Disney, Netflix, KFC: 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.

Disney launches streaming service to rival Netflix

Disney is launching its own streaming service to rival Netflix which will include bespoke content.

Disney+ will launch in the US on 12 November with original content including a new Marvel TV series starring Tom Hiddleston and a new Star Wars TV series. Disney has already begun pulling content from other video-on-demand sites.

The plan will cost $6.99 per month — nearly half Netflix’s standard $12.99 plan — but will also be available on an annual basis for $69.99 per year (which works out at $5.83 monthly).

Speaking at an investor day in California yesterday (11 April), Kevin Mayer, chairman of Disney’s direct-to-consumer and international business segment, said: “We’re confident consumers are going to love the service.”

Disney+ will include 7,500 episodes of current and off-air TV shows, 25 original series and 10 original movies and specials as well as 500 films. All of the Star Wars films, the recent Captain Marvel and The Simpsons will be on the service at launch, with Disney planning all new Disney theatrical releases to be available on the platform.

Disney CFO Christine McCarthy said the company expects 60 million to 90 million subscribers for Disney+ around the world by the end of fiscal 2024, two-thirds of which it expects to come from outside the U.S..

Disney+ will be rolled out worldwide by the end of 2021. After the initial North American launch in the fourth quarter of 2019, the service will roll out to Western Europe and in Asia-Pacific regions.

The new details on Disney+ come nearly two years after Disney ended its exclusive output deal with Netflix and revealed plans for its own streaming service.

KFC creates CGI Colonel Sanders to poke fun at influencers

KFC has created a CGI Colonel Sanders to poke fun at influencers.

The computer-generated mascot is a younger, better looking-version of KFC’s founder with rounded glasses and tattoo saying “secret recipe for success”.

The company has shared images of CGI Sanders on Instagram with photo descriptions that read: “Always try to inspire like I do when I’m making amazing fried chicken”. It also plans on promoting partnerships with brands like Old Spice and Turbo Tax, as well as Dr. Pepper.

The new Sanders will include a social media campaign until April 22 that pokes fun at influencers but has already garnered attention online for his good looks.

Netflix to launch magazine to gain industry support

Netflix may launch its own print magazine as it looks to market its programmes and films in more varied ways.

The streaming service is reportedly looking to launch a quarterly publication to promote its own shows and stars. Rumoured to be named Wide, Netflix hopes the magazine will gain publicity for smaller shows and build credibility to help it win awards.

The publication won’t be available to the general public, according to Bloomberg, instead it will be distributed at industry events in the hopes it will reach important players in the industry.

The magazine is part of a continued effort for the streaming service to promote its shows to industry professionals and last year, the company took over a building in Los Angeles for a month, hosting screenings and parties.

Greenpeace criticises Nestlé’s plastic use in parody ad

Greenpeace has launched a parody ad that criticises Nestlé’s plastic consumption.

Greenpeace is using the ad to raise awareness that Nestlé used 1.7 million metrics tons of plastic packing in 2018 – a 13% increase from 2017.

The video builds upon a previous parody KitKat video from 2010 that criticised Nestlé’s use of palm oil. After the 2010 video went viral, Nestlé announced it would stop using palm oil suppliers linked to deforestation.

In the ad, Greenpeace introduces a fictional Nestlé employee – the ‘chief plastics officer’ – who, after a game of squash, tries to get a bottle of water from a vending machine. However, he finds inside a plastic-filled monster who eats him.

Greenpeace’s project leader Mirjam Kopp says: “Nestlé has created a plastic monster and it’s time it dealt with it. It claims to take the plastic pollution crisis seriously, but its actions don’t back that up: Nestlé continues to increase its reliance on throwaway plastics. It’s time for Nestlé to phase out single-use plastics across its supply chains and embrace systems of refill and reuse.”

The video ends on a serious note with footage of a man in the Philippines wading through a sea of plastic waste.

EE launches first podcast

EE is launching its first podcast series which it says will bring its “brand platform to life”.

‘Who says you can’t’, created by digital agency AnalogFolk, sees presenter Rick Edwards interview inspiring people who have defied expectations. Guests include rapper turned mental health campaigner Professor Green, budget chef Miguel Barclay and an 85-year old fashion model.

