Snapchat takes a hit
Snapchat’s shares received another pounding yesterday after losses at its parent company Snap Inc nearly quadrupled in the second quarter. Snap lost $443m despite revenues rising 153% to $182m. That was below analyst expectations.
Growth also slowed, with Snapchat adding 7.3 million new users in the quarter, below the 8 million expected. It now has 173 million daily active users.
Amazon’s UK tax bill drops 50%
Amazon’s corporate tax bill fell by 50% last year despite revenues increasing 54% over the same period. The news has renewed criticism of Amazon over its tax arrangements. However, corporation tax is paid on profit not revenue, and last year Amazon made £24m, compared to £48m the year before. That means it had to pay £7m in tax compared to £15m.
Investor sues former Uber CEO
One of Uber’s early investor is sueing its former CEO Travis Kalanick for fraud and breach of contract. Benchmark Capital, a venture capital firm and early Uber investor, accuses Kalanick in the suit of being “selfish” for hiring “loyal allies” to the company’s board.
If successful, the lawsuit could see Kalanick kicked off Uber’s board of directors, making it impossible for him to return as CEO. Recent speculation has suggested Kalanick has said he is “Steve Jobs-ing it” – a reference to the fact that Jobs stood down as CEO of the company but then returned. Kalanick was removed as Uber CEO following a string of allegations over gender discrimination and workplace culture.
Lego hires second CEO in eight months
Lego is hiring its second CEO in eight months as it looks to bring in a younger boss to steer the company through the shift to digital. Bali Padda, a 61-year-old Briton, was hired as the company’s first non-Danish CEO in January. But he will now be replaced by Niels Christiansen, the former boss Danish industrial group Danfoss.
Lego’s new chairman, Jorgen Vig Knudstorp, led the search. And he told the Financial Times the decision was not due to Padda’s performance but to his age and the realisation he would only be able to do the role for a few years.
News Corp posts $817m loss as value of UK newspapers drops
News Corp posted a loss of $817m last year after big declines in the value of its UK newspapers, which include The Times and The Sun, as well as its Australian business.
Revenue fell by 2% to $8.29bn due to lower print advertising revenues and foreign currency fluctuations. Digital ad revenue was a bright spot, now accounting for 25% of all its revenue. But the rise was not enough to offset a decline in subscription and circulation revenue.
Thursday, 10 August
Facebook takes on Netflix with new video service
Facebook is taking on the likes of YouTube, Netflix and Amazon Prime with the launch of a new video service.
Via the Watch tab viewers will be able to see a range of shows, including original content funded by the social network. Rolling out first in the US, Watch will be personalised so users can discover new shows based on what their friends are watching. The videos will also serve up targeted advertising before and during the shows.
The introduction of the video service sees Facebook move away from user generated clips or broadcasts by news outlets into original content in the style of Netflix and Amazon.
Content coming to Watch will include Major League Baseball, Women’s basketball, parenting shows and a safari show from National Geographic. According to Reuters, Facebook has also signed deals with Vox Media, BuzzFeed, ATTN and Group Nine Media to produce original shows.
The news comes as yesterday Disney announced plans to scrap its exclusive deal with Netflix and launch its own streaming service from 2019.
ANA exposes agencies’ non-transparent production practices
Advertising agencies and holding companies engage in non-transparent practices in the production of commercials, music, events and other materials, according to a new ANA report.
The Production Transparency in the US Advertising Industry report exposes a “non-transparent agency-controlled bidding” system that can lead to higher costs and inefficiencies for advertisers.
Agencies were found to be controlling the bidding process for production while also competing for projects themselves. Practices include agencies asking independent post-production houses to submit bogus, inflated “check bids” so they can route jobs back to their in-house production teams.
The report also found brand side marketers are not always aware of the ownership of the agency unit submitting the bids, as some in-house facilities have generic names or names that are unrelated to the agency.
Eleven of the 12 experts involved in the writing of the report support the conclusion that transparency concerns exist at multiple agencies and holding companies.
Jaguar Landrover UK sales drop 14%
Jaguar Landrover UK sales fell 14% during the first quarter of 2017, despite a 3.5% increase in global sales.
Profit before tax and one-off items was £157m, down from £348m the previous year, due to higher costs and pay increases.
The car maker’s UK sales performance is thought to have been affected by increases to Vehicle Excise Duty (VED) rates on cars over £40,000. Despite poor performance in the domestic market, Jaguar Landrover’s sales rose 30% in China, followed by a 16% boost in North America.
The company confirmed plans to invest between £4bn and £4.35bn in new products, technology and manufacturing capacity, including investment in a new plant in Slovakia. In June the car manufacturer announced it was looking to recruit 5,000 people to its UK workforce, including 1,000 software engineers.
Vantiv finalises £9.3bn acquisition of UK rival Worldpay
Worldpay, the UK’s largest payment processing company, has been acquired for £9.3bn by US rival Vantiv.
