Apple, Nike, brand packaging: 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.

CIM research warns brands over packaging

Brands face considerable reputational damage if they fail to promote sustainable packaging, according to new research from the Chartered Institute of Marketing (CIM).

Some 70% of consumers believe that companies use too much packaging when delivering or selling products, with Amazon and eBay named among the worst offenders.

Supermarkets too come in for criticism, with a sixth of consumers saying that too much plastic is being used to package food. Eight out of 10 consumers would like to see more done by large companies to promote sustainable packaging.

CIM CEO Chris Daly says greener purchasing decisions are increasingly dictating consumer behaviour: “The study shows how consumers don’t want or require the excess packaging which comes with products – both online and in store.

“With the conversation about sustainability evolving every day, marketers must recognise that packaging is an area that could make or break a consumer purchasing decision.

“The fact that some respondents have even decided to not purchase from certain brands due to over-elaborate packaging shows a real shift in consumer behaviour.”

More than a quarter of respondents would be willing to spend more on a product if they knew the boxes, paper and envelopes used were sustainable.

Apple TV reportedly looking to sport to improve content offer

Apple has reportedly held meetings with MGM to discuss a potential buyout of the media company and film studio, which has a portfolio that includes the James Bond films.

The move is seen as a quick, though possibly expensive, way to beef up content on the company’s burgeoning Apple TV streaming service.

According to the story in the Wall Street Journal, they have also met with members of the Pac-12 American college football conference about streaming live games, signalling a first move into sports coverage for the tech giant.

Apple TV launched in the US and UK last month, with a limited amount of content initially available.

Bond films and sport might suggest a rather male-orientated focus, but certainly if the latter starts to prove successful, it could have major repercussions in an already crowded sport streaming market.

Nike reports record quarter

Nike has reported earnings and sales beyond analysts’ expectations, with the company’s Jordan brand enjoying it’s first ever $1bn (£765m) quarter.

However, shares fell by 2%, with growth in the company’s native US territories slower than hoped.

Digital sales, a primary focus of the sportswear giant over the past year, were up by 38%, with online sales going up by 70% in the US on Black Friday.

Outgoing CEO Mark Parker says he has “never been more optimistic about the future of this company”.

Parker will be replaced next month by John Donahoe, formerly the CEO of eBay, as the company looks to build further on its direct-to-consumer, digital-based success.

Amazon to open fulfilment centre in north-east England

Amazon is to open a fulfilment centre in Darlington, with the potential for 1,000 new jobs.

It will be the 22nd such centre in the UK, but the first in north-east England, adding to a smaller delivery station in Washington, near Sunderland.

Criticised in the past for poor working conditions and wages, Amazon says staff at the centre will receive a salary starting at £9.50 an hour with a benefits package and career progression opportunities.

The online retailer currently employs some 30,000 people in the UK.

Thursday, 19 December

UK regulator poised to curb the power of Facebook and Google

The Competition and Markets Authority (CMA) is exploring how regulation could curb the power of Facebook and Google amid fears the duopoly is harming competition in digital advertising.

The CMA is proposing the development of a “new regulatory regime” that could include rules governing the behaviour of online platforms aimed at giving people greater control over their data.

The regulator is proposing potential measures to “open up the search market”, such as limiting Google’s ability to be the default search engine on devices and browsers. It is also considering measures to ensure Facebook connects more seamlessly with rival social networking sites, as well as requiring platforms to allow people to turn off personalised advertising.

In July, the regulator launched a review into how major online platforms like Google and Facebook operate. It found that in the UK people spend an average of 3 hours and 15 minutes online each day, more than a third of which is spent on sites owned by either Google (including YouTube) or Facebook (including Instagram and WhatsApp).

The CMA investigation revealed that in 2018 Google accounted for more than 90% of all revenues earned from search advertising in the UK, with revenues of around £6bn, while Facebook accounted for almost half of all display advertising revenues in the UK, reaching more than £2bn.

The regulator says it is concerned the position of the digital giants may have become “entrenched with negative consequences for the people and businesses who use these services every day”. It added that the lack of real competition to Google and Facebook could mean people are already missing out on “the next great new idea from a potential rival” and could mean a lack of proper choice for consumers, as well as higher prices for advertisers.

“The market position of Google and Facebook may potentially be undermining the ability of newspapers and other publishers to produce valuable content as their share of revenues is squeezed by large platforms,” the CMA added.

