Uber, Sports Direct, BP: 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.

Uber discloses nearly 6,000 sexual assaults in the US

Uber received almost 6,000 reports of sexual assault in the US in 2017 and 2018.

A report from the company shows 5,981 sexual assault incidents were reported out of the 2.3 billion US trips over the two-year period.

While the number of cases rose in 2018, the rate of incidents dropped by 16%, as the number of journeys was higher.

Uber is facing growing scrutiny around the world, and recently lost its licence to operate in London.

Uber’s chief legal officer, Tony West, says: “Voluntarily publishing a report that discusses these difficult safety issues is not easy. Most companies don’t talk about issues like sexual violence because doing so risks inviting negative headlines and public criticism. But we feel it’s time for a new approach.”

In April, Uber released a campaign highlighting its safety features including the ability to share location. Some 99.9% of the total journeys were concluded without safety issues, it said.

Passengers – as opposed to drivers – accounted for nearly half of those accused of sexual assault, the report added.

Papa John founder sues agency involved in racist conference call

Papa John’s founder John Schnatter is suing Laundry Service and its parent company, saying the agency secretly recorded a phone call with him then leaked details of the conversation to the media. He also says his use of a racial slur during the call was taken out of context.

Schnatter used the n-word during the media-training phone call with Laundry Service, which took place on May 2018, and was made public in a Forbes story in July of that year. The reaction to the story was swift, with Schnatter leaving his chairman role that day and was soon removed from Papa John’s marketing materials, and later left its board of directors. Papa John’s sales and stock price also tumbled.

Schnatter says he was criticising other public figures’ uses of a racial slur in the meeting, which touched on whether the chain should hire singer Kanye West to push its pizza. The executive told advertising officials he “never” used the slur.

Sports Direct could ditch Piccadilly Circus Lillywhites store

Mike Ashley’s Sports Direct could be getting ready to offload its iconic Lillywhites store in Piccadilly Circus.

The 97-year lease for the large London building has been put on the market as the landlord, Criterion Capital, conducts rent review talks. A sale could lead to the removal of the Lillywhites name from the site where the sports department store has traded since 1925.

Lillywhites was founded by members of the Lillywhite cricketing family in 1863 with a store that sold cricketing equipment and was a favourite of George VI and Wimbledon contestants. Ashley bought the company in 2002 when it was a chain with 10 sites around the UK. Lillywhites’ main store now sells the same stock as Sports Direct.

The potential closure comes as more House of Fraser stores are also shut. At least five sites have closed since Ashley bought the chain out of administration last year, and it is expected to close more in 2020.

BP invests in solar as it appeals to environmentalists

BP is increasing its stake in solar energy developer Lightsource BP as it looks to position itself as a low carbon company.

The company announced plans to set up a 50/50 joint venture with the company, which will increase its stake in the company by buying new shares for an undisclosed price.

BP made its return to the solar market by buying a 43% stake in Lightsource for £200m in 2017. It has used the UK solar startup to re-establish a presence in the solar sector as it looks to diversify its business and appeal to environmentally conscious consumers.

Chief executive at BP’s alternative energy division, Dev Sanyal, says: “BP is committed to helping meet the world’s rapidly growing demand for low-carbon energy. Solar, which is predicted to increase by a factor of 10 by 2040, plays a key role in this energy transition.”

BP’s fresh investment in the solar company came as environmental lawyers prepared to take action against a multimillion-pound BP advertising campaign.

ClientEarth say the company was misleading the public with claims of being committed to a low-carbon future. The charity is calling for the ads to be banned unless they include a health warning that BP’s oil and gas spending is contributing to the climate crisis

HSBC to increase overdraft rates to 40%

HSBC is bringing in a single overdraft rate of 39.9% for UK customers, as much as quadrupling the rate it charges.

The bank is removing a £5 daily fee for going into an unarranged overdraft and introducing an interest-free £25 buffer on some accounts.

HSBC UK currently charges rates of 9.9% to 19.9% on arranged overdrafts, but the higher rate will be applied across its whole range of accounts except for its student bank account.

HSBC UK’s head of lending and payments, Madhu Kejriwal, says: “By simplifying our overdraft charging structure we are making them easier to understand, more transparent and giving customers tools to help them make better financial decisions.”

The new annual rate comes in response to tough new rules from regulators designed to protect consumers. The Financial Conduct Authority’s plans to shake up the overdraft market including stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts.

But there have been concerns that banks will hike authorised overdraft charges to claw back some revenue lost from unauthorised overdraft fees. Nationwide Building Society made a similar move in July, with the introduction of a single overdraft interest rate of 39.9%.

