Facebook, Kraft Heinz, McDonalds: 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.

Facebook sued for ads ‘discriminating’ against older and female users

Facebook is being sued for discriminating against older and female users by allowing brands to withhold advertising for financial services such as bank accounts, insurance, investments and loans.

The US class action alleges that the social media giant allows financial services advertisers to “target” prospective customers by age and gender. The legal case claims that Facebook enables financial services companies to limit ads for their services to demographics such as “people ages 24 to 40” or “men ages 20 and older”.

The case comes seven months after Facebook said it would overhaul its targeted ad system in a bid to settle lawsuits brought by US civil rights groups, which alleged the platform allowed employers, landlords and lenders to discriminate by age, gender and postcode when placing job, housing and credit ads.

Lawyer for the complainants, Peter Romer-Friedman, told Reuters: “The internet is not a place where you can discriminate against people because of their age or gender, particularly in financial services opportunities.

“It would be like General Motors refusing to offer women or older people the same features on a car as men or younger people.”

Facebook said it was reviewing the complaint and added that its policies “have long prohibited discrimination”.

Kraft Heinz calls for ‘fundamental change’ as sales slide

Kraft Heinz CEO Miguel Patricio is calling for “fundamental change” after the consumer goods giant saw sales slide by 4.8% to $6.08bn (£4.6bn) in the three months to 28 September.

“We need to do a fundamental change in the company from a company that was much more focused on today, and probably pursuing a strategy that was focused on inorganic growth, to a company that needs to pursue organic growth and needs to understand the future better than anybody else,” said Patricio.

The Kraft Heinz CEO said media spending would “increase by a significant percentage” on brands that are driving profitability and the company will reallocate a “substantial” amount of investment to media in 2020 to support its flagship brands. Patricio noted the successful Heinz 150th anniversary campaign, which featured a tie-up with singer Ed Sheeran.

The company also pointed to its ambition to become faster at developing products, with the CEO admitting that Kraft Heinz had failed to take full advantage of the move to plant-based lifestyles and allowed brands like Beyond Meat and Impossible Foods to take the lead.

Other changes include uniting research and development under a single department head and working on nine “near-term transformation projects”. Five of the nine projects will be focused on driving sales performance, two will look to drive operational efficiency and a further two will be focused on organisational effectiveness, Advertising Age reports.

McDonald’s apologies for ‘Sundae Bloody Sundae’ campaign

McDonald’s Portugal has been forced to apologise for using the phrase “Sundae Bloody Sundae” to promote a Halloween themed dessert.

The fast-food chain said the words were not intended to be an “insensitive reference to any historical event”, despite the fact Bloody Sunday refers to one of the worst days of the Northern Ireland Troubles when 13 people were killed by the British army.

In a statement, McDonald’s Portugal said: “When promoting its Halloween Sundae ice cream, McDonald’s Portugal developed a local market activation for a small number of its restaurants in Portugal.

“We sincerely apologise for any offence or distress this may have caused.”

The Halloween promotion has since been cancelled.

Tesco pledges to cut a billion pieces of plastic from its own brand products

Tesco has pledged to remove 1 billion pieces of plastic from its own brand products by the end of 2020.

The supermarket will ditch plastic ready-meal trays, yoghurt pot lids, straws and loose fruit bags, as it tackles its use of non-recyclable packaging.

From next year Tesco plans to ban brands whose products contain too much non-recyclable packaging and remove all plastic secondary lids on products such as cream, yoghurt and cereal. The retailer will also remove plastic sporks from snack pots and plans to eliminate 200 million pieces of plastic used in the packaging of its clothing and greeting cards.

All small plastic bags used to pack lose fruit, vegetables and bakery will be switched to paper bags. Plastic straws will be replaced with paper versions and Tesco will swap the black plastic trays used for its own-label ready meals with recycled board.

“By focusing on solutions that we can apply across all our UK stores and supply chain, we can make a significant difference and achieve real scale in our efforts to tackle plastic,” says outgoing CEO, Dave Lewis.

