M&S, Thomas Cook, WPP: 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.

M&S fashion boss Jill McDonald to leave after less than two years

Marks & Spencer’s managing director of clothing and home, Jill McDonald, is leaving after less than two years with the business.

M&S’s chief executive Steve Rowe will now lead the division with a promise to tackle “long-standing issues”.

He says: “The business now needs to move on at pace to address long-standing issues in our clothing and home supply chain around availability and flow of product. Given the importance of this task to M&S, I will be overseeing this programme directly.”

McDonald, who previously held chief executive roles at McDonald’s and Halfords, was hired to turn around the struggling clothing and home business as the retailer dealt with shrinking consumer spend.

However, this hasn’t been successful and in its most recent annual results M&S’s UK clothing and home revenues had fallen 3.6% on the previous 12 months.

It is understood that McDonald was reluctant to leave but Rowe said she left “with my thanks and good wishes for the future”.

Thomas Cook to sell tour business in restructuring plans

Thomas Cook is in £750m rescue talks with banks and its largest shareholder, Fosun.

The measures, which have not been finalised, would see the Chinese investor buy the firm’s tour business.

Thomas Cook’s chief executive, Peter Fankhauser, says the proposal is “not the outcome any of us wanted” but is “pragmatic”.

The travel agent launched a strategic review earlier this year, but says that since then the European travel market has become “progressively more challenging”.

Frankhauser adds: “After evaluating a broad range of options to reduce our debt and to put our finances onto a more sustainable footing, the board has decided to move forward with a plan to recapitalise the business, supported by a substantial injection of new money from our long-standing shareholder, Fosun, and our core lending banks.

“While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution which provides the means to secure the future of the Thomas Cook business for our customers, our suppliers and our employees.”

WPP to sell stake in Kantar

WPP is selling a 60% stake in Kantar to private equity house Bain.

Mark Read, chief executive of WPP, says: “Kantar is a great business and we look forward to working with Bain Capital to unlock its full potential. As a strategic partner and shareholder in Kantar, WPP will continue to benefit from its future growth while our clients continue to benefit from its services and capabilities.”

The sale is part of Read’s plan to cut debt and simplify the global ad agency network after ditching his predecessor Sir Martin Sorrell’s acquisition-fuelled growth strategy.

He adds: “This transaction creates value for WPP shareholders and further simplifies our company. With a much stronger balance sheet and a return of approximately 8% of our current market value to shareholders planned, we are making good progress with our transformation.”

Kantar was valued at $4bn including debt by WPP.

Norwegian Air chief executive resigns

The chief executive and co-founder of Norwegian Air, Bjørn Kjos, has stepped down after 17 years in charge of the airline, admitting “I’m way overdue”.

Under the leadership of Kjos, Norwegian Air developed from a small domestic airline into Europe’s third biggest low-cost carrier. It also broke into the transatlantic market by offering cheap fares to the US.

However, more recently the company has struggled to make a profit and has been hit by the grounding of the Boeing 737 Max plane after two crashes. The 737 Max is not expected to be allowed to fly again until at least October.

Kjos will be replaced in the interim by chief financial officer, Geir Karlsen, while a search for a successor is carried out.

AA releases film to celebrate Cannes Lions campaign

The AA is releasing a film to celebrate its first Cannes Lions campaign ‘Creativity Is GREAT’.

The film features some of the key moments from the campaign at Cannes, including 10 leadership and networking events and a rainbow box installation at the festival.

The campaign was the first-of-a-kind partnership between Government and leading companies in the advertising industry and was created in the hopes of promoting the UK ad industry in the wake of Brexit.

It received funding from the Department for International Trade, which was matched by several leading businesses including Channel 4, Clear Channel, Framestore, London &Partners, M&C Saatchi and Newsworks.

President of the Advertising Association, Keith Weed says: “The GREAT campaign is widely 100recognised as one of the best examples of national branding and marketing on the world stage and our campaign for Cannes Lions underlines the UK Government’s appreciation of the importance of creativity to the country’s economy, culture and reputation.

“Advertising, with its entrepreneurial spirit and creative excellence, can be the perfect partner for Government in its ambitions for the UK’s international trade.”

Thursday, 11 July

Santander joins forces with Kurupt FM for scam awareness videos

Santander has teamed up with Kurupt FM from BAFTA-winning BBC TV show People Just Do Nothing for a fraud awareness campaign.

‘MC Grindah’s Deadliest Dupes’ is a three-part mini-series that follows one of the show’s characters MC Grindah as he goes undercover to investigate scams that have been created to grab the attention of younger audiences online.

