Kraft Heinz, Disney, Deliveroo: 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.

Kraft Heinz promises brand investment after disappointing results

Kraft Heinz is promising more investment in its brands after a disappointing set of results.

The FMCG reported fourth quarter sales that fell 5%, prompting shares in Kraft Heinz to decline by 8%. The stock is now down nearly 40% in the past year and almost 70% in the past three years.

Kraft Heinz (KHC) has faced many challenges in the past few years, including accounting issues and a slide in sales and earnings as people try to eat fewer processed foods and embrace plant-based products. This quarter, the company noted volatile pork prices as another issue.

CEO Miguel Patricio, who was recruited last year to stabilise the company, says: “Our turnaround will take time, but we expect to make significant progress in 2020.”

He adds: “We will be making necessary investments in our brands based on deep consumer insights.”

Oliver Dowden named culture secretary after cabinet reshuffle

Oliver Dowden has been appointed secretary of state for the Department of Digital, Dulture, Media and Sport, in the first major reshuffle since December’s general election.

Dowden was an aide to David Cameron before becoming an MP in 2015 and campaigned for the UK to remain within the EU. He joins the cabinet in place of Nicky Morgan and is the ninth culture secretary in the past 10 years.

Advertising Association CEO Stephen Woodward, says: “We welcome the appointment of Oliver Dowden MP as secretary of state for Digital, Culture, Media & Sport and look forward to working closely with him and the team at DCMS to advance the position of advertising as a jewel in the crown of the UK’s £110bn creative industries sector.”

UEFA teams up with Disney in a bid to boost girls in sport

UEFA has teamed up with Disney to launch a pan-European project aimed at increasing the number of girls playing football.

The biggest-ever attempt to boost girls’ involvement in the game will start this March in seven European countries, with the aim of being in every country on the continent by the end of 2021.

The new ‘Playmakers’ project is aimed at girls aged five to eight years old, who are not currently playing football, and is focused around play and games involving popular Disney characters and storylines.

The first stage of the project will be based around the Incredibles 2 film and characters but as as Playmakers rolls out across Europe, new Disney storytelling will be added to the programme.

In its early sessions, Playmakers focuses on building girls’ confidence in their movement, encouraging creative thinking and communicating easily with their friends. Later sessions introduce girls to basic football skills, but the programme continues to put the emphasis on making sport fun.

UEFA examined research which showed that globally 84% of girls under the age of 17 are not meeting the World Health Organization minimum activity guidelines. Girls aged between 15 and 24 are half as likely to participate in sport as boys the same age, according to studies by the European Commission for Education, Sport, Youth and Culture.

UEFA Head of Women’s Football, Nadine Kessler, says: “We want girls to have the same feeling and be encouraged to create their own game and make their own decisions. This is exactly what this programme is about – creating an environment for all girls to flourish and develop, whether that be fundamental movement skills, football basics or life skills and values.

“We truly believe that this unique programme can be the spark for a more active generation of football-loving girls.”

Pot Noodle partners with Deliveroo for Valentines Day campaign

Pot Noodle is partnering with Deliveroo for Valentines Day to help time-starved consumers.

Send Noods will allow mates, dates and lovers to send noodles to those they care about on the Deliveroo app for one day only.

The launch comes after research from Pot Noodle revealed that nearly a quarter (22.4%) of young people are more likely to consider sending a nude to their Valentine than purchasing a gift due to a lack of time. Pot Noodle is hoping to show that romance doesn’t have to equate to an expensive gift or hours spent slaving away over the stove.

Pot Noodle marketing manager, Lena Portchmouth, says: “This year we’re encouraging our fans to send noods, not nudes. With our Pot Noodle delivery service, we’re certain that lack of time or money won’t be a barrier in providing the forkin’ best package out there this Valentine’s Day. After all, what’s more romantic than a Pot Noodle?”

The special edition kits will cost £1.00 and be available across Leeds and London.

Coronation Street seeks three-year sponsor

ITV is on the hunt for a new sponsor for Coronation Street after its eight-year partnership with Comparethemarket.com ended in November.

The UK price comparison website is only the third sponsor in the soap’s history. The TV show is now looking to create a new on and off air sponsorship package to coincide with its 60th anniversary at the end of this year.

ITV’s deputing managing director for commercial, Simon Daglish, says: “Comparethemarket.com/Corrie has been one of the UK’s longest running and most successful partnerships and I would personally like to say a huge thank you to all at Compare the Market for taking a big idea and turning it into an iconic partnership. But, like all good things it has to come to an end.

“As we approach the 60th birthday of a British institution we are looking for an ambitious brand to connect with the cultural phenomena that is Coronation Street.”

