Good morning and welcome to Marketing Week’s round-up of the news that matters in the marketing world today.
YouTube readies launch of music streaming service to rival Apple
YouTube is set to launch a new music streaming business as it looks to take on the might of Apple, Amazon and Spotify.
The subscription service, which is set to launch next week on 22 May, will replace Google Play Music.
It will first launch in the US, Australia, New Zealand, Mexico and South Korea before being rolled out in the UK and 13 other countries.
A subscription for YouTube Music Premium will cost $9.99 (about £7.40) a month, but free ad-supported accounts will also be available.
Following the announcement, shares in Spotify dropped more than 2.5%, while Apple’s dipped by 0.4%.
Barclaycard partners with The Muppets to launch loyalty push
Barclaycard has partnered with The Muppets to launch its new loyalty offer ‘Barclaycard Entertainment’ through which customers will be offered ticket and other perks at 3,500 live events each year.
The activity kicks off this evening with a 30-second TV ad featuring Kermit the Frog, Miss Piggy and a host of other favourites. The multichannel campaign also includes video-on-demand, out of home, print and cinema, alongside a series of videos to run on social channels.
Barclaycard says the introduction of the loyalty scheme is in response to the growing trend for the ‘experience economy’. Its data shows spending on entertainment increased 10.1% in 2017 compared to the previous year, with big ticket releases responsible for much of the growth.
Alex Naylor, UK marketing director at Barclaycard, says: “With the experience economy booming, there is no better time to help customers get more from every gig, concert and festival. With special benefits and event perks built in, Barclaycard Entertainment will bring consumers even closer to their favourite acts.
“The Muppets are synonymous with entertainment so working with them to launch this campaign was a no-brainer – they have been putting smiles on people’s faces across the world for generations.”
Asda clocks up fourth consecutive quarter of growth
Asda has recorded its fourth consecutive quarter of sales growth as it prepares for its billion-pound merger with Sainsbury’s.
The UK’s third largest supermarket shrugged off the tough retail climate, clocking a 3.4% increase in like-for-like sales during the first three months of the year. Easter falling in March gave the chain a significant boost during the quarter though; when stripped out, like-for-like sales rose by a more modest 1%.
Asda’s online grocery business, meanwhile saw a 8.3% sales rise, while its George.com clothing arm saw a 21.9% boost.
Roger Burnley, chief executive and president of Asda, says: “During the first three months of the year, we have continued to invest sensibly where it matters most to our customers with lower prices, innovation in our own brand and further improving [customers] shopping experience whether in store or online.
“While we are not complacent, we are positive about our growing momentum and excited by the opportunity that our proposed merger with Sainsbury’s offers to accelerate our successful strategy and go further, faster.”
Last month, Sainsbury’s and Asda announced an unexpected merger that will give the combined entity a greater market share than rival Tesco.
M&S rebrands as Markle & Sparkle in Royal Wedding nod
Marks & Spencer is set to rebrand as Markle & Sparkle this weekend, in honour of the Royal Wedding between Prince Harry and Meghan Markle.
Its website, social media accounts and selected store windows will each get the Royal makeover, with the official unveiling set to happen in Windsor. M&S favourite Percy Pig and his new wife Penny will be cutting the ribbon.
Sharry Cramond, marketing director, food & hospitality, at M&S says: “As a quintessentially British brand we had to do something special to mark the Royal Wedding and what better way to welcome Meghan to the family than to ‘marry’ both our names together for the weekend. As a retailer we’ve celebrated 34 Royal Weddings over our 134-year history, but this is the boldest idea we’ve delivered yet.”
M&S yesterday rebranded its chicken sandwich ‘The Proposal’, a nod to the fact Prince Harry reportedly asked Markle to marry him over roast chicken.
New rules on gender stereotypes in ads proposed
The UK ad watchdog is consulting on a new rule to tackle harmful gender stereotypes in ads. It follows the launch of a report by the Advertising Standards Authority (ASA) last year which suggested stronger regulation was needed for ads that feature certain types of gender stereotypical roles and characteristics given the harm they can cause.
The Committee of Advertising Practice’s (CAP) proposed new rule states ‘advertisements must not include gender stereotypes that are likely to cause harm, or serious or widespread offence’ and will cover both broadcast and non-broadcast media.
