Amazon, ITV, Nestlé: 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.

Amazon delivers bumper Christmas results

Amazon’s revenues surpassed $87bn (£66.4bn) in the final quarter of 2019, driven by increased investment in faster shipping and making its one-day shipping default for Prime members.

This was up from $72.4bn (£55.3bn) the previous year and equivalent to $29bn (£22.1bn) a month. Amazon boss Jeff Bezos says the number of items delivered to US customers with Prime’s free one-day and same-day delivery more than quadrupled when compared with the same quarter last year.

Revenues for Amazon’s cloud computing business, Amazon Web Services, were up 34% year on year to $9.9bn (£7.6bn) in the final quarter of the year.

Profits, meanwhile, increased from $3bn (£2.3bn) in Q4 2018 to $3.3bn (£2.5bn) in Q4 2019, with the tech giant’s shares rising by over 10% in after-hours trading.

ITV names new group chief data officer

ITV has hired Channel 4’s Sanjeevan Bala as its new group chief data and AI officer.

Reporting to CMO Rufus Radcliffe, Bala, who joins in May 2020, will lead the transformation of ITV’s group-wide data and AI strategy. He will be responsible for evolving and consolidating the organisation’s data assets, raising the overall data capability and accelerating the adoption of AI to fuel growth.

Bala will head up a team, providing both data science to create new value, and analytics to “power experimentation” across ITV’s commercial teams, direct to consumer business, broadcast, studios, marketing and strategy functions, the management board, and advertising partners.

Bala joins ITV direct from his role as head of data science at Channel 4, where he led a team that launched a number of global-first commercial innovations resulting in incremental advertising and viewing value.

Radcliffe says: “Accelerating ITV’s data capabilities is at the heart of ITV’s ‘More Than TV’ strategy, and we are delighted that Sanjeevan is joining ITV at this exciting time in our transformation.

“Sanjeevan has a proven track record of using data to drive commercial value, and we look forward to him building upon the foundations already established to take ITV’s data strategy to the next level.”

ParalympicsGB and Nestlé partner for Tokyo 2020 Games

Paralympics GB and Nestlé have partnered to support the Tokyo 2020 Games and encourage British families to live a healthier and more active lifestyle.

Taking inspiration from the Paralympics GB team, the campaign will share top tips on how to keep fit and remind UK households of the importance of a nutritionally balanced breakfast.

Nestlé Cereals UK is backing four of the Games’s most popular sports – athletics, table tennis, cycling and power lifting. This will include new pack designs for eight of its cereals including Cheerios, Shredded Wheat and Shreddies, as well as competitions for a suite of prizes aiming to help UK households get sporty.

“As we build towards Tokyo 2020 we are delighted to be working with Nestlé Cereals UK on such an ambitious campaign which we believe can have a positive impact on the whole nation,” says Mike Sharrock, CEO of the British Paralympic Association.

“The Paralympic movement is all about celebrating inclusivity and what people can achieve when given the opportunity and this exciting new partnership will bring families together and encourage them to feel the enormous benefits of leading more active lives.”

John Lewis launches virtual sofa

John Lewis has launched a new augmented reality feature in its iOS app that will allow customers to see how sofas and armchairs will look in their homes before they buy.

Developed in-house, the new feature is initially being tested with more than 120 of the retailer’s best-selling sofas, with more to be added in the coming weeks.

Customers can try out different colour swatches, check the furniture’s scale, move the product around the screen and rotate it for a full 360 view.

“Buying a new sofa or armchair is a very considered purchase as it’s something we tend to have for a long time,” says John Lewis’s head of online product and customer experience, Sean O’Connor.

“From talking to our customers we know that many of them go through as many as 13 different stages before making their final choice of sofa; so we wanted to simplify this process for them.”

O2 to offer free tickets to shows for a year

O2 is marking its 18th anniversary with a giveaway that will see one person win a pair of tickets for every event taking place in The O2 arena for a year.

The Blue Ticket, which will give access to more than 100 shows including Harry Styles, Stormzy and Elton John, can be won by following O2 on Twitter, retweeting and tagging a friend in the competition post using the #O2BlueTicket hashtag.