Thursday, 13 February

WhatsApp reaches 2 billion user landmark

WhatsApp says the Facebook-owned messaging service now has 2 billion users.

Half a billion users shy of Facebook, the figure means that more than a quarter of the world’s population uses the app.

In a blog post, the company reiterates its commitment to keeping the service private with end-to-end encryption despite successive governments around the world expressing concern that it provides a safe communication platform for terrorists.

“Private conversations that once were only possible face-to-face can now take place across great distances through instant chats and video calling,” the blog reads.

“There are so many significant and special moments that take place over WhatsApp and we are humbled and honoured to reach this milestone.

“We know that the more we connect, the more we have to protect. As we conduct more of our lives online, protecting our conversations is more important than ever.

“That is why every private message sent using WhatsApp is secured with end-to-end encryption by default.”

Retailers call for rates reform

Marks & Spencer, Superdrug, Morrisons, Debenhams, Boots and Greggs are among some of the high street’s biggest names are calling on the government to reform business rates.

More than 50 retailers have signed a letter to a letter to chancellor Sajid Javid, with the backing of the British Retail Consortium (BRC).

The letter asks the chancellor to lower “unsustainable” business rates and to allow retailers to appeal against costs.

“Every year, retail faces higher and higher business rates bills, holding back much needed investment in an industry that is transforming at a dramatic pace,” says BRC CEO Helen Lewis.

“Swift action at the upcoming Budget would show the chancellor was serious about levelling up all parts of the UK and supporting a retail industry towards realising a brighter future.”

Ad industry in favour of Ofcom’s social media regulation powers

The ad industry has reacted favourably to the news that the government is to give Ofcom new powers to force social media platforms to remove or regulate harmful and unacceptable posts.

IPA director general Paul Bainsfair says: “We clearly support the protection of individuals from online harms. Simultaneously we support protecting advertisers from appearing adjacent to, and inadvertently financially supporting, harmful content.

“We therefore support any regulation that helps to alleviate such instances for all.

“Furthermore, we support equivalent regulation for the online arena as exists for offline media. Extending Ofcom’s remit should deliver this.”

ISBA director general Phil Smith adds: “The online harms consultation came about because of issues which are critically important to our society.

“From tackling terrorist content to protecting young people from abuse and material that threatens their mental health, we have worked with our members and with technology companies to improve their response and build trust.

“It is absolutely right that government is taking further action, and there is much to welcome in this initial consultation response.

“We are pleased that ministers recognise the importance of freedom of expression and the need to maintain a vibrant public square.

“This is essential if we are to continue to back enterprise and support the advertising sector, which is the engine of our successful, exporting creative industries.”

Chartered Institute of Marketing CEO Chris Daly says: “The announcement is good news for the marketing industry; it’s important that this critical role is handed to an established and credible body such as Ofcom.

“Digital channels have completely changed the way the marketing sector operates as the use of social media has grown.

“Ofcom’s new powers will give businesses greater confidence that they can invest in social media marketing without inadvertently supporting platforms where users are at risk.”

BP targets becoming net carbon zero by 2050

New BP CEO Bernard Looney wants the multinational to be at the forefront of a new global energy system that will face up to the challenge of climate change.

“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero,” Looney says.

“We all want energy that is reliable and affordable, but that is no longer enough. It must also be cleaner.

“To deliver that, trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system. It will require nothing short of reimagining energy as we know it.”

The aim is to reach a net carbon zero figure within 30 years, but that target would not include eliminating the intensity of the carbon emissions in the products it sells.

McDonald’s brings Big Mac Special Sauce to the UK

Fans of Big Mac Special Sauce will be able to buy it in the UK for the first time as McDonald’s puts it on sale in 50ml pot for six weeks.

It is the first time the sauce has been made available to customers, with the dipping pots for sale in limited numbers for 50p each.

Ingredients for the Big Mac sauce have always been kept secret and will remain so, but McDonald’s is encouraging buyers to use it as part of their home cooking.

McDonald’s vice-president of food and marketing in the UK & Ireland, Michelle Graham-Clare, says: “We are delighted to finally bring these dipping pots to the UK and Ireland.

“We are looking forward to seeing the imaginative ways our customers attempt to ‘Mac It Better’ in kitchens across the UK, by adding our iconic Special Sauce to their breakfast, lunch and dinner.”

Wednesday, 12 February

Ofcom becomes UK’s first internet watchdog

Ofcom’s regulatory powers are expanding to internet platforms, meaning the broadcasting regulator will be responsible for holding tech companies in the UK to account for the first time.