Thursday 5 December

National Lottery reveals new brand identity

A new National Lottery brand identity has been unveiled, complete with a redesigned website and improved mobile app.

Camelot enlisted the help of design agency Jones Knowles Ritchie (JKR) to create more visible branding for the lottery, now in its 25th year.

The branding heavily promotes the idea that buying a lottery ticket is a way of doing good for the community at large, helping to fund various projects and causes.

The logo’s crossed fingers have been animated for the first time to bring some added personality, while colour coding and digital architecture improves navigation and user experience.

Camelot CMO Keith Moor says the lottery’s quarter-century was the perfect time for a rejig of the brand identity and to reinforce its underlying purpose.

“Millions of players know and love The National Lottery, but for many others this is a chance to introduce our brand purpose: ‘making extraordinary happen for everyone’,” he says.

“In 2020, we will look for more opportunities to increase the level of National Lottery branding through the suite of assets brought to life by our partnership with JKR, so the public becomes even more aware of the extraordinary difference they make to the UK by playing The National Lottery.”

Metro Bank CEO announces departure

Metro Bank has announced that CEO Craig Donaldson is to leave, two months after chairman and founder Vernon Hill quit the high street lender.

Donaldson has had to oversee a traumatic past 12 months, including the fallout from an accounting scandal and a 90% loss in market value.

To add to the bank’s woes, its biggest backer, the billionaire hedge fund manager Steve Cohen, recently cut his stake from 9.86% to 6.46%.

One of the country’s longest-serving CEOs, Donaldson has been at Metro Bank since 2009 and will be succeeded by current chief transformation officer Dan Frumkin on an interim basis.

“While this has undoubtedly been a challenging year, it has been a privilege to serve,” Donaldson said in a statement. “I committed to work with the board until we felt that the bank was sufficiently strong for me to step away. This has been achieved.”

A Metro Bank spokesperson stressed that Donaldson’s departure was not the result of any investor pressure and had been a mutual decision.

Huawei starts new legal action in the US

Chinese telecoms company Huawei has begun new legal action against the US government over a ban imposed due to fears over security risks.

Huawei has asked the US Court of Appeal to overturn a decision stopping mobile firms in rural parts of the country using money from a government fund to help buy the Chinese company’s infrastructure equipment.

Huawei technology for next-generation 5G communications has been particularly sought after.

“The US government has never presented real evidence to show that Huawei is a national security threat,” says the company’s chief legal officer Song Liuping. “That’s because this evidence does not exist.”

It’s the second time this year that Huawei has mounted a legal challenge in the States, as it finds itself caught up in an escalating dispute between the Chinese and US governments.

D&AD changes awards to better reflect industry

Non-profit design and advertising association D&AD has announced new categories for its annual awards, including a Design Transformation category, recognising projects that use design thinking as a key driver of business growth.

Digital Design, as a continuously evolving field, expands its sub-categories to recognise work across digital product, service and experience design. The Digital Marketing award also sees new categories including e-commerce, use of AI, in-game advertising and creative use of data.

Writing for Design and Advertising has been incorporated within existing advertising and design categories. Juries will include both design writers and copywriters, and be judged on the merit of the writing.

“Each year, thousands of pieces of work from creatives all around the world are entered, and judged by an international panel of industry experts,” says D&AD CEO Patrick Burgoyne.

“Following feedback from the judges and entrants in last year’s programme, we’ve made some key changes to better reflect the industries we serve.”

Judging for the D&AD Awards will take place online and in person in the lead-up to D&AD Festival, which takes place 19-21 May at The Old Truman Brewery in London.

Captain Birds Eye launches a new signature eau de toilette

With Christmas fast approaching, Birds Eye has launched a limited-edition signature eau de toilette, ‘AHOY! by Captain Birds Eye’.

Inspired by the hypnotic and evocative power of the high seas, the aromatic scent is reminiscent of a fresh ocean breeze, bursting with top notes of zingy grapefruit, sweet mandarin and intoxicating patchouli.

Annalisa Fanali, Birds Eye spokesperson, explains: “We know the British public have a soft spot for our Captain. So this Christmas, we wanted to treat fans to something special, by creating his own signature scent – after all, who doesn’t love the fresh aroma of the ocean?”

But don’t get too excited. This limited edition is very limited, to just 50 bottles. To win one of them, you have to visit the Birds Eye Facebook page and leave your suggestions for what the Captain’s next product launch should be (he’s already released a calendar, of course).

