Facebook, Ribena, Huawei: 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.

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Facebook charged with home discrimination over targeted ads

Facebook has been charged in the US for allegedly allowing companies advertising housing to discriminate against users based on their race, sex and disability.

The US Department of Housing and Urban Development (HUD) charged the site for violating the Fair Housing Act. It claims Facebook has allowed advertisers to pick from user attributes, meaning they can exclude groups such as ‘foreigners’ or ‘Puerto Rico Islanders’ as well as picking based on interest meaning they could exclude people who express an interest in ‘Hijab fashion’ or ‘parenting’.

It also alleges Facebook lets advertisers exclude certain neighbourhoods or show ads only to men or women.

Facebook says it is disappointed by the charges. “We’re surprised by HUD’s decision, as we’ve been working with them to address their concerns and have taken significant steps to prevent ads discrimination,” a Facebook spokesperson tells the BBC.

In separate news, Facebook is tightening up the rules around political advertising in Europe ahead of EU elections in May. The update means advertisers will be required to provide verifiable public contact details before they can run political campaigns.

The restrictions require political advertisers to prove they live in the country they are targeting and to store ads in a public database for seven years, along with data on who they were targeting, spend and reach. Advertisers must also verify who paid for the ad.

READ MORE: Facebook charged with home discrimination through targeted ads

GDPR boosts email marketing ROI, claims report

GDPR has helped to improve the ROI of email marketing, according to research by the Direct Marketing Association. The survey of marketers found that almost two-thirds (62%) are now confident in their organisation’s ability to measure return on investment – the highest proportion since the DMA started asking the question in 2012.

And the estimate for ROI has gone up. Marketers say for every £1 spent on email they get a return of £42.24, up from £32.28 in 2017. The lifetime value of individual email addresses is also up, to £37.32.

“The good news for proponents of email marketing is that ROI is increasing; marketers are predicting an increase in investment in the channel; they’re also bullish about their ability to measure its effectiveness and their overall competence in the discipline of email marketing,” says Rachel Aldighieri, MD of the DMA.

Some 91% of marketers now rate email as important, with 56% feeling positive about the impact of GDPR and just a fifth feeling negative. The report finds that the new data regulations have had a positive impact on a range of email metrics, with marketers finding that while list sizes may have decreased, 74% said open rates increased while 75% said click-through rates had also risen. There was also a reduction in opt-out (cited by 41% of marketers) and spam complaints (55%).

Huawei posts higher annual profit despite espionage accusations

Huawei’s profits hit a record high in 2018, with its consumer business seeing a profit of 348.9 billion yuan (£39.8bn), driven by sales of its premium smartphones, including the P20 and Mate series.

Overall, net profit hit 59.3 billion yuan, up 25% year on year. Global revenue increased 19.5% to surpass $100bn for the first time, with Huawei now deriving more than half its revenue from overseas.

Huawei has claimed it could become the biggest smartphone vendor globally this year.

However, despite the profit hike, Huawei remains under a cloud of suspicion as US authorities claim its telecoms network equipment could be used by the Chinese government for spying.  The US is calling on allies to ban the company from building next-generation mobile networks, despite Huawei saying the government has no influence on the company.

Yesterday, the UK became the latest to criticise Huawei, this time for failing to fix security flaws in its mobile network equipment and revealing “significant technical issues”.

READ MORE: China’s Huawei posts higher profit as smartphone sales hit record

Ribena to redesign bottles to put recycling front and centre

Ribena is planning to redesign its 500ml plastic bottles in a bid to ensure all its packaging is fully recyclable in the UK. The update will build on work Ribena has already done: 10 years it became the first UK soft drink brand to use bottles made from 100% recycled plastic, while in January this year it light-weighted its bottles to remove 325 tonnes of plastic from production annually.

A key element of the redesign will be a reduction in the full printed sleeves that currently cover the bottles. While it revolutionised packaging in the 1980s by protecting drinks from UV and increasing brand prominence, it is no longer seen as fit for purpose.

