Google, Nissan, junk food ads: 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.
Junk food ad ban to hit London’s transport system
Junk food advertising will be banned across London’s public transport network from 25 February next year, potentially costing Transport for London (TfL) millions in lost revenue.
As part of the ban, posters for food and drink high in fat, sugar, or salt, will be banned from London’s Underground, Overground, buses, bus shelters, tram services, river services and taxis. Fast-food chains such as McDonald’s will still be allowed to advertise on the transport system but they will be required to promote their healthier alternatives and cannot promote their brand using a simple generic logo.
The move comes as London’s mayor Sadiq Khan revealed plans to tackle what he calls a “ticking time bomb” of childhood obesity and says “tough action” is necessary.
“Reducing exposure to junk food advertising has a role to play in this – not just for children, but parents, families and carers who buy food and prepare meals,” he says.
The scheme is supported by health experts but The Advertising Association (AA) believes it will have “little impact on the wider societal issues that drive obesity”.
Chief executive of the AA, Stephen Woodford, says: “There is no clear evidence that a ban on high fat, salt and sugar advertising on the TfL out-of-home estate will have a positive effect on reducing childhood obesity rates in London. We all want to see rates of childhood obesity dropping but believe there are far better ways to achieve this goal.”
The mayor’s office is hoping brands would continue to pay to promote healthy alternatives, which will ensure TfL’s revenue doesn’t take a hit.
“It’s clear that advertising plays a huge part in the choices we make, whether we realise it or not, and Londoners have shown overwhelming support for a ban on adverts for junk food and drink on our transport network,” Khan says.
“It’s completely unacceptable that in a city as prosperous as London, where you live and the amount you earn can have a massive impact on whether you have access to healthy, nutritious food. I’m determined to change this.”
However, the outdoor industry has questioned whether new adveritsers will come into make up the shortfall. Justin Cochrane, chairman of trade body Outsmart, says junk food ads earn TfL up to £35m a year.
“They’re convinced that new advertisers will come in and that could be the case but over a much longer period of time. Advertising plans are already done for next year,” he says.
Nissan sacks chairman over cash scandal
Nissan has sacked its chairman Carlos Ghosn over allegations of financial misconduct. Ghosn had spent almost 20 years at the helm of the Japanese carmaker.
Accusations include under-reporting his salary and using company assets for personal use. Sky News reports that Ghosn was arrested alongside another top executive Grey Kelly after an investigation found Ghosn allegedly failed to disclose £34.5m in income.
A statement from the company reads: “Over many years [Ghosn and Greg Kelly have been] reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation”.
He was sacked following an emergency meeting at Nissan’s headquarters in Yokohama, Japan. Nissan has since created a committee which will propose nomination for a new chairman.
“The board acknowledged the significance of the matter and confirmed that the long-standing alliance partnership with Renault remains unchanged and that the mission is to minimise the potential impact and confusion on the day-to-day cooperation among the alliance partners,” a Nissan spokesperson says.
READ MORE: Carlos Ghosn sacked as Nissan chairman over financial scandal
Google ramps up ad vetting for EU vote
Google has revealed plans to enhance its ad vetting process ahead of the European Parliament elections in May 2019 in order to provide more transparency around political advertising.
As part of the plan, advertisers will have to submit an application to Google so it can verify their identity and nationality before they can then pay for political ads. Google will also require all ads that mention political parties, candidates and current officeholders make it clear who’s paying for them.
This new process will come into force in January.
The news comes as tech giants such as Facebook and Google come under fire for their alleged role in Russian election meddling and the rise of fake news online. In September, the two tech firms agreed to a code of conduct, meaning they would do more to tackle the spread of fake news over concerns it can influence elections.
READ MORE: Google reveals new policy for elections ad ahead of EU vote
Almost half of Brits will make a Black Friday purchase
As chaos descends on the UK high streets (and online), new research by YouGov for KPMG reveals 42% of Brits are planning to make Black Friday purchases this week and another 25% say they’re intending to get involved in Cyber Monday on the 26 November.
