General election, Facebook, Ocado: 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.

Conservatives secure overall majority to win UK general election

Boris Johnson’s ‘Get Brexit Done’ campaign message appears to have resonated with voters as the Conservative Party secures an overall majority in the British parliament. The UK will now leave the EU by 31 January.

Among the campaign pledges, the Tories say they will legislate to make the UK “the safest place in the world to be online”, protecting children from online abuse and ensuring there is “no safe space for terrorists to hide online”. The party says it will, for example, review the Gambling Act, which has become “an analogue law in a digital age”.

The Conservative manifesto promises to support startups and small businesses via government procurement, expanding the provision of startup loans which have proved popular with female and BAME entrepreneurs. The Tories also plan to create a £3bn National Skills Fund, that will provide “matching funding” for individuals and SMEs to pay for education and training.

Johnson’s Conservatives say they will cut taxes for small retail businesses to help revive the high street and extend the Towns Fund to 100 towns to let communities decide on where the money should be spent to improve their local economy.

The Tories also say they will encourage flexible working and consult on making it the default unless employers have good reasons not to.

By contrast, the Labour Party had said it would address the “monopolistic” hold the tech giants have on advertising revenues and support local newspapers and media outlets.

The party also intended to establish an inquiry into ‘fake news’, which it described as “undermining trust in media, democracy and public debate”, curb gambling advertising in sports with a new Gambling Act “fit for the digital age” and enforce stricter rules around the advertising of junk food and levels of salt in food.

Following the defeat, Labour leader Jeremy Corbyn says he will stand down after a “period of reflection”.

Facebook commits $130m to creation of content oversight board

Facebook will spend $130m (£98.4m) on the creation of an independent content oversight board to oversee how the social media giant makes content decisions on content.

While the company is yet to confirm who will sit on the board, the members will operate independently from Facebook and will include a director, case managers and dedicated staff members. The funding will enable the board to operate for an initial six years.

“We’ve seen strong global interest in serving on the board and this is a sign that we are heading in the right direction,” says Facebook director of governance and global affairs, Brent Harris.

“While we had hoped to announce members by the end of this year, we’ve decided to take additional time to consider the many candidates who continue to be put forward.”

Facebook has been developing ways for the board to deliberate cases in the future, including a new case management tool that will provide secure access to case information and allow board members to collaborate from locations worldwide. The oversight board is expected to begin operating next year.

Ocado promises ‘big and better’ offering under M&S deal

Ocado says its range of products will be 50% bigger and offer lower-priced, better quality goods thanks to its forthcoming tie-up with Marks & Spencer (M&S).

According to finance boss Duncan Tatton-Brown, Ocado will stock 6,000 M&S products, compared to the 4,000 it sells through its current supply deal with Waitrose, which ends next year. The new products on offer will be the “same price or lower, and of the same quality or better” than Waitrose, The Guardian reports.

“Marks & Spencer has a lot more products than Waitrose so customers should find matching products from the existing range at the same or a cheaper price – and a few things they didn’t know they needed,” Tatton-Brown adds.

In February, M&S splashed out £750m to buy half of Ocado’s UK retail business to help it gain a foothold in the online grocery delivery market. While initially there were concerns Waitrose shoppers would desert Ocado, Tatton-Brown says there is a decline in the number of customers saying they might shop elsewhere.

M&S is having to adapt its range to cater to the Ocado customer base, for example stocking bigger pack sizes of products like cheddar cheese and multipacks of plum tomatoes. The retailer is working hard to shake off its image as a pricey convenience store in a bid to appeal to families and has done a lot of work this year around its price messaging.

Pepsi branches out with cola-coffee hybrid

Pepsi is hoping to cash in on the ready-to-drink iced coffee market with the launch of a hybrid cola and coffee drink.

Pepsi Café, which will be rolled out across the US in April, is a mixture of Arabica coffee and Pepsi cola, containing almost twice the caffeine of a normal cola. The drink will be available in either original or vanilla flavours.

Vice-president of marketing, Todd Kaplan, says Pepsi is reacting to demand among consumers for products that offer “energy, indulgence and refreshment”.

“We are confident that cola fans, iced coffee drinkers and anyone in need of an extra caffeine boost will love the unexpected flavour medley of roasted coffee infused into the refreshing, crisp flavor of Pepsi,” he stated.