The culture secretary Nicky Morgan is making the change as part of the government’s response to a public consultation on online safety measures.

Ofcom’s remit will now include judging whether tech firms that host user-generated content, such as Facebook and YouTube, have breached a legal “duty of care” by exposing users to illegal and harmful content. It will also have the power to fine or prosecute the companies it believes have broken the rules.

“There are many platforms which ideally would not have wanted regulation, but I think that’s changing,” says Morgan. “I think they understand now that actually regulation is coming.”

Twitter, Snapchat and TikTok will also now fall under Ofcom’s remit.

Facebook could be forced to give up WhatsApp

Facebook, Amazon, Apple, Microsoft and Google’s parent company Alphabet are being investigated by the US regulator for “problematic” deals that go back a decade.

The Federal Trade Commission (FTC) is looking into whether these companies harmed competition by buying up smaller rivals. The investigation includes Facebook’s acquisition of WhatsApp, Apple’s acquisition of Beats and Amazon’s acquisition of Diapers.com.

“If, during this study, we see that there are transactions that were problematic, it is conceivable we could go back and initiate enforcement actions to deal with those transactions,” says FTC chair Joseph Simons.

This means the tech giants in question could be forced to undo these deals or break off parts of their business. The FTC says it hopes to move quickly with its latest suite of investigations.

Snapchat unveils mental health support feature and series

Snapchat is launching a new feature called Here For You that will provide in-app support to users who may be experiencing a mental health or emotional crisis, or who may be curious to lean more about these issues and how they can help friends who are dealing with them.

Set to roll out in the coming months, the feature will show safety resources from specialist localised partners when users search for certain topics such as those related to anxiety, depression, stress, suicidal thoughts, grief and bullying.

Snapchat will also be debuting a new Snap Original called ‘Mind Yourself’ that will focus on young people suffering or recovering from a mental health issue, including OCD, body dysmorphia and PTSD.

“All of this reflects the responsibility we feel to help make a positive impact on the lives of the people who use our platform,” Snap says. “Studies show that interacting with friends, whether in person or online, leaves us feeling overwhelmingly positive emotions.”

Virgin Money signs music sponsorship deals

Virgin Money has partnered with The O2 in London and the SSE Hydro in Glasgow as part of efforts to reposition the brand in the UK and reward customers better.

Supported by a ‘Brighter Music Moments’ campaign, the sponsorship will see Virgin Money offer customers a variety of unique experiences, events and music content. Flagship Virgin Money stores will also be ‘bank by day, music venue by night’, including co-working spaces, events throughout the year and content-creation studios.

“Music is the soundtrack to our lives, and we want our customers to feel truly rewarded by their bank and experience something that only Virgin Money can offer in an authentic way,” says Virgin Money’s marketing director, Helen Page.

“This is the beginning of a journey we’re on to tap into the Virgin DNA, going back to our roots, but in a way that is befitting of the new decade. We hope to redefine the role of sponsorship to drive a much deeper customer experience.”

Spotify launches app for children

Spotify has beta launched an ad-free app for children, Spotify Kids, which the music streaming giant promises has been designed with privacy and safety top of mind.

Featuring singalongs, soundtracks and stories, all content has been handpicked by Spotify’s editors to ensure it is appropriate for children, while parental controls will allow parents to choose between the ‘audio for younger kids’ or ‘audio for older kids’ experience.

The UK launch also includes new artists selected especially for their “resonance with British youngsters”, including CBeebies, Little Mix, Rastamouse, George Ezra, Hey Duggee, McFly, Adele, Craig David, Calvin Harris, Spice Girls, Take That and Busted.

The app is exclusive to Spotify Premium Family subscribers, at no extra cost, and intended for children over the age of three.

Spotify says it will expand the app experience over time as it continues to incorporate best practises and learnings, including insights from parents, caregivers and other experts.

Tuesday, 11 February

Harry’s $1.4bn takeover falls through

The proposed $1.4bn (£1.1bn) acquisition of direct-to-consumer razor brand Harry’s has fallen through amid concerns the deal would harm customers.

Wilkinson Sword owner Edgewell Personal Care was told by the US Federal Trade Commision (FTC) that the acquisition will cause “uncertainty” and could harm competition and hurt consumers. The FTC had said earlier this month it would fight any proposed deal with a lawsuit.

Edgewell CEO Rod Little says his company disagrees with the FTC’s position but does not have the resources to fight the lawsuit, adding that proceeding with a “standalone strategy” was now the best course of action.

Founded in 2013, Harry’s began selling razors to consumers online before branching out into face washes and female-focused products. In 2016, rival Dollar Shave Club was acquired by Unilever for $1bn (£774m). Both direct-to-consumer brands have since claimed a growing share of the shaving market, putting pressure on established names such as Gillette and Wilkinson Sword.