“There are so many iconic acts gracing the stage at The O2 over the course of 2020 but for us, it’s our customers that are the headline act,” says O2 CMO Nina Bibby.

“This February marks the 18th birthday of the O2 brand and what better way to recognise by gifting one lucky person the opportunity to see every single incredible artist and event at The O2 for a while year.”

Thursday, 30 January

Privacy concerns weigh on Facebook profits as ad business grows

Facebook has experienced its first annual fall in profits for five years, down 16% in the year to 31 December to $18.4bn (£14.1bn).

This is despite the social media giant’s advertising business growing by 25% during the fourth quarter to $20.7bn (£15.9bn) and rising by 27% to $69.6bn (£53.5bn) in the year to 31 December.

Profits were impacted by increasing legal costs, up 51% to $46.7bn (£35.9bn), which included $550m (£384m) paid out to settle a lawsuit in Illinois over Facebook’s use of photos for its facial recognition technology.

During the fourth quarter of 2019 the social media company spent $3bn (£2.3bn) on sales and marketing and $9.9bn (£7.6bn) in the year to 31 December.

Acknowledging the damage issues over transparency and privacy have caused the company, CEO Mark Zuckerberg said: “My goal for this next decade isn’t to be liked but to be understood. In order to be trusted, people need to know what you stand for.”

During December 2019 Facebook had 1.66 billion daily active users on average, up 9% year on year, and 2.5 billion monthly active users as of 31 December, up 8% year on year.

These numbers swell when the company takes into account the number of users across the family of apps (Facebook, Instagram, Messenger and WhatsApp) – some 2.26 billion daily active users on average for December 2019, up 11% year on year. The Facebook family of apps had 2.89 billion monthly active users as of 31 December, up 9% year on year.

Unilever sales rise as emerging markets fuel growth

Unilever sales rose by 2.9% in 2019, fuelled by 5.3% growth in emerging markets and the strong performance of its home care division.

In overall terms, the FMCG giant says its brand and marketing investment (as a percentage of turnover) was flat in 2019, while in constant currencies investment increased by €70m (£59.2m).

Unilever’s turnover rose by 2% to €52bn (£44bn) during 2019, with home care accounting for €10.8bn (£9.1bn). Sales in the home care division rose by 6.1% last year, with “cleaner choice” products, such as Cif surface sprays with natural cleaning ingredients, performing well.

The beauty and personal care sector grew by 2.6%, generating a turnover of €21.9bn (£18.5bn). Dove notched up double digit growth, as the deodorants business performed strongly, while prestige brands including Dermalogica, Hourglass and Living Proof also delivered double digit growth. The company noted the impact of “brand and marketing efficiencies” in this division as a result of its zero-based-budgeting programme.

Unilever’s food business turned over €19.3bn (£16.3bn) in 2019, with sales growth of 1.5%. The ice cream division grew thanks to plant based and ‘better for you’ offerings, including Magnum vegan and Ben & Jerry’s lighter Moophoria variants.

Chief executive Alan Jope described Unilever as “stepping up” the execution of its fundamental growth drivers: “These are to: increase penetration by improving brand awareness and availability; implement a more impactful innovation programme; improve our performance in faster growing channels; drive purpose into all our brands; and fuel growth through cost savings.”

Jope confirmed Unilever also continues to evaluate its portfolio and has initiated a strategic review of its global tea business.

“As we near the completion of our three-year strategic plan, we expect continued improvement in underlying operating margin and another year of strong free cash flow, remaining on track for our 2020 goals,” he added.

UK ad spend up 5.6% as digital drives growth

UK ad spend rose 5.6% year-on-year to £5.97bn during the third quarter of 2019, marking the industry’s 25th consecutive quarter of market growth.

According to the Advertising Association/WARC Expenditure Report, UK ad spend is forecast to grow by 5.2% to £24.8bn and rise by a further 5.2% in 2020 to reach £26.1bn.

Spend on digital out of home rose by 17.1%, TV broadcaster video on demand (VOD) increased by 16.7% and search was up 11.9%, while ad spend on national online newsbrands grew by 6.5%.