Almost a quarter (22%) will purchase Christmas gifts during the Black Friday sales. Since the UK adopted the traditionally American retail event in 2013, consumer spend has notably expanded from what was once the ‘traditional’ Christmas shopping period.
Another 17% of respondents plan to buy something for themselves, while 18% intended to buy something for a family member.
The research suggests the promotional period is mainly utilised by younger consumers, with 75% of shoppers aged 18 to 24 saying they’ll be shopping during Black Friday, compared to 36% of 45- to 54-year-olds and 24% of those older than 55.
Commenting on the findings, Paul Martin, UK head of retail at KPMG, acknowledges that retail performance throughout the year has been “dreary”.
“The key to success is to translate any sales growth into all important profit. But with their margins under significant pressure at the moment, that requires retailers to both exercise exceptional cost efficiency and supreme advance planning if the likes of Black Friday are to benefit the bottom line,” he explains.
British Gas owner to take a multi-million dollar hit from price cap
Centrica, the owner of British Gas, is set to take a £70m hit during the first quarter of 2019 thanks to the new energy price cap was revealed.
The price cap means customers who pay by direct debit will pay no more than £1,137 a year, which is £68 less than the company’s standard variable tariff, according to BBC. The news comes after British Gas lost 372,000 customers in the four months to October.
Centrica’s chief executive Iain Conn says the company is maintaining a focus on performance delivery and financial discipline and demonstrating resilient cash flows “remain our objectives for 2019 and beyond”.
According to the BBC, more than half of all households in Britain are on default tariffs because they’ve never switched or have not done so recently.
READ MORE: British Gas owner to take £70m hit from price cap
Virgin Atlantic approaches struggling FlyBe
Virgin Atlantic has allegedly approached struggling regional airline Flybe, which recently bowed to financial pressure and put itself up for sale, The Telegraph reports.
Part of Sir Richard Branson’s Virgin Group, Virgin Atlantic has launched discussions with Flybe’s advisors just four years after announcing the closure of Little Red – a previous venture aimed at cracking into the market for domestic UK flights.
Virgin Atlantic’s interest in Flybe is likely to do with better connecting long-haul operations with smaller UK airports, as a bid for Flybe could allow the airline to feed passengers from regional airports to its international network across the UK.
The airline is currently expanding its partnerships with Air France-KLM and Delta Air Lines in the US.
Accountants from KPMG have been brought in to help Flybe with its financial planning as the regional airline attempts to dodge future financial pressures.
Recently Flybe revealed its half-year profits plummeted by 54% to £7.4m.
READ MORE: Virgin Atlantic ‘open talks with Flybe’
Thursday, 22 November
Amazon suffers major data breach as Black Friday looms
Amazon has been hit with a major data breach that caused customer names and email addresses to be posted on its website. The news comes just two days ahead of major discount shopping event Black Friday, during which 77% of purchases are expected to be made online according to PwC figures.
Refusing to reveal the scale of the breach or where the affected customers were based, Amazon confirmed that it was a “technical issue” that caused customer names and email addresses to be posted its website, rather than a breach of its site or systems.
The ecommerce giant emailed customers to inform them that their email address and/or name had been “inadvertently” revealed, but that the technical error had been fixed. Customers were told not to change their passwords and Amazon reassured them that their personal information remained secure.
READ MORE: Amazon hit with major data breach days before Black Friday
Mothercare UK sales drop 14.3% amid ‘market uncertainty’
UK sales at Mothercare dropped 14.3% to £196.2m during the 28 weeks to 6 October, with like-for-like sales dipping by 11.1%.
The babycare specialist also saw its UK online sales fall by 7.8% during the half year to 6 October, poor performance which it blamed on the continuation of “difficult trading conditions”, uncertain consumer confidence and “negative brand coverage” in connection to the group’s refinancing efforts.
International sales declined by 7.3% during the period to £369.6m, although the retailer did report signs of recovery in key markets such as Russia, China and Indonesia, in addition to a new partnership in India intended to secure long-term growth.
