Asda, Twitter, Camelot: 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.

Asda pledges £20m to key food poverty charities

Asda is set to invest at least £20m into two of the UK’s leading food poverty charities – FareShare and The Trussell Trust – in an effort to help one million people out of food poverty over the next three years.

The partnership is expected to enable both charities to provide an additional 24 million meals every year and give 500,000 more people access to fresh food in the UK.

Asda has also committed to making sure all of its shops are able to donate surplus food to foodbanks by 2020.

Morrisons to scrap single-use plastic bags

Joining the likes of Asda, Tesco and Sainsbury’s, Morrisons has become the latest supermarket to vow to get rid of single-use plastic bags.

Following trials in a number of stores, which the supermarket said customers had “responded positively” to, Morrisons will start phasing all 5p bags from March and said it should only be “a matter of months” before they are all gone.

“We are listening to customers and they’re telling us they want to reduce the amount of plastic getting out into the environment,” a spokesperson said.

“We’ve already seen a big reduction in plastic bag usage since the 5p charge was introduced. The ambition behind introducing a charge on single-use carrier bags was to reduce their usage and we now feel the time is right to stop offering them altogether.”

Twitter reports first profit

Twitter has posted its first ever quarterly profit gain, with net profit reaching $91.1m (£65m) in the fourth quarter of 2017, thanks to a rise in video ad sales and expansion outside of the US.

Total revenue for Q4 was up 2% year-on-year to $732m (£526.2m) while ad revenue increased 1% to $644m (£462.9m). Owned-and-operated ad revenue was up 7% to $593m (£425.3m).

The social network’s daily active userbase also grew 12% over the year, marking the fifth consecutive quarter of double. It now has 330m total monthly active users, 262m of which are international.

Camelot to ‘reinvigorate’ National Lottery advertising

Camelot UK is conducting a review of its above the line advertising business for The National Lottery – the group’s first major advertising review in 10 years.

Camelot said one of the key outcomes of the strategic review was a commitment to “reinvigorate” The National Lottery brand – which includes Lotto, EuroMillions and National Lottery Scratchcards – by making it and the role it plays in society more relevant and visible.

AMV BBDO has been in charge of the advertising for the last 15 years, however Camelot’s commercial director Richard Bateson said it has opened up the pitch to make sure it has “the best agency for the job”.

A final decision is expected to be made by early April.

Dr. Martens appoints new global marketing director

Mathieu Garcia has joined Dr. Martens as global marketing director. He was previously at Ralph Lauren Europe for 12 years, most recently as vice president of marketing.

Garcia will work with the global product teams to drive the brand’s “go-to-market” plans behind its seasonal collection launches and communication strategies, while monitoring best practices across regions.

Dr. Martens’ global senior VP of product and marketing, Darren Campbell, said Garcia will be “instrumental in moving the brand forward through authentic marketing activities, enabling further connectivity with our global consumers.”

Thursday, 8 February

Tesla reports $675.4m loss

Tesla, the electric car company owned by billionaire Elon Musk, has reported a $675.4m loss during the three months to 31 December.

Profits were reportedly hit by heavy spending on the next generation of electric cars, including its Model 3 sedan which failed to maintain production targets. According to reports in the Guardian, Tesla made just 2,425 Model 3s in the fourth quarter of 2017, despite there being a 500,000 strong waiting list.

Musk remained upbeat, stating that the company is expected to build around 2,500 Model 3s a week by the end of the first quarter of 2018, with plans to reach 5,000 vehicles per week by the end of the second quarter.

Production of other models, however, exceeded targets. Tesla delivered 101,312 Model S sedans and Model X SUVs in 2017, up 33% on 2016.

News of Tesla’s loss making performance comes just a day after Musk’s private aerospace company SpaceX successfully launched its Falcon Heavy rocket into space, complete with a Tesla Roadster sports car attached.