UKTV launches new mental health series in partnership with CALM

UKTV is launching a new mental health-focused comedy series as it looks to extend the partnership between its comedy channel Dave and the charity CALM (Campaign Against Living Miserably).

The three-part series of stand-up comedy specials, entitled Comedy Against Living Miserably, will feature a selection of leading comedians who will each discuss their own mental health stories before taking to the stage.

The series is the latest initiative in Dave’s partnership with CALM since the ‘Be the Mate You’d Want’ campaign last year, which included an ad break takeover where airtime was given to encourage viewers to spend that time texting or calling a friend.

Each episode of the new series will act as a fundraising event for CALM, with comics waiving their fee to donate to the charity.

“The whole Dave team are really proud of the work we do with CALM, we are so glad we have managed to make these three stand-up specials happen as they promise to be brilliantly funny and are for such an important cause,” said Dave channel director, Luke Hale.

Simon Gunning, CEO of CALM, added: “We’re delighted to continue our partnership with Dave and UKTV for Comedy Against Living Miserably. We’ve seen how comedy can be an effective vehicle for conversations around mental health, suicide and generally being there for your mates when things get tough.”

Thursday, 31 October

Twitter to ban political advertising

Twitter is banning all political advertising in a move its CEO Jack Dorsey says is not about free expression but “paying for reach”.

The new policy, which Dorsey revealed on his Twitter account, comes into effect on 22 November and will apply worldwide to all electioneering ads, as well as ads related to political issues. Ads encouraging people to vote will not be banned.

The timing means the ban will be in place in time for the general election in the UK on 12 December.

Dorsey says: “This isn’t about free expression”, adding that: “This is about paying for reach. And paying to increase the reach of political speech has significant ramifications that today’s democratic infrastructure may not be prepared to handle. It’s worth stepping back in order to address.”

If Facebook was really serious about change it would cut the political ads

The move will put pressure on Facebook, which has repeatedly defended its decision to allow political advertising on its platform.

Speaking on Facebook’s Q3 earnings call last night, Facebook CEO Mark Zuckerberg says he doesn’t agree with “critics” who say it won’t ban political ads because of the money, claiming they accounted for less than 0.5% of its revenue this year.

He adds: “We need to be careful about adopting more rules that can restrict what people can say. I don’t think it’s right for politicians to be censored.”

Facebook’s has faced a backlash over its policy on political advertising. However, this latest controversy doesn’t seem to have impacted its business, with revenues up 28% year on year to $17.7bn and its user base up 8%, with 1.6 billion using it daily and 2.4 billion quarterly.

Molson Coors removes ‘Brewing’ from its name in push beyond beer

Molson Coors, the company behind brands including Carling, Cobra and Coors Light, is removing the word ‘Brewing’ from its corporate name as it broadens its product line-up beyond beer.

From next year, Molson Coors Brewing Company will be known as Molson Coors Beverage Company. It reflects plans to move “beyond beer” with products including canned wine and alcoholic coffee, as well as invest in premium beers.

The changes will see Molson Coors cut between 400 and 500 jobs, mostly in the US. It also plans to move its headquarters from Denver to Chicago, a shock move considering its eponymous beers Coors and Coors Light are synonymous with Colorado.

However, the company believes this will free up investment for its biggest brands while enabling it to expand beyond beer.

“Our business is at an inflection point. We can continue down the path we’ve been on for several years now, or we can make the significant and difficult changes necessary to get back on the right track,” says Molson Coors CEO Gavin Hattersley, who took on the job last month.

“Our revitalisation plan is designed to streamline the company, move faster, and free up resources to invest in our brands and our capabilities.”

The decision comes as sales and profits missed analyst forecasts amid a difficult market for beer as particularly young consumers drink less and shift to other beverages, such as spiked seltzers. Molson Coors’s sales have declined in six of the last seven quarters.

Facebook agrees to pay £500,000 fine related to Cambridge Analytica scandal

Facebook has agreed to pay the £500,000 it was fined by the UK’s data protection watchdog over its role in the Cambridge Analytica scandal, in which the personal details of 87 million users were harvested by the company.