Coca-Cola already sells a rival product – Coke with Coffee – which is available in Australia, Italy, Spain, Thailand and Poland. The drinks giant is also poised to bring its Coke Energy drink to the US next year after launching in the UK in March.

Both Pepsi and Coke are tapping into a trend for drinks with a twist, such as alcoholic sparkling waters or seltzers, alcoholic kombuchas and Pepsi itself even created a limited-edition rosé-flavoured cola this month.

Mike Ashley blames Harrods for closure of House of Fraser store

Sports Direct boss Mike Ashley is blaming Harrods for his company’s decision to close its House of Fraser store in Milton Keynes.

The department store located in the Centre:MK shopping centre is set to close at the end of January, with the loss of 172 jobs.

Ashley says Harrods, which reportedly holds a legacy to the lease of the store entitling it to the site if House of Fraser vacates, has refused to formally accept Sports Direct’s proposals to either invest in the entire store or take a part of the store that will now be vacant.

“We are still yet to receive formal acceptance of our proposals and Harrods are refusing to secure continuity of employment for the staff currently employed by House of Fraser Milton Keynes,” says a Sports Direct spokesman.

“Regrettably, we have been left with no choice but to announce the closure of the store on 31 January, causing a devastating number of redundancies.”

Harrods has hit back at the claims, stating that it is entirely House of Fraser’s decision to close and that the luxury department store had been in conversations with both House of Fraser and the landlord to “ensure the best outcome”.

It is thought Harrods may use the site to open its second H Beauty standalone store. The first 23,000sq ft store will open in the spring at the Intu Lakeside shopping centre in Essex.

Thursday, 12 December

Nestlé to sell US ice cream business

Nestlé is selling its US ice cream business to Froneri in a £3.1bn deal expected to close in the first quarter of 2020, pending customary regulatory approvals.

Froneri was created in 2016 when Nestlé merged some of its European ice cream businesses with R&R, a business owned by private equity group PAI Partners. Since then, the two sides have operated Froneri as a joint venture, with Nestlé and Paris-based PAI Partners each owning stakes of just under 50% and management owning the rest.

Nestlé CEO Mark Schneider says: “We are now making this business our global strategic partner in ice cream and are convinced that Froneri’s successful business model can be extended to the US market. With this transaction, we are taking a decisive step towards our goal of achieving global leadership in ice cream.”

Nestlé’s ice cream brands include Häagen-Dazs, Skinny Cow, and Drumstick. The hope is the deal will enable the brands to compete with rival Unilever. The move is part of Schneider;s plan to divest parts of the business. Earlier this year, he sold off Nestlé’s skin health unit to private equity and its life insurance arm.

Nestlé will continue to manage its remaining ice cream businesses in Canada, Latin America and Asia as part of its market structure.

BT to launch monthly sport streaming service

BT is launching a monthly pass allowing sports fans to watch content in a move to rival Amazon.

The new £25-a-month pass allows anyone to watch fixtures on BT Sport without having to pay hundreds of pounds over an annual contract. Subscribers will be able to watch matches from Premier League and Champions League football without a contract for the first time.

BT has previously used its sports portfolio as a way to attract consumers into contracts for broadband, phone and TV services. However, consumers are now looking for more flexible offers in the form of subscription services thanks to the rise of Amazon Prime and Netflix.

BT Consumer managing director of marketing Pete Oliver says: “Customers can sign up on a flexible monthly basis for the first time. Monthly pass forms part of BT’s ambition to offer BT Sport customers unrivalled choice and the highest-quality broadcasts on even more devices and platforms.”

BT is racing to keep up with the competition. Sky began offering sport and entertainment on a pay-as-you-go basis seven years ago through its streaming service Now TV.

CMA could block Amazon investment in Deliveroo

Amazon’s investment in Deliveroo raises serious competition concerns that may need an in-depth investigation, the UK competition watchdog has said.

The Competition and Markets Authority (CMA) has warned that under the current deal there is a “real risk” customers and businesses will face higher prices and poorer services. The two firms have less than a week to counter the regulator’s concerns or face a long investigation.