William Hill ramps up US expansion with major TV deal

William Hill has struck a deal with US TV network CBS to become the exclusive provider of betting odds across the network’s channels, websites and fantasy football platform from March.

In a sign of the bookmaker’s push into the US market, William Hill will have exclusive media, branding and promotional rights across CBS’s digital sports platforms. Chief executive Ulrik Bengtsson describes it as a “major step forward” in the brand’s US expansion.

The US sports betting market has opened up since the Supreme Court repealed an act banning betting activity in May 2018. William Hill’s rivals have been quick to capitalise on opportunities stateside. Ladbrokes Coral owner GVC signed a partnership with Yahoo Sports in October, while Flutter Entertainment – parent company of Paddy Power Betfair – now has access to Fox Sports via its £10bn acquisition of betting brand Stars Group in October.

Betting brands are continuing to look outside the UK market as tighter restrictions have come into force, most notably the government’s decision to cut the maximum stake per spin on fixed odds betting terminals from £100 to £2.

Ocado ups marketing spend amid £214.5m loss

Ocado has posted a £214.5m loss before tax in the year to 1 December after the fire at its Andover warehouse in February 2019 took its toll.

Marketing costs, excluding voucher spend, rose from £13.9m in 2018 to £21.2m due to increases in online acquisition following the disruption caused by the warehouse fire and the trial of an offline media campaign.

Retail revenue did, however, rise by 10.3% to £1.6bn during the period, making Ocado the UK’s fastest growing grocer.

Preparations for the September switch from Waitrose to M&S products are now reportedly “well underway”.

Following a range review, Ocado is confident that M&S has substitutes at the same price or lower, and of the same quality or better, for the majority of those currently supplied by Waitrose, which represent 4,000 products out of the total range of 58,000. This will be the first time M&S food is available to buy online.

Nike on track to reach 100% renewable energy by 2025

Nike is on track to meet its goal of using 100% renewable energy in its owned or operated facilities globally by 2025, according to its 2019 impact report. Across North America the company is currently powering its owned or operated facilities with 100% renewable energy.

The sportswear giant says 76% of its branded footwear and apparel use some recycled material and it has recycled 7.5 billion plastic bottles into footwear and apparel over the past decade. The company also claims that by shifting to sustainable cotton it has saved 53.5 billion litres of water.

The impact report also reveals that the sportswear brand has eliminated single use plastic bottles from its headquarters globally and in most key cities such as London, Los Angeles and New York.

CEO John Donahoe points to the impact the climate crisis is having on athletes, which is compelling Nike to “swiftly evolve” its business.

“If there is no planet, there is no sport. It is this understanding that drives the urgency of our commitment to sustainability and impact,” he adds.

Aside from the environmental achievements, Nike has increased the representation of women at vice-president level globally to 39%, up by three percentage points from 2018. In the US, it has increased vice-president level representation among “underrepresented groups” to 21%, up by two percentage points.

Some 50% of Nike’s global employees have also undertaken unconscious bias awareness training, according to the impact report, and more than 1,000 members of staff have taken part in the pilot for a mentoring programme designed to “advance career and culture”.

Vodafone promotes 5G benefits in new Channel 4 series

Vodafone has partnered with Channel 4 on a three-part TV series that aims to bring to life the technological potential of 5G.

The series, called Rough Guide to the Future, is the first advertiser-funded programme from Vodafone to air on terrestrial television. The first episode will launch on Channel 4 on 12 February at 9pm.

Vodafone describes the UK roll-out of 5G as “the biggest technology evolution since the emergence of the smart phone” but says many consumers “currently perceive its key benefit as just significantly faster download speeds”.

The series, fronted by Grand Designs presenter Kevin McCloud, aims to show the wider potential for businesses and the public to live and work better through 5G-powered technology.

Developed and project managed by Wavemaker Content, the series will be amplified by social media content, digital activations and traditional TV advertising.

“We want the public to know that our investment in 5G, which sees us offer it in more places than any other network and at no extra cost, is about so much more than lightning-fast download speeds,” says Vodafone UK’s consumer director Max Taylor.

“It is about connecting us for a better future. This new series brings to life the huge possibilities that 5G can unlock in areas as diverse as robotics, sustainability, and communication. I hope it will inspire the nation as to the potential of 5G.”

Staff call on British Museum to end BP sponsorship

Employees at the British Museum are calling on the institution to end its sponsorship deal with oil giant BP following protests over the weekend.