The redesign will put bottle-to-bottle recycling front of mind. Ribena has appointed Seymourpowell to lead the redesign.

Charlotte Flook, head of Ribena at Lucozade Ribena Suntor, says:, “We are really excited about what the future holds for Ribena, which will be available with a new bottle and label from 2020. We wanted to find a design partner who would work closely with us to really celebrate Ribena’s brand personality and maintain in-store impact.”

Mondelēz, Jacob Douwe Egberts and General Mills top list of FMCG product innovators

Mondelēz International, Jacob Douwe Egberts and General Mills have topped a list of FMCG product innovators in the UK, according to a new list by Nielsen.

Mondelēz was praised for innovations including its milk chocolate wafer snack Cadbury Roundie, Jacob Douwe Egberts for the luxury coffee brand L’OR Classique, and General Mills for granola snack Nature Valley Bars.

The qualifications for the Nielsen list include requirements for distinctiveness, relevance, endurance, and the broaders strategies employed by brands to make them successful. They include ‘special treat’ products, those that tap into trends towards healthier and free-from options, growing an existing core brand or appealing to new consumers for example through premiumisation.

Some of the common factors driving innovation came from brands that showcased exceptional abilities not just to win market share and deliver growth, but in deploying specific strategies for their product category. This was done by listening to consumer needs and optimising package and product design, such as offering new formats of currently existing popular products.

Smruti Kulkarni, Europe leader of machine learning and design solutions at Nielse, comments: “In today’s FMCG marketplace, the pressure on marketers to innovate and provide a unique and differentiated offering is high.

“Over time, consumer needs and attitudes have evolved, with the emergence of e-commerce, private labels and exposure to digital platforms providing personalised messaging from brands. This fierce competition for consumer’s attention has made product innovation a challenging feat for FMCG companies.”

Thursday, 28 March

Arcadia looks to shut stores amid high rents

Arcadia is looking to shut stores as it struggles to cope with high rents and declining sales.

Sir Philip Green’s business is reported to be considering the closure of 67 stores spanning small high streets to larger sites such as shopping centre Merry Hill in the West Midlands

The Financial Times says it has seen a list of the stores that Green’s business – which spans Burton, Topshop, Evans, Dorothy Perkins, Miss Selfridge and Wallis – no longer wants to operate.

The shops reportedly cost Arcadia about £11m in annual rent which the company is keen to reduce amid struggling sales.  Arcadia wants to reduce rent by 25% with the proposed list  thought to be a first step towards a negotiation with landlords over leases that are either too costly or in struggling locations.

This could take the form of a company voluntary arrangement – where companies keep operating but reduce their rents.

The potential store closures are a sign of the continuing decline of the high street which is suffering due to high rents and the rise in online shopping. Arcadia is feeling the effect in particular as younger consumers – who tend to shop online – are core to some of its brands.

READ MORE: Arcadia retail empire draws up list of shops it wants to exit

Virgin Media to launch targeted ads by July

Virgin Media will begin using Sky’s targeted ad technology this year to bring “more scale and opportunity” to TV advertisers.

From July Sky’s AdSmart will be available on Virgin TV in the UK, and in Ireland later on in the year, enabling advertisers to target a potential audience of 30 million viewers.

AdSmart enables different ads to be shown to households watching the same programme and gives advertisers and brands the ability to tailor their campaigns to specific audience and location.

Jamie West, Sky’s group director of advanced advertising, says: “This partnership with Virgin Media brings advertisers even more scale and opportunity to reach TV audiences in a trusted, brand-safe and measurable way. With the recent announcement that AdSmart will be going global with NBC Universal in the US, AdSmart is quickly becoming the one-stop shop for reaching consumers around the world within a premium video environment.”

Sky Media will serve as exclusive advertising sales agents across the entire AdSmart network in the UK.