The third quarter was particularly strong for cinema advertising, up 46.5% on the same period in 2018. However, spend on TV (non-VOD) fell by 2.3%, while direct mail spend was down 4.5%.

“These media spend figures are particularly impressive given this was a period of Brexit and political uncertainty and very low overall economic growth,” says Advertising Association chief executive, Stephen Woodford.

“As the Credos report on UK digital advertising showed, this is in part fuelled by the exceptional growth in SME spend in digital, as well as larger advertisers continuing to move budgets into digital formats in most media sectors.”

BBC culls 450 jobs in cost-saving push

The BBC is cutting 450 jobs from its news division in a bid to save £80m by 2022, as the corporation comes under pressure from the government over its funding future.

The aim is to cover fewer stories, which will be produced by a centralised pool of journalists creating content to be rolled out across the BBC, rather than for specific programmes, with an added emphasis on online.

Head of news, Fran Unsworth, said the BBC was covering around 100 different news stories a day across its service, which was “overwhelming” the public. The programmes set to lose dedicated journalists include Newsnight, Radio 5 Live and the Victoria Derbyshire show, which has already been axed.

According to The Guardian, Unsworth said the potential decriminalisation of non-payment of the licence fee being proposed by the government could lead to further cuts and she also pointed to the impact of changing media habits. Unsworth added that never before in her career had she felt the BBC “under the threat” as it is now.

Manchester City rolls out #SameGoals campaign to boost female participation in football

Manchester City is bringing back its #SameGoals campaign as it looks to inspire the next generation of female footballers.

The club is planning a number of activations to mark the campaign, which is now in its third consecutive year. This includes giving a free limited edition football to every girl who shares a video of them scoring or saving a goal, when posted to one of three social channels using the hashtag #SameGoals.

Aspiring female footballers will also be given the opportunity to take part in specially organised football clinics in the hometowns of four Manchester City Women players.

The club will also hold a #SameGoals festival on 9 February ahead of Manchester City’s home game with West Ham United, where children and families will be able to take part in skills challenges and coaching clinics.

Head of women’s football at Manchester City, Gavin Makel, says: “Everyone at Manchester City has been delighted with the success of the past two years of Same Goals and we’re extremely excited with our plans for 2020.

“Our aim is to create a movement to get girls scoring goals. As a club, we are committed to doing all we can to help develop the next generation of female footballers and by hosting the hometown clinics and football festival, we want to show girls around the country that they can realise their potential.”

Wednesday, 29 January

iPhone sales propel Apple to record profits

Apple’s revenues and profits hit a record in the final quarter of 2019 as strong sales of the iPhone boosted its performance.

Apple generated $91.8bn in revenues, up 9% year on year and ahead of analyst expectations due to $56bn in sales of the iPhone. Services revenue – money it makes from things like Apple Music and the App Store – also hit a record high of $12.7bn.

“We are thrilled to report Apple’s highest quarterly revenue ever, fuelled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for services and wearables,” says Apple CEO Tim Cook.

“During the holiday quarter our active installed base of devices grew in each of our geographic segments and has now reached over 1.5 billion. We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers — and a great driver of our growth across the board.”

Adidas commits to ending plastic waste

Adidas has committed to ending its creation of plastic waste, promising to innovate on new products and sign partnerships to achieve its aim.

The commitment is part of its ‘Three Loop Strategy’, which focuses Adidas on creating three categories of sustainable products. The first category focuses on recycled materials; the second on creating a circular loop where products can be remade; and the third on a ‘bionic’ loop that will see Adidas investing in “products that can have multiple lives before being returned to nature”.

“We’re not just focused on changing how we do business, we’re dedicated to changing how our industry does business,” says Adidas’s vice-president of brand strategy James Carnes.

The sportswear company has a series of targets to ensure it meets its commitment. These include short-term goals such as recycling more than 50% of the polyester it uses this year and longer term aims such as achieving climate neutrality by 2050.

“We believe that through sport we have the power to change lives, and we are dedicated to creating that change. Since 1998, we’ve been developing and introducing innovations to end plastic waste,” explains Carnes.