Facebook originally appealed against the fine, causing the Information Commissioner’s Office (ICO) to counter-appeal. However, it has now come to an agreement with the ICO in which it makes no admission of liability but does say it “wishes it had done more” to investigate Cambridge Analytica earlier.

ICO deputy commissioner James Dipple-Johnstone says: “The ICO’s main concern was that UK citizen data was exposed to a serious risk of harm. Protection of personal information and personal privacy is of fundamental importance, not only for the rights of individuals, but also as we now know, for the preservation of a strong democracy.”

Facebook lawyer Harry Kinmonth says while the social network has made changes to how third-party developers can access data, the ICO did not find any evidence that the data of its users was transferred to Cambridge Analytica in the EU.

“However, we look forward to continuing to cooperate with the ICO’s wider and ongoing investigation into the use of data analytics for political purposes,” he adds.

Fiat Chrysler and Peugeot merge to create world’s fourth biggest car maker

Fiat Chrysler and Peugeot owner PSA are to merge through a 50/50 share swap that will create the world’s fourth largest car maker.

FCA chairman John Elkann will chair the combined groups, while Peugeot’s CEO Carlos Tavares will be the chief executive. The two companies hope the deal will help them manage a global decline in demand and the investment needed to develop more tech-focused and cleaner models.

The combined company expects to make annual savings of £3.2bn. It will have almost £170bn and operating profit of more than £9bn.

Tavares says: “This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity.”

Wednesday, 30 October

M&S launches ‘buy now, pay later’ service

Marks & Spencer is launching a ‘buy now, pay later’ service that will give customers the option of paying for orders of more than £30 in interest-free installments.

The retailer has partnered with Clearpay to offer consumers the opportunity to spread their purchases over six weeks.

M&S say its customers are increasingly looking for ways to spread the cost, particularly of larger purchases. The maximum spend on the new scheme is £800, it does not require a credit application and customers can manage their payments through a phone app.

Kirsty Ward, director of M&S Bank and Services, says: “We’re committed to providing our customers with seamless, easy and convenient ways to pay, and that’s why we’ve introduced this fully integrated and interest-free option to help spread the cost of shopping on M&S.com. The Clearpay solution complements our existing M&S Credit and Debit Cards offered through M&S Bank.”

The scheme is part of M&S’s transformation strategy, which includes the business’ target of a third of clothing and home purchases occurring online by 2022.

Amazon Prime ad banned for misleading customers

An Amazon advert has been banned for misleading customers with unclear options over its Prime membership scheme.

The Advertising Standards Authority (ASA) upheld seven complaints about the promotion, which appeared during the checkout process on Amazon.co.uk.

It stated: “We’re giving you a 30-day free trial of Amazon Prime! Starting with this order.” Underneath the text was a gold box asking people to “Order Now With Prime”, which was contained within a larger grey box that read: “Continue with Free One-Day Delivery. Pay later.” The option to “Continue and don’t gain Amazon Prime benefits” was written in fainter blue writing to the left, which complainants said made the process unclear and misleading.

The ASA also cited issues with the presentation of information regarding payments beyond the trial period, which was contained within small print at the bottom of the page.

It read: “By signing up you acknowledge that you have read and agree to the Amazon Prime Terms and Conditions and authorise us to charge your credit card after your 30-day free trial.”

Amazon said its primary objective was to make sure consumers who joined Prime did so intentionally. The site provided data that it believes proves that consumers were clear that they could continue with their order without signing up for Prime, while also showing that consumers expressly intended to sign up and had not been misled.

An Amazon spokesman says: “The evidence from millions of transactions demonstrates that customers have had positive experiences. The ASA has instead based its ruling on a handful of complaints and a subjective opinion of the page.”

However, the ASA upheld the complaints explaining: “We considered that the average consumer was likely to view the text within the grey and gold boxes as the only two options available, with the ‘option’ in the grey box allowing them to continue without signing up to Prime, when that was not the case.”

It adds: “The information provided by Amazon did not demonstrate that the average consumer was not likely to be misled by the presentation of the options.”

Harrods expands beauty business to Essex

Harrods is heading to Essex and changing its renowned green branding to millennial pink with the opening of its first standalone beauty shop in the Lakeside shopping centre. The venture, called H Beauty, will take over a 23,000 sq ft store and is designed to appeal to a younger audience.