Wednesday 4 December

Google co-founders step down

Google co-founders Larry Page and Sergey Brin are stepping down from their roles as CEO and president of parent company Alphabet, describing it as a “natural time to simplify our management structure”.

While Page and Brin, who founded Google in 1998, will stay on the board, Google CEO Sundar Pichai will also take on the role of Alphabet CEO. The parent company was created in 2015 as part of a corporate restructure aimed at making the tech company’s activities “cleaner and more accountable”.

Page and Brin will remain “actively involved as board members, shareholders and co-founders”, saying they have “never been ones to hold on to management roles when we think there’s a better way to run the company”. They believe Alphabet and Google no longer need two CEOs and a president.

The pair add that it is time to “assume the role of proud parents – offering advice and love, but not daily nagging” and say there is “no better person” than Pichai to take the company forward.

Pichai thanked Page and Brin for giving Google it’s “timeless mission, enduring values” and “culture of collaboration and exploration”.

TikTok admits disabling users’ accounts to prevent bullying

TikTok has admitted to deliberately preventing videos on its platform made by disabled users from going viral in a bid to reduce cyber-bullying.

Moderators were instructed to look out for content from disabled people, people with facial disfigurements, those with other “facial problems” such as a birthmark or squint, Down’s syndrome and autism. They were then told to limit viewership of these “vulnerable” users’ videos to prevent them experiencing bullying or harassment “based on their physical or mental condition”, a source told German site Netzpolitik.

Once such a video had reached 6,000 to 10,000 views, moderators were instructed to prevent the content appearing in the app’s main video feed.

A TikTok spokesman tells the BBC that the “blunt and temporary policy” had been implemented early on when there was an increase in bullying on the app.

The social platform adds: “This was never designed to be a long-term solution, and while the intention was good, it became clear that the approach was wrong. We have long since removed the policy in favour of more nuanced anti-bullying policies.”

Peloton shares drop amid fallout over ‘sexist’ ad

Shares in US direct-to-consumer fitness brand Peloton fell by 9% overnight as criticism against its Christmas advert mounted.

Described as “sexist” and “dystopian”, the ad, released on 21 November, shows a woman being gifted a Peloton exercise bike by her husband for Christmas. She then records a vlog showing her workouts over the year to thank him for his present.

She ends with the line: “A year ago, I didn’t realise how much this would change me.”

The advert has been branded “sexist”, “out of touch” and “dystopian” on social media, with some likening it to an episode of Black Mirror. Others have claimed that the gift suggests the wife is being pressured to keep her weight in check by her husband.

Peloton launched in the UK last year with a £50m investment, including a £7m advertising campaign. The idea was to promote the fitness company as an aspirational brand that offers convenience for time-poor people. The bike costs around £1,990 in the first instance and then users must sign up to a £39 a month subscription to access the workouts and live trainers.

Coca-Cola commits to Super Bowl ad after a year out

Coca-Cola will screen an advert during the Super Bowl after opting out of the event last year.

The drinks giant confirmed it will run a 60-second in-game ad, with multiple brands under consideration for the slot, according to Ad Age. In 2018, Coca-Cola chose to run an ad before the Super Bowl kicked off and ahead of the US National Anthem, a change in direction after a previous 12 years of in-game advertising.

Speculation is Coca-Cola will use the ad to introduce Coke Energy, which while already available in the UK will arrive in the US in January, or sparkling water Aha, set to debut in America in March. The launch of Aha has, reportedly, hit a stumbling block in the UK due to connections to the catchphrase of satirical TV presenter Alan Partridge.

Coke’s Super Bowl advert will be created by Wieden&Kennedy.

Wowcher under fire for ‘time-limited’ offer

The Advertising Standards Authority (ASA) has banned an advert from deals site Wowcher for “misleadingly” implying an offer was time-limited by the use of a countdown clock.

On 1 July the Wowcher website featured an offer for a ‘Nectar Memory Foam Mattress’ for £279 next to a countdown clock, which featured text stating “Price Guaranteed For” and “Save up to 30%” next to the original price of £399 with a strikethrough.

The complainant, who purchased the item, did not realise that once the countdown clock reached zero it reset for a further four days at the same offer price of £279 and argued that the ad “misleadingly implied” the price would revert to £399 once the countdown ended.

Wowcher argued that the purpose of the countdown timer was to inform customers of the period during which they could guarantee the deal price would remain the same and stated that the timer was not intended to claim the deal listing would expire.

The ASA ruled that consumers were likely to understand from the countdown clock that it was offering a time-limited offer and once the clock reset the product would revert to its original price. As the offer did not return to its normal price after the countdown ended, in line with consumer expectations, the offer was not “genuinely time-limited”.