Pete Jeavons, marketing communications director at BT and EE, says: “At EE, we’re always trying to find new solutions to the digital dilemmas that our customers face, introducing products and services like data gifting that tackle these issues head on.

“Launching this podcast allows us to tell the stories of inspiring individuals that share our ‘who says you can’t’ thinking and have achieved amazing things by challenging the way things have traditionally been done.”

EE will promote the podcast series across Facebook, Instagram and Twitter.

Thursday, 11 April

Coca-Cola partners with Channel 4 on women’s football show

Coca-Cola is partnering with Channel 4 on the launch of its first weekly women’s football show.

Hosted by Clare Balding, Women’s Football World will cover news, insight, opinion and analysis from leagues around the world, including England’s WSL, UEFA Champions League and activity in the USA, Germany, Italy and France.

Alongside the weekly show, Channel 4 will also be creating short-form content led by freestyle footballer and influencer, Liv Cooke, as it looks to build a women’s football community across Channel 4, All4 and its social and digital platforms.

Coke’s involvement in women’s football follows the drinks giant’s sponsorship of the Premier League and the launch of its ‘Where Everyone Plays’ campaign.

Andrea Bombrini, senior brand manager at Coca-Cola Great Britain, believes it is an “exciting time” for the women’s game, which is why the brand is getting involved.

“With a longstanding heritage of supporting the game at all levels, from grassroots to the world stage and via our partnership with Fifa Women’s World Cup, we hope the new show shines a light on the incredible talent in women’s football and brings fans even closer to the game.”

Häagen-Dazs makes gender equality major part of pitch process

Häagen-Dazs has made inclusion a major part of the pitch process for its new global agency as it looks to raise the bar on gender equality.

The ice cream brand says it is looking to take a “more proactive approach” to marketing, so is looking for an agency that feels strongly about creative diversity, particularly when it comes to reflecting women’s views in its advertising given its core customer is female.

Häagen-Dazs says it is also wants to work with an agency that is committed to gender inclusion internally too, so will be looking for both a diverse workforce and to ensure the agency culture is supportive of women.

Jennifer Jorgensen, vice-president and marketing director at Häagen-Dazs, says: “It’s notoriously tough for women to make it to the top in advertising. We want to do our part to help change that dynamic and support agencies who support the advancement of women in the industry. We get to choose where we spend our money, and we are choosing to spend it with agencies who share our values.”

Patagonia sues AB InBev over “copycat brand”

Outdoor clothing firm Patagonia is suing AB InBev over the branding and marketing for its Patagonia beer brand.

AB InBev has recently started testing the beer in the US, after selling it for years in Argentina. But the clothing firm claims AB InBev has deliberately created a “copycat brand” using a similar logo and launching in ski resorts where Patagonia ski wear is popular in order to confuse consumers.

In legal filings it claims the brewer is looking to take advantage of its reputation and standing as an environmental advocate by also advertising on billboards that it will plant a tree for every case of the beer sold.

“In short, AB has done everything possible to make it appear as though this Patagonia beer is sold by Patagonia,” the brand states in the filings.

Patagonia has itself been brewing a beer called Long Root since 2016, and added a second variety a few weeks ago. The brand claims AB InBev even got in touch about a particular grain it uses in its beer.

P&G extends global commitment to reduce plastic

Procter & Gamble (P&G) has extended its commitment to reduce plastic as part of its Ambition 2030 sustainability plan, which it first outlined last April.

Part of the pledge was to have 100% recyclable or reusable packaging by 2030, but it will now also reduce its use of virgin petroleum plastic in packaging by 50% by the same deadline.

It plans to achieve this goal by increasing its use of recycled plastic, driving conversion to more concentrated product forms and using alternative materials where possible. It estimates these measures will avoid the use of over 300,000 tonnes of virgin plastic.

P&G says Ariel bottles in Europe already use 25% recycled plastic, while for Lenor that figure is 50%. In North America, 73% of its fabric care packaging across brands including Tide, Gain and Downy is recyclable, and it aims to make this more than 99% by 2023.

Hair care brands Head & Shoulders, Pantene and Aussie have increased recyclable levels to 25% in Europe, and more than one million Head & Shoulders Beach Plastic bottles have been produced around the world since 2017.

