WH Smith, BT, coronavirus latest: 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.

Saga suspends cruise operations

Saga has suspended its cruise operations until the beginning of May over coronavirus fears.

It follows Boris Johnson’s decision to change travel advice yesterday with the government warning people aged 70 and over and those with pre-existing health conditions should not go on cruises.

Saga said the decision to suspend cruises could have a £10m-£15m hit on profits.

“Our customer service teams will be in contact with cruise customers who were due to travel in the next six weeks to offer them either a full refund or a credit for a future departure,” it said.

Yesterday, Princess Cruises revealed that it would suspend global operations of its 18 cruise ships for two months.

Norwegian Air temporarily cuts half of staff

Norwegian Air is to cut 4,000 flights and temporarily suspend half of its staff as it struggles to deal with the effects of coronavirus.

The budget airline blamed the “extraordinary market situation due to the coronavirus.” Adding: “We must look at all possible measures to reduce costs. The airline has decided to ground 40% of its long-haul fleet and cancel up to a quarter of its short-haul flights.

The announcement comes amid falling demand for air travel, due to increasing travel restrictions and many travellers opting to stay at home.

CEO of Norwegian, Jacob Schram, says this is “an unprecedented situation” and is calling on “international governments to act now to ensure that the aviation industry can protect jobs and continue to be a vital part of the global economic recovery”.

The company employs 1,200 people in UK.

Shopping centre giant Intu warns it could collapse

The owner of nine of the UK’s largest shopping centres has warned that it could go bust.

Intu Properties, which includes Manchester’s Trafford Centre and Lakeside in Essex within its portfolio, abandoned a £1.5bn fundraising to pay off debts a week ago.

It cited “extreme” market turmoil over coronavirus as causing a major dent in the business while announcing a deepening of annual losses to more than £2bn.

The company says there was now “material uncertainty” over its ability to continue as a going concern.

Chief executive Matthew Roberts says: “In the short term, fixing the balance sheet is our top priority. We have options including alternative capital structures and further disposals to provide liquidity, and will seek to negotiate covenant waivers where appropriate.”

Intu also revealed it is in talks with its lenders adding it was examining avenues to boost its finances.

BT boss tests positive for Coronavirus

BT boss Philip Jansen has been diagnosed with coronavirus but has promised “there will be no disruption to business”.

The telecoms group has confirmed that Jansen tested positive for Covid-19 yesterday and as a result is in self-isolation.

BT says it is now working closely with Public Health England to undertake a full deep clean of relevant parts of its headquarters. It added it will “ensure those employees who have had contact with Philip are appropriately advised.”

Jansen says: “Having felt slightly unwell I decided as a precaution to be tested. As soon as the test results were known I isolated myself at home. Given my symptoms seem relatively mild, I will continue to lead BT but work with my team remotely over the coming week. There will be no disruption to the business.”

He added that he decided to go public because he had attended an event earlier in the week with other figures in the mobile phone industry.

WH Smith issues profit warning

WH Smith has warned that the outbreak of coronavirus is hitting footfall, especially in its airport-based travel business – and is likely to affect full-year sales and profits.

The retailer has become the latest company to issue a profit warning due to the pandemic.

It’s shares dropped 15% to £13.39 as it warned that the virus outbreak would cost it up to £130m in lost revenues. It said annual profits were likely to be £30m-£40m lower than previously expected. This in effect halves its profit forecast of nearly £80m.

The newsagent, stationer and bookseller says that since February it has seen a “significant impact” to its travel business in the Asia Pacific region, which accounts for about 5% of its travel business.

In the past fortnight, passenger numbers have dropped significantly at UK airports, where its shops represent 60% of travel revenues; in the US, which accounts for a quarter of travel revenues; and in Europe. WH Smith expects revenues at its UK airport shops to fall by 35% in March and April.

The pandemic could also affect high street spending in the UK, the retailer said, and would drag down its full-year revenues and profits

WH Smith says it is now managing the business to protect profitability, taking “all necessary action to reduce costs” while also prioritising the health and safety of its customers, staff and business partners.

It added: “Over the longer term, the board remains confident in the strategy and believes the group is well-positioned to benefit from the normalisation and growth of the global travel market.”