ISBA director general, Phil Smith, welcomed the findings: “The report examines the case for a full market investigation, ISBA has been clear it would support such a case. More needs to be done to increase digital advertising transparency and ensure consumers have greater control over their data.

“Furthermore, certainty needs to be brought to the regulatory structures that surround social media platforms.”

Uber pays out $4.4m to settle gender discrimination lawsuit

Uber is to pay out $4.4m (£3.4m) to settle claims of gender discrimination following allegations of a toxic workplace culture first publicised in 2017.

Following an “extensive investigation” the US Equal Employment Opportunity Commission said it had “found reasonable cause to believe that Uber permitted a culture of sexual harassment and retaliation against individuals who complained about such harassment.”

The $4.4m will be used to compensate anyone who the commission finds experienced sexual harassment and/or related retaliation after 1 January 2014. Current or former employees from 2014 to mid-2019 are still eligible to make a claim.

The Financial Times reports that Uber has also agreed to update its internal policies and be monitored for three years by former US Equal Employment Opportunity Commission commissioner, Fred Alvarez.

Uber’s head of legal, Tony West, said the company has worked hard to inculcate a culture of “fairness and accountability.”

Children’s exposure to HFSS ads on TV halves

Children’s exposure to TV advertising for food and soft drinks has halved, falling from an average of 35.5 ads per week in 2008 to 17.8 ads per week in 2018.

Research from the Advertising Standards Authority (ASA) into children’s exposure to ads for alcohol, gambling, and food and soft drink products high in fat, salt or sugar (HFSS), found that kids saw 12.4 ads for HFSS products per week in 2016, falling to eight in 2018. That means children now see fewer TV ads for HFSS products than they do non-HFSS ads.

The number of gambling ads seen by children on TV fell to 3.2 per week in 2018 from a peak of 4.4 in 2013, making up 2.2% of all the TV ads children saw last year. Children’s exposure to gambling ads (relative to adults’) has fallen year on year from 38.6% in 2008 to 20.4% in 2018. Children saw an average of one gambling ad on TV for every five seen by adults in 2018.

The number of alcohol ads seen by children remains at a similar level to the past three years – 1.1 ad per week in 2018.

Overall, children’s exposure to all TV ads has decreased by 38.1%, from a peak of 229.3 ads per week in 2013, to a low of 141.9 ads in 2018. Children’s total TV ad exposure (relative to adults’) has fallen from a peak of 63.9% in 2008 to 40.5% in 2018. Last year children saw, on average, two ads for every five ads seen by adults.

The ASA argues that even taking into account children’s reduced engagement with TV, exposure to ads for alcohol and HFSS products has still fallen disproportionately further.

“Our priority is to ensure children are protected and we’re pleased that there’s a clear reduction in children’s exposure to TV ads for HFSS products and consistently low alcohol ad exposure levels,” says ASA chief executive, Guy Parker.

“We’ve also policed the rules online through our proactive monitoring work, which uses technology to find out which ads children are seeing, followed by swift action against online advertisers who have broken the rules.”

British Airways plummets down airline rankings for customer satisfaction

British Airways (BA) has fallen out of favour with passengers and tumbled to near bottom of the airline rankings for customer satisfaction.

According to the annual Which? poll, BA was rated worst for food, seat comfort and value for money on both short and long-haul services.

The survey of 6,500 Which? readers’ opinions found that in the short-haul category BA just came ahead of Vueling and Ryanair, which was again last on the list. While in 2015 British Airways topped the short-haul category in the Which? survey, a combination of IT failures, data breaches and mass cancellations have severely damaged the brand.

In the long-haul category, only American Airlines fared worse than BA.

A spokesman for the airline claims BA’s own data shows customer satisfaction scores have increased and “continue to increase” amid a £6.5bn investment in new aircraft, food, lounges and technology.

Ryanair did not responded to The Guardian’s requests for comment, but has previously described the Which? survey as “totally unrepresentative and worthless”. The airline came out bottom in all categories, apart from value for money.

Patagonia customers raise $10m for environmental organisations

Patagonia customers have donated $10m (£7.6m) to 1,043 grassroots environmental organisations in the space of just 17 days.

On Black Friday, the ethical clothing company committed to match individual donations made via its Patagonia Action Works platform (between 29 November and 31 December) to a $10m figure, which has now been reached. This means that the grassroots organisations are set for a $20m (£15.2m) windfall.