The move comes as the ASA looks to crackdown on sexist and body-shaming ads.
The public consultation closes on 26 July 2018.
Thursday, 17 May
Ministers cut fixed-odds betting stakes to £2
The government is cutting the stake fixed-odds betting terminals (FOBTs) as it looks to “reduce harm among the most vulnerable”. Players will now only be allowed to stake a maximum of £2, down from £100 previously.
The machines have been a point of focus for anti-gambling campaigners, who claim FOBTs easily cause addiction and cause harm to people’s mental, social and financial wellbeing. However, betting firms have warned the move will lead to thousands of job losses. Betting firm William Hill says it makes just over half its retail revenues from FOBTs, while Betfred has warned it will axe 4,500 jobs if the £2 limit is introduced.
Mothercare to shut 50 stores and bring back former CEO
Mothercare is to close 50 stores with the potential loss of at least 800 jobs and bring back its former CEO as it looks to turnaround its fortunes.
Mark Newton-Jones, who was ousted as CEO last month, is to return despite the admission under his tenure that the babycare retailer was in financial difficulties and at risk of breaching its loans. It is now trying to secure funds to support the business, with plans to raise £28m from shareholders, secure new debt facilities and take loans from shareholders and a “trade partner”.
It will also launch a company voluntary arrangement (CVA), which is a form of insolvency under which it will ask landlords and other creditors to let it shut down 50 stores and reduce rents on another 21. The aim over the next two years is to cut its number of stores from 137 today to 78 by 2020, while also making cost-savings in head office.
Facebook launches ‘Discover’ tab in the UK
Facebook is launching the ‘discover’ tab in the UK — a feature in Messenger that enables users to browse business pages and find chatbots.
Launched in the US last year, the feature works when users tap on the discover icon in Messenger, allowing them to browse recently visited businesses and discover featured experiences and categories.
There are three key aspects of discover: firstly, ‘featured’ allows users to explore chatbots and business pages they might enjoy; secondly, there is a ‘free-form search field’ that allows users to find specific chatbots and pages; and thirdly a ‘recently used’ option that shows users chatbots and businesses they have recently interacted with.
M&S rebrands roast chicken sandwich to celebrate royal wedding
Marks and Spencer is rebranding its roast chicken sandwich to honour Prince Harry and Meghan Markle’s wedding.
Between 16 and 27 May, the sandwich is being rebranded and special packaging introduced to commemorate the royal nuptials along with a new name: ‘The Proposal’. The retailer is also promising to give free The Proposal meal deals to all 2,000 public guests invited to the wedding over the weekend.
“The news that Harry got down on one knee to pop the question over a roast chicken really captured the nation’s imagination and inspired the M&S sandwich team to create a limited edition rebrand of one of the nations’s favourite sarnies,” says Helen Brennan, sandwich product developer for M&S.
Lachlan Murdoch to become chairman and CEO of new Fox company
Lachlan Murdoch, son of media mogul Rupert Murdoch, will serve as chairman and chief executive of the new Fox company, once the deal to sell Fox assets to Walt Disney is approved by shareholders and regulators.
The move means Lachlan Murdoch will take a role that is senior to his father, who will serve as co-chairman of the new company. Fox is maintaining ownership of its news, sports and business channels, but selling the film business..
“We have worked through the winter ‘standing up’ a reimagined independent Fox,” says Lachlan Murdoch.
Rupert Murdoch adds: “The new Fox will begin as the only media company solely focused on the domestic market; focused on what Americans love best – sports, news and entertainment, built and delivered for a US audience.”
Wednesday 16 May
Spotify launches biggest marketing campaign to date
Spotify has launched its biggest marketing campaign to date as the music streaming service aims to “double down” on its commitment to its freemium model.
The new campaign, which follows the launch of its entirely reimagined Spotify for Free experience, is titled ‘Love What You Love’ and features two activations – one of which the company has put its spin on action and horror film trailers.
The second part of the campaign, however, was inspired by dating apps. It includes digital videos donned “Match Instantly,” as well as out of home marketing.
As part of the new Spotify free experience, ad-supported users have access to all the songs they love and the freedom to discover millions of new tune.