Mothercare’s total worldwide sales fell 9.8% to £566.1m, with group revenue during the half year period down 13.1% to £295m.
The retailer does, however, claim to be on track towards delivering £19m of savings as part of a strategic transformation plan, following the implementation of a leaner organisational structure and efforts to make its sourcing more efficient. Mothercare also reported that its UK store closure programme is ahead of schedule.
CEO Mark Newton-Jones says he is confident the new strategy will “reinvigorate the business” and restore Mothercare as a leading global specialist for parents and young children. He describes the company’s “relentless focus” on transforming itself into a sustainable business that has a “relevant future” for its global customer base.
He adds: “This momentum has allowed us to focus on revising the overall structure of the group, something which will help drive a greater focus on becoming a stronger global brand, with improved product design, marketing and distribution of Mothercare products around the world.”
Facebook appeals £500,000 Cambridge Analytica fine
Facebook is appealing the £500,000 fine imposed by the UK’s data watchdog for its part in the Cambridge Analytica scandal.
The social media giant claims the fine is unjustified as the Information Commissioner found no evidence that UK users’ personal data had been shared inappropriately among the 87 million Facebook users’ whose data was harvested by political consultancy Cambridge Analytica.
While initial claims suggested that 1.1 million UK users had had their details exposed, the Information Commissioner’s Office (ICO) found no evidence that UK citizens were among the 30 million people whose data Cambridge Analytica claims to have licensed.
However, the ICO applied the maximum fine possible on the basis that UK consumers’ data had been put at risk and the tech firm had not done enough to address the problem.
Earlier this month, Information Commissioner Elizabeth Denham described a “disturbing disregard for voters’ personal privacy” by a number of players including social media platforms and called for a code of practice covering the use of data in campaigns and elections.
She added that while voluntary initiatives by the social media platforms are welcome, “a self-regulatory approach will not guarantee consistency, rigour or shore up public confidence”.
READ MORE: Facebook appeals against Cambridge Analytica fine
Ikea to cut 350 UK jobs as it explores smaller formats
Ikea is poised to cut 350 jobs in the UK as it shifts to new, smaller format stores.
Adapting to changing consumer shopping habits, the furniture giant plans to add 4,000 staff to its global workforce over the next two years by creating 11,500 new posts, but eliminating 7,500 other roles. The UK job losses are likely to come mainly from head office.
The new roles will be required for smaller stores, called Touchpoints, with 30 locations planned so far.
Ikea’s UK boss Javier Quinones described the new stores as being “in between” the size of its new small city centre Planning Studio on London’s Tottenham Court Road and its big out-of-town stores. Rather than selling product, the Planning Studio allows consumers to seek advice on big purchases such as kitchens and bathrooms, before ordering online.
READ MORE: Ikea eyes bigger city centre stores as shopping habits change
Ryanair shrugs off Brexit blues as bookings soar
Ryanair has shaken off Brexit uncertainty by taking record numbers of flight bookings this week, as the budget airline reached a new peak of 5.25 million visits to its website and app.
Despite warning that a no deal Brexit could ground planes, Ryanair has seen no sign of customers avoiding dates around 29 March when the UK is expected to leave the EU, the Guardian reports.
The budget carrier, which is Europe’s largest airline by passenger numbers, appears to be benefitting from the fact that, if the draft deal between Britain and the EU is approved, flights could operate as normal during the transition period.
Speaking to the Guardian, CMO Kenny Jacobs said that while flight disruption “absolutely was a possibility” until the company saw the “transition agreement and the no-deal documents”, demand had not been affected even by the weakened pound.
“I saw no evidence consumers were anxious. It would take a long time for the British consumer to not go on holiday,” he stated.
Jacobs added that while holidaymakers were looking to save money, the weak economy meant they were hunting for budget fares. The Ryanair CMO also confirmed that the airline was not interested in buying rival Flybe, which put itself up for sale last week.
READ MORE: Ryanair reports record number of bookings despite Brexit looming
Wednesday, 21 November
Marks & Spencer causes controversy over Christmas window display
Marks & Spencer is being accused of sexism after one of its window displays was branded “vomit-inducing” for placing women’s “fancy little knickers” beside men’s suits.