The CMA has the ultimate power to block the deal, as it did when Sainsbury’s and Asda sought a tie-up. Amazon could also be forced to sell or reduce its stake in Deliveroo in order to gain approval from the regulator. In a similar case, broadcaster BSkyB was forced to sell more than half its 17.9% stake in ITV.

The CMA noted that Amazon might be discouraged from re-entering the food delivery market, which it exited last year.

The CMA’s executive director, Andrea Gomes da Silva, says: “If the deal were to proceed in its current form, there’s a real risk that it could leave customers, restaurants and grocers facing higher prices and lower-quality services as these markets develop. This is because the significant competition which could otherwise exist between Amazon and Deliveroo would be reduced.”

Amazon has stressed it has only a minority stake in Deliveroo, while Deliveroo is “confident” the deal will add to competition in the sector.

British pubs see first boost in 10 years

Britain’s pubs are seeing their first boost in a decade, new figures reveal.

According to the Office for National Statistics (ONS), there was a net gain of 320 pubs in the year to March – the first increase since 2009.

However, since 2010, almost 6,000 pubs have been lost as younger consumers drink less and consumer spending has tightened.

On Tuesday, (10 December) British pub chain Wetherspoons said it planned to add 10,000 jobs in the UK and Ireland over the next four years by opening new pubs and hotels and enlarging existing ones.

The chain currently has 875 pubs and has been among the chains to capitalise by focusing on larger sites with a strong food offering.

Most of the new openings were in England, and there was a small net gain in Northern Ireland. Scotland and Wales continued to see declines.

Stagecoach chairman Sir Brian Souter to step down

Stagecoach’s co-founder and chairman, Brian Souter, is to step down after 39 years with the company.

He started the transport group with just two buses in 1980 but will be retiring in the new year as part of a management shake-up.

Ray O’Toole, a non-executive director, will replace Souter as chairman from 1 January.

As part of the overhaul, Ann Gloag, Souter’s sister, will also retire from her position as non-executive director on 31 December.

Souter grew Stagecoach with Gloag quickly in the 1980s and 1990s after paying his way through university by working as a bus conductor.

The shake-up at Stagecoach comes at a difficult time for the group, which withdrew from the UK railway market this week after losing three key contracts over the past 18 months.

Souter says: “At the age of 65, the time is right for me to step down to spend time on my other interests and with my family, including my three young grandchildren.

“My family and I continue to have a significant shareholding in Stagecoach and I have every confidence in the management team, our strategy and the positive prospects of the business. I look forward to continuing to represent the interests of stakeholders as a non-executive director on the board.”

Wednesday, 11 December

Pernod Ricard appoints new UK marketing director

Pernod Ricard has appointed Raja Banerji as its new UK new marketing director.

Banerji, previously vice-president of marketing at Pernod Ricard India, began his career as a sales trainee at Bakeman’s Industries in the early 1990s. He joined joining Bacardi-Martini in 1997 and, in 2002, Pernod Ricard India as senior marketing manager.

He joins Pernod Ricard UK’s executive committee, based in London, reporting to managing director David Haworth.

“Raja has a wealth of experience across sales and marketing within the drinks industry in India, having held roles within Bacardi and Beam in addition to Pernod Ricard,” Haworth says.

“I am delighted to be welcoming him on-board at an exciting time for the business, as we look to continue driving momentum within wine and spirits with our enviable portfolio of premium brands for all moments of conviviality.”

Banerji replaces Philip Ainsworth, who took on the top UK marketing role in 2017 having joined Pernod in 2014. It is understood Ainsworth has left the business but is yet to reveal his next move.

Interflora introduces ‘voice commerce’ technology

Interflora has become the first UK retail brand to offer Alexa-activated “voice commerce” technology.

The flower delivery network has introduced an Amazon Alexa skill that allows customers to order and pay for Interflora goods using just their voice. They can then make a payment using Amazon Pay with another voice interaction, with an Interflora voice assistant on hand to guide them through the process.

Saying ‘Alexa, open Interflora’ launches the skill, and shoppers can state their preferences on colours and types of flowers, while an Interflora voice assistant will recommend flowers based on the occasion or season.

“Our brand is all about connecting people; helping them to share a special moment and bring them closer, wherever they are in the world,” says Interflora’s head of marketing, Jon Brook.