Virgin Media will trial AdSmart on its free-to-air TV channel, Virgin Media One, in the Republic of Ireland at the end of the year and will use both AdSmart and tech developed by its parent company Liberty Global.

Managing director of Virgin Media Television, Pat Keiely adds: “AdSmart is truly a game changer for our industry and we’re delighted to play our part by adding scale and building on its current momentum.”

Budget airline Wow Air postpones all flights

Icelandic budget airline Wow Air has postponed all flights as it finalises a deal with investors.

Flights between Dublin and Reykjavik have been cancelled as the carrier ends negotiations to secure a cash injection.

On its website, the company says flights are on hold “until documentation with all parties involved have been finalised” and said that all passengers flying today had been informed via text message or email.

Passengers are entitled to cancel their reservation for a full refund or change their reservation to the next available WOW air flight.

The privately-owned airline, founded in 2011, posted a pre-tax loss of almost $42m for the first nine months of 2018.

Tough competition and higher costs have been among pressures facing European airlines, which has seen the collapse of a number of low-cost airlines including Monarch Airlines, Primera Air and Flybmi.

READ MORE: Wow Air grounds all flights as cash lifeline sought

Dove partners with Getty to launch diverse photo library

Beauty giant Dove has joined forces with Getty Images and digital media company Girlgaze to create a diverse stock photo library.

Project #ShowUs is a portfolio of more than 5,000 images featuring 179 women from 35 countries, cast and shot by over a hundred female photographers.

The project stems from the insight that 70% of women globally do not feel represented by everyday images and aims to combat beauty stereotypes through realistic pictures of a diverse range of women and non-binary people.

Dove’s global vice president, Sophie Galvani says: “For over 60 years, we have believed in liberating women from narrow beauty ideals and have showcased beauty diversity in our advertising. However, this is not enough, and we cannot make the systemic change we need alone.”

The brand has spent over a year creating the bank of images which includes a large range of ethnicities, sizes and includes disabled models. None of the images will be photoshopped.

Amanda de Cadenet, Founder and CEO of Girlgaze, adds: “Project #ShowUs is a game changing initiative for us, as we know when there’s more diversity behind the lens, there is more diversity in front of it.”

Girlgaze, Dove and Getty are calling on creative and media professionals to start using the library.

McDonald’s buys start-up to tap into personalisation

McDonald’s has bought an artificial intelligence start-up to create personalised menus.

Israeli start-up Dynamic Yield’s will produce technology that will automatically change menus depending on the weather, time of day and traffic.

McDonald’s is reported to be paying £227m for the tech firm which has also produced algorithms for Ikea and William Hill.

The technology can not only suggest McFlurry ice cream products on hot days, or show what is popular at that particular restaurant at a certain time, but also offer customers at drive-thus their usual food order through number plate recognition.

“It can know time of day, it can know weather. We can also have it understand what our service times are so it only suggests items that are easier to make in our peak hours,” McDonald’s chief executive Steve Easterbrook told Wired.

The ultimate aim is to provide a “much more personalised experience” and to be able to suggest additional items based on the customer’s initial order, he added.

McDonald’s will also integrate the algorithm into its app and the self-order kiosks already in stores.

READ MORE: McDonald’s bites on big data with $300 million acquisition

Wednesday, 27 March

Uber buys Middle Eastern rival for £2.3bn

Uber has acquired Middle Eastern ride-sharing rival Careem for £2.3bn.

Dubai-based Careem, which was founded in 2012 and operates in 15 countries throughout the Middle East, Africa and Asia, will continue to operate under its own brand as a subsidiary of Uber.

“This is an important moment for Uber as we continue to expand the strength of our platform around the world,” Uber chief executive Dara Khosrowshahi says in a statement.

“Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region.”

The acquisition is considered an opportunity for both companies to rapidly expand and capitalise on the region’s under-penetrated mobility opportunity and growing digital economy.