The display at a Nottingham store shows mannequins in suits with the tagline “must-have outfits to impress”, next to women’s lingerie featuring “must-have fancy little knickers”.
The juxtaposition has received backlash online, with many arguing that the display furthers harmful stereotypes of what is expected of men and women.
In response, the retailer says: “M&S sells more underwear, in more shapes, sizes and styles, than any other retailer, especially at Christmas.
“We’ve highlighted one combination in our windows, which are part of a wider campaign that features a large variety of must-have Christmas moments, from David Gandy washing up in an M&S suit through to families snuggling up in our matching PJs.”
READ MORE: Marks and Spencer slammed for ‘vomit-inducing’ window display claiming women must-have ‘fancy little knickers’
Sugar tax on soft drinks raises £154m
The sugar tax has raised £154m since it came into force in April despite many brands reformulating to reduce sugar in their drinks and therefore avoid having to increase the price.
The clampdown on sugar forced many brands, including Fanta and Lucozade, to cut the sugar content of their drinks. Others, such as Coca-Cola, have not reformulated their core drinks but instead put more marketing spend and promotion behind lower sugar variants.
The revenue collected from the levy will help fund physical education activities in primary schools.
Robert Jenrick, the exchequer secretary to the treasury, says: “Today’s figures show the positive impact the soft drinks levy is having by raising millions of pounds for sports facilities and healthier eating in schools, as well as encouraging manufacturers to cut sugar in over half the drinks found in UK stores.
“Helping our next generation to have a healthy and active childhood is a priority for us, and I’m pleased to see the industry is playing its part.”
READ MORE: Sugar tax on soft drinks raises £154m
Glamour US stops print to focus on digital
Glamour US is halting monthly printing in order to focus on digital. Condé Nast, the magazine’s publisher, will no longer be regularly publishing the magazine after 80 years as it tries to combat the decline in print media.
Last year, it stopped regular print editions of Teen Vogue and Self magazines while launching a new queer online site Them.
The publication’s new editor-in-chief, Samantha Barry said in an internal email viewed by the FT: “We’re doubling down on digital . . . expanding video and social storytelling, with new and ambitious series and projects.
She added: “As a result of this investment plan, we’re going to move off a monthly print schedule.”
Glamour’s online traffic has grown 12% from a year ago to 6.3 million visitors per month.
READ MORE: Condé Nast pulls plug on print edition of Glamour
Accountancy watchdog investigates Patisserie Valerie audit
The accountancy watchdog is to investigate Patisserie Valerie after the firm discovered a black hole in its accounts that almost put it out of business.
The Financial Reporting Council (FRC) says it will investigate the auditor, Grant Thornton’s, work on parent firm Patisserie Holdings, for the years ended September 30 2015, 2016 and 2017, and will also probe the cake chain’s former finance chief Chris Marsh.
The cake company has been under intense pressure since October when it discovered a £40m accounting black hole leading to the suspension and resignation of chief financial officer Chris Marsh.
READ MORE: Auditor faces FRC probe after Patisserie Valerie’s near-collapse
Renault keeps chairman amid scandal
Renault has hired a temporary deputy chief executive to take over the running of the French car business following the arrest of its CEO Carlos Ghosn in Japan. However, the firm does not plan to fire Ghosn despite French finance minister Bruno Le Maire saying Ghosn is “no longer in a position” to lead the car maker.
Following an emergency board meeting, Renault says its chief operating officer, Thierry Bolloré, would step up to the role because Ghosn was “temporarily incapacitated”.
However, Renault was clear Ghosn would remain as its chairman and chief executive. An independent director Philippe Lagayette, will also help run the car company in the interim.
Ghosn was arrested in Japan on Monday after allegations of tax evasion and misuse of company funds.
Ghosn is also chairman of Nissan and Mitsubishi Motors and, according to the Financial Times, is thought to have been planning a merger between Renault and Nissan before his arrest, which Nissan’s board opposed.