In Europe, Fairy dishwashing liquid will go from 25% recycled plastic use in transparent bottles today to 65% in 2020, while Fairy Ocean plastic bottles have expanded from the UK into Germany, Spain, Belgium and Turkey for a total of 3.2 million bottles.

WeWork’s global expansion bill hit $2.5bn in 2018

Serviced office provider WeWork spent $2.5bn on global expansion last year, according to documents seen by the Financial Times. Overall, that means operating costs for the business jumped 93% to $3.5bn.

The privately owned business has been rapidly growing over the past couple of years to become the largest office tenant in both London and New York, thanks to this investment activity.

It now operates in 100 cities across the world and by the end of 2018 had 425 locations.

WeWork told bondholders the expense of its growth and market development more than tripled to $477m in 2018 compared to a year earlier, while sales and marketing costs were up 164% to $379m.

WeWork, which is backed by Japan’s SoftBank and its $100bn Vision Fund, also racked up $177m of operating cash losses, which was funded by $2.7bn of cash from investors and creditors the documents show.

Virgin Trains brand could disappear by November

The Virgin Trains brand could disappear from the UK after the company’s partner Stagecoach, which owns 49% of the business, was barred from three rail franchise bids.

Virgin boss Sir Richard Branson says he is “devastated” by the disqualification and warned the brand “could be gone from the UK in November”, after the Department for Transport (DfT) disallowed the bids as they did not meet pensions rules.

Virgin was bidding to renew the West Coast franchise in partnership with Stagecoach and French operator SNCF, while Stagecoach put in bids for the East Midlands and South Eastern franchises, both of which were rejected.

Wednesday, 10 April

Tesco profits soar as boss hails brand recovery

Tesco’s profits were up 28% year on year for the full year to 28 February, with the company on track to meet the “vast majority” of the turnaround goals set when he joined four years ago after an accounting scandal that nearly brought the supermarket chain to its knees.

Tesco describes its performance as “strong”, with full-year pre-tax profits at £1.7bn and UK same store sales rising 1.7%. Group sales were up 11.5% to £56.9bn.

Tesco points to strengthening brand health scores as a key sign that its turnaround is on track. Citing YouGov BrandIndex data, it says consumer perceptions of quality are up 1.9 points and value perceptions 1.3 points, helping by its own-brand product relaunch of more than 10,000 items, eight new ‘Exclusively at Tesco’ brands and the launch of its discount chain Jack’s.

There are now 149,000 more customers shopping at Tesco, it claims.

“After four years we have met, or are about to meet, the vast majority of our turnaround goals. I’m very confident that we will complete the journey in 2019/2020,” says CEO Dave Lewis. “I’m delighted with the broad-based improvement across the business.”

Despite “market uncertainty”, Tesco is “confident” it will meet the remaining goals in its turnaround plan this financial year and plans to investment further to ensure it remains competitive. Tesco is celebrating 100 years this year, and is focused on “customer satisfaction, cash profitability, free cash flow and earnings growth”.

Lush shuts UK social media as it shifts to ‘direct’ comms with customers

Lush is shutting down its social media channels in the UK to instead focus on direct communications with customers as it gives up the “fight” with algorithms.

In a tweet on its Twitter account, Lush say is it “switching up social” from next week, with customers directed to its website, email and call centre if they want to talk to the brand, rather than its Facebook, Twitter or Instagram accounts.

Lush suggests that changes to how algorithms show content from brands on social media and associated cost to reach users in their news feed is behind the change. The decision applies to its Lush UK accounts, as well as Lush Kitchen, Lush Times, Lush Life, Soapbox and Gorilla.

Instead, Lush suggests it will be looking to personal accounts, for example that of its founders, to talk to customers in social media.

“Lush has always been made up of many voices, and it’s time for all of them to be heard. We don’t want to limit ourselves to holding conversations in one place, we want social to be placed back in the hands of our communities – from our founders to our friends,” says the company.

“We believe we can make more noise using all of our voices across the globe, because when we do we drive change, challenge norms and create a cosmetic revolution. We want social to be more about passions and less about likes.”