According to a blog post from Uber, the Middle East is already experiencing the economic and social benefits of developing technology and access to transportation.

The deal is still subject to regulatory approvals and the transaction is expected to close in 2020.

READ MORE: Uber to acquire Careem to expand the Greater Middle East regional opportunity together.

EU approves new controversial copyright laws

The European Parliament has voted in support of new copyright laws after more than two years of lobbying from music artists to the head of YouTube.

The reforms relate to Articles 11 and 13: the first of which would force tech giants such as Google and Facebook to pay for content from news websites, while the latter would hold them accountable for posting content from artists and musicians without a copyright licence.

Memes and gifs will be exempt from the new laws.

Many are in favour of the new reforms but tech companies say it will be difficult to prevent copyright violations while arguing that artists are already paid fairly under the current system.

This also marks the first major change to copyright laws since an amendment in 2001.

According to the BBC, it has taken a number of revisions for the current legislation, which was backed by 348 MEPs, with 278 voting against it. The member states are now required to approve the decision and if they do they’ll have two years to implement it.

However, Google argues there’s still legal uncertainty.

“The details matter and we look forward to working with policy-makers, publishers, creators and rights holders, as EU member states move to implement these new rules,” the company says.

READ MORE: Article 13: Memes exempt as EU backs controversial copyright law

WFA names Mastercard marketing boss as its new president

Mastercard’s chief marketing and communications officer, Raja Rajamannar, is the new president of the World Federation of Advertisers (WFA) where he will serve as president for a two-year term with the option to extend for a further two years.

Rajamannar has been at Mastercard since 2013 where he has been responsible for the company’s marketing transformation such as helping pioneer its move to become a symbol brand, as well as the launch of its sonic branding.

“The opportunity in front of marketers today to make a difference for their brand, their business and even the world is tremendous. I am honoured to pick up and carry the torch as president of WFA, an organisation committed to elevating and advancing the activities of our profession, and a role I am convinced will become even more important in the years to come,” Rajamannar says.

Rajamannar replaces David Wheldon, CMO at RBS, who has been president since 2015.

Wheldon will continue to serve on the WFA’s executive committee as regional vice-president for Western Europe.

Young’s launches new campaign for Chip Shop and Gastro brands

Young’s Seafood is launching a new campaign designed to promote its Chip Shop and Gastro brands.

The campaign, which will go live on 1 April, uses Sky’s AdSmart technology which allows different ads to be shown to different households that are watching the same programme, meaning brands can “cherry-pick” their audiences using thousands of combinations from age, location or life style.

AdSmart monitors more than 600 channels before identifying relevant opportunities to target consumers during key buying moments.

The spot, produced by Quiet Storm, marks the first time the Chip Shop and Gastro brands have appeared on TV together and highlights the Chip Shop message of “less than 250 calories per fillet” in another brand first for Young’s.

Digital advertising via websites such as BBC Good Food and Delicious Magazine will support the TV spot.

Marketing and policy teams need to work more closely together

Nine out of 10 marketers believe it is becoming more important to work closely with the policy team in order to meet society’s changing brand expectations and demands.

New research from the WFA finds both sides demand greater interaction with 87% of policy experts and 68% of marketers wanting to see better collaboration.

Currently, 65% of policy executives feel there is too little interaction between the two teams, compared to 43% of marketers.

Most marketers see the value that policy teams bring in avoiding regulatory challenges, with 65% able to think of a time when the policy team helped avoid regulatory scrutiny.

But marketers say even more dialogue and collaboration between policy and marketing will be required in the future when it comes to data collection and privacy (74%) and corporate reputation and responsible marketing (both 80%).

Half of marketers (54%) also feel policy professionals don’t understand the challenges they face, while policy professionals feel misunderstood to an even greater extent, compared to 76% of policy respondents who say the same about marketers.

Tuesday, 26 March

Apple TV+

Apple unveils streaming service to rival Netflix

Apple unveiled a flurry of new offers at an event in California yesterday evening, as it looks to extend its reach beyond hardware and cement its future in services.