Harrods’ managing director Michael Ward told the Times it was planning to take advantage of the problems faced by Debenhams, House of Fraser and John Lewis to claim a bigger slice of the beauty market. Rather than be wary of bricks and mortar given the struggle of the three British department stores, Ward says “they have created an opportunity for us.”

Harrods claims to have a 9.3% share of the UK beauty market with its London store holding the biggest beauty hall in the world. Harrods has doubled this space over the past year to accommodate exclusive beauty brands.

Ward explains: “The beauty market continues to grow and we are the biggest seller of beauty in the UK from just one door, so why wouldn’t we focus on that area?”

The pink H Beauty branding was designed to be different from its iconic store to attract more “youthful and playful” shoppers. A trip to the store will also be an experience, with the brand offering cocktails as well as facials.

Ward adds: “We’re going to test the concept and if it is successful we can roll it out across the country.”

There are plans to open a second H Beauty store in Milton Keynes.

Gatwick partners with EasyJet to streamline boarding

Gatwick is working with EasyJet to try out new ways to board passengers.

The two-month scheme has already begun and includes boarding people in window seats first, starting at the back, followed by middle then aisle seats. The experiment, dubbed Gate 101, has already seen a reduction in the journey from the airport gate to seat by 10%.

The airport operator says that the window-to-aisle seat pattern of boarding is best suited for individuals and business passengers.

Abhi Chacko, the airport’s head of enabling technologies, says: “By communicating to passengers better and boarding passengers by seat number, we also expect to make the whole boarding experience more relaxing and, potentially, prevent large numbers of passenger rushing forward at any stage.”

Currently, many major airlines allow passengers to be seated according to price with economy tickets seated last. However,Gatwick’s experiment may show whether it is worth the carriers abandoning their commercial strategies in exchange for faster turnaround times.

Vauxhall owner explores Fiat Chrysler merger

Fiat Chrysler is in talks with PSA, the French owner of Peugeot and Citroën, over a merger that would create a £39.9bn global car maker, according to reports.

PSA Group owns a number of key brands, including British car maker Vauxhall, with a potential merger creating a huge combination of brands and people. Reports suggest discussions remain in the early stages and there is no guarantee of a final deal with many financial and political hurdles to overcome.

The talks come after a proposed tie-up between Fiat Chrysler and French carmaker Renault collapsed in June.

Car makers are experiencing unprecedented pressures as the industry shifts toward electric models and the development of new technologies for autonomous vehicles. This combined with a slow in demand has meant brands are facing mounting costs which would be eased by a merger.

Tuesday, 29 October

John Lewis trials new sustainability initiatives

John Lewis is piloting a number of new sustainability initiatives at its Oxford store, including removing all 5p single-use bags and replacing bubble wrap with an eco-friendly option.

In addition, customers can bring back hangers to be reused or recycled from any retailer or brand, while membership cardholders will be given gift vouchers in exchange for returning empty beauty product packaging and used clothing.

John Lewis is also set to become the first retailer in the UK to trial a reusable ‘click and collect’ bag made from 100% recycled materials.

“Our customers have told us they want us to help them reduce their impact on the planet and that reducing and recycling packaging is key for them,” says John Lewis’s head of sustainability, Stephen Cawley.

“Our message that we want customers to take away just the product that they love, and reduce and reuse the packaging that they don’t, will be clearly communicated throughout the shop.”

Just Eat becomes headline sponsor of Love Island

Just Eat has signed a two-year deal with ITV to become the headline sponsor of Love Island from early 2020, marking its “most significant” TV sponsorship to date.

The food delivery business will run a series of idents during the ad breaks throughout the sixth series of Love Island, including catch-up shows Unseen Bits and Aftersun.

The campaign will also run on social media, CRM, PR, experiential and through Just Eat’s restaurant partner network of 35,700 restaurants.

“Our sponsorship of Love Island is our most significant commitment to TV sponsorship to date, bringing together the UK’s biggest food delivery brand with the UK’s most exciting entertainment property,” says Just Eat’s UK marketing director, Matt Bushby.