The combined group will be renamed Worldpay and headquartered in Cincinnati, where Vantiv is based. No formal guarantees have been given regarding jobs in the UK, where Worldpay employs 5,000 people in London, Manchester, Cambridge and Gateshead.
Worldpay handles 40% of card payments at British tills, which are increasing in number due to the rise of contactless payments for transactions under £30.
The acquisition has, however, come under criticism from politicians including Liberal Democrat leader Vince Cable, who said the Worldpay takeover was a further example of British companies being sold off as “cheap pickings” following the devaluation of pound in the wake of the Brexit vote.
Accenture boosts creative marketing capabilities with latest acquisition
Less than a week after its acquisition of marketing and sales consultancy Brand Learning, Accenture has snapped up US creative marketing agency Wire Stone for an undisclosed sum.
The purchase of Wire Stone is the latest in a string of high profile acquisitions for the professional services firm, which over the past year have included US digital optimisation company Clearhead, ecommerce solutions provider Media Hive and UK creative agency Karmarama.
Strengthening its play for the digital advertising space, Accenture is hoping to tap into Wire Stone’s knowledge of integrated campaigns and immersive experiences, as well as expertise in brand positioning, creative design and data-driven insights.
Wednesday, 9 August
Disney unveils streaming service
Disney has become the latest entrant into the streaming market, and in so doing, has caused Netflix headaches by ending the deal it had with the subscription film and TV service. Netflix had been the exclusive US streaming partner for all Disney and Pixar’s animated and live action films since earlier this year.
From 2019, Disney will have a paid-for subscription streaming service of its own, as will its subsidiary sports broadcasting network ESPN. Netflix’s shares immediately dropped in value following the news.
Pensioners’ spending power on the up
Brands have a lucrative and growing market among the retired population, according to new figures from the Office for National Statistics, which show pensioners’ average income has nearly tripled in 40 years to £29,500 a year. Working households’ average income has only doubled in the same period to £41,900. Retired people’s incomes therefore now represent 70% of the figure for working households, compared with 52% in 1977.
The rise is mainly due to private pensions, and with their disposable incomes also growing faster than those of workers, marketers might be better off shifting some of their attention away from millennials and onto their parents and grandparents.
Murdoch’s Sky buy-out hits the buffers
Rupert Murdoch’s attempt to finalise a full buy-out of Sky has hit further delays, as the Government has tasked Ofcom with investigating the deal further. The Department for Culture, Media and Sport (DCMS) wants the regulator to examine “new evidence” relevant to 21st Century Fox’s £11.7bn bid to acquire the 61% of Sky it doesn’t currently own. In the US, its right-wing Fox News channel is being sued for allegedly using quotes it knew were faked in a false story smearing the Democratic Party.
DCMS secretary Karen Bradley was planning to refer the acquisition to the Competition and Markets Authority to judge whether the deal would harm media plurality in the UK. A previous Murdoch bid was withdrawn in 2011 in the immediate aftermath of the News of the World phone hacking scandal.
Instagram tests streaming with friends
Instagram has started testing a new feature as part of its live video capability, allowing users who are livestreaming to invite one of their friends to join in. The most likely main upshot for brands is that it presents the possibility of Instagram influencers hosting joint streaming sessions together, though the company’s blog post simply sells it as a means for users to have “more fun” connecting with friends.
The test feature is currently only available to a small number of Instagram users, but will roll out globally in the coming months.
Brexit industrial strategy under scrutiny
Companies are demanding clarity from the Government over its strategy for business after Brexit, and in particular to set out deals that will be made on behalf of individual industry sectors. The EEF, the trade body representing manufacturers, says this would “have great potential to boost industry”, but it claims the Government has left numerous questions hanging over the process.
Advertising bodies have been particularly keen to ensure the industry gets the option to access working visas for talent from the EU. Former Chancellor George Osborne last month said advertising needed to fight to be heard in policy debates at Westminster, which will become even more important if deals are done on a sector-by-sector basis.
Tuesday, 8 August
Netflix buys comic company behind Kick-Ass
Netflix has made its first acquisition, buying Millarworld, the comic book company behind Kick-Ass and Kingsmen, for an undisclosed sum.
The Glasgow-based business was set up by former Marvel comic developer Mark Millar. It is a move that will enable Netflix to own its own superhero characters to develop into shows and movies, much in the way Marvel-owner Disney has done.
Netflix also intends to turn Millarworld’s existing portfolio of character franchises – of which there are 18 – into films, TV series and children’s shows.
The comic book company will continue to create and publish new stories and character franchises under the Netflix label.
Uber’s Kalanick won’t return as CEO
Uber’s co-founder Travis Kalanick, who was asked to step down from the firm earlier this year amid allegations of sexual harassment and a toxic culture within the firm, will not be returning as CEO.
In a letter to employees, co-founder Garrett Camp says: “Despite rumours I’m sure you’ve seen in the news, Travis is not returning as CEO. We are committed to hiring a new world-class CEO to lead Uber.”
There are reports Kalanick was planning on “Steve Jobs-ing it”, in reference to the fact Jobs left Apple before returning, but Uber has confirmed that will not be the case.