Channel 4 under pressure to move out of London

Channel 4 is under pressure to accelerate its relocation outside London, with reports the Government is working on new laws to force the move.

According to the Telegraph, Culture Secretary Matt Hancock has instructed officials to do the groundwork on new legislation that could be forced through Parliament if a deal with Channel 4 is not struck.

With discussions over the broadcaster’s future having raged for more than two years, there is reportedly an appetite within Government to resolve the issue in “weeks not months”. However as Channel 4 is owned by taxpayers, but funded by commercial advertising, the Government would need new powers to force the broadcaster to move its headquarters if it was against the wishes of its board and new chief executive Alex Mahon.

Although Channel 4’s headquarters and programme commissioning would have to relocate, the broadcaster’s advertising sales office could remain in London. While it is up to the board to decide, cities across the Midlands, North of England and Scotland are all throwing their hats in the ring to become Channel 4’s new home.

Eurostar commits to halve plastics by 2020

Train operator Eurostar has committed to halve its use of plastics by 2020, including the millions of plastic bottles handed out to passengers every year. The company also plans to reduce food waste and seek out alternative packaging materials to cut its use of paper.

Speaking to the Guardian, outgoing Eurostar chief executive Nicolas Petrovic admitted that reducing the company’s dependence on plastic bottles was a “major challenge”, but reiterated that they had already made a start by banning plastic straws on board trains and in lounges. Eurostar has also set up a working group to look at alternatives for plastic cutlery in the buffet bar.

These targets make up part of Eurostar’s new 10-point plan to cut carbon emissions and reduce waste over the next three years. This builds on the Tread Lightly programme launched in 2007, which to date has seen the train operator cut carbon emissions by 32% and halve waste across its business.

Eurostar joins a growing list of brands that have committed to phasing out plastic over the past few weeks. Frozen food retailer Iceland has pledged to go plastic-free with its own brand products, while McDonald’s, Coca-Cola and Evian are planning to overhaul packaging, and Diageo and Costa are phasing out the use of plastic straws.

Mr & Mrs Smith hires former Dixons Carphone CMO

Boutique travel club Mr & Mrs Smith has hired former Dixons Carphone CMO Julian Diment as its first chief growth officer.

The brand’s co-founder and CEO, Ed Orr, credited Diment with bringing a “broad range of sales and marketing knowledge”, particularly expertise in “perfecting the customer experience”.

Diment began his career as a trainee at Saatchi & Saatchi in 1993, joining the agency’s board at the age of 25. After founding his own restaurant, in 2002 Diment was made senior operations manager at the Football Association, before joining Orange as head of entertainment and digital marketing.

Then in 2006 Diment moved to luxury goods brand Alfred Dunhill as global marketing director, before taking on the role of European director of marketing and brands at Best Buy Europe.

In 2012 Diment joined Carphone Warehouse as CMO, moving on to become CMO of Dixons Carphone in 2014. His last position before joining Mr & Mrs Smith was as chief strategy officer and chief marketing officer of sales software platform, Honeybee.

Global claims 22% share of commercial radio market

Broadcaster Global claimed a 22% share of the UK commercial radio market in the fourth quarter of 2017, according to the latest RAJAR (Radio Joint Audience Research) figures.

Global reaches 24.8 million weekly listeners across its range of radio stations including Heart, Classical FM and LBC. The figures show that Heart remains the UK’s biggest commercial radio brand, attracting 9.2 million listeners every week, while pop chart focused Capital has 8.3 million weekly listeners, 2.1 million in London alone.

LBC (Leading Britain’s Conversation) added 332,000 listeners year-on-year during the fourth quarter of 2017 and reaches 2 million people a week across the UK. The station also claimed 6.2% of London’s commercial radio share at breakfast.

The RAJAR figures also show the Bauer Media Group grew its digital reach during the fourth quarter to 12.1 million, with 61% of listeners reaching Bauer’s content via a digital device.