These include an Apple credit card, its news subscription offer Apple News+, a games subscription service called Apple Arcade and a new Apple TV app.

But perhaps most notable was the launch of Apple TV+, a video subscription service that it hopes will rival the Netflix and Amazon Prime.

Launching this autumn, the subscription service will feature original shows, movies and documentaries, thanks to tie-ups with directors and stars including Oprah Winfrey, Steven Spielberg, Jennifer Aniston, Reese Witherspoon and JJ Abrams.

“We’re honoured that the absolute best line-up of storytellers in the world — both in front of and behind the camera — are coming to Apple TV+,” Eddy Cue, Apple’s senior vice-president of internet software and services said at the event. “We’re thrilled to give viewers a sneak peek of Apple TV+ and cannot wait for them to tune in starting this [autumn]. Apple TV+ will be home to some of the highest quality original storytelling that TV and movie lovers have seen yet.”

Apple has yet to disclose the pricing and where Apple TV+ will be available.

Nike fined £10.7m for restricting football merchandise sales

Nike has been fined €12.5m (£10.7m) by the European Commission for restricting the sale of football merchandise across borders.

Affected products include mugs, bed sheets and stationery featuring the logos of clubs such as Manchester United and Barcelona, among others, but not Nike’s trademark.

Nike reportedly restricted the manufacturers of these products from selling in different countries leading to less choice and higher prices for consumers.

The illegal practices took place between 2004 and 2017, but Nike received a 40% reduction on the fine for co-operating with the investigation.

READ MORE: Nike fined by EU for restrictions on football merchandise sales

Sports Direct considers takeover bid for Debenhams

Mike Ashley’s Sports Direct is considering a cash bid for Debenhams as it looks to protect its stake in the business from being wiped out by an alternative rescue plan.

In a statement issued to the stock market after the London exchange closed on Monday, the retail group said it will seek to run the department store chain “for the benefit of all of Debenhams’ stakeholders rather than for the benefit of Debenhams’ existing lenders”.

Sports Direct is contemplating the offer “alongside other options” but added that such a bid would be “compelling for Debenhams shareholders” as it will allow them to cash in their investments should they wish to.

READ MORE: Sports Direct considering cash bid for Debenhams 

George at Asda to make clothes from recycled plastic bottles

George at Asda

Asda’s George fashion and homeware brand is to start selling products made from recycled plastic and clothing, as part of its commitment to only use polyester sourced from recycled materials by 2025.

Products include cushions and throws made from recycled plastic bottles and blouses and dresses made with fabric from recycled polyester, which will launch as part of George’s spring/summer 2019 range.

Asda has also committed to helping customers better understand the sustainability of their clothing and reduce its environmental impact. It will provide information about garment care and raise awareness of how consumers can repurpose, reuse or recycle old clothing.

George already publishes a list of the first-tier factories it works with, where clothes are cut, sewn and trimmed, on its website but to further increase transparency around its supply chain it will also begin to publish a list of second-tier apparel factories, those responsible for dyeing, printing and finishing garments.

“As the second largest clothing retailer in the country, we have a responsibility to do the right thing by our customers, not only on the price and quality of our goods, but also on the impact we have on the world around us,” senior vice-president for commercial, Nick Jones, writes in a blog post.

“Our George sustainability strategy builds on the work we’ve done to date and sets stretching targets and commitments to reduce the environmental and social impact of our products.”

Samsung issues surprise profit warning

Samsung has issued an unexpected profit warning, as memory chip sales slide.

The South Korean tech firm says it expects to miss market estimates for the first quarter of this year, as the price for LCD screens and semi-conductors falls.

“The company expects the scope of price declines in main memory chip products to be larger than expected,” it said in a regulatory filing.

Samsung, which as well as being the world’s largest smartphone maker also supplies display screens to Apple, has been affected by lower than expected demand for the latest iPhones and the fact consumers are not upgrading.