“We believe that every person, from casual music listeners to discography aficionados, has a personal connection to their favourite music and that there is a right song for every moment. This campaign celebrates that universal yet personal experience and invites people to embrace their connection to music for free on Spotify,” the company says in a statement.
New Look to review prices over ‘fat tax’
New Look is conducting a review of its prices after it was accused of charging more for some of its larger sized clothing items.
The fashion retailer says it intends to “ensure pricing differences like these” did not happen again.
According to reports, shopper Maria Wassell accused New Look of levying a “fat tax” on women who are a size 16 and above when she noticed a pair of plus-size green striped pants (£22.99) were three pounds more than the standards sizes (£19.99).
Ms Kent said she felt she was being discriminated against for being plus-sized when she is “only slightly bigger than average”, before claiming the average size for a British woman is 16.
New Look said in a statement: “We are in the process of reviewing the pricing structure of our Plus Size collection in a way which works best for our customers and our business.
“We are proud of the ranges we offer to our Plus Size customers and value all customers, no matter what their body shape or size.”
Premier Foods experiences highest sales growth in five years
Premier Foods, the maker of Mr Kipling Cakes and Oxo stock cubes has reported its best revenue growth in five years resulting in a more than 5% climb in shares.
The company says it exceeded revenue, trading profit and debt expectations in the first quarter.
For instance, revenue climbed 3.6% to £819.2m and profit grew 5.1% from £117m to £123m, while the group also clawed back its debt to £496.4m from £523.2m.
After years of struggling the company has attributed the result to new products such as Batchelors Super Noodles and Angel Delight. Batchelors is the fastest growing brand in the company’s portfolio.
Premier boss Gavin Darby says innovation, the company’s international business and strategic partnerships with Nissan and Mondelez International also helped.
“In the year ahead, we expect to make further progress on our key priorities, building on the strong momentum we created in 2017-18,” says Darby.
Waitrose’s ‘beautifully simple’ campaign triggers demand for featured products
Waitrose’s ‘beautifully simple’ campaign, which highlights easy-to-make recipes using simple ingredients, has helped to drive sales for featured products.
For instance, last week’s featured recipe included stuffed sea bass, chorizo, potatoes and peas, therefore triggering increased demand for charlotte potatoes by 54%. While chorizo sales increase by 116% and pre-packed fish sales rose by 11%.
Meanwhile, total sales excluding fuel were up 3.8% year on year with the warmer weather experienced last week likely to have influenced what consumers purchased across Waitrose stores.
This week also saw the company’s biggest sales of ice cream this year, up 55% year on year. Barbecue meat sales continue to build too, up 28%.
Prepared salads sales increased by more than 22%, and fruit sales also had an outstanding week, with strawberry sales were up 38%, melons (up 26%), mangoes (up 41%) and figs (up 138%).
UK employment hits record high
The UK may have experienced its slowest economic growth in five years but it has failed to have an impact on the nation’s job prospects as employment rates hit a record high in the first three months of 2018.
According to the Office for National Statistics there were 32.34million people in work in the first quarter of the year, up 396,000 year on year.
The UK’s employment rate also climbed by 0.4 points to 75.6% in the most recent quarter, marking the highest margin of growth since records began in 1971.
Pay growth has also returned in full force. Average growth in earnings, excluding bonuses, rose to 2.9% in the three months to March after a 2.8% rise in February.
Tuesday, 15 May
Facebook suspends 200 apps from its platform
Following the Cambridge Analytica scandal, Facebook has suspended 200 apps from using its platform.
In a blog post, the company’s vice president of product partnerships, Ime Archibong, said Facebook is investigating all the apps that had access to large amounts of information before it changed the platform policies in 2014 – significantly reducing the data apps could access.
“We have large teams of internal and external experts working hard to investigate these apps as quickly as possible,” Archibong said.
“To date thousands of apps have been investigated and around 200 have been suspended – pending a thorough investigation into whether they did in fact misuse any data. Where we find evidence that these or other apps did misuse data, we will ban them and notify people.
“There is a lot more work to be done to find all the apps that may have misused people’s Facebook data – and it will take time. We are investing heavily to make sure this investigation is as thorough and timely as possible.”