Within the Bauer Media Group, the Magic Radio Network recorded its highest ever reach attracting 3.9 million listeners, while the Absolute Radio Network grew its reach to a record 4.7 million listeners, 70% of whom listen via a digital device.

The Kiss breakfast show with Rickie, Melvin & Charlie remains the number one national commercial breakfast show for the fifth consecutive quarter, with Kisstory maintaining its position as the number one digital-only commercial station with 1.7 million listeners, up 22% year-on-year.

Wednesday, 7 February

Snap soars after surprise growth in users and revenues

Shares in Snapchat-owner Snap soared more than 25% in after-hours trading last night (6 February) after the company posted higher than expected growth in both users and revenues.

Revenue growth accelerated for the first time in three quarters, rising 72% to $285.7m in the three months ended 31 December. Snapchat has made a number of improvements to its ad offering, including the introducing of a self-service feature that accounted for 90% of impressions in the quarter and boosted the number of brands using the service and ad views.

Unique daily users were up by 18% year on year to 187 million, helped by improvements to its Android app. However, Snap still posted a net loss of $350m for the quarter as it continues to grow its team and invest in new tech.

“Our business really came together towards the end of last year and I am very proud of our team for working hard to deliver these results,” Snap cofounder and CEO Evan Spiegel said on a conference call with investors.

“We executed well on our 2017 plan to improve quality, performance and automation, which removed friction from our advertising business and improved our application for the Snapchat community.”

PepsiCo says it is not planning to launch ‘Lady Doritos’

PepsiCo says it is not planning to launch Doritos designed specifically for consumers after media speculation that a launch was imminent. The headlines were sparked by an interview CEO Indra Nooyi gave to the ‘Freakonomics Radio’ podcast, in which she claimed women do not eat Doritos in the same way men do and that the company is looking at designing and packaging snacks different for women.

She went on to say: “Yes, we are looking at it, and we’re getting ready to launch a bunch of them soon. For women, low-crunch, the full taste profile, not have so much of the flavour stick on the fingers, and how can you put it in a purse? Because women love to carry a snack in their purse.”

However, the company now says the reports were “inaccurate” and that Doritos already caters to both male and female shoppers.

“We already have Doritos for women — they’re called Doritos, and they’re enjoyed by millions of people every day,” says the company. “At the same time, we know needs and preferences continue to evolve, and we’re always looking for new ways to engage and delight our consumers.”

Ryanair escapes ad ban over ‘number one airline’ claim

Ryanair has been given the go-ahead to continue saying it is “Europe’s number one airline” in its advertising after a ruling by the ad regulator.

Some 15 complainants raised issue with the company using the claim in its TV, radio and poster advertising, questioning whether the claim was misleading because Ryanair cancelled “many of their flights” in September and October last year. However, Ryanair pointed out that the International Air Transport Association had found it was the world’s largest airline and that the cancellations had affected less than 0.5% of their 129 million customers and so they remained the biggest airlines even with the cancellations included.

The Advertising Standards Authority (ASA) agreed and said Ryanair can continue to use the statistic in its marketing. “Because the most recent available figures showed Ryanair had carried more passengers than any other European airline, we concluded that the claim ‘Europe’s number one airline’ was unlikely to mislead consumers,” says the ASA in the ruling.

Tesco faces record £4bn equal pay claim

Tesco is reportedly facing one of the UK’s largest ever equal pay claims after female shop assistants launched legal action claiming they are paid £3 an hour less than their male warehouse workers in similar roles, according to the Guardian.

The law firm Leigh Day has launched legal action on behalf of nearly 100 shop assistants but if the courts back the claimants it could affect up to 200,000 shopfloor staff, which could each be owed up to £20,000 in back pay over at least the last six years. Currently Tesco warehouse staff earn between £8.50 and £11 an hour, while store staff earn about £8 in basic pay.