The decision means that the ad cannot appear again in its current form and the ASA told Wowcher to ensure that its future advertising did not “misleadingly imply that discount offers were time-limited”, for example by using a countdown clock, if that was not the case.

Tuesday 3 December

Energy firms provide ‘unacceptable’ customer service as some callers wait up to 30 minutes

Energy firms are providing “unacceptable” customer service as some callers wait more than 30 minutes to speak to an operator, according to Which?.

The consumer group found huge variations in waiting times between energy firm, with around a fifth typically taking more than 10 minutes to pick up.

The consumer group made 432 calls to 36 energy suppliers to find out how long customers were left waiting before speaking to a member of staff. On some occasions it took more than 30 minutes for calls to be answered.

Each provider was called 12 times at different times of the day and on different days of the week to calculate the average call waiting time for customers.

Which? found that Scottish Power left customers waiting for an average of 21 minutes and 24 seconds before calls were answered. That is 20 minutes slower than the fastest company in its research, So Energy, which answered calls in just 38 seconds.

Which? head of home products and services Natalie Hitchins says: “Energy customers should be able to expect good customer service from their supplier, so it is unacceptable that some people are facing waits of half an hour or more just to speak with an adviser.”

UK drivers take on Volkswagen over dieselgate

UK drivers are accusing Volkswagen of “cheating” emissions rules by installing unlawful “defeat devices” as they take legal action over the ‘dieselgate’ scandal.

Nearly 100,000 VW drivers have filed a High Court claim alleging the car maker installed a defeat device inside its diesel cars to automatically lower fume emissions.

If the motorists win this part of their case then further litigation is likely to follow to determine whether VW is liable to the claimants in damages and if so how much it will have to pay.

VW says: “Volkswagen Group continued to defend robustly its position in the High Court in London. It remains Volkswagen Group’s case that the claimants did not suffer any loss at all and that the affected vehicles did not contain a prohibited defeat device.”

In 2015, the company was found to have installed software on its cars that deceived diesel emissions tests.

VW admitted to having manipulated the systems in 11 million vehicles worldwide in what became known as ‘dieselgate’. In 2017, it pleaded guilty in the US to criminal charges and paid out £3.3bn in civil and criminal penalties.

At the time, the VW CEO, Martin Winterkorn, apologised on behalf of the company, saying: “I personally am deeply sorry that we have broken the trust of our customers and the public. We do not and will not tolerate violations of any kind of our internal rules or of the law.”

Ocado aims for £500m in funding for tech expansion

Ocado is looking to raise £500m to expand its robots and software business.

The firm has launched a bond sale to pay for building more automated warehouses, which it is already selling to supermarket chains worldwide as they fight off the likes of Amazon.

The bonds will turn into equity if its stock climbs by between 40% and 45%. The convertible bond will mature in six years’ time and pays a coupon of between 0.75% and 1.25%.

However, analysts are unsure of the move with shares in Ocado falling more than 7% as a result of the fundraising announcement. This reversed some of the gains from Friday, when it signed an agreement with Japan’s largest supermarket chain Aeon.

Delayed film releases hit Cineworld

Cineworld’s profits have fallen below expectations as it is hit by a delay in franchise films.

Between 1 January and 1 December, box office revenue fell by 12.8% while retail sales dropped by 7.4%. Total revenue dropped by 9.7%.

Cineworld was quick to note that the second half of its financial year had started strongly with film releases such as Spider-Man: Far from Home, Joker and Frozen 2.

However the chain says: “As anticipated, the box office performance for the reported period was slower than the comparative period in 2018 reflecting the phasing of major releases and postponement of some highly anticipated movies to 2020.”

The delay in film franchises means its full year results are set to be below management’s expectations.

FA Cup delays matches by a minute for mental health awareness

This season’s FA Cup third-round fixtures will be delayed by one minute to send a “powerful” message about mental health.

The FA, in partnership with the Heads Up campaign and the National Health Service’s Every Mind Matters, wants to encourage fans to talk more about their mental wellbeing.

All 32 third-round ties, which will take place over the weekend of 3-6 January, will kick-off one minute later than usual.

FA chief executive Mark Bullingham says: “While delaying kick-off times by 60 seconds is a simple idea, it provides a powerful platform for us and our Heads Up charity partners to deliver a really important message on mental health.

“We know that men in particular can be reluctant to talk about the subject, so it is important that we use football as a vehicle to stress the importance of mental fitness.”