All three videos, which have been created by Engine, end with the line ‘Don’t Get Kurupted’.

Santander wanted to develop the videos specifically for younger audiences after learning that ID theft among people aged under 21 has risen by 26%.

Meanwhile, Santander’s own research shows that those aged under 25 are three times more likely to act on an instruction in scam correspondence, 85% have shared details on Instagram that could leave them open to ID theft and a quarter have entered personal details on a website using unsecure WiFi.

Each video highlights a different scam that could affect younger people, such as inadvertently giving away a password or how to avoid getting ripped off when buying online.

The third video focuses on the fact that it’s not just hardened criminals who do time for money laundering and that it can happen to regular people if they misuse their bank account.

Susan Allen, head of retail and business banking at Santander UK, says: “We recognised that to engage younger audiences with these important messages [about how to avoid scams], we needed to do something different and memorable. We hope that everyone, no matter what age, will enjoy Deadliest Dupes and learn how to stay safe so they Don’t Get Kurupted.”

M&S pushes family credentials with Little Shop campaign

Marks & Spencer (M&S) has launched Little Shop, a collection of 25 miniature toy versions of well known M&S Food products such as Percy Pigs and Colin the Caterpillar, as it looks to emphasise its position as a family-friendly grocer.

Shoppers will receive one free collectable for every £20 they spend in a sealed packet, which comes complete with an information card about the product.

The campaign is aimed at parents with children aged between four and eight, with the hope they will collect, play and swap the miniature items to build their own M&S Little Shop.

Other miniature products include Plant Kitchen Cauliflower Popcorn, baby British strawberries, a small version of its Best Ever Prawn Sandwich and a teeny Chicken Tikka Masala.

The activity will be supported by an integrated communications campaign, spanning celebrity endorsement, influencer partnerships and PR.

Consumers have already taken to social media to share their annoyance at M&S adding to the plastic problem though, particularly given McDonald’s has been under pressure this week to scrap the plastic toy it gives away with Happy Meals.

Vans launches UK loyalty scheme

Vans has launched its customer loyalty programme, Vans Family, in the UK, as it looks to create “authentic connections” with people.

Those who sign up will receive access to insider information, members-only contests and experiences, and previews of upcoming product launches.

Members also get points for shopping and engaging with the brand, as well as access to exclusive patterns to customise their footwear and accessories.

Vans launched the scheme in the US in February last year and in that time has gained eight million members.

Doug Palladini, Vans global brand president, says: “The Vans Family loyalty programme will engage our fans, from newcomers to loyalists, as individuals with unexpected experiences tailored to their personal interests. In doing so, we are creating authentic connections with people who like Vans, deepening our relationships with them, and creating new pathways to interact in relevant ways.”

Amazon Music subscriptions growing at a faster rate than Spotify and Apple

Amazon is gaining subscribers to its music streaming service at a faster rate than rivals Spotify, Apple and Google.

The tech giant has grown subscribers to Amazon Music Unlimited by 70% in the past year, according to the Financial Times, and in April it had more than 32 million subscribers to all its music services, including Unlimited and Prime.

Meanwhile, Spotify, which is still the world’s largest music streaming service with 100 million subscribers, is growing at about 25% a year.

Amazon has gained popularity in recent months in part thanks to Alexa, which can play music via voice demands.

NHS hopes to reduce pressure with Amazon Alexa tie-up

The NHS has partnered with Amazon to provide health advice to patients, particularly the elderly and blind, who cannot easily search for information via its AI-powered voice assistant Alexa.

Alexa’s algorithm will use information from the NHS website to provide patients with answers to common questions such as “how do I treat a migraine?”, “what are the symptoms of flu?” and “what are the symptoms of chicken pox?”.

It is hoped that getting people to ask Alexa for health advice such as this will help ease pressure on the NHS by providing reliable information for common illnesses.

The health secretary, Matt Hancock, says: “Technology like this is a great example of how people can access reliable, world-leading NHS advice from the comfort of their home, reducing the pressure on our hardworking GPs and pharmacists.”

Wednesday, 10 July

Amazon reveals exclusive beauty tie-up with Lady Gaga

Lady Gaga has signed an exclusive deal with Amazon for the roll out of her Haus Laboratories beauty range, becoming the first major make-up brand to launch on the site.

The singer’s debut business venture, Haus Laboratories will be launched on Amazon in nine countries from September, including the UK, US, Japan, France and Germany.

Speaking to The Business of Fashion, Lady Gaga explained she chose to work with Amazon because it did not seek to change her brand identity to fit into any corporate image.