“Our commitment to eliminate the use of virgin polyester in our products by 2024 helps us get one step closer to being a more circular company.”

Creating a circular business model will also be key, with Adidas looking to extend the life of its products through rental, repair and re-commerce. It will aim to use materials that can be recycled multiple times or are developed from natural resources or cells and proteins in a lab.

McDonald’s expands delivery service to Just Eat

McDonald’s has struck a deal with Just Eat, making it the second delivery partner to work with the fast food giant after it teamed up with Uber Eats in 2017.

The deal is described by Just Eat as “exclusive” even though the Uber Eats agreement is still running. Just Eat will begin delivering McDonald’s orders at the end of the year in the UK and Ireland.

Delivery has proved hugely popular in the UK, with its UberEats deal now available in 950 restaurants and accounting for more than 10% of McDonald’s UK business.

McDonald’s UK CEO Paul Pomroy says: “Our McDonald’s delivery service, McDelivery, is a key part of our offer and has proven extremely popular with our customers since its launch in 2017. It provides even more convenience and complements our traditional restaurant and drive-thru business, as well as our My McDonald’s app.”

Facebook rolls out tool to let users limit the data they share with advertisers

Facebook is rolling out a new privacy feature called ‘Off-Facebook Activity’ that lets users see which third-party apps have used information about them.

The tool also lets users disconnect any information the third party has shared from their account and stop them showing targeted ads. However, this does not mean the data is deleted but that data will be anonymised before being shared with advertisers.

The move is part of Facebook’s commitment to improve privacy controls on its social network following its $5bn from the US Federal Trade Commission over the Cambridge Analytica scandal. Facebook is sending users a reminder to check their privacy settings.

Facebook’s vice-president of Northern Europe Steve Hatch says: “There are a number of ways you can control your information on Facebook and we’re always looking at more ways for you to do this. That’s why from today, our Off-Facebook Activity tool will make it easy to manage which apps and websites can access your information.”

Habito escapes ban over ‘Mortgage Kama Sutra’ ads

Habito has avoided the wrath of the Advertising Standards Authority after the ad regulator that its ‘Mortgage Kama Sutra’ ad, which appeared in Grazia, did not break the ad rules.

The print ad equated the challenges of taking out a mortgage with a poor sex life. It was illustrated with suggestive imagery with captions such as ‘Downpayment Doggy’, ‘Prime 69’ and ‘The Base-rate Scissor’.

Two complainants questioned whether the ads was overtly sexual and therefore “offensive and irresponsible”. In mitigation, Habito pointed to a YouGov survey that found one in 10 couple believe the stress of mortgage applications had a negative impact on their libido and said it was meant as a “fun take on mortgages for an adult-only audience”.

And the ASA found in Habito’s favour, saying most readers would see the ads as a “humorous play on the results of a survey”.

“While we acknowledged that some would find the artistic illustrations of sexual positions and accompanying descriptions distasteful, they were not explicit and we considered that most readers were likely to view the ad as a humorous play on the results of the survey.

“Consequently, we concluded that the ad was unlikely to cause serious or widespread offence to those who saw it and was not irresponsible,” says the ASA in its ruling.

Tuesday, 28 January

Sainsbury’s pledges £1bn to cut emissions

Sainsbury’s has pledged to invest £1bn over the next 20 years to reduce greenhouse gas emissions to net zero by 2040.

The supermarket giant, which currently has a carbon footprint of 1 million tonnes, will focus on reducing emissions, food waste, plastic packaging and water usage over the next 20 years.

By the end of 2022, all Sainsbury’s stores will be 100% lit by LED and the company has promised to halve its use of plastic packaging by 2025. The company has also committed to reducing food waste by 50% by 2030.

Sainsbury’s outgoing chief executive Mike Coupe says: “Our commitment has always been to help customers live well for less, but we must recognise that living well now also means living sustainably.

“We have a duty to the communities we serve to continue to reduce the impact our business has on the environment and we are committing to reduce our own carbon emissions and become net zero by 2040, 10 years ahead of the government’s own targets, because 2050 isn’t soon enough.”