Launched in September, the Patagonia Action Works platform is designed to connect individuals with local grassroots organisations. There are currently more than 100 environmental NGOs on the platform, working in the areas of biodiversity, climate, communities, land and water. Almost all of the NGOs received at least one donation, with the most successful group receiving more than €70,000 (£59,400).

“The enthusiasm of our community to donate in their thousands, in support of environmental protectors, is something we never anticipated,” says Patagonia’s director of environmental initiatives for Europe, Mihela Hladin Wolfe.

“In Europe, this means we can more than double the money that we will be giving to grassroots NGOs in 2020. To face the crisis ahead we will need vigorous collective action – something that this campaign has demonstrated in spades.”

Wednesday, 18 December

Fiat Chrysler and Vauxhall-owner merge in £38bn deal

Fiat Chrysler and Vauxhaull-owner PSA are merging to create the world’s fourth largest carmaker.

The car deal between the two rivals has been on the cards for some time and will create a business with a combined market value of £38.1bn.

The companies, which said they were yet to agree a name for the new entity, confirmed the deal would involve no plant closures despite £3.1bn in annual savings being targeted.

Both companies say the savings achieved by the tie-up, through shared investments in technology, would be invested in “the new era of sustainable mobility’’. The sector is currently in a period of transformation as brands develop electric vehicles and self-driving systems, while exploring what car ownership looks like in the future.

Fiat Chrysler and PSA said the new group will be led by the French firm’s chief executive, Carlo Tavares, with Fiat Chrysler’s chairman John Elkann as chairman.

Both parties expect the transaction to complete within 12 to 15 months, subject to shareholder approval and regulatory clearances.

ASA cracks down on e-cigarette ads

The Advertising Standards Authority (ASA) has banned four separate e-cigarette companies from promoting their products on Instagram.

The advertising watchdog doesn’t allow the advertising of unlicensed, nicotine-containing e-cigarettes, however companies are allowed to put factual information about their products on their own websites. Its also states that any promotions should not show people “who are, or seem to be, under 25” using e-cigarettes or playing a significant role.

British American Tobacco (BAT) is among those to have received a warning and an ad ban for selling e-cigarettes and using influencers who appeared under the age of 25. BAT argued its Vype Instagram account was equivalent to a company-owned site.

The ASA rejected this claim, adding that BAT’s celebrity-driven ads “clearly went beyond the provision of factual information and was promotional in nature”.

Mylo Vape, Ama Vape Lab and Attitude Vapes were also all subjected to ad bans.

The ruling followed complaints from Action on Smoking and Health, Campaign for Tobacco-Free Kids and Stop (Stopping Tobacco Organisations and Products) that Instagram posts from BAT, Ama Vape Lab, Attitude Vapes and Mylo Vapes broke advertising rules.

Whirlpool recalls nearly half a million washing machines

Whirlpool is recalling nearly half a million washing machines over safety fears.

The machines, branded as Hotpoint or Indesit, have a door locking system that can overheat creating the risk of fire.

The machines involved were on sale for more than five years (between 2014 and 2018) with up to 519,000 washing machines believed to be affected – about 20% of the total number sold.

This is not the first time Whirlpool has faced safety issues. Early this year more than 5 million tumble dryers, sold over 11 years, were found to be a fire danger. Months later it emerged that thousands of affected appliances were still in people’s homes.

The latest recall should officially begin in early January and all affected customers will be able to claim a free replacement or free in-home repair, the company has said.

Betting association launches safer gambling campaign

The Betting and Gaming Council (BGC), the trade association for the UK gambling industry, is launching a campaign to promote safer gambling over the festive period.

‘Limits are Good’ shows a series of short digital films and associated content, each featuring a humorous but thought-provoking social situation where having limits is a good thing. These include a woman who celebrates a football win too much and a man who fills a room with bubbles in his bath.

The campaign, which will run across digital and some retail sites, is targeting men aged between 18-34, with the aim of encouraging them to set deposit limits and not overindulge on betting at Christmas.

BGC chairman Brigid Simmonds says: “We set limits on what we do every day and betting and gaming should be no different. Over the festive period with so many important sporting events, if people wish to have a bet it’s important not to lose track of how long you spend or the amount you have staked.”

Pandora appoints new CMO to drive brand transformation

Premium jewellery brand Pandora is appointing a new chief marketing officer to drive transformation.

Carla Liuni, Bulgari’s former vice president of global marketing and communication, will join the brand in March 2020.