The Guardian reports that members of the PCS union’s culture group said the museum had a duty to recognise the climate crisis and cut ties with fossil fuel backers like BP.

In a statement the union says: “As a public institution, the British Museum owes it to its staff, its visitors and its future to play a responsible role in the greatest challenge facing society. It is not true that we cannot afford to refuse BP’s oil money. In fact, we cannot afford to accept it.”

In response to the exhibition Troy: Myth and Reality, which is “supported by BP”, protesters positioned a four-metre high Trojan horse on the museum’s forecourt. They also occupied 11 rooms in the museum, conducting speeches and singalongs, and scattered origami swans inscribed with the message: ‘Choose sponsors who care about our future’.

The British Museum is being urged to follow in the footsteps of the Royal Shakespeare Company, which in October terminated its eight-year partnership with BP, and the National Theatre, which ended its association with Shell the same month.

Monday, 10 February

John Lewis warns over potential store closures

The new chairman of the John Lewis Partnerships has warned it may have to close John Lewis stores and cut jobs as part of plans to improve the finances at the department store chain following a difficult year.

Sharon White told the company’s staff council that it faced “difficult decisions about stores and jobs” during the “most challenging period” since it was founded in the 1920s, according to a report in The Guardian. Profits at the company collapsed last year and it has warned staff may miss out on their bonus.

However, she said JLP, which also runs Waitrose, will show “humanity” to staff affected. It operates 50 John Lewis and 338 Waitrose stores.

Google accused of competition abuse in holiday rental market

Google has been accused of unfairly promoting its holiday rental search service over rivals’ by more than 30 competitors in an official complaint by one of them to the European Commission.

A letter has been sent to EU competition commissioner Margrethe Vestager signed by 34 companies including Expedia, TripAdvisor and eDreams. The letter, which has been seen by the Financial Times accuses Google of harming competitions by increasing the prominence of its holiday rental search box.

“We see strong indications of a competitive strategy for Google to reduce us and our industry to mere content providers for the ‘one-stop-shop’ of Google’s new product,” the letter says.

The websites claim Google features its new holiday rental service in a visually-rich ‘OneBox’ at the top of its general search results pages. That position “secures Google’s service more user attention and clicks” than competing services even if these are more relevant, the letter continues.

Women hold third of board roles at FTSE 100 companies

Women hold a third of board positions at the UK’s biggest public companies, hitting the government’s target a year sooner than expected.

The latest report from the Hampton-Alexander Review found 349 women sitting on the boards of FTSE 100 companies. However, businesses are struggling to achieve the second target of having 33% of women in the leadership teams of firms listed on the FTSE 100 and 250.

To achieve this, half of all roles will need to go to women this year. The review also highlight the lack of women in specific roles, with women making up just 15% of finance directors but 66% of human resource directors.

The government has hailed the fact businesses managed to achieve the one in three target voluntarily without the need for legislation or fines. However, it is clear more still needs to be done to get gender equality in business.

“The Hampton-Alexander Review has done fantastic work but it’s clear that women continue to face barriers to success, whether that’s through promotion to key roles or how they are treated by colleagues,” says business secretary Andrea Leadsom.

According to Marketing Week’s Career and Salary Survey, women hold just 30.2% of senior marketing roles but 61% of all marketing roles.

M&S rolls out mobile pay and go technology

Marks & Spencer is rolling out its Mobile Pay Go to 50 stores following a trial at six shops.

The 50 stores, 49 of which are in London, allow shoppers to make purchases without having to go to a check-out. M&S claims purchases can be made in less than 40 seconds and that during the trial a Mobile Pay Go transaction took place every three seconds over lunchtime, reducing queue times and allowing staff to work in other areas of the store.

M&S may introduce the technology to other stores as well as it looks to use digital tech to improve the customer experience in-stores.

M&S’s director of retail, operations and property, Sacha Berendji, says: “M&S is changing to become a digital first retailer with industry-leading store operations – and Mobile Pay Go is a really exciting part of that.

“The roll-out means more of our customers will be able to benefit from this popular technology and enjoy a seamless shopping experience – which we know is especially important at lunchtime.”

January retail sales growth rises to six-year high

Retail sales experienced their biggest increase in six years in January as the result of the general election and discounting encourages consumers to spend.

Sales were up 5.7% last month, according to accountancy firm BDO’s high street sales tracker, the biggest annual rise since January 2014.

There were gains across all sectors. However, BDO has warned the strong growth may not last as stock levels suggest discounting is driving growth.

“This may be a false dawn in terms of a high street recovery,” says BDO’s national head of retail and wholesale Sophie Michael.

“February will show whether consumer confidence has got a toehold in some kind of recovery for retail.”