The case follows similar actions against Asda and Sainsbury’s; both those cases are now working their way through the employment tribunal process. So far, Leigh Day has submitted evidence to Acas on the Tesco claim, a step before heading to tribunal

Separately, the trial of three of Tesco’s former bosses over fraud has been abandoned after one of the men on trial, former UK finance chief Carl Rogberg, suffered a serious heart attack last Thursday (1 February). The Serious Fraud Office will decide in early March whether to pursue a re-trial of Rogberg, former UK boss Chris Bush and former commercial food director John Scouler

PepsiCo signs up as a UEFA Champions League sponsor for another three years

PepsiCo has extended its sponsorship of the UEFA Champions League for a further three years after initially signing up as a partner in 2015. The deal will see six of the company’s leading brands, including Walkers, Gatorade and Pepsi Max, support the competition through to 2021.

As part of the renewed partnership, PepsiCo will put increased support behind the opening ceremony for the final, while Walkers will partner with the UEFA Foundation for Children, which aims to bring the game to children around the world by providing a safe environment and new facilities to enjoy the sport.

Ramon Laguarta, PepsiCo global president, says: “PepsiCo has a great, storied history with the game of football, which is why we’re delighted to be renewing our partnership with the UEFA Champions League. Over the past three years this has been a powerful, exciting platform, and we remain committed to bringing the best of football to millions of fans across the world.”

Tuesday, 6 February

Doritos to launch ‘lady friendly’ crisps with quieter crunch

Doritos’ parent company PepsiCo has unveiled plans to launch ‘lady-friendly’ crisps that make a quieter crunch when eaten. They’re also less messy, and come in a package small enough to fit in a woman’s handbag.

Indra Nooyi, global chief executive at PepsiCo, told Freakonomics Radio that the different sexes have different snacking behaviour, claiming that recent research revealed woman don’t like to lick their fingers or crunch loudly when eating in front of others.

However, the move has been widely criticised on social media. It is understood the company is looking to launch the new range soon, but it is unclear whether the lady-friendly crisps will be available in the UK.

Lloyds Bank to axe almost 1,000 jobs

Lloyds Bank has revealed plans to slash up to 1,000 jobs across six divisions as part of a new three-year strategic plan.

The company’s chief executive Antonio Horta-Osorio says redundancies will be somewhat counterbalanced by the eventual creation of 465 new roles across the business.

The majority of the cut-backs, about which staff were reportedly informed last month, are believed to take place across commercial banking, insurance and wealth, risk, community banking and in its information office.

Analysts believe the move has stemmed from a growing number of customers shifting to online banking.

The full plan will be unveiled on February 21 alongside the bank’s full year results.

Ex Silicon Valley employees to fight tech addiction with new campaign

Former employees of both Google and Facebook are joining forces for a new campaign designed to help fight tech addiction among young people.

The Center for Humane Technology is also working with Common Sense Media, a not-for-profit agency that promotes internet safety among youth, to launch its ‘Truth about Tech’ campaign.

It will highlight the potential dangers that come with online use while also calling for policymakers to regulate tech companies using questionable methods.

Supporters include executives from both Google and Facebook, who are among a number of tech executives who raised concerns about the impact of social media among young people.

Dozens of Homebase stores to close after ‘botched’ takeover

Homebase’s Australian owner plans to close up to 40 of its stores, putting 2,000 jobs at risk, following a “botched” takeover.

Initially Wesfarmers, which paid $340m for the chain in 2016, had planned to rebrand the stores to replicate its successful Australian-based Bunnings franchise.

However, following poor results and a drop in the share price, the Australian firm has put Homebase under review. The corporation cited an £584m impairment charge and write downs as the major contributors to its failings.

UK retail sales strengthen over January

UK retail sales strengthened over January, increasing by 0.6% on a like-for-like basis from January 2016, when they had dropped 0.6% on 2015.

Overall, sales rose 1.4% last month, against a growth of 0.1% in January 2016. This is roughly in line with the three month and 12-month averages of 1.5% and 1.6% respectively, according to BRC’s KPMG retail sales monitor.