Thursday, 12 March

Industry leaders react to Budget key points and change in base rate

Chancellor of the exchequer Rishi Sunak’s maiden budget speech, set against a backdrop of mounting anxiety over the coronavirus and its damaging effect on the economy, was greeted with some cautious enthusiasm within the marketing and advertising industry.

Some of the key points in yesterday’s budget speech included:

A £30bn war chest to tackle the coronavirus threat
Cuts in interest rates to assist the economy during the crisis
Business rates abolished for retail, leisure or hospitality business with a rateable value below £51,000
Fuel, beer, wine and spirit duties frozen
Corporation Tax remains at 19%
£5bn to get superfast broadband into rural areas and £510m for shared rural mobile phone network pothole fund
Plastics packaging tax to charge manufactures and importers £200 per tonne on packaging made of less than 30% of recycled plastic

An Advertising Association spokesperson reacted favourably to news that the Bank of England was changing the base rate to help aid business planning during the ongoing coronavirus situation.

“It is too early to tell what its overall effect will be on the advertising industry, adspend and the wider economy at this time, but signs such as the cancellation or postponement of events including SXSW and Advertising Week Europe are indicative of an industry experiencing pressures,” a statement read.

“While the circumstances are different, comparisons can be drawn with the economic shock of 2008 and 2009. Experience shows much of the spend at the time was delayed and returned the following year.

“This positive move by the Bank will help businesses navigate through this period of uncertainty.”

IPA director general Paul Bainsfair also welcomed the news: “From brand awareness to brand building, we know that advertising has enormous power to transform businesses, and can be especially powerful during a downturn.

“Anything that Government can therefore do to help secure businesses, so that we can help grow them and our own agencies, will be much needed.”

US brings in European travel ban

President Trump announced on Wednesday night that visitors from continental Europe, ie excluding Britain and Ireland, will not be allowed to enter the United States for a period of 30 days.

The move is one of a series of measures introduced by the White House in a bid to stop the coronavirus spreading through the country.

With the stock market continuing to falter, the National Basketball Association announcing it was suspending the season and actor Tom Hanks announcing he has contracted the virus, the US has been angered at their government’s failure to tackle the escalating situation.

However, Association of Flight Attendants-CWA president Sarah Nelson said that the move would be hugely damaging for the country’s tourist industry.

“There is no explanation for how this will help fight the spread of the virus,” she said. “It makes little sense when the virus is already in the United States.”

The ban will come into force from tomorrow, Friday 13 March, but exempts US citizens, permanent legal residents and their families.

“The virus will not have a chance against us,” Trump told a prime-time television audience from the Oval Office.

Cannes Lion issues coronavirus update

Organisers of this year’s Cannes Lion have issued a statement updating contingency plans for the festival, scheduled to take place from 22-26 June.

With concerns that the event could be postponed due to ongoing global fears about the coronavirus, the statement reads: “We continue to monitor the situation closely and follow all guidance from health and government officials.

“We remain fully committed to ensuring the health, safety and wellbeing of our customers, employees, sponsors and partners.

“As things stand, anyone who is submitting a Lions entry for 2020 should follow the existing process and timeline. If anything about that process changes, we will issue a further announcement.”

There is the option to postpone the event to late October if circumstances change.

The statement continued: “If we do make that decision, we will announce to our customers no later than 15 April 2020, sharing weekly updates ahead of any announcement date.”

Cannes Lion managing director Simon Cook added: “As we stand today, all of our plans are proceeding as scheduled and we are still working towards Cannes Lions 2020 taking place as planned on 22 June.

“However, as the global situation is evolving constantly, we want to be open about our contingency plans. We have consulted with our customers and partners and have prepared accordingly by putting measures in place to allow flexibility, should we need it.

“As always, the safety of all those involved is our utmost priority, and any decision we take will reflect this.”

McLaren set to announce Paul Walsh as chairman

The former Diageo CEO Paul Walsh is reportedly being lined up as a chairman of the McLaren Group, which includes the Formula One team, road car and applied technologies division.