Pandora CEO Alexander Lacik says: “As part of our turnaround programme, we are significantly stepping up our marketing investments and have just relaunched our brand to improve relevance for consumers.

“Carla has a unique profile which combines mass market brand building with the ability to create the aspirational and desirable worlds of luxury goods. She is a passionate and energetic leader and I am very happy she will take this critical role in our leadership team.”

During the past four years Liuni has been responsible for marketing at the flagship jewellery brand of luxury group LVMH. Before joining Bulgari in 2015, she spent almost 20 years at Procter & Gamble, where she was general manager for the prestige division, which included fragrance, makeup and skincare brands such as Dolce & Gabbana, Gucci and Hugo Boss.

Liuni adds: “The company is now on an incredibly exciting transformation journey to drive brand relevance as the centrepiece of its turnaround, and I look forward to joining the team and contributing.”

Tuesday, 17 December

Unilever says growth remains ‘top priority’ as it issues warning

Unilever has warned that its underlying sales growth for 2019 will be below its guidance of the lower half of its 3% to 5% range.

The miss comes amid an economic slowdown in South Asia and difficult trading conditions in West Africa. Trading environments in developed markets also remain “challenging”, with a full recovery in North America expected to take more time.

Despite the hit to growth, earnings, margins and cash are not expected to be impacted.

Unilever CEO Alan Jope says: “Due to challenges in certain markets, we expect a slight miss to our full year underlying sales growth delivery.

“Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance.”

Nicky Morgan to stay on as culture secretary

Nicky Morgan is to stay on as culture secretary despite standing down as an MP. Morgan will become a peer in the House of Lords and retain her role as head of culture, media, sport and digital.

However, the move is unlikely to be a long-term one, with Morgan saying she has agreed to remain in post until a full cabinet reshuffle, expected after the UK leaves the EU at the end of January. The Department for Culture, Media and Sport has had eight culture secretaries over the past nine years.

Key challenges for Morgan include issues around data, advertising regulation – particularly in areas such as gambling and junk food – and regulation of digital platforms.

Retailers offer big discounts in run-up to Christmas

Retailers are offering big discounts in the run-up to Christmas as they bid to attract customers amid weak consumer spending, strong competition and relatively mild weather.

Advisory firm Deloitte estimates that average price cuts could top 50% by Christmas Eve. Discounts of up to 50% are available at Debenhams, Oasis and Hobbs, while Topshop, Marks & Spencer and Ted Baker are offering 40% and House of Fraser 30%.

The discounting is not exclusive to the high street either, with Boohoo offering up to 80% off, 70% at Missguided and 50% at Asos.

Deloitte’s lead consumer analytics partner Jason Gordonsays: “Retailers have faced a challenging year, as consumer confidence has continued to fall amid macroeconomic uncertainties. In addition, the introduction of Black Friday in recent years means consumers have also come to expect an increasing amount of pre-Christmas discounting. The result is a blending of promotions, one seeping into the next, and a steady price decline rather than a steep Boxing Day drop.

“With one shopping weekend left before Christmas, this week could see a tipping point in promotions.”

Birds Eye brings in former Cadbury marketer as new marketing director

Birds Eye has appointment former Cadbury, Coca-Cola and Procter & Gamble marketer Sarah Koppens as marketing director.

Koppens will report into UK general manager Steve Challouma, who held the marketing director role until his promotion. She is tasked with building on three years of growth at Birds Eye, which in recent years has acquired the Goodfella’s and Aunt Bessie’s brands.

Challouma says: Sarah is the perfect person to join the Birds Eye team ahead of another key year for the brand. The company has undergone a transformation over recent years, with the marketing activity a crucial contributor to that positive performance. We are confident that Sarah will continue to take the brand forward, with years of incredible experience and invaluable marketing expertise to draw from.”

Koppens was previously marketing director at Cadbury, overseeing some high-profile product launches that helped to grow market share. She has previously held roles with companies including L’Oreal, Procter & Gamble and Coca-Cola. Most recently, she was managing her own property development business as part of a planned career break to bring up her two children.

Koppens says: “I’m so excited to join the Birds Eye team to help drive further fame for the brand and generate even more growth in the frozen category. The transformation of the brand has been remarkable, and the efforts of Steve and the team have rightfully been recognised across the industry.

“I’m looking forward to continuing that progression, with some fantastic initiatives and products coming up for Birds Eye.”