British Retail Consortium chief executive Helen Dickinson says 2018 had a good start against a “challenging backdrop” and “during what is traditionally a lean month, with sales creeping up in-line with the year’s average.”

The sale of non-food items declined (2.9%) while the sale of food items grew (2.9%).

Monday, 5 February 2018

Netflix airs surprise Cloverfield Super Bowl ad

Netflix shocked Super Bowl viewers with an advert announcing the release of the third Cloverfield film available to stream straight after the game.

Rumoured to have cost more than $40m to make, The Cloverfield Paradox was sold to Netflix by studio Paramount which decided against plans to release the film in cinemas in April. The film follows on from 2008’s Cloverfield and 2016’s 10 Cloverfield Lane, and was produced by J.J Abrams. The shift to streaming is significant as Paramount had previously released both Cloverfield films in cinemas.

The surprise element of Netflix’s Super Bowl advert managed to steal the thunder of its streaming competitors Hulu and Amazon Prime Video, the latter which aired its first-ever Super Bowl ad promoting its adaptation of novelist Tom Clancy’s Jack Ryan books.

Lloyds Bank bans Bitcoin purchases

Lloyds Banking Group has banned its customers from buying Bitcoin on their credit cards following a sharp fall in the value of the digital currency.

According to BBC reports the ban, which starts today, applies to eight million credit card customers across Lloyds Bank, Bank of Scotland, Halifax and MBNA. These restrictions do not extend to debit card purchases.

The banking group fears that while customers are buying Bitcoin to make a profit, it will have to foot the bill for unpaid debts if the cryptocurrency’s price continues to fall. Bitcoin ended last week down 30% in value, which was its worst week since April 2013.

The move from Lloyds comes just a week after Facebook announced it would block any advertising that promotes cryptocurrency products and services.

JD.com to open first European AI research centre in the UK

JD.com is to open its first European research centre focused on artificial intelligence and big data in Cambridge during the first half of 2019.

Only the ecommerce giant’s second research centre outside its native China, the group’s founder and chief executive, Richard Liu, told the Financial Times that the cost of hiring talent specialising in AI was now lower in Europe than in the US and China.

He also confirmed plans to spend at least €1bn over two years to build JD.com’s logistics network in France, with plans to roll out to the UK and Germany in a bid to challenge Amazon in Europe by 2019.

According to the Financial Times, JD.com also plans to launch in the US in the second half of this year, as it looks to ensure 50% of the company’s profits come from outside China within 10 years.

Trinity Mirror closes in on £125m deal to buy Express

Publisher Trinity Mirror is this week poised to seal a £125m deal to buy the Express and Star newspapers, and celebrity magazine OK!, from media mogul Richard Desmond.

The talks originally collapsed three years ago over the publisher’s £406m pension deficit, although these concerns now appear to be resolved. According to the Guardian, the current editor-in-chief of the Daily and Sunday Mirror, Alison Phillips, is expected to take over as editor of the Express.

Desmond will retain a minority stake in Trinity Mirror. He began his publishing career in 1974 at the age of 23, before going on to launch OK! magazine in 1993 and later purchase the Express Newspapers for £125m in 2000.

GSK on track for record sales

GlaxoSmithKline (GSK) is expected to post record sales of over £30bn for the first time, as chief executive Emma Walmsley’s first set of full-year results are released this week. This is an 8% rise on the previous year.

She is expected to reinforce her main strategy to refine the firm’s medicines pipeline by focusing investment on only those with the greatest commercial potential.

A former marketer, Walmsley became the most powerful woman in British business after being appointed CEO of the pharmaceutical company in March 2017, taking over from Andrew Witty who had held the position since 2008.

Prior to joining GSK in 2010, Walmsley worked at L’Oreal for 17 years across a variety of marketing and general management roles in Paris, London and New York.