Lush says it will trial the strategy in the UK first, saying it “isn’t an action that can be supported just yet in all markets”.

Asos profits plunge 87% as discounting hits bottom line

Asos’s profits plunged 87% in the first half of its financial year as heavy discounting across the fashion sector and issues with traffic to its website hit performance.

Pre-tax profits fell to £4m for the six months to 28 February, although sales were up 14% year on year to £1.3bn. UK sales rose 16%, while international sales were up 12%.

However, Asos was forced to cut prices significantly, particularly over Christmas, as rivals turned to discounting to shift stock. Changes to its marketing which impacted the number of people visiting its website and a drop in its search engine rankings also hit sales.

CEO Nick Beighton says while there are a number of things the online retailer “can do better” he is confident that after heavy investment Asos’s performance will improve in the second half.

“We now have the tech platform, the infrastructure, a constant conversation with our growing customer base who love our own great product and the constantly evolving edit of brands we present to them,” he adds.

“We believe that ultimately there will only be a handful of companies with truly global scale in this market. We are determined that Asos will be one of them.”

Lastminute.com launches media consultancy to help other brands in-house

Lastminute.com is launching its own media consultancy, called Playbook, as it looks to help other businesses in-house media.

Playbook will be part of a new independent media company at Lastminute.com that sits separately from its main travel business. It is led by the team that built its in-house media and trading business, Travel Peope, with former chief commercial officer Alessandra Di Lorenzo as CEO.

Di Lorenzo says: “Having in-housed media for lastminute.com across Europe, we’ve experienced the challenges, solved the problems, spotted the opportunities and honed the process. We realised that we are perfectly placed to de-risk the process for other businesses, and to help move other brands forward by making their marketing activity more efficient, intelligent and relevant.

“2019 and beyond looks set to be a tough year for marketers” she continues. “In-housing proven and repeatable marketing activities is a no-brainer for companies wanting to empower their teams to drive powerful and tangible achievements, faster.”

Playbook will work with companies from any sector, not just travel, as it already working with clients in FMCG and travel to help identify opportunities to in-house and build core capability.

Debenhams falls into administration, with stores and jobs at risk

Debenhams has fallen into administration after a last-ditch attempt by shareholder Sports Direct to take over the company failed to win support from lenders.

The retailer is going through what is known as a pre-pack administration process, which lets the company sell itself or its assets as a going concern without affecting business operations. This means lenders have taken control of the business and will look to sell it, while shareholders lose their investments. That includes Sports Direct’s owner Mike Ashley, who owned a near 30% stake in the company at a cost of about £150m.

Debenhams was the biggest department store chain in the country with 166 stores employing around 25,000 people. Some 50 of those stores were already earmarked for closure, although all will remain open and continue to trade.

The move comes after Debenhams rejected two final takeover offers from Sports Direct, which offered £200m to rescue the business. The offer was turned down because as part of the terms of the rescue, Ashley wanted to be made CEO.

Ashley has called the administration process a “national scandal”, claiming politicians and regulators had been as “effective as a chocolate teapot”. He is calling for the process to be reversed.

Tuesday, 9 April

Waitrose unveils first digital ad screens

Waitrose & Partners has rolled out a new digital network that will give brands the opportunity to advertise on screens across 100 of its high footfall stores.

The new digital screens will feature a mixture of Waitrose & Partners content and external advertising placed by JCDecaux, the media company which won the grocer’s advertising contract in January 2018. They will be located in proximity to store entrances.

“We look forward to our continued partnership with JCDecaux UK and to working together to deliver this new communications channel,” says Rupert Ellwood, head of marketing at Waitrose & Partners.

“Through this new digital network, Waitrose & Partners will bring our own relevant and inspiring content to our customers – enhancing the experience for our shoppers and creating an exciting new opportunity for clients and brand partners.”

Brexit uncertainty slows retail sales

March marked a disappointing end to the first quarter of 2019 for UK retailers thanks to ongoing uncertainty around Brexit and a late Easter.

Total sales fell 0.5% year on year between 24 February and 30 March, according to figures from the British Retail Consortium and KPMG. Over the three months to March, in-store sales of non-food items decreased by 1.5%, down from growth of 2.3% a year ago.