READ MORE: Samsung issues profit warning as chip sales slide

Monday, 25 March

Tesco trials plastic-free fruit and veg

Tesco is trialling removing plastic from a number of fruit and vegetable items in an effort to cut down on packaging waste.

Starting today, the trial will run for one month at two of its Extra stores in Watford and Swindon.

Plastic packaging will be removed from 45 items including apples, mushrooms, bananas and avocados, where loose alternatives are available.

“We hope this trial proves popular with customers,” says Sarah Bradbury, director of quality at Tesco. “We’ll be keeping a close eye on the results, including any impact on food waste.”

READ MORE: Tesco begins plastic-free trial for selection of fruit and veg

British Army ads planned to target ‘January blues’

The British Army’s ‘Snowflake’ recruitment campaign has been accused of targeting young people during a time when they were more likely to feel emotionally low.

According to the Guardian, which has seen a briefing document, social media promotion of the campaign was organised to coincide with TV ads shown on one of the bleakest weekends of the year.

“Social should be synced with the biggest TV shows that we are launching in and should account for unweights during the launch weekend, especially on the Saturday and Sunday 5 and 6 of Jan, when the ‘January blues’ are settling in”.

Charlotte Cooper, UK research and campaign officer at Child Soldiers International says this is “another example of how the army tries to exploit young people’s emotional vulnerability to drive recruitment, instead of encouraging a fully informed, mature and rational decision over a potentially life-changing commitment.

“The snowflake campaign tried to present a new side to the army, but this advertising brief shows the same old story: young people with the fewest options being mis-sold a one-sided view of military life as the magic ticket to a better life.”

READ MORE: Army ads accused of targeting youngsters during ‘January blues’

Uber to buy Dubai-based rival

Uber is set to acquire Dubai-based ride-sharing taxi company Careem in a deal worth $3.1bn.

According to sources close to the matter, Uber will pay $1.4bn in cash and $1.7bn in convertible notes for Careem, which will be convertible into Uber shares priced at $55 per share.

The news comes as Uber prepares to make its IPO this month. The 10-year-old company was most recently valued at $76bn in the private market and is seeking a valuation of up to $120bn.

Uber spokesman Matt Kallman has declined to comment on the acquisition of Careem.

READ MORE: Uber to Seal $3.1 Billion Deal to Buy Careem This Week

Simply Be launches ‘Unretouched’ Spring campaign

Online retailer Simply Be has unveiled its 2019 Spring campaign which looks to “champion” body acceptance and encourage women to not let their shape or size define them

The campaign shows three models – including a power lifter, dance teacher and new mum – living the moments, hobbies and talents that changed their relationships with their bodies, with Simply Be claiming it has been “completely unretouched”.

“We’ve created a campaign that simply celebrates women for whatever it is that makes them, them. Hopefully by showing our girls unretouched and embracing opportunities regardless of their size or shape, we’ll inspire other people to be their true selves,” says Ralph Tucker, chief product and supply officer at parent company N Brown group.

“Fashion shouldn’t shame our shape or size, it should empower us… so we’re encouraging all women to use their style to champion their individuality while showing that curves really don’t mean compromise.”

The campaign will run for four weeks and include TV, digital and print adverts, including slots during Hollyoaks and Made in Chelsea.

Majestic Wine to close stores and rebrand

Majestic Wine is closing stores and renaming itself Naked Wine, the brand it bought in 2015.

The wine retailer will begin trading under the new name in June, which is when it will outline a “transformation plan” which will likely result in a number of store closures and job losses.

Rowan Gormley, group chief executive, says: “It is clear that Naked Wines has the potential for strong sustainable growth, and we will deliver the best results for our shareholders, customers, people and suppliers by focusing all our energies on delivering that potential.

“Where we have no choice but to close stores we will aim to minimise job losses by migration into Naked.”

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