Waitrose to expand meat-free range by 60%
Waitrose is set to expand its selection of vegan and vegetarian food by 60%, after reporting that sales of its meat-free food were up 34% year-on-year.
Among the 50 new products are two exclusive brands, The Happy Pear – created by renowned plant-based and whole food chef duo David and Stephen Flynn, and The Vegetarian Butcher – a Dutch company specialising in meat substitutes, made using plant-based proteins.
The retailer will have a dedicated vegan section, which will be signposted in its shops. In total, the range will feature 125 ingredients, ready meals and other meat-free products designed to make shopping easier for customers looking for vegetarian and vegan options.
“Our current selection of products has been selling really well week after week, with requests for more choice coming from our customers and Partners, so we could clearly see there was an appetite to have more vegetarian and vegan options in our shops,” explains Chloe Graves, Waitrose’s chilled vegetarian and vegan buyer.
“Increasing our range builds on the work we did last year to increase choice for our customers in this area. We are working with some fantastic exclusive brands to ensure our shoppers have a really unique selection of food to choose from.
The range will launch in 125 Waitrose stores from Monday 4th June.
Bauer Media calls on government for new mental health law in the workplace
Bauer Media has launched a petition calling on the government to make it a requirement for every workplace or college to have a mental health work aider in the UK – equal to the legal requirement for a physical first-aider.
The call comes after a survey carried out by the publisher found that 90% of the public say they still feel there is a taboo abound discussing mental health, with 86% agreeing mental health is one of the biggest challenges facing the country today and 33% saying they are more stressed now than they were a couple of years ago.
Meanwhile, 47% said they don’t feel they have a good work/life balance, while 15% said they had taken time off work as a direct result of stress/anxiety.
“I hope this will spur the government into action to protect the wellbeing of its citizens at work,” said mental health campaigner Natasha Devon.
“These results are significant because they challenges traditional thinking about the proportion of the population affected by mental health issues and the reasons behind them.”
Online sales of music, games and video reach record share of physical market
Online sales have reached a record share of the physical entertainment market – music, games and video – according to the latest quarterly entertainment barometer from Kantar Worldpanel.
For the first time, sales of physical music products (CDs and vinyl) are equally split across online and bricks and mortar stores, as e-commerce sales rocketed by 13.6%.
“Overall, physical entertainment declined by 13.5% over the past quarter but online sales were a real bright spot,” says James Foti, consumer specialist at Kantar Worldpanel.
“The average shopper spent almost £19 when shopping online over the past 12 weeks – that’s in comparison to around £15 in store – and the lure of e-commerce has now persuaded 27% of consumers to buy their physical entertainment goods exclusively online.
“A further 37% still split their spend across online and offline, suggesting the high street still plays an important place for shoppers and that those retailers which aren’t embracing a multichannel approach may lose out.”
The games sector performed ahead of the overall market, in part thanks to shoppers upping their average spend to £53 over the past 12 weeks – a 7.2% increase on the year before.
Amazon continues to pick up share in gaming, particularly in mint titles, with 200,000 additional shoppers buying a brand new game from the retailer during the 12 week period.
People making healthier choices, finds FDF report
The Food and Drink Federation has published a new report demonstrating the progress its members have made to support people in making healthier choices.
Over the past five years FDF members have reduced energy in the average basket by 5.5% and sugars by 12.1%. During the lifetime of the latest salt targets (2012-2017) FDF’s members have reduced salt content by a further 11.4%, continuing to build on more than 15 years of steady reformulation work.
Kate Halliwell, FDF head of UK diet and health policy said: “At a time when one in three children are leaving primary school overweight or obese, industry’s ground-breaking work to tackle this issue is more important than ever.
“Through continued collaboration with Governments across the UK and other industry stakeholders, we are committed to being part of the solution and to improving the nation’s diet – and our commitment is demonstrated in this new report.”
Aldi partners with ITV to broadcast first fully signed ad break
Aldi has partnered with ITV to broadcast the first ever ad break done only with sign language to mark Deaf Awareness Week, which runs from 14 to 20 May.