“With the show on air every night during the week, we’ll be able to amplify the message that you don’t have to wait till Friday or Saturday night to order your typical takeaway treat but that we cater for all food occasions, whether you fancy sushi, pizza, a Greggs sausage roll or a KFC.”

Tiffany considers LMVH takeover bid

Tiffany is reviewing a takeover offer from luxury goods giant LVMH.

LVMH, which owns brands including Louis Vuitton, Dior and Moet & Chandon is thought to have put in an offer worth around $14.5bn (£11.3bn) for the US-based jewellery brand.

In a statement, LVMH confirms it has held preliminary discussions regarding a possible transaction with Tiffany. Tiffany, which is listed on the New York Stock Exchange, says it has received an unsolicited, non-binding proposal from LVMH of $120 per share in cash.

If a deal goes through, the takeover would be the biggest LVMH has made since buying Bulgari for $5.5bn in 2011.

UK ad spend reaches record level of £6bn for Q2 2019

UK ad spend rose 5.8% year on year to reach £6bn in Q2 2019, marking UK advertising’s 24^th consecutive quarter of market growth.

Ad spend over the first six months of 2019 was 5.2% higher than a year earlier, at £12.bn, according to the latest figures from the Advertising Association/WARC Expenditure Report.

Overall market growth is being driven by increased spend on online advertising, which saw rises across most formats. Digital ad formats for radio broadcasters witnessed a year-on-year rise of 15.9% and online national newsbrands recorded growth of 15.6% over the same period.

Digital out of home – not included in online totals – experienced growth of 17.2%.

The report reveals particularly strong growth in Q2 2019 compared to Q2 2018 in TV video on demand (VoD) and cinema. TV VoD saw an increase of 20% in Q2 2019, while cinema recorded a rise of 49.6%. The sector benefited from the entry of a number of new advertisers in comparison to the same period in 2018, boosting growth substantially.

Growth for 2019 is forecast to rise 5% to reach £24.7bn and by a further 5.3% in 2020.

Sony Music UK launches children’s entertainment label

Sony Music UK is launching a children’s record label called Magic Star that will sign, develop and market artists and branded projects to family entertainment audiences.

Led by NBCUniversal’s Will Speer, Magic Star will partner with established brand leaders in the family entertainment market and will work with the other Sony entertainment companies.

The new division will also work in collaboration with each of Sony Music UK’s labels and their artist rosters, as well as explore opportunities with new artists.

“We recognise family entertainment as an untapped market so launching Magic Star provides a wealth of opportunity for us and will strengthen our capacity for growth,” says Sony Music UK’s chief operating officer Nicola Tuer.

Speer, who joins Magic Star from NBCUniversal where he oversaw international marketing across DreamWorks TV and NBCU Kids and Family, says: “Sony Music has identified a huge opportunity within the family entertainment market to create fresh new audio and audio-visual content and also have access to a wide repertoire of signed artists who already have huge family appeal.

“The scope is endless, and I am very much looking forward to bringing my experience in kids’ media to such an entertainment powerhouse like Sony Music.”

Monday, 28 October

Mike Ashley pushes MPs to probe the ‘collapse of Debenhams’

Sports Direct owner Mike Ashley has criticised MPs for not taking more of an interest in the “collapse of Debenhams”.

Writing to MP Rachel Reeves, in a letter seen by the Guardian, Ashley claims that “No one in parliament seems sufficiently interested about the Debenhams failure” and compared the perceived lack of action to the scrutiny around the collapse of Thomas Cook. Reeves is the chair of the business, energy and industrial strategy select committee, which is investigating the failure of travel giant Thomas Cook.

Ashley says in the letter that he is disappointed the committee was not “properly investigating” the situation at Debenhams. He alleges that politicians are only interested in their own PR when it comes to cases such as Thomas Cook and so are ignoring “cases which are just as bad if not worse”.

The Sports Direct boss adds: “It is very apparent that a head of steam is developing in the media and in the electorate that they will not tolerate these sorts of situations any longer, where businesses and advisers profit from playing the system at the expense of others.”