Sainsbury’s will work with the Carbon Trust to assess emissions and set targets for reduction, while publicly reporting on its progress every six months.

Multi-million pound Brexit ad campaign fails to deliver

The government’s Brexit advertising campaign, noted for being its biggest since the Second World War, may have failed to encourage more people to seek information about leaving the EU.

More than £46m was spent on the ‘Get Ready for Brexit’ campaign until work was paused after an extension was agreed with the EU in October. Despite the costs, the National Audit Office (NAO) says the Cabinet Office “could not demonstrate that the campaign resulted in significantly better preparedness”.

The NAO notes that a key performance indicator — the proportion of UK citizens who reported that they had looked or started to look for information — “did not notably change compared to the beginning of the campaign”. It added that the impact of the campaign was likely to have been reduced as fears over a no-deal exit receded during October.

Less than half of the total £100m budget earmarked for the advertising campaign was spent during the two-month period from the start of September.

The report comes as the government prepares a new ‘Ready to Trade’ campaign on 1 February — the day after the UK is due to formally leave the EU. Another campaign will aim to raise awareness of Britain’s departure this week and the end of the transition period on 31 December — the deadline by which Britain must negotiate a new trading relationship with the bloc.

Virgin Group and Heineken appoint new top marketers

Virgin Group and Heineken UK have both hired new top marketers as they focus on brand building.

Heineken UK’s marketing director, Cindy Tervoort, is leaving to take up a global role with the brewer’s ecommerce business. Tervoort has been head of UK marketing for four years and is being replaced by Michael Gillane.

Gillane is currently director of data driven commerce and market intelligence. In the role, he has built and developed the UK’s digital acceleration unit driving in-housing of media and data capability, and integration with consumer insights and ecommerce.

Heineken’s UK managing director David Forde says: “I am confident that Michael will continue to develop our market leading no and low alcohol portfolio and drive our premiumisation and digital transformation journeys. I have personally worked with Michael for six years and I know him to be a passionate leader who fosters true cross functional collaboration.”

Tervoort is to become managing director of Beerwulf, Heineken’s ecommerce portal, which specialises in offering craft and variety beers plus draught at home systems.

Elsewhere, Virgin Group has appointed Claire Hilton as head of global brand development.

Hilton will work to support more than 60 companies with culture, purpose and brand building as Virgin moves into its 50th year.

Hilton has spent the past 16 years at Barclays, where most recently she was managing director of brand & insight. During her tenure, Hilton was behind the bank’s purpose-led marketing strategy.

She says: “Virgin is a brand I have always admired. The opportunity to join the team in its 50th year is an exciting privilege. It’s going to be fascinating working with a variety of Virgin companies across multiple industries and continents to ensure Virgin’s brand DNA shines through. Ultimately, the role exists to help Virgin companies embody our central purpose of changing business for good.”

Metro launches first brand campaign

Metro Bank has launched its first nationwide brand campaign as it plans for further expansion in the UK.

‘People-People-Banking’, created by Mr President, celebrates the bank’s employees as it highlights the importance of customer service.

The campaign begins with a series of out-of-home ads that depict six Metro Bank employees who “demonstrate the highest standards of customer service”.

Later this week, the bank will debut its ad, which follows a bank manager as she heads off to work, interacting with locals before opening the bank to a customer and her dog.

The challenger bank has 73 stores in the UK and is hoping the ad push will give it a boost outside London and the south east of England.

Metro Bank’s brand and marketing director, Jessica Myers, says: “Since we were founded nearly 10 years ago, our purpose has always been to create fans. We champion the value of human relationships in banking. The launch of our first ever brand campaign now gives us an exciting platform to communicate this and showcase our award-winning customer service credentials.”

The ad will be supported by cinema, online video and paid search.

Adidas celebrates Superstar shoe’s 50th anniversary

Adidas is launching a campaign that celebrates its classic Superstar shoe’s place in culture.

‘Change Is a Team Sport’ kicks off with film that honours the trainer’s 50-year history and inducts a new class of representatives into the Superstar team.