Walsh will replace Shaikh Mohammed Bin Essa Al Khalifa, with his arrival expected to pave the way for a move to take the company public in the near future.

The appointment could be made within days, on the eve of the F1 season-opener in Melbourne, Australia.

McLaren is due to post its annual results next month.

PepsiCo causes splash buying Rockstar Energy Beverages

PepsiCo has bought energy drinks brand Rockstar Energy Beverages, in a deal worth $3.85bn (£2.9bn).

The move is seen as part of a concentrated effort by the new PepsiCo CEO Ramon Laguarta to reduce the company’s reliance on sugary drinks and to open up another front in its ongoing battle with Coca-Cola.

The Rockstar deal joins recent health-conscious buyouts of SodaStream and the South African Pioneer Food Group, which produces cereal and fruit juice.

With energy drink consumption continuing to grow in the US, Laguarta is reportedly keen on expanding PepsiCo’s market share.

MORE: PepsiCo aims for energy boost with $3.85 billion Rockstar deal

Wednesday, 11 March

Unilever to close washing powder factory

Unilever is planning to close its washing powder factory in Warrington as a result of consumers using more liquid and gel capsule detergents than powders.

Following a review into the FMCG giant’s 136-year-old site, which produces powders such as Persil and Serf, Unilever says it has been unable to identify any “commercially sustainable solutions”.

In the last four years, Unilever says market volumes have fallen by 15% and this is a trend it expects to continue.

“Over recent years, there has been a sustained and irreversible decline in demand for washing powder, as consumers increasingly switch to other types of laundry product, particularly laundry liquids and laundry capsules,” Unilever says.

“As a direct result of this structural shift in the market, the Warrington factory is now running at less than half its capacity.”

The site’s 123 staff are expected to have left their roles by the end of the year. Unilever also intends to move the majority of production of laundry powders to an existing manufacturing partner in Europe, with some smaller volumes to be moved to Unilever’s other sites.

Auto Trader launches perfume for new campaign

Auto Trader is launching a perfume as part of a marketing campaign centred around the smell of success.

Eau De New Car, which is available to buy for £175 on Auto Trader’s website, has been designed to smell like a brand-new car.

According to Auto Trader’s research, this is the smell most people associate with success. The brand describes the scent as a “fresh, purifying fragrance which blends notes of fine leathers and hard wax from the most premium of vehicles, to recreate the heady emotion of the first journey in a new car, culminating in a finish of musk and carpeted aroma.”

The 50ml bottle will be supported by a perfume advert, produced in-house, which also features ex-Top Gear host Rory Reid.

Out-of-home activity, meanwhile, includes a scented double-sided six sheet in Manchester’s Arndale Centre that will have bespoke branding and dispense the perfume via motion-triggered scent diffusers.

The campaign will be amplified further through PR announcing the story with consumer research that links new cars with the feeling of success.

“PR continues to play an integral role in our brand activity and in-housing more of our marketing capability enables us to launch impactful campaigns that convey more of Auto Trader’s personality,” says Auto Trader’s head of marketing communications, Ben Darby.

“2020 is set to be an exciting year for the brand where we’ll continue to test and try new channels and formats to broaden our touchpoints with the full spectrum of new and used car buyers.”

Warner Bros ad banned for inappropriately targeting children

A Warner Bros ad for the horror film IT Chapter Two has been banned by the Advertising Standards Authority for inappropriately targeting children on Spotify.

The ad, heard between songs on the Classical Lullabies playlist on Spotify, featured a voice-over from the character Pennywise the Dancing Clown stating: “For 27 years I dreamt of you. I craved you. Oh I missed you.” This was followed by the noise of a number of laughing clowns.

Warner Bros Entertainment UK said the ad could only be heard by logged in users of Spotify and was intended to attract the attention of 18-44-year-old – the “relevant demographic” for the film.

Warner Bros used the parameters ‘Age is 18-44’ and ‘Real Time Genre is not Children’, which is also known as ‘No Kids Music’ to ensure the ad was appropriately targeted.

Spotify said it believed the parameters used were appropriate and they did not believe the playlist was designed primarily for children.

