gifts while avoiding the high street crowds.

Brits’ ‘Super Saturday’ shopping list includes: food (27%), clothing, footwear and accessories (17%), alcohol (16%), toys (13%), cosmetics and perfume (11%), homeware (10%), personal electronics (10%), DVDs, computer games and books (9%), home electronics (8%) and white goods (5%).

Tuesday, 18 December

ITV unveils new year-long on-screen identity project

ITV has unveiled a new on-screen identity for its main channel in the form of a year-long project called ‘ITV Creates’.

As part of the project, which starts on 1 January, the broadcaster’s on-screen idents (the short bumper that plays before a programme) will be transformed by a new artist each week who will “brand the channel” for that seven-day period by creating a piece of work illustrating their version of the ITV logo.

ITV Creative has worked alongside artistic director, curator and consultant Charlie Levine to help source the 52 artists who are taking part in the project. They come from a diverse range of backgrounds and are a combination of up-and-coming and established artists who work across various visual arts disciplines.

“Idents have been around since the dawn of TV and the way they have behaved has changed very little. We wanted to push against the prevailing convention that idents are set, the idea that they are moving wallpaper that last 5 or 10 years without changing,” ITV’s Creative’s executive creative director Tony Pipes says.

Patisserie Valerie launches loyalty programme

Patisserie Valerie is launching its first loyalty programme as it looks to move on from the scandal surrounding the black hole that was found in its finances earlier this year.

The branded Patisserie Valerie app, built and powered by Yoyo Wallet, will be rolled out across all 155 stores in the UK and Ireland, providing customers with a mobile payment option, automated loyalty points tracking, rewards and digital receipt collection.

The bakery chain says this marks the first time staff will be able to capture anonymised customer basket data at the point-of-sale, enabling the company to collect and analyse purchasing behaviour in order to offer personalised rewards.

“[The partnership] is the first in a range of initiatives we will be launching over the next few months to enhance our in-store customer experience. The Yoyo platform offers the perfect blend of speed, convenience and rewards – a thank you to our loyal customers,” says CEO Steve Francis.

The focus on customer experience comes after Patisserie Valerie was brought to the brink of collapse after it was discovered the company was nearly £10m in debt instead of having £28m in the bank as it had previously reported. The company was rescued by chair Luke Johnson, who pumped £20m of his own money into the business.

NiQuitin encourages smokers to quit with £1.3m New Year campaign

NiQuitin’s parent company Perrigo has revealed a £1.3m New Year campaign aimed at encouraging smokers to quit.

In NiQuitin’s TV spot, which will air on 1 January, viewers hear from ex-smoker Christina who had been smoking since a young age but quit using NiQuitin with the goal of living a healthier lifestyle.

As part of the campaign, NiQuitin is also launching a chat bot that will provide a 10-week support plan with tips on the health benefits associated with quitting, money-saving updates, motivating messages and top tips to help smokers continue the quitting journey.

This comes as research by NiQuitin reveals 55% of smokers require considerable support when trying to quit, while another 82% say they expect quitting to be “really tough”.

Senior director of marketing at Perrigo, Holly Turner, says the new year is the biggest entry point for people to start quitting.

“NiQuitin wants to be the brand that is there to support them through the difficult journey. We will be heroing Christina’s story and how she successfully quit with the help of NiQuitin,” she adds.

The TV spot will be supported by out-of-home and digital activity.

France stands alone on introducing digital tax on tech giants

France has confirmed plans to introduce a digital tax on big technology firms despite failing to secure an EU-wide agreement.

France has been pushing for a GAFA (Google, Apple Facebook and Amazon) tax in order to ensure these companies are paying their fair share of taxes. The French finance minister Bruno Le Maire says the tax should bring in about £420m in 2019.

Earlier this year, the European Commission put forward proposals for a 3% tax on the revenues of large internet companies with global revenues of more than £675m. However, the move triggered concerns that it could breach international rules.

The tax on tech giants should not affected smaller companies.

READ MORE: France to introduce digital tax in new year

Jaguar Land Rover could slash thousands of jobs in 2019

Jaguar

Jaguar Land Rover (JLR) is planning to slash more than 5,000 jobs as part of a £2.5bn savings plan, The Financial Times reports.

The proposed move has been triggered by possible fallout from Brexit, declining sales in China and a dwindling demand for diesel cars. The company has seen a 30% slump in sales of diesel vehicles, which are associated with high levels of air pollution, while sales in China have slumped by 44%.

JLR employs 40,000 people in the UK. It previously cut 1,000 agency staff at its Solihull plant earlier this year. Some workers have also had their hours reduced.

JLR reported a £90m loss for the three months to September and in October the company outlined a £2.5bn savings plan without indicating how many jobs would be lost as a result.

“Jaguar Land Rover notes media speculation about the potential impact of its ongoing charge and accelerate transformation programmes,” a JLR spokesperson says.

“As announced when we published our second quarter results, these programmes aim to deliver £2.5bn of cost, cash and profit improvements over the next two years. Jaguar Land Rover does not comment on rumours concerning any part of these plans.”