Adidas general manager for Originals & style Torben Schumacher says: “Change Is a Team Sport celebrates the idea that when creators join together, we can drive and inspire change much like the way the Adidas Superstar has been the shoe for game-changing creators and teams for 50 years and counting.

“We’ve looked to our Adidas family to inspire the next generation and create a new legacy for one of the most iconic shoes of all time.”

The film, directed by and starring Hollywood actor Jonah Hill, follows skater Jenn Soto as she makes her way through a facility where creators from different crafts and generations come together to work for change. Meeting an array of different creators along the way, all decked out in black tracksuits and Superstars, Soto’s trip through the facility underscores the fact that it’s teamwork that drives meaningful change.

The film also stars pop and sport culture icons such as Pharrell Williams, actress Yara Shahidi and singer Anitta.

Monday 27 January

Fox opens up new Super Bowl ad slots

Super Bowl broadcaster Fox has opened up new ad slots for this weekend’s game having claimed earlier in the month that ad slots had sold out in record time.

With a number of big brands returning to in-game ads after absences of varying lengths, the media fuss surrounding political ads from Donald Trump and Michael Bloomberg’s 2020 election campaigns and, on the field, the return of two much-loved, established teams (the Kansas City Chiefs and San Francisco 49ers), hype surrounding the game has reached heights not seen in recent years.

Working in tandem with the National Football League (NFL), Fox has created two 60-second “floating” slots that will be sold to long-term sponsors and appear during one of the game’s unscheduled breaks (for a timeout, injury or other delay in the action).

The NFL has been concerned with the number of ad slots during previous games and had reached an agreement with Fox to cut down on the amount of agreed in-game commercial breaks, from five to four.

Nearly 10,000 retail jobs already lost this year

Barely a month old, 2020 is already looking like one of the worst years on record for retail.

The Centre for Retail Research says 9,949 jobs in the sector have been lost over the past four weeks, with more bad news to come.

Julie Palmer, a partner at insolvency specialists Begbies Traynor, warns: “We’re going to see more retail failures this year.

“January is traditionally a really bad month for retailers and if retailers have not had a good Christmas, they will really struggle, particularly at the end of January when the quarterly rent bill is due.”

Begbies Traynor says there are a record 500,000 retailers at risk.

A number of retailers, including Asda, Debenhams, HMV and Topshop, have announced store closures in January, while Mothercare closed for good and Beales and Hawkin’s Bazaar are both in administration.

H&M faces questions over data protection breach

High street retailer H&M is reportedly being investigated in Germany after claims were made that the company had used data to run checks on the personal lives of staff.

According to a report in the German newspaper Frankfurter Allgemeine Zeitung, H&M collected data to keep checks on staff, described by Hamburg’s state data protection commissioner in Johannes Caspar as “comprehensive research of the employees, which is without comparison in recent years”.

The employees in question all worked at the company’s custom centre for Germany and Austria.

“The local team has taken a range of action and is in close dialogue with all colleagues,” says an H&M spokesperson.

“Since the incident is in legal examination we cannot further comment on that at the moment.”

Nike’s Vaporfly running shoe faces ban

World Athletics, the sports governing body, is expected to ban Nike’s controversial Vaporfly shoe amid claims that it gives runners an unfair advantage.

Independent studies claim the Vaporfly, with its foam soles and carbon fibre plating, can improve performances by up to 6%.

Somewhat inevitably, rumours of an imposing ban has seen a new wave of interest among buyers, with the shoe enjoying a surge of popularity on the secondary, resale market.

Renault and Nissan keen to revive partnership in Japan

Chief engineers at Renault and Nissan are to meet in Japan this week, hoping to fully restore collaboration projects to a backdrop of ongoing controversy surrounding former Nissan boss Carlos Ghosn.

With Brazilian-born businessman now a fugitive pleading his innocence against charges of financial misconduct, the two car companies are keen to resurrect the partnership originally put together by Ghosn.

Both Nissan and Renault see the alliance as a potential cost-cutter, with new hybrid power systems a particular area of interest.

“The alliance has taken a hit, but the alliance engineering team is still there,” Reuters quoted a third party as saying.

“You cannot, from one day to the next, stop something that’s been embedded so deeply.”