While the ASA agreed Warner Bros had taken appropriate steps to target the ad responsibly, because it appeared around content that was likely to be heard by young children, who were likely to be distressed by it, the ad had been inappropriately targeted.

It must not appear again in its current form.

Avon and Marie Claire UK partner for #SpeakOut campaign

Avon and Marie Claire UK have partnered to launch #SpeakOut, a campaign calling for an end to pejorative words such as ‘bossy’, ‘lippy’ and ‘bitchy’ that are often used to describe women.

The brands will post daily social media content throughout the week to encourage people to join the #SpeakOut movement, including voxpops on their Instagram stories and quotes on Twitter. Marie Claire will also run a number of editorial features on its website.

“Marie Claire is renowned for its campaigning spirit and for leading the conversation on the issues that matter most to women,” says Marie Claire editor-in-chief, Andrea Thompson.

“#SpeakOut addresses concerns we know are weighing on the minds of our readers and speaks to their experiences of being a woman at work in 2020. Collaborating with Avon for the launch and using Marie Claire’s platform to share the conversation we had around that table, we hope to empower women to redress the share of equal voice we are currently deprived of.”

Ryanair suspends all Italian flights

Ryanair is suspending flights to, from and within Italy, following the Italian government’s decision to “lock down” the country to contain the spread of coronavirus.

All domestic flights will be suspended between 1 March and 8 April, while international flights will be suspended between 13 March and 8 April.

Passengers can either obtain a free move to an earlier Ryanair flight operating up until midnight on Friday 13 March, or they will be able to choose between a full refund or a travel credit that can be redeemed on Ryanair flights in the next 12 months.

Ryanair says it will continue to comply fully with WHO and national Government guidance and travel bans, and it “apologises sincerely” to customers for schedule disruptions.

Tuesday, 11 March

Airlines cancel flights as coronavirus hits global markets

Airlines including British Airways, EasyJet and Ryanair have cut the number of flights they operate to and from northern Italy as the government there locks down the country in response to the coronavirus.

Airlines are offering refunds or rebooking after the Foreign Office advised against all but essential travel to regions operating under quarantine. Ryanair will now operate just one flight a day from Fridays to Mondays from the region and has suspended internal flights. BA and EasyJet have cancelled a number of flights and are reviewing their schedules.

Qantas, meanwhile, has cut almost a quarter of its flights over the next six months amid falling demand from consumers. Its CEO Alan Joyce is forgoing some of his wage, while other executives are taking a 30% pay cut and bonuses for the year have been set at zero.

“We expect lower demand to continue for the next several months, so rather than taking a piecemeal approach we’re cutting capacity out to mid-September,” says Joyce.

Advertising Week Europe postponed

Elsewhere, Advertising Week Europe, which was due to take place in London next week (16 – 19 March), has been postponed amid mounting concerns over the spread of the coronavirus.

The event will now be held from 14 – 17 September. The event is the latest to be cancelled or postponed in response to the outbreak and concerns over public health and safety. Others to be affected including South by Southwest, Mobile World Congress, Facebook’s f8 conference and the Adobe Summit, which will now be a digital-only event.

“Advertising Week prides itself on being an inclusive and accessible platform and we felt it was critical to ensure it could be comfortably and safely attended by British, European and global delegates,” says the company in a statement.

“We remain committed to the live experience at Advertising Week Europe, harnessing our influential audience, face-to-face meetings and continuing professional development to help drive business forward.”

Facebook and Google ban ads for face masks

Facebook and Google are banning ads for face masks on a temporary basis as they crack down on advertisers making health or medical claims related to coronavirus.

The ban applies to ads on Facebook’s social network as well as commercial listings on Marketplace, its shopping site. The hope is it will help to halt price gouging, as well as misleading people that products could prevent someone from contracting the disease.

“Our teams are monitoring the Covid-19 situation closely and will make necessary updates to our policies if we see people trying to exploit this public health emergency,” says Facebook’s director of product management Rob Leathern.

Google has a ban for ads over coronavirus but some advertisers were getting around the rules by failing to mention the disease in ads for products such as face masks.

Google said it would temporarily block ads over the next few days mentioning surgical face masks in all ads across mobile, search, and YouTube.