Ashley, via the Sports Direct group, splashed out £150m on acquiring around a 30% stake in Debenhams, which was lost when the retailer fell into administration in April.

Wetherspoons under fire for Brexit beermats

Pub chain J.D Wetherspoons is under fire for spending £94,856 on pro-leave messaging ahead of the 2016 EU referendum, despite failing to seek shareholder approval.

The company is accused of breaching the Companies Act by spending £18,000 on 1.5 million “Brexit beer mats”, £8,400 on 200,000 beer mats and £68,186 on another 200,000 beer mats, 5,000 posters and 500,000 booklets, according to Electoral Commission data.

The beer mats, which exhibited the message “‘vote ‘leave’ – take back control”, were distributed in more than 900 Wetherspoons pubs during the referendum campaign and featured criticism of International Monetary Fund chief Christine Lagarde and the then chancellor, George Osborne.

It is alleged by legal experts that Wetherspoons should have sought shareholder approval as the spending constituted political expenditure under the 2006 Companies Act. Not only is political spending supposed to be approved in advance by shareholders, but companies are meant to declare any political spending above £2,000 in their annual reports.

Wetherspoons chairman and founder Tim Martin, who owns 32% of the business, has used the pub chain as a platform for his pro-leave views, which the Guardian understands some of the company’s investors have objected to.

During the EU referendum campaign Martin authored a two-page pro-leave editorial for the Wetherspoons News magazine, which ran alongside nine pages of Eurosceptic articles.

Uber experiments with cooking classes and dining ‘experiences’

Uber is testing a new feature that allows users to book cooking classes or learn how to make five-course meals, pitched as dining ‘experiences’.

Currently only available to Uber Eats customers in San Francisco, Uber Moments will allow customers to book classes via the app over the next month until 17 November. Options so far include a $75 (£58) class on making Chinese dumplings and a $55 (£43) class learning how to create a five-course Nigerian dinner.

Only last week (24 October), Uber Eats announced it was partnering with Costcutter supermarkets in the UK for its first foray into the grocery sector. The deal will enable more than 1,700 convenience shops to sell everyday items via the app.

The updates to Uber Eats follow the announcement by CEO Dara Khosrowshahi last month that Uber plans to combine all its different products into a revamped app in a bid to become “the operating system for your daily life”. Khosrowshahi described the app as “a one-click gateway into everything Uber can offer for you”.

Telegraph newspapers up for sale

The Daily Telegraph and the Sunday Telegraph newspapers have been put up for sale by their owners, the Barclay twins, who are reviewing their investments.

Sir Frederick and Sir David Barclay acquired the Telegraph Media Group (TMG) in 2004. The papers posted a £900,000 profit for the last financial year to 17 October, a 94% drop on the previous year. The Daily Telegraph averages a daily circulation of 310,586, while the Sunday Telegraph has an average circulation of 244,351 copies.

A source told the BBC that the brothers are looking to sell the newspaper over the next 12- 18 months. The Barclay brothers’ wider portfolio includes The Ritz hotel, Spectator magazine, delivery business Yodel and online retailer Shop Direct.

Facebook launches news section

Facebook is rolling out a news section on its app, which CEO Mark Zuckerberg claims is the first time the social network has formed a “long-term, stable relationship with publishers”.

Currently being piloted in the US, the news tab will highlight national stories Facebook and its team of in-house journalists think are a good fit for its users. Based on conversations with publishers, the social media giant has formed an editorially independent “curation team” to manage the ‘Today’s Stories’ section.

News will be personalised based on the news users read, share and follow. There will also be sections dedicated to a variety of different topics, such as business, health and sports.

Furthermore, there will be a ‘Your Subscriptions’ section for people who have linked their paid news subscriptions to their Facebook account.

Zuckerberg describes the introduction of the news tab as a sign Facebook is making “multi-year financial commitments” to publishers with the goal of creating a “sustainable model” for online journalism.

Campbell Brown, vice president of global news partnerships, says the introduction of the news tab function will aid in Facebook’s effort to “sustain great journalism and strengthen democracy”.