“If it’s not perfectly in line with what they do… they’ll be like, ‘Can you just change half of the equation?’. The answer is no. No deal. No message of self-acceptance, no deal. [The deal with Amazon] was so wonderful because this was like, ‘Let’s make a deal, let’s make a deal to change the world with their beauty’.”

The inclusive make-up range is backed by Lightspeed Ventures Partners, which has also invested in Gwyneth Paltrow’s wellbeing lifestyle brand Goop. Haus Laboratories will no doubt be pitted against Rihanna’s Fenty Beauty range, which finally came to Boots stores nationwide in May.

Superdry reports ‘very disappointing’ £85.4m loss

Superdry has issues that cannot be “resolved overnight” according to founder and interim CEO Julian Dunkerton, after the fashion retailer reported an annual pre-tax loss of £85.4m for the year to 27 April 2019. This is compared to profits of £65.3m a year prior.

Underlying profit before tax fell to £41.9m, which Superdry acknowledged was “significantly” below the £97m generated in the previous year, taking into account “onerous” lease provisions.

The company highlighted brand and marketing as “strategic imperatives” needed to re-ignite the brand DNA through consumer engagement and social media. The retailer is keen to create “clearer customer segmentation”, develop a growth plan for ecommerce and build a “cohesive team to stabilise the business”.

Reflecting on the results, Dunkerton said his first priority on returning to Superdry in April, after a six-month battle with the board to regain control, has been to “steady the ship and get the culture of the business back to the one which drove its original success”. He claimed the focus will be on returning the business to its design-led roots and getting the retail basics right.

Chairman Peter Williams added that while the results were “very disappointing” and it is clear change will take time, he believes Dunkerton and the leadership team have the right plan to deliver long-term sustainable growth.

Marriott facing £99.2m fine for data privacy breach

Hotel group Marriott International is facing a fine of £99.2m from the UK’s data privacy regulator after it was found that around 339 million guests had their personal details exposed.

The data breach is understood to date back to 2014 but was only discovered last year. It occurred within Starwood, a rival hotel company that Marriott acquired in 2016.

The UK’s Information Commissioner’s Office (ICO) ruled that Marriott had failed to properly review Starwood’s data practices and should have done more to improve its data security.

The decision comes in the same week that the ICO handed British Airways a record fine of £183m for a data breach that saw hackers obtain the details of about 500,000 customers last year.

Under the EU’s General Data Protection Regulation (GDPR), which came into effect last year, the ICO is able to issue significantly larger fines for data breaches than it could previously.

Marriott International’s president, Arne Sorenson, says: “We are disappointed with this notice of intent from the ICO, which we will contest. Marriott has been co-operating with the ICO throughout its investigation into the incident, which involved a criminal attack against the Starwood guest reservation database.

“We deeply regret this incident happened. We take the privacy and security of guest information very seriously and continue to work hard to meet the standard of excellence that our guests expect from Marriott.”

Information Commissioner Elizabeth Denham, however, states that GDPR makes it clear organisations must be accountable for the personal data they hold.

She adds: “This can include carrying out proper due diligence when making a corporate acquisition and putting in place proper accountability measures to assess not only what personal data has been acquired, but also how it is protected.”

Facebook sets target to double female workforce by 2024

Facebook plans to double its global female workforce and its number of black and hispanic employees in the US by 2024.

Over the next five years the tech giant wants at least 50% of its workforce to include women, people who are black, hispanic, Native American, Pacific Islanders, people with two or more ethnicities, people with disabilities and veterans.

In a statement coinciding with the release of its 2019 Diversity Report, the tech giant said that these targets will not only create a “more welcoming community”, but that they will drive accountability which is “absolutely key to progress”.

Over the past six years Facebook says it has achieved higher representation of women in leadership by focusing on hiring and growing female leaders within the company. It claims the majority of female leaders in recent years have been promoted internally.

Since 2014, the company says it has increased the number of black women working in the business by 25 times and the number of black men by 10 times. Facebook also says it is advancing its work with programmes such as the Military Skills Translator, which helps veterans navigate job opportunities at Facebook. Currently veterans make up 2.2% of the tech giant’s workforce.

The company also says it is working on new initiatives worldwide to improve its disability inclusion programmes and has made LGBTQ+ inclusion a “priority for the people at Facebook”. The company reports that 8% of current US-based Facebook employees identify as LGBTQ+.

Greenpeace Rang-tan ad ‘recycled’ by Dutch supermarket

Greenpeace’s advert highlighting the destructive impact of the global palm oil industry has been co-opted by a supermarket for the second time as Dutch supermarket Ekoplaza plans to run the campaign.