JLR sells 13 models but only three – the Range Rover Velar, the Jaguar E-Pace and the electric Jaguar I-Pace – experienced a climb in sales in the three months to September.

READ MORE: Jaguar Land Rover set to cut thousands of jobs in the new year

Monday, 17 December

asos

Asos issues profit warning after poor November sales

Asos has issued a profit warning, saying sales are set to be below where the company expected after difficult trading conditions in November hit the business.

While the online retailer says sales for the three months to 30 November have delivered “solid growth” of 14%, November saw a “significant deterioration”. Asos says conditions “remain challenging” with a high level of discounting and promotional activity, while warm weather has reduced its average basket size.

Asos is now guiding that sales growth for the financial year to August 2019 will be 15%, down from the between 20% and 25% it had previously expected. Retail gross margin will be -150bps, where previously it was predicted to be flat at 49.9%.

Nick Beighton, CEO, says: “We achieved 14% sales growth in a difficult market, but in the light of a significant downturn in November, we think it’s prudent to recalibrate our expectations for the full year. We are taking all appropriate actions and our ambitions for Asos have not changed.”

The warning will send chills through the rest of the retail industry, particularly those dependent on high street sales. Laura Ashley has just become the latest retailer to say it will close stores, with plans to shut 40 across the UK as it plans to expand in China. That will take Laura Ashley’s UK store number down from 160 to 120.

Government cracks down on nuisance calls

Company bosses whose firms pester people with nuisance calls could be fine up to £500,000 under new laws coming into effect today that make bosses personally liable for their firm’s behaviour.

The changes by the Information Commissioner’s Office (ICO) is a shift from previous laws, where only a business was liable for fines. Some companies have previously declared bankruptcy to avoid paying the penalties, only to start trading again under a different name, says the ICO.

Ofcom estimates consumers were bombarded with 3.9 billion nuisance calls and texts last year. The ICO issues fines of more than £1.9m to 23 companies for nuisance marketing in 2016/17.

Margot James, minister for the digital and creative industries, says: “We are determined to stamp this menace out and this new law is the latest in a series of measures to rid society of the plague of nuisance calls.”

READ MORE: Company bosses to be held responsible for nuisance calls with £500,000 fines

Deliveroo, Just Eat and McDonald’s in talks with TfL over junk food ad ban

A number of major fast food and delivery chains are in talks with Transport for London (TfL) over its plan to introduce a junk food ad ban on the London transport network. According to The Times, brands including Deliveroo, Just Eat and McDonald’s are in discussions about how to continue advertising on the network and reach its hundreds of millions of annual passengers.

Deliveroo says it has had “very positive engagement” with TfL, while Just Eat is “exploring options” to ensure its advertising is compliant once the ban comes in in February.

The bank for ads high in fat, salt and sugar (HFSS) comes into force on 25 February 2019 as TfL looks to do its bit to try to tackle rising obesity rates. However, while TfL says the ban is supported by Londoners, ad industry bodies have questioned the move saying it will impact TfL’s revenues and do little to solve the obesity problem.

READ MORE: Giants scramble to beat TfL junk food ad ban (£)

Raheem Sterling fronts new Nike ad

Nike Raheem Sterling

Manchester City footballer Raheem Sterling is fronting a new ad from Nike, the latest in its ‘Just Do It’ marketing campaign.

The image, which was shared on Nike’s social media channels, includes a close-up of Sterling alongside the words: “Speaking up doesn’t always make life easier. But easy never changed anything.”

The ad comes after Sterling spoke up about racist abuse following comments by Chelsea supporters during a match between the two teams last weekend. On Instagram, he wrote about how the negative portrayal of black players in the media could fuel racism and aggressive behaviour.

Sterling is the latest sports star to front the campaign, which has also featured former NFL player Colin Kaepernick, as well as tennis player Serena Williams.

Facebook hit by new privacy scandal after API bug gives app developers access to photos

Facebook has been hit by a new privacy scandal after it revealed that a bug in its Photo API gave app developers too much access to the photos of up to 5.6 million users.

The bug allowed apps that had approval to use their timeline photos to also receive their stories, marketplace photos and photos they had uploaded to Facebook never shared. Facebook says the bug was live between 13 and 25 September, when it discovered the breach. It informed the European Union’s privacy watchdog, the Office of the Data Protection Commissioner (IDPC), on 22 November.

Facebook has issued an apology and said it will be providing tools for app developers so they can see if they were impacted and then delete photos they shouldn’t have access to. Any users impacted by the bug will be told via a Facebook notification that directs them to the help centre.

The fact it took Facebook so long to report the breach could be an issue as under new data laws companies have 72 hours between discovering a breach and reporting it to authorities. However, Facebook says it only knew the breach fell under GDPR rules on 22 November and it then reported it to authorities within 72 hours.

Nevertheless, the breach is another hit for Facebook and raises further questions about its ability to securely store people’s personal data. This latest news follows a security breach in September that allowed hackers to scrape information of 30 million users, as well as a number of bugs that have led to Facebook sharing more data with apps than it should have done.

READ MORE: Facebook bug exposed up to 6.8M users’ unposted photos to apps

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