It is hoped the initiative will raise awareness of the importance of looking after mental health by promoting the free online Every Mind Matters resources and the Your Mind Plan tool, which fans can use to create a personal mental health action plan.

Heads Up campaign chairman Godric Smith adds: “The Emirates FA Cup is a competition for everyone – for clubs big and small – and we want to use its power to help show that we all have mental health and that we can all take a minute to focus on how we can start to improve it.”

Monday 2 December

H&M tests clothing rentals

H&M is testing a clothing rental service in a bid to face up to mounting criticism of the fashion industry over waste and pollution.

The trial, which is running in H&M’s flagship store in Stockholm, Sweden, will offer clothes for 350 kroner (£29) a week. The service is currently limited to 50 garments and only available to members of its loyalty scheme.

The test will run for three months, with H&M monitoring how it runs before it considers expanding it. The Stockholm store is also testing a range of other services, including clothing repairs, a coffee shop and beauty bar.

“We have a huge belief in rental, but we still want to test and learn quite a lot and do tweaks and changes,” H&M’s head of business development, Daniel Claesson, said in a presentation at the flagship reported by Business of Fashion.

H&M joins retailers including Banana Republic and Urban Outfitters in offering rental services. The market is thought to me worth around $1bn globally, with websites such as Vinted and Hurr Collective gaining in popularity.

UK ad spend to be among fastest in the world, says GroupM

Ad spend in the UK is expected to be among the fastest in the world with growth of 6.7% in 2020, according to GroupM.

The media agency owned by WPP forecasts spend to be 7.8% this year, the same as in 2018 as strong growth since the 2008/09 recession continues. That marks the sixth consecutive year of mid- to high-single-digit growth, with the UK’s ad sector expanding by 55% since 2013 making it “unambiguously” the world’s fourth largest.

“UK advertising has been so resilient in the face of so many challenges,” says the report.

Growth has been boosted spend from digital-first brands such as Facebook, Netflix and Google, all of which have spent hundreds of millions promoting their services. There is also a longtail of advertisers spending on digital media.

David Pemsel steps down as Premier League CEO before starting

David Pemsel has resigned as the new CEO of the Premier League two months before he was due to start the job.

The decision means the Premier League will now have to start its hunt for a new boss all over again. It is the second time an incoming CEO has stepped down before starting after broadcasting exec Susanna Dinnage also took up the role only to change her mind.

“Following media disclosures earlier this week and discussions with David Pemsel, the Premier League has today accepted David’s resignation and he will no longer be joining as chief executive,” says the Premier League in a statement.

Richard Masters will continue as interim CEO while the Premier League finds a new CEO.

Pemsel has agreed to take up the role only last month. He was previously CEO of Guardian Media Group and has worked in various marketing jobs.

Anna Bateson, chief customer officer and the Guardian’s top marketer, has taken on the job of interim CEO.

“Since joining the Guardian in 2016 and taking responsibility for our brand and reader revenues in 2017, Anna has helped us achieve impressive revenue growth, while also working closely with editorial colleagues on marketing and brand activities,” says the company.

“As previously announced David Pemsel has resigned as chief executive of GMG. We would like to express our gratitude to David for his leadership during an extremely important period for the organisation.”

Ted Baker warns about stock over-valuation

Ted Baker has warned that it may have overstated the value of its stock by up to £25m, another blow to the fashion business following the departure of its founder and boss Ray Kelvin last year over misconduct allegations.

A review will be carried out by law firm Freshfields Bruckhaus Deringer, while independent accountants have been brought in to investigate. Ted Baker says it does not expect any cash impact.

“Ted Baker is committed to ensuring the independent review is completed in an efficient and transparent manner and will update the market as appropriate. While the review is ongoing, the company will not comment further,” it says in a statement.

The news is the latest problem to hit Ted Baker. Kelvin was forced to resign after claims he presided over a culture of “forced hugging”. Since then, its sales, profits and share price have all tumbled, with the retailer reporting a loss of £23m in the six months to 10 August, compared to profit of £24.5m in the same period in 2018.

TV advertising to experience biggest price rises next year

The price of TV advertising is forecast to increase by 6.6% globally next year and online video by 6%, according to the World Federation of Advertisers (WFA).

Smaller price rises are expected for other traditional channels, while online display is forecast to experience a 4.4% rise. The numbers were compiled by analysing data from 17 companies covering 50 markets.

In total, ‘offline’ media is forecast to see prices rise by 5%, while ‘online’ media (which includes only online video and online display) will experience a 5.2% rise.

In the UK, prices are expected to be less volatile. TV, for example, will see prices rise by an average of 2.7%, online video by 3.7% and online display will be flat.