“We’re committed to protecting users and surfacing helpful, authoritative information as the coronavirus situation continues to evolve,” a Google spokesperson tells Business Insider. “Out of an abundance of caution, we have decided to temporarily ban all medical face mask ads. We’re actively monitoring the situation and will continue to take action as needed to protect users.”

Elsewhere, the NHS is working with digital platforms including Google, Facebook and Twitter to halt the spread of misinformation over coronavirus.

While experts say there is limited evidence of concerted efforts to spread falsehoods about the virus, the NHS is keen to ensure the public is accessing correct information. It has worked with Twitter to suspend a fake hospital account that was putting out inaccurate information and verify accounts belonging to NHS organisations.

It has also worked to ensure the public is shown correct information in searches across digital platforms.

Cadbury wants to end ‘over-commercialisation’ of Easter

Cadbury wants to put the heart back into Easter with a campaign that rather than prioritising finding chocolate eggs to eat asks people to show loved ones they care.

The campaign, called ‘Show you care, hide it’ by VCCP, encourages people to consider where they hide an egg for a loved one, rather than handing one over. A TV ad shows a grandfather hiding shiny purple eggs around his flat for his grandson and granddaughter. Outdoor ads will showcase hiding spots in real homes, while across digital and social platforms there will be a focus on the act of hiding.

Cadbury senior brand manager Declan Duggan says: “We see Easter as a holiday to reawaken the generous spirit in people; a Cadbury Easter Egg is all it takes to connect with your loved ones and show you care.”

Tesco to sell Asian business in £8bn deal

Tesco is selling its Lotus operations in Thailand and Malaysia for £8bn to Thai firm CP Group in a move outgoing CEO Dave Lewis says will allow the business to “further simplify and focus”.

Around £5bn of the proceeds of the deal will go to shareholders. Tesco has more than 2,000 stores employing 60,000 people in Asia.

Tesco now has operations only in the UK, Ireland and central Europe.

CP Group is Thailand’s largest private company, owning businesses in retail and telecoms. It owned the Lotus chain in the 1990s but sold it to Tesco after losing money during the Asian financial crash in 1997.

Starbucks tests greener takeaway cup

Starbucks is testing a more environmentally takeaway cup with a biodegradable liner as it looks to reduce plastic waste.

A report in the Wall Street Journal says the cup is being trialled at stores in London, New York, San Francisco, Seattle and Vancouver. The company hopes customers will not be able to tell the difference.

Starbucks considered 12 prototypes before opting for a BioPBS liner that has a coating made of renewable material. It is currently difficult to recycle takeaway coffee cups because they have a plastic liner to stop them from leaking and keep drinks hot.

The company plans to get feedback from its staff and customers about the trial before deciding on a wider roll-out.

Monday, 9 March

Tesco limits sales of key items amid stockpiling panic

Tesco is restricting sales of food and household items such as dry pasta, tinned vegetables and UHT milk amid coronavirus stockpiling.

Both in-store and online shoppers are limited to buying no more than five of a range of products, including antibacterial gels, wipes and sprays.

Waitrose has introduced a temporary cap on the sale of items such as anti-bacterial soaps and wipes on its website and is allowing store managers to make their own judgement at a localised level. Meanwhile, Boots has restricted sales of hand sanitisers to two per person and Asda limiting sales of some types of hand sanitiser to two bottles per person.

A government spokesperson told the BBC it was in touch with UK supermarkets to “discuss their response” to the coronavirus.

One in 10 UK consumers is thought to be stockpiling amid fears about the virus, based on an analysis by Retail Economics of 2,000 shoppers.

UK seeks £500m windfall from digital services tax

The UK is hoping to raise £500m through its proposed digital services tax despite opposition from the US government and some British businesses.

The Financial Times (FT) reports that the tax, which will come into effect in April, will be included by the Chancellor in Wednesday’s Budget. The digital tax, focused on large US tech companies such as Facebook, Amazon and Google, is intended to claim back millions of pounds businesses avoid paying to the state by diverting profits through “low-tax” countries like Ireland.