While clothing performed better thanks to mild weather, and jewellery and beauty products were boosted by Mother’s Day, consumers were generally cautious not to overspend, especially on big ticket items such as furniture.

Online sales of non-food products grew 3% in March against growth of 7.9% in March 2018. However, the high proportion of sales occurring online compared to the high street is likely to do with the underlying issue of profit pressure.

“Retail sales slowed in March, even when the Easter distortions were accounted for, as greater uncertainty caused people to hold off from splashing out,” says BRC chief Helen Dickinson.

“Brexit continues to feed the uncertainty among consumers. For the sake of everyone, MPs must rally behind a plan of action that avoids no deal – and quickly – or it will be ordinary families who suffer as a result of higher prices and less choice on the shelves.”

The Guardian launches campaign to promote podcast

The Guardian has launched an ad campaign for its daily news podcast, Today in Focus, the first time it has promoted the podcast outside its own channels.

The campaign, created with in-house creative agency Oliver, has been designed to target commuters in particular, with one tube poster reading: ‘Don’t read this poster. Listen to it.’

The ads will run on London Underground tube panels for two weeks, as well as in print in the Guardian and social media.

“I am hugely proud of the concept behind this design, especially as it is one of the first times we have taken campaign creative for Today in Focus beyond our own Guardian channels,” says Kate Davies, head of brand and awareness at Guardian News & Media.

“We know people often listen to podcasts when they are on the move, so this felt like a natural next step in reaching potential new listeners during their commute to work, while also providing an impactful design for use in print and on social”.

Accenture acquires Spanish agency Shackleton

Accenture has acquired Spanish brand communications agency Shackleton as part of a series of moves to strengthen its creative capabilities in Europe.

The move follows the recent acquisitions of Kolle Rebbe in Germany, Hjaltein Stahl in Denmark and Storm Digital in the Netherlands.

Anatoly Roytman, head of Accenture Interactive (Europe, Africa and Latin America), Accenture’s digital agency, says: “The addition of Shackleton proves our commitment to fostering creative talent and expanding our capabilities globally so that we can help our clients build highly creative and effective brand experiences.”

Shackleton was founded in 2004 and has 176 employees in offices in Madrid, Barcelona and Santiago de Chile, who will all become part of Accenture Interactive.

Financial terms of the deal have not been disclosed.

Spotify rolls out new measurement tools for marketers

Spotify has rolled out a new set of streaming conversion metrics that will allow music marketers to see how their Spotify advertising campaigns impact streaming behaviour.

Through Spotify’s self-serve advertising platform Spotify Ad Studio, artist teams and labels will now be able to see a number of new insights including how many people who heard their ad also checked out their music on Spotify, whether the ad performed better with fans that have been playing their music recently or with newer listeners, and how many users saved music to their library or added a song to a playlist.

Spotify says it intends to offer these types of conversion metrics for future advertising products.

Monday, 10 April

Tesco plots Amazon Prime-style Clubcard reboot

Tesco is planning an Amazon Prime-style reboot to its Clubcard loyalty scheme, which would offer greater incentives to sign up to its bank and mobile phone services.

The Sunday Times reports that the scheme could be linked to Tesco Bank’s Tesco Pay+ app, which allows customers to collect Clubcard points while making payments. To put the scale of a potentially rebooted Tesco loyalty scheme into perspective, the supermarket serves 80 million shoppers a week versus the estimated 15 million Amazon Prime members in the UK.

Tesco will release its full year results on Wednesday, when analysts expect profits will rise 28% to £2.1bn thanks in large part to the growth of the wholesaler Booker, acquired by the supermarket giant in 2018 for £4bn.

Ahead of any proposed merger between rivals Sainsbury’s and Asda, Tesco is said to have been renegotiating deals with suppliers by leveraging its buying alliance with French supermarket Carrefour, which it is thought could deliver hefty cost reductions.

Websites face fines for failing to tackle ‘online harms’

The government plans to fine or block websites failing to tackle “online harms” such as terrorist propaganda and harassment.

The Department for Culture, Media and Sport has proposed an independent watchdog and a code of practice that tech companies would have to follow covering a range issues including terrorist content, child sex abuse, revenge pornography, hate crimes, harassment and “fake news”.