Pret holds on to a bit of the Eat brand as it lets customers save their menu favourite

Pret is to hold on to small piece of the Eat brand by letting customers save their favourite item from its menu.

An Instagram campaign under the hashtag #Saveyourfave lets customers vote to save either the chicken pot pie, firecracker chicken toasted flatbread or humous and falafel mezze salad. The winner will be available in Pret stores early next year.

“We know Eat customers will miss the food that they’ve enjoyed over the years, so we want to offer one of their favourite products on Pret’s menu,” says Pret’s UK food and coffee director Guy Meakin.

“Once customers have voted for their winner, our Food Team will work closely with Eat on the finished result and we are looking forward to sharing it with customers in 2020.”

Pret bought rival Eat for £60m last year with plans to turn around a third of its 94 stores into Veggie Prets.

Monday, 16 December

DFS enlists Wallace and Gromit for their winter sale campaign

Celebrating their 30th anniversary, holiday-season stop-motion favourites Wallace and Gromit will be on our screens more than usual over the coming weeks, with the duo taking a starring role in the DFS winter sale campaign.

Helena Bonham Carter will also feature in a series of ads as the voice of Lady Tottington, reviving a role she last played back in 2005 in the Oscar-winning Wallace & Gromit: Curse of the Were-Rabbit.

The television and cinema spots begin with Wallace trying to win Lady Tottington’s affection by inventing the ultimate sofa for her, complete with a built-in foot massager.

‘The Grand Sofa Caper’ campaign was shown in cinemas over the weekend and will make its television debut on 21 December, running until 24 February.

DFS marketing director Nick Ashworth says the campaign is part of an ongoing partnership with the celebrated animation studio Aardman: “As brands, we share similar values and have the same commitment to quality craftsmanship.

“Wallace & Gromit are the perfect fit for our core target segments and allow us to show how we can bring comfort and quality to families this Christmas.”

Hallmark apologises for pulling same-sex ads

Hallmark Cards has issued an apology after the company controversially pulled an ad featuring a same-sex couple getting married.

The spot, for the wedding planning site Zola, was taken off the Hallmark cable channel last week, prompting a huge backlash on social media and criticism in the press and among political figures in the US.

Pressure from a conservative lobby group One Million Moms, an online project of the American Family Association, prompted the ban.

However, Hallmark CEO Mike Perry says the original campaign will now be shown on the channel again.

“We are truly sorry for the hurt and disappointment this has caused,” Perry adds.

The Hut Group secures €1bn in new funding

Asset manager BlackRock is to invest €600m (£501m) in the UK health and beauty online retailer The Hut Group (THG), a sum that will be matched by another investor, Belgium-based Sofina.

The funding will help the company expand its beauty and wellness brands, as well as its ecommerce platform Ingenuity.

There’s also a five-year £150m revolving credit facility provided by lenders including Barclays and HSBC and a £200m package provided to a new THG subsidiary comprising the company’s substantial property assets.

Manchester-based company THG was set up in 2004, with sales increasing from £80 in 2010 to more than £1bn this year.

It has invested £100m in building an operations and manufacturing hub in Poland, as well as investing heavily in its Manchester HQ, where the majority of its 7,000-strong workforce is located.

British Steel takeover still a possibility

The Chinese conglomerate Jingye Group has refuted claims that its proposed takeover of British Steel has hit the buffers.

Jingye says it still expects to sign a deal in the new year. “Any suggestion to the contrary is completely incorrect,” it declares.

Last month, Jingye agreed to buy British Steel, paying about £50m to take over the collapsed business and save about 4,000 jobs.

But a report in the Sunday Telegraph claimed the deal is in danger of being called off and the government is talking to other interested parties.

However, as well as Jingye’s denials, the government has also rejected the claim.

China threatens retaliation over proposed German Huawei ban

The Chinese ambassador in Germany says that there will be major trade repercussions if Angela Merkel’s government doesn’t allow Huawei to supply 5G wireless equipment to the country.

The Germans have been debating a bill that would impose a ban on “untrustworthy” 5G suppliers.

With Huawei already facing restrictions and possible exclusion from the 5G market in the US, the Chinese government is determined to stand its ground rather than lose out on a valuable European market.

“If Germany were to take a decision that leads to Huawei’s exclusion from the German market, there will be consequences,” ambassador Wu Ken says. “The Chinese government will not stand idly by.

“Could we say one day that these German cars are no longer safe because we’re in a position to manufacture our own cars?

“No. That is pure protectionism.”