Camp assured staff that finding a new CEO is “is the board’s top priority”, adding that it’s time for a new chapter and “the right leader” for the next phase of the car-sharing company’s growth.
Google engineer fired over anti-diversity memo
The Google engineer behind an internal memo suggesting biological differences are to blame for the shortage of women in tech and leadership positions has been fired for “perpetuating gender stereotypes”.
The employee in question, James Damore, confirmed his dismissal in an email yesterday.
Earlier on Monday, Google CEO Sundar Pichai told employees that elements of the memo “violate our Code of Conduct and cross the line by advancing harmful gender stereotypes in our workplace”.
Walmart heirs buy cycling brand Rapha
The grandsons of Walmart founder Sam Walton have bought upmarket cycling clothes brand Rapha. Steuart and Tom Walton and their company RZC Investments now own a controlling stake in the business.
The brand, which was founded in 2004 by CEO Simon Mottram who retains his minority stake, used to supply British cycling’s Team Sky, and is popular among amateur cyclists.
Rapha’s revenues grew by 30% to £63m in the year to January.
UK shaving club secures £3.5m investment
Competition in the shaving subscription market is hotting up as British player Cornerstone secures a £3.5m investment in a new funding round led by private equity firm Calculus Capital. William Reeve, a former board member of Graze, Lovefilm, Zoopla and Paddy Power, will also join the Cornerstone team as an adviser.
The firm has already received backing from angel investors including Quidco CEO Andy Oldham, ex-Jack Wills chairman Will Hobhouse, Charles Tyrwhitt chairman Nick Wheeler and the former president of Levi’s Joe Middleton. The latest investment takes the total raised by Cornerstone to £8m since it was launched in 2014.
The brand is up against hot competition however, with US firm Harry’s launching in the UK earlier this year supported by a big marketing push. The brand already has three million subscribers in the US and is looking to replicate its success on this side of the Atlantic.
Meanwhile, Dollar Shave Club, which was bought by Unilever last year, is also making a big splash in the shaving subscription market, although it is yet to come to the UK.
Cornerstone currently has 140,000 subscribers and employs 27 staff in its London office.
Monday, 7 August
Flora teams up with influencers for new campaign
Flora has teamed up with 20 influencers for the launch of its new flavoured dairy-free spreads, in a campaign created by TMW Unlimited.
The campaign sees a number of food and lifestyle influencers, including the ‘Topless Baker’ Matt Adlard, creating recipes and ideas of how to use Flora’s new range of dairy-free spreads.
The spreads consist of: Flora Dairy Free Walnut Spread; Flora Dairy Free Avocado & Lime Spread; and Flora Dairy Free Coconut & Almond Spread.
“Working with influencers has showcased just how versatile our new Flora dairy free flavours range is within cooking & baking, bringing the great flavours of walnut, coconut & almond and avocado to a wide range of great tasting recipes,” says Sian Jenkins, brand manager, Flora.
UK data protection laws to be overhauled
Brits could obtain more control over what happens to personal information under proposals outlined by the government. This is part of an overhaul of UK data protection laws drafted by the digital minister, Matt Hancock.
Citizens will be able to ask for personal data, or information posted when they were children, to be deleted.
Proposals also include making it simpler for people to withdraw consent for their personal data to be used, expanding personal data to include IP addresses, DNA and small text files.
People will also be able to get hold of the information organisations hold on them much more freely.
Google employee anti-diversity memo causes row
A Google employee’s opinion criticising the firm’s diversity initiatives is causing rows at the firm.
In an internal memo, a male software engineer argued the lack of women in top tech jobs was due to biological differences between men and women.
The memo was posted on an internal discussion board and the article was published in full on tech website Gizmodo.
“We need to stop assuming that gender gaps imply sexism,” he wrote in the piece, arguing that the abilities of men and women differ in part due to biological causes .
The author said women generally “prefer jobs in social or artistic areas” while “more men may like coding”.
Consumer spending falls for third month, says Visa
UK consumer spending fell for the third month in a row in July, according to research from credit card firm Visa.
Compared with the same month in 2016, spending fell by 0.8%, slightly faster than the 0.2% decline in June.
Spending has now dropped for the past three months, marking the longest falling streak in over four years.
Transport and communications spending, which dropped by 6.1% year-on-year, and clothing and footwear, which fell by 5.2%, saw the biggest decreases.
Food and drink spending was down by 0.5% annually, while spending on household goods fell by 4%.
Household goods spending has either fallen or stagnated each month since last December. However, spending in hotels, restaurants and bars rose 6% year-on-year.
Google working on news product to rival Snapchat’s
Google is working with publishers on a news product called Stamp that would serve up articles in a mobile magazine-like design, similar to Snapchat’s Discover service.
Stamp evolved from media relationships Google already has for another one of its products, called AMP, which is meant to help load articles faster.
“The success of the open source AMP project is down to the constant collaboration with publishers that involves working early on upcoming features,” Google said Friday in a statement.