According to the BBC, the rules would apply to Facebook, Twitter and Google, as well as messaging services like Snapchat and cloud storage services.

The proposed new regulator would have the power to fine companies and individual company executives, as well as name and shame those who break the rules.

The government is also considering making search engines remove links to offending websites and has suggested blocking harmful websites completely. Furthermore, there might be a possible levy on the industry to fund the regulator.

Unveiling the proposals, digital, culture, media and sport secretary Jeremy Wright claims “the era of self-regulation for online companies is over.”

He adds: “Voluntary actions from industry to tackle online harms have not been applied consistently or gone far enough.”

While children’s charity the NSPCC welcomed the news, head of research at free market think tank the Adam Smith Institute, Matthew Lesh, said the government should be “ashamed” for taking a lead on “internet censorship”. Lesh described the proposals as a “historic attack on freedom of speech”.

Specsavers goes live with first global campaign

Specsavers has unveiled its first global campaign, which is a collaborative project by all the countries within the group.

Aired on Sunday evening (7 April) across ITV and social media, the Paws advert features Snowdrop, a performing Persian cat from Prague, struggling to get through a cat flap fitted upside down by a shortsighted handyman.

Devised by the in-house creative team, the TV advert will be supported by activity across Specsavers’ social channels including YouTube, Facebook and Instagram.

According to CMO Katherine Whitton, the “fame and fondness” of the ‘Should’ve gone to Specsavers’ tagline has global relevance.

“It was time that we made an ad designed to work in every market we operate in,” she adds. “The beauty of the campaign idea and insight is how universal it is with no barriers to it being enjoyed be all, whatever your age and wherever you live.”

Mike Ashley calls for Debenhams execs to ‘take lie detector tests’

Mike Ashley has accused executives at Debenhams of engaging in “a sustained programme of falsehoods and denials” over his continued bid to take control of the struggling department store chain.

The Sports Direct owner suggests that the top team should take lie detector tests after he claimed they were misrepresenting what had happened in a meeting between the two firms following his offer of a £150m cash injection.

In a statement, released on Sunday, Sports Direct claimed that “misrepresentations were made to induce Sports Direct into signing a non-disclosure agreement, locking them out of any ability to trade in the bonds or equity of Debenhams for a period of time”.

It appears Ashley and two colleagues have already taken lie detector tests, the results of which Sports Direct claim “showed without any doubt” they had given an accurate report of the meeting.

However this morning, in light of the “press speculation”, Sports Direct has issued a new statement reiterating its offer to invest £150m in Debenhams in exchange for Ashley being appointed chief executive and £148m of debt being written off by lenders.

The company also stated it was still considering a £61m takeover bid and has until 5pm on 22 April to announce either a firm intention to make an offer for Debenhams or walk away.

In this morning’s statement Sports Direct also added that it wanted to “seek to constructively engage with the Debenhams board”. This is despite the fact that Ashley, who currently owns a 29.7% stake in the department store business, had yesterday called for an investigation and for the firm’s shares to be suspended.

According to BBC reports, Debenhams’ financiers are considering the offer. If Ashley’s bid is turned down, it is thought the company is likely to go into administration this week.

Holland & Barrett slammed for ‘shabby’ treatment of suppliers

Holland & Barrett has been accused by senior MPs of treating its suppliers “shabbily” amid accusations of poor payment practices.

According to small business commissioner Paul Uppal, the health food chain has “a purposeful culture of poor payment practices”, which includes taking an average of 68 days to pay invoices and is evidenced by the claim 60% of its invoices were not paid within agreed terms.

The Guardian reports that the commissioner received a complaint from a technology company over an unpaid £15,000 invoice, which Holland & Barrett only paid in full 28 days after the complaint was submitted to the commission.

“Holland & Barrett’s refusal to cooperate with my investigation, as well as their published poor payment practices, says to me that this is a company that doesn’t care about its suppliers or take prompt payment seriously,” Uppal states.

Chair of the business, energy and industrial strategy select committee, Rachel Reeves, described it as “outrageous” for a company to take an average of 68 days to pay its invoices, adding: “Consumers would be appalled to hear that a big name on the high street such as Holland & Barrett is treating their suppliers so shabbily.”