“Voice technology feels like a natural step for us and just one more way to help our customers send their love and thoughts to someone special to them, and we’re delighted to be first to market in the UK with such an exciting development.”

Maurice Saatchi quits agency amid scandal fallout

Maurice Saatchi has left M&C Saatchi, the agency he co-founded in 1995, as the company continues to deal with the fallout of a recent accounting scandal.

Shares in the agency fell by up to 40% as it issued a second profit warning in three months after reports broke last week that the company had an £11.6m hole in its accounts.

Non-executive director Michael Dobbs will also be stepping down from the agency, together with fellow non-execs Michael Peat and Lorna Tibian.

“We have accepted the decision of these directors to resign,” says M&C Saatchi chairman Jeremy Sinclair.

“We are determined to restore the operational performance and profitability of the business and are already implementing all of the recommendations set out in the PwC report.”

Lord Saatchi founded the firm with his brother Charles after being forced out of Saatchi & Saatchi after a shareholder revolt.

Land Rover launches winter campaign for the US

Land Rover’s new winter campaign highlights its partnership with US Ski and Snowboard, the national governing body for Olympic skiing and snowboarding.

Featuring a number of athletes alongside the latest fleet of Land Rovers, the debut 30-second spot saw two-time Olympic gold medalist Mikaela Shiffrin handling heavy weather with ease on her way up to a mountain slope in a Range Rover Sport.

‘Play Harder This Winter’ will run throughout the winter season across various platforms, including online and social.

“As snow has started to fall and the competitive Ski and Snowboard season has started, Land Rover is calling for people to Play Harder this season with a campaign starring US Ski and Snowboard athletes enjoying their Land Rover SUVs,” says Jaguar Land Rover North America vice-president of marketing Kim McCullough.

Land Rover was named official vehicle partner of US Ski and Snowboard in September, with athletes participating in more than 200 events around the world.

Pub group Blackrose’s ad banned for talking up the effects of alcohol

The Advertising Standards Authority (ASA) has upheld a ruling that pub group Blackrose Group breached the Code by implying that alcohol could enhance confidence, by encouraging excessive drinking and implying that alcohol was capable of changing people’s mood.

The pub management company posted three adverts on Facebook, with one, for the Ship and Royal pub in Newcastle on 2 October 2019, saying “Hats off to everyone doing the going sober for October… me I’m going on a bender till December”.

The post was accompanied by a beer glass, sunglasses and teary-laughter emojis.

The ASA also ruled that life insurance provider Dead Happy was irresponsible when it created a paid-for posting on Facebook in September that trivialised suiced. The posting came with an illustration of a laughing skull and the words: “Life insurance to die for.”

Tuesday, 10 December

McDonald’s introduces tech to make it easier for customers to donate to charity

McDonald’s is introducing technology that will make it easier for its customers to donate to its charity, Ronald McDonald House.

The tech enables customers to round-up their purchase to the nearest whole dollar, with the extra money donated. The option is available at 14,000 McDonald’s in the US at both digital self-order kiosks and the front counter.

Ronald McDonald House helps families with ill or injured children stay together by offering private bedrooms, as well as home-cooked meals and laundry facilities near to the hospital where they are receiving treatment. The charity has provided more than 2.5 million overnight stays globally, helping families save more than $930m.

McDonald’s CEO Chris Kempczniski says: “At McDonald’s, we know the importance of bringing families together. For more than 45 years, McDonald’s, our franchisees and our customers have been proud supporters of Ronald McDonald House Charities.

“As a founding mission partner of the charity, McDonald’s remains committed to leveraging the size and scale of our restaurants to promote and raise money to support the growth of the charity.”

To encourage customers to use the service, McDonald’s has created a ‘Menu of Moments’ to show how even small amounts can make a difference. Just 92 cents, for example, can help a parent read a bedtime story to their sick child.

Just Eat takeover battle heats up

The battle to buy takeaway delivery firm Just Eat is hotting up as one suitor increases its offer for the UK business by £200m.

Dutch investment company Prosus has increased its cash bid to £5.1bn as it looks to see off rival buyer Takeaway.com, which agreed an £8.2bn deal for Just Eat earlier this year. Since Prosus began bidding for Just Eat, the value of Takeaway’s offer has risen because its share price is up by a fifth and it plans to pay Just Eat shareholders in stock.