The new levy is expected to include a 2% tax on revenues generated by UK users of large social networks, search engines and online marketplaces, the FT reports.

The measure would apply to companies with an annual global revenue of more than £500m and who generate in excess of £25m of UK sales from “relevant activities”. The aim is to ensure that online transactions, such as advertising, are taxed where users of these social networks and search engines live.

UK tech companies are suggesting, however, that they could also be hit by the digital services tax as EU competition rules, which apply during the Brexit transition period, mean British business cannot offset the tax against other levies such as corporation tax. Just Eat CFO, Paul Harrison, told the FT that the tax represents “pure double taxation”.

Elsewhere, the US government has already threatened it will impose tariffs on the UK if it goes ahead with the digital services tax, which could sour future trading deals.

Refuge launches campaign to drive awareness of domestic abuse

To mark International Women’s Day (8 March) Refuge has launched a campaign to drive awareness of the National Domestic Abuse Helpline.

As domestic abuse affects almost one in every three women, the charity wants to give the helpline maximum exposure by broadcasting it across TV, outdoor and social media. As part of the campaign, created by BBH, high-profile women including presenter Lorraine Kelly, singer Jess Glynne and comedian Miranda Hart changed their names on Twitter to the number of the National Domestic Abuse Helpline – 0808 2000 247.

Refuge also staged a takeover of London’s Piccadilly Lights, while 10 second idents featuring a voiceover from the charity’s patron, the Oscar winning actress Olivia Colman, ran throughout the day thanks to donations from Sky and A+E Networks UK.

Since November, the helpline and new domestic abuse website have been solely operated by Refuge, giving survivors access to emergency domestic abuse services across the country, as well as emotional and practical information. The helpline runs 24 hours a day, every day of the year.

“Refuge’s freephone 24-hour National Domestic Abuse Helpline is at the heart of how this country responds to domestic abuse – it is a lifeline to hundreds of thousands of women across the country,” says Refuge chief executive, Sandra Horley.

“0808 2000 247 is a number that every woman should know. International Women’s Day, Refuge and an amazing band of high-profile women will work to make this a reality. Women’s lives depend on it.”

Facebook sued by Australian watchdog over Cambridge Analytica breach

Facebook is being sued by the Australian information commissioner amid claims the privacy of 300,000 Australians was breached during the Cambridge Analytica scandal.

Commissioner Angelene Falk alleges that Facebook collected user data which was then passed onto the This is Your Digital Life app created by Cambridge Analytica for political profiling. As this was not the reason the data was supposed to have been collected, Facebook’s actions are said to be in contravention of Australian privacy law.

The data collected included names, dates of birth, email addresses, location, friends lists, page likes and Facebook messages. According to the social media company, 311,127 Australians shared data with the This is Your Digital Life app between March 2014 and May 2015. However, the commissioner claims that Facebook has not been able to identify which Australian users were affected.

“We consider the design of the Facebook platform meant that users were unable to exercise reasonable choice and control about how their personal information was disclosed,” says Falk.

“Facebook’s default settings facilitated the disclosure of personal information, including sensitive information, at the expense of privacy.”

Adidas links up with women driving change in the sports industry

Adidas is partnering with incubator iFundWomen to help support female entrepreneurs in the sports sector.

The sportswear giant will offer a group of female founders a grant to take their business to the next level, as well as ongoing mentorship and support. The nine entrepreneurs chosen to receive funding and coaching include Francesca Brown, founder of London-based Goals4Girls, a football development programme set up to empower disadvantaged young women aged 11-16.

“Not only is lack of capital preventing women from starting businesses, but lack of access to mentors and support networks are also cited as the biggest barriers,” says senior director for global women at Adidas, Alexa Andersen.

“Through this partnership, we’re able to support some of the most exciting women-led businesses in the industry, through funding, mentorship and more. Together with iFundWomen, we want to help break down barriers for women entrepreneurs in the sports industry and co-create a more inclusive future for all.”

Adidas plans to extend its partnership with iFundWomen beyond the initial nine entrepreneurs in celebration of Women’s History Month this month. Between now and 31 March the partners are launching an open call for more women to submit their ideas and apply to join the programme to receive financial support and business coaching.