On Tuesday evening, Renault said: “At this stage, the board is unable to comment on the evidence seemingly gathered against Mr Ghosn by Nissan and the Japanese judicial authorities.”
The Nissan-Renault-Mitsubishi group is among the biggest auto alliances in the world, selling about 10 million vehicles a year.
READ MORE: Renault keeps Carlos Ghosn as chief but brings in new top team
Tuesday, 20 November
McDonald’s top UK marketer departs
McDonald’s vice-president of marketing and food development, Emily Somers, has stepped down from her role to “pursue new opportunities” and set up her own consultancy. A replacement has yet to be appointed.
She became the fast-food chain’s most senior marketer in the UK in March when former UK CMO Alistair Macrow was promoted to CMO of high-growth markets, including China, Hong Kong, Italy, Poland, Russia, South Korea, Spain, Switzerland and the Netherlands.
She has worked at McDonald’s since 2015, having previously headed up the McDonald’s account while at Leo Burnett between 2009 and 2014. Immediately prior to joining the restaurant chain she was managing director of Havas Worldwide London.
A McDonald’s spokesperson said: “Following a number of years at McDonald’s, both as an agency partner and most recently as vice-president of marketing and food development, Emily Somers has decided to pursue new opportunities. We would like to thank Emily for the energy, passion and creativity she has brought to the role and the outstanding work delivered under her leadership.”
Instagram deletes fake likes, comments and follows
Instagram is clamping down on the use of automated apps to artificially grow audiences, as it looks to clean up influencer marketing.
In a blog post published yesterday (19 November), the social platform confirmed it will be removing fake likes, followers and comments from accounts that use third-party apps to boost their popularity.
Instagram has built a machine learning tool that can identify accounts with inauthentic activity. These account holders will receive an in-app message alerting them any fake followers, likes or comments have been removed.
People using these third-party apps normally have to share their username and password, so Instagram will also then ask them to secure their account by changing their password.
Fake followers and transparency are becoming a growing concern for brands using influencer marketing, according to Influencer Marketing 2020 study by Marketing Week’s sister brand Influencer Intelligence.
Tanqueray launches taste-focused global campaign
Tanqueray gin has launched a global campaign, which urges consumers to go back to what matters most – taste – in order to cut through the increasingly cluttered gin market.
The multimillion ‘Unmistakably Tanqueray’ campaign features a series of blindfolded models who imply the brand’s taste is so distinctive that people don’t need to see the bottle to know it’s Tanqueray.
The campaign, which has been created by St Luke’s Communication, will run across out of home, print and digital around the world.
Tanqueray’s global head DJ Hageman, says the market is becoming “ever more confusing” for consumers as the “world of gin continues to grow”. “We want to bring the conversation back to what really matters – taste.”
Searches for sustainable fashion surge
There has been a spike in the number of consumers searching for ethical fashion over the past 12 months.
Terms such as ‘vegan leather’ and ‘organic cotton’ have increased by 47%, according to fashion search engine Lyst, which tracked more than 100 million searches on its site over the past year.
Several sustainable brands also made it onto the company’s ‘most searched for’ ranking.
These include trainer brand Veja, which uses environmentally-friendly materials and supports fair trade in its supply chain. The brand saw a 113% increase in searches compared to last year.
READ MORE: Sustainable fashion searches surged in 2018
Vision Direct says thousands at risk from hack
Vision Direct has confirmed a cyber attack has exposed the personal data of thousands of customers, including card numbers, expiry dates and CVV numbers, the three-digit code on the back of a card.
It has identified 16,300 people as being at risk; anyone who entered their details on to the site between 3 and 8 November could be affected.
READ MORE: Vision Direct hack puts customers’ money at risk
Monday, 19 November
Advertising the least trusted profession, says report
Advertising executives are the least trusted profession in the UK, according to a new study by Ipsos Mori.
The research, which asks consumers to say how much they trust professions ranging from politicians to engineers and nurses, included ad execs for the first time this year. It found that just 16% of the British public trust advertisers, behind politicians on 19%, government ministers on 22% and journalists on 26%.