The retailer believes the advert, which focuses on the plight of an animated baby orangutan called Rang-tan, reflects Ekoplaza’s commitment to remove palm oil from its own-brand products and work with suppliers to move towards 100% sustainable, organic palm oil in other products sold by the chain.

The ad, devised by creative agency Mother, will appear online and in 75 Ekoplaza stores. Whereas in the British version the voiceover was provided by actor and Greenpeace ambassador Emma Thompson, the Dutch voiceover is by actor Georgina Verbaan, who is well known in the country for her support of environmental causes.

“The story of palm oil is incredibly complex – our aim is to eradicate palm oil that causes rainforest destruction from the products we sell,” explains Steven IJzerman, quality manager at Ekoplaza.

“We want to use our reach to highlight this important issue to Dutch consumers. The journey to totally transparent, sustainable sourcing is a long one and we’re totally committed to bringing more brands along it.”

Originally run by Greenpeace and then promoted by British supermarket Iceland at Christmas, the Rang-tan advert is described by Mother as the first ad ever to be “100% recycled” from one brand to another not once, but twice.

In December last year the campaign caused a stir when it was banned from appearing on TV by Clearcast, the body which approves ads for broadcast, because the ad was originally created by Greenpeace, an organisation unable to prove it is not a “political advertiser”.

Tuesday, 9 July

Asos marketing roles under threat after profit fall

Asos is reportedly consulting on making around 100 people at its head office redundant as it attempts to turn around a heavy fall in profits.

According to The Times, the majority of those jobs will be in the marketing department.

Group revenue at Asos was up 14% to £1.3bn for the six months to the 28 February but pre-tax profits fell by almost a third to £4m. Asos, which called the figures “disappointing”, said they came after a period of heavy investment and widespread discounting in the fashion industry.

Asos is also trying to cut costs by tightening up its return policies to deal with the issue of “serial returners”. Asos has not commented on the job cuts report.

McDonald’s under fire over plastic toys in Happy Meals

McDonald’s is under mounting pressure to rethink the free, often plastic, toys it gives away with its Happy Meals as consumers demand a reduction in single-use plastics.

A petition calling on McDonald’s to scrap the toys has more than 330,000 signatures after the issue was highlight on BBC programme War on Plastic. Most of the toys are made from plastic that cannot be recycled and quickly end up being thrown out, an issue that is rising up consumers’ priorities as awareness over plastic’s impact on the environment spreads.

McDonald’s is exploring ways to make the toys from a type of plastic that is more easily recycled and changing the type of products on offer to include books, soft toys and board games. However, no decision on getting rid on the plastic toys has been made.

“Given the focus on plastics, you probably will see a bit more of a mix going forward,” Elaine Strunk, McDonald’s head of global sustainability, tells the Wall Street Journal.

Retail sales slump in June as pressure on the high street rises

Retail sales in June fell by the largest margin for the month in almost 25 years as pressure grows on the British high street.

Total sales were down 1.3% year on year, while like-for-like sales fell 1.6% according to figures from the British Retail Consortium (BRC) and KPMG. That marks the worst performance in June since the BRC started measuring sales in 1995.

The slowdown is in part due to a difficult comparison with last year, when warm weather and the men’s football World Cup caused a rise in spending. But they also reflect ongoing issues as consumers hold back on spending despite rising wages and amid Brexit uncertainty.

The biggest slowdown was in non-food sales, which decreased by 4.3% in the three months to the end of June. Food sales were up 2.4%.

“There are few places retailers can hide from the difficult trading conditions that have been hitting the industry for some time,” says Paul Martin, UK head of retail at KPMG.

Burger King challenges customers to spot difference between meat and plant-based burgers

Burger King is introducing a ’50/50 menu’ that will randomly select either a meat or plant-based burger for those who order it as it looks to prove there is little difference between the two.

The campaign is rolling out in Sweden ahead of a wider European launch. It comes as Burger King introduces its Rebel Whopper and Rebel Chicken King in Europe – copies of its beef and chicken burgers that are made from a plant-based patty. It is hoped the campaign will encourage more people to try the meat-free burger option.

“We are really proud of how hard it is to tell our plant-based burgers apart from real meat. With the 50/50-menu, we hope that more people dare to try them. And hopefully have fun trying to figure out which one they got,” says Daniel Daniel Schröder, marketing director for Burger King Sweden.

There will be no indication on the box as to which burger the customer has. They can scan the box to find out but will have to input a guess before they get the answer.

P&G moves into pest control market

Procter & Gamble is moving into the pest control market as it looks to new areas for growth. According to the Wall Street Journal, the company is introducing a brand, called Zevo, that will offer sprays that kill insects and indoor traps to capture bugs.