Prosus boss Bob van Dijk says: “Just Eat is a quality business, which we believe has all the ingredients to be transformed into a long-term sector winner.

“In recognition of this potential, we have decided to increase our offer to 740p per share, which we believe provides Just Eat shareholders with compelling value and therefore good reason to accept our all-cash offer.

“Unlike the Takeaway.com offer, which relies on shares remaining at an above sector multiple, our cash offer provides certainty of value to Just Eat shareholders. We urge shareholders to accept our offer, as it is the only one that delivers certainty in the face of undeniable industry change.”

Supermarket sales slow in the run-up to Christmas

Supermarket sales growth has slowed in the run-up to the festive period, with sale up by just 0.2% in the four weeks to 1 December according to data from Nielsen.

Black Friday may be partly to blame, with shoppers switching spend away from the weekly shop to take advantage of the deals available. In the week of Black Friday, sales were down 0.7% year on year.

UK supermarkets are experiencing an unexpectedly slow start to the festive period, with grocery sales growing by just +0.2% in the last four weeks, reveals data released today by Nielsen.

All the major supermarkets experienced a decline in sales, with Morrisons performing worst as sales fell 2.5%. Tesco was the best performing of the big four, with sales down 0.5%.

By comparison, Lidl saw significant growth of 13.8%, followed by Aldi on 8.2%, Co-op on 3.2%, Iceland on 2.7% and Marks & Spencer on 1.2%.

Nielsen’s UK head of retailer and business insight Mike Watkins says: “Though it has been a disappointing start to Christmas, we must remember that around one third of shoppers never intended to start their Christmas grocery shopping until December.

“This means that there is still a strong chance that grocery sales will pick up pace, but this depends on how the crucial final two weeks of the year perform. A late surge in sales is quite possible this year as Christmas Eve falls on a Tuesday.”

BrewDog offers free beer to voters

Craft brewer BrewDog is bringing back its ‘Vote Punk’ campaign, offering everyone who votes in the general election on Thursday 12 December free beer.

To get the free pint, voters must take a selfie outside a polling station and then show it in any BrewDog bar on the same day. People who voted by post can show their postal registration confirmation to qualify.

This is the second time BrewDog has looked to encourage people to vote. It first ran the campaign during the last general election in 2017.

BrewDog boss James Watt says: “Casting a vote is any citizen’s duty and a responsibility not to be taken lightly. That’s why we are rewarding anyone who votes in this general election with a Punk IPA on us.

“We’re not affiliated with any political party or movement, choosing to settle our differences over a pint instead, and now we can offer you the chance to do both – voting on the 12th and then having a beer on us the same day.”

Away appoints new CEO amid backlash over working culture

Direct-to-consumer luggage brand Away has appointed a new CEO amid a backlash over its corporate culture.

An investigation by The Verge uncovered a “toxic” culture at the startup, with former staff claiming they were expected to work excessive overtime without extra pay and discouraged from taking time off. They were also publicly chastised in front of other staff via messaging tool Slack.

Lululemon Athletica COO Stuart Haselden will take over as CEO at Away starting on 13 January. CEO Steph Korey and her co-founder Jen Rubio will remain on the company board, with Korey assuming the role of executive chairman.

Korey says: “Stuart’s impressive track record in strategically scaling retail businesses and teams offers invaluable expertise as Away enters its next phase of growth. I believe Stuart’s leadership, supported by other key executives who have joined Away this year, will have an enormous impact on our business, community, and culture, and we look forward to learning from his depth of experience.”

Monday, 9 December

Political advertising ramps up on Snapchat

Snapchat is enjoying a substantial increase in political advertising revenue, generating $3.6m (£2.7m) over the past three months alone.

The social media platform, which is actively used by more than 200 million people, made $5.4m (£4.1m) in political advertising this year according to figures published by the Washington-based Center for Responsive Politics (CRP). That figure is compared to $2.5m (£1.9m) generated between mid-2018 and mid-September 2019.

According to the Financial Times, Snapchat’s increasing popularity is down to the younger demographic of its users and its ability to let advertisers target highly specific groups of people.