As this is the first year respondents have been asked about ad execs there is no way to know if trust levels are rising or falling. But the low figure paints a poor picture of trust in the marketing industry. Trust is lowest among people living in rural areas, at just 9%, and highest among millennials although still only 23%.
“Advertising executives are near-uniformly distrusted, with just 16% of the public saying they trust them to tell the truth,” says the report.
Nespresso tries to make coffee pods greener in deal for ethical aluminium
Nespresso has inked a deal with mining company Rio Tinto to use more sustainable aluminium in its coffee capsules amid mounting concern over their environmental impact.
Under the deal, Rio Tinto will supply aluminium produced with renewable power and respect for biodiversity to Nespresso. The aim is to use 100% sustainable aluminium in all coffee capsules produced by Nespresso by 2020.
Nespresso is facing growing criticism over the impact of its coffee capsules, with millions ending up in landfill every year. And it is facing growing competition from brands such as Halo, which just last week claimed to have created the world’s first fully compostable coffee capsule and packaging.
READ MORE: Rio Tinto, Nespresso join forces to make coffee pods greener
Coca-Cola is not planning to take on Starbucks after Costa acquisition
Coca-Cola CEO James Quincey says the company’s aquisition of Costa is not an attempt to take on Starbucks but instead to move into the ready-to-drink and at-home segments of the coffee market.
Speaking to CNBC, he says coffee has a total addressable market of around $500bn and that the company sees an unlocked opportunity to make quality coffee available at locations such as petrol stations and convenience stores.
“The biggest piece is in immediate consumption channels. And, actually, while coffee shops exist, the biggest piece is the rest,” explains Quincy. “Helping other customers have a store in a store and executing coffee within other people’s outlets is a big opportunity for them, and I think there’s a lot of white space to do a lot better around the world.”
Coca-Cola paid Whitbread £3.9bn to buy Costa in August.
READ MORE: Coca-Cola CEO on coffee strategy: We’re not going head to head with Starbucks
Tesco and WWF join up to tackle environmental impact of food shop
Tesco and WFF have joined forces to try to tackle the environmental impact of people’s grocery shopping. The partnership aims to reduce the damage of the average UK shopping basket by 50% while ensuring it remains affordable.
It will try to do that by focusing on three key areas: helping customers eat more sustainable diets, restoring nature in food production and eliminating food and packaging waste.
The move comes as new research finds growing demand for more sustainable food, with nearly 80% of shoppers wanting supermarkets to do more. However, 59% of people are confused about which foods count as sustainable and 75% believe cost to be a barrier to shopping more sustainably.
Dave Lewis, Tesco Group CEO, says: “Our Little Helps Plan illustrates what we are doing to address the most significant environmental and social challenges facing our shoppers, colleagues, suppliers, and communities. I’m pleased we’re making progress, but we want to go further to achieve our goal of providing customers with affordable, healthy, sustainable food.
“Partnering with WWF will help us make our customers’ shopping baskets more sustainable. Our shared ambition is to reduce the environmental impact of the average shopping basket by half. By working with farmers, suppliers, colleagues and other experts we hope to develop innovative solutions so shoppers can put affordable, tasty food on their plates today, confident they are not compromising the future of food for generations to come.”
Programmatic to account for two-thirds of digital ad spend next year
Almost two-thirds (65%) of digital ad spend will be traded programmatically next year, according to Zenith. The figure means programmatic ad spend will reach $84bn next year, up from 19% year on year from $70bn in 2018.
Zenith predicts that by 2020, programmatic spend will hit $98bn, equal to 68% of digital media advertising. Digital media is categorised as paid-for advertising within online content, including online video and social media, but excluding paid search and classified advertising.
The US is set to be the biggest programmatic market with spend of $40.6bn, followed by China with spending of $7.9bn and the UK with $5.6bn. The US is also the market with the highest proportion of programmatic spend, at 83%, followed by Canada on 82%, the UK on 76% and Denmark on 75%.