The launch is part of P&G’s efforts to develop new products that can have the same sort of success as brands such as Tide detergent and Gillette razors. It was developed by a much smaller team than normal to it could make faster decisions and react more quickly to consumer feedback.

The pest control industry is worth around $1.3bn in the US and is growing at a rate of around 6% year, according to Nielsen. Raid is the market leader with 49% share, with Hot Shot in second place on 14%. P&G hopes to differentiate by positioning itself as children and animal-friendly.

Monday, 8 July

British Airways faces £183m GDPR fine

British Airways could be fined £183m for a breach of its security systems last year.

It is the biggest penalty the Information Commissioner’s Office (ICO) has handed out since GDPR came into effect last year, far exceeding the £500,000 fine imposed on Facebook after the Cambridge Analytica scandal (which happened before GDPR).

BA says it is “surprised and disappointed” by the finding.

“British Airways responded quickly to a criminal act to steal customers’s data,” says chief executive Alex Cruz. “We have found no evidence of fraud/fraudulent activity on accounts linked to theft. We apologise to our customers for any inconvenience this event caused.”

BA now has 28 days to make an appeal.

Unilever brings back Marmite XO

Unilever is relaunching an extra strong version of Marmite following a social media campaign from fans calling for its return.

Marmite XO (extra old), which was first launched as a limited edition almost a decade ago, will go on sale in Tesco stores nationwide from today for £3.99 for a 250g jar.

XO was created in 2010 when the ‘Marmarati’, a group of Marmite’s biggest fans, selected it from a number of test recipes.

It has been matured for 28 days, four times longer than the original, which is what Unilever says gives it its “intense and full-bodied taste”.

“Whether it’s smothered on a crumpet or spread on a slice of sourdough, the recipe has built a cult following – with the public often taking to social media to call for its return,” says Camilla Williamson, a brand manager at Marmite.

XO will be sold exclusively in Tesco for six months, ahead of a wider supermarket rollout, subject to demand.

Internet advertising to exceed half of global total in 2021

Internet advertising will account for 52% of global advertising expenditure in 2021, according to Zenith’s latest ad forecasts, exceeding the 50% mark for the first time. This is up from 47% this year and 44% in 2018.

However, the growth rate is falling rapidly as the internet ad market matures. While internet ad spend grew 17% in 2018, Zenith predicts just 12% growth for 2019 and 9% in 2021.

Internet ad spend growth is led by the overlapping channels of online video and social media, which are expected to grow 18% and 17% respectively year on year to 2021.

Ad revenue for printed newspapers and magazines, meanwhile, it expected to total just $70bn this year – less than half of 2007’s peak of $164bn.

Traditional TV ad revenues are also forecast to shrink every year from now to 2021, falling from $184bn in 2018 to $180bn in 2021.

Other traditional media are more healthy, with radio ad revenue up 1%, out-of-home up 4% and cinema up 12% year on year. However, cinema still only accounts for 0.8% of total ad spend.

Peperami launches new TV ad

Peperami’s infamous meat-stick character Animal is returning to TV, alongside a couple of new friends ‘Chicken’ and ‘Beef’, in an effort to reposition Peparami as a “protein snack for a new generation”.

The 40-second tongue-in-cheek spot, created by Atomic London, parodies the “painfully earnest” ads of sports brands.

It is the first of a major push for the meat snacking brand around its newly expanded core products – pork, chicken and beef – ahead of multiple new product development launches planned for 2019 and 2020.

“Our partners at Atomic have done an amazing job in modernising the cult icon that is Animal and bringing his brothers to live,” says Pavan Chandra, Peperami brand head. “It’s exactly what the brand is about – fun and humour that appeals to our core audiences of blokes and mums.”

The TVC, which will air today, will be supported by a seven figure marketing campaign including OOH, shopper marketing, PR and social media.

Deutsche Bank to cut 18,000 jobs

Deutsche Bank has confirmed plans to cut 18,000 jobs as part of a radical three-year transformation plan to turn the business around.

By 2022, the struggling bank says it will cut its global workforce to 74,000, which it anticipates will cost €7.4bn.

While it has not yet specified where the jobs will be lost, London is home to its biggest trading operation and where the majority of its 8,000 UK employees are based.

Chief executive Christian Sewing says this is “the most fundamental transformation” of Deutsche Bank in decades.

“This is a restart for Deutsche Bank,” he says. “In refocusing the bank around our clients, we are returning to our roots and to what once made us one of the leading banks in the world.”