Aldi’s ad, part of its ‘Like Brands’ campaign, sees Oscar winner and deaf actress Maisie Sly and her mum (who is also deaf) star in the ad about fish fingers. Created by McCann UK, it is already on air but on later today will feature in a fully signed ad break during Coronation Street. Other brands taking part include Microsoft, Gaviscon, Nurofen, Matalan, Velux, WeBuyAnyCar and Money Supermarket.
The collaboration aims to raise awareness of the challenges of deafness and hearing loss, which impacts one in six people in the UK. Around nine million people have some form of hearing problem in the UK, with Aldi marketing director Adam Zavalis saying he was “delighted” to support DAW to demonstrate its commitment to inclusivity.
Kelly Williams, ITV managing director commercial, adds: “With the size and scale of audience for a programme like Coronation Street, we’re able to use the power of TV to make sure people know about Deaf Awareness Week. Showcasing Aldi’s innovative new advert and working with McCann to bring other brands on board makes this a truly creative partnership, the result of which I hope will really resonate with viewers.”
WPP considers former AOL chief in hunt for new boss
WPP is considering the former boss of AOL Tim Armstrong as it hunts for a new CEO to succeed Sir Martin Sorrell.
Sorrell departed last month after an investigation into allegations of personal misconduct, leaving the company he founded without a leader amid concerns about WPP’s future as brands cut spending. According to the Financial Times, Armstrong is considered a contender because of his knowledge of restructuring; Unilever marketing boss Keith Weed is also reportedly being touted as a possible successor.
Armstrong is currently CEO of Oath, a subsidiary of Verizon that owns AOL and Yahoo. He was the boss of AOL until its sales to Verizon in 2015 and has been key to bringing AOL and Yahoo together under their new owner.
High street footfall sees ‘unprecedented decline’
Footfall on the high street fell by 3.3% last month, taking the decline over March and April an “unprecedented” 4.8%, according to data from the British Retail Consortium and Springboard. Bad weather and the continued squeeze on consumer spending both negatively impacted the number of people visiting shops, causing a worse decline than during the depths of the recession in 2009, when footfall was down 3.8% across the two months.
The data also showed that town centre vacancy rates rose to 9.2%, with all areas of the UK except Greater London reporting an increase. In total in 2017, there were 4,083 store openings, the lowest level since 2010, while 5,855 shops closed, according to the Local Data Company.
And while the figures represent tough trading conditions, they also reflect changing shopping habits. The BRC Figures show that even when people did return to the high street, they were spending on going to restaurants and pubs rather than shops.
Springboard’s Debra Wehrle says: “It is clear that retail trading is doubly challenged by a thrifty consumer, in concert with a continuing predisposition towards leisure rather than retail spend.”
Santander plots standalone digital bank
Santander is planning to launch a standalone digital bank under a separate brand in the UK within months amid growing competition in the marketer. The bank would focus on the business market, in particular small companies, and offer a range of services beyond traditional lending such as help with payroll and pensions.
A spokesman for Santander tells The Telegraph: “We are working on a project to build an open digital financial services platform for SMEs. We look forward to sharing more about the platform soon.”
The move comes as banks including Santander compete for an £833m fund earmarked by RBS to help improve competition in the business banking marketing. RBS agreed last year to spend the money paying business customers to move to smaller rivals.
READ MORE: Santander to launch stand-alone UK digital bank
Poundworld future in doubt as owner puts it up for sale
The owner of Poundworld has ditched a rescue plan and instead put the discount chain up for sale, with the future of the business and fate of its employees in doubt.
TPG, the American private equity back of Poundworld, has instructed Deloitte to find a buyer by the end of the month, according to Sky News. The move comes less than two weeks after Poundland said it was seeking approval for a rescue plan that would see it close up to 100 of its 355 shops across Britain. The fate of the plan, known as a Company Voluntary Arrangement, is now unclear but if a buyer cannot be found it cloud lead to Poundworld falling into administration.
The move adds to fears about the performance of the high street, with New Look, House of Fraser, Mothercare and Carpetright all planning CVAs and Toys R Us and Maplin falling into administration. Sky News says bidders for Poundworld could include turnaround specialists such as Alteri Investors and Endless, as well as high street players like B&M.
source: Marketing Week