CRP researcher Anna Massoglia told the FT: “Snapchat enables advertisers to target political ads to very specific characteristics of users they want to see the ads, and provides a breadth of data on the targeting of its political ad buys.”

The platform has been encouraging politicians, particularly prospective candidates in the US presidential election, to build profiles and this year also introduced a curated news channel covering the American election.

Aviation Gin parodies Peloton ad

US gin brand Aviation Gin, owned by actor Ryan Reynolds, has taken a swipe at Peloton’s widely criticised Christmas campaign by inviting the wife from the advert out for a drink.

The Aviation Gin ad shows a shell shocked Monica Ruiz, the actress who played the grateful wife in Peloton’s ‘The Gift that Gives Back’ campaign, sharing a cocktail with friends who encourage her to relax (presumably after the fierce backlash to the advert) by explaining: “You are safe here.” Toasting a fresh start, the advert ends with one of the friends telling Ruiz: “You look great by the way”.

The end line is a clear reference to the advert from fitness company Peloton, which shows a wife being gifted the £1,990 exercise bike and then spending the next year recording a vlog to thank her husband for the present. The advert, described as “dystopian” and widely deemed sexist, caused the company’s share price to drop 9%, wiping $942m (£716m) from Peloton’s market value.

Reynolds pushed the ad out via his Twitter account on Friday with the comment “Exercise bike not included”. Since then, the advert has been watched more than 3.7 million times on Reynolds’ YouTube page alone.

Conservatives quadruple Facebook ad spend as general election looms

With the general election just three days away, the Conservatives have quadrupled spending on Facebook in a final push before voters head to the polls.

The political party splashed out £22,491 on Facebook ads on 4 December, according to Facebook Ad Library data, compared to just £5,577 on 3 December.

Sky News reports that the Tories have been pushing messaging around their ‘Get Brexit Done’ agenda. This includes ads posted from Boris Johnson’s official account showing the current Prime Minister in a high-vis jacket accompanied by the words: “Parliament has been blocking Brexit for three years. Your vote can end the chaos, respect the referendum and get it done!”

The Labour Party, by contrast, has consistently invested heavily on Facebook advertising, spending around £726,000 between 6 November and 3 December. The content appears to be gaining some traction, with two ads posted by London mayor Sadiq Khan generating more than 1 million impressions each, the highest threshold measured by Facebook.

According to Sky News, the top five Facebook adverts in terms of impressions run during the campaign to date have been posted by Labour.

Tesco considers sale of stores in Thailand and Malaysia

Tesco is considering the sale of its stores in Thailand and Malaysia in a move that could see the supermarket giant exit two of its last remaining international markets.

The retailer operates 1,967 stores in Thailand under the Tesco Lotus brand and another 74 in Malaysia, which in total employ more than 60,000 people. According to The Guardian, the businesses made combined revenues of £4.9bn in the year to February 2019, generating a profit of £286m – around a fifth of Tesco’s total global profits.

The decision to consider an offer for the Thai and Malaysian businesses comes after outgoing chief executive, Dave Lewis, said in June there were growth opportunities in Asia and talked of plans to open a further 750 convenience stores in Thailand. The Guardian reports that Tesco’s Asian business is growing faster than its core business and is more profitable, with margins of around 6% compared to less than 3% in the UK.

If Tesco were to exit Asia it would mean the supermarket’s only non-UK operations are in Ireland and central Europe. In 2015, the company sold its South Korean business for £4bn.

RBS accused of faking reviews for new mobile bank Bó

Royal Bank of Scotland (RBS) has been accused of writing fake reviews for its mobile bank Bó before the app was officially available to download.

The Telegraph reports that a series of five-star reviews for the app were published months ahead of Bó’s launch on 27 November, praising features such as its notifications and design. It has also been found that a positive review, published on the app’s release date, was authored by an account with the same name as an RBS employee.

The Telegraph has found three reviews on the Apple App Store accusing RBS of faking comments about Bó, with one stating: “Was keen to test this out but concerned by the mass of five-star reviews parroting the marketing materials.”

In a statement, RBS explained that 2,800 people had signed up to Bó as part of a pilot phase, which included bank staff: “We test our products, including with staff, before they are available to our customers and use feedback from pilots to improve the services and products we offer.”