Vodafone, Google, Twitter: 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.

Vodafone and Three UK confirm plans to merge

Vodafone and Three UK are planning to merge their UK businesses, creating the biggest mobile network business in the country – if the deal is approved by competition regulators.

Vodafone and Three UK are the country’s third and fourth largest mobile network providers respectively. If the deal goes ahead, the merger will form a mobile network business with 27 million customers, larger than Virgin Media O2, which currently has 24 million customers in the UK. The next largest provider is currently EE, owned by the BT Group, with 20 million customers.

The Competition and Market’s Authority (CMA) has already stated it will investigate the planned merger, as it raises concerns about the potential impact on competition in the UK mobile market. In a statement, it says: “With millions of consumers and many businesses relying on their services, it’s right that the CMA reviews the impact this deal could have on competition.”

Ahmed Essam, CEO of Vodafone’s UK business, says: “As we go into the coming weeks, we are going to bring the case to the CMA. We believe that this case stands on very strong grounds. We’re very confident on our case.”

A previously planned merger between O2 and Three UK was blocked by the European Commission in 2016, over concerns that consumer choice would fall and prices would increase as a result. Vodafone and Three UK have claimed their customers will “enjoy a better network experience with greater coverage and reliability at no extra cost” under the merger.

Consumers want brands to disclose their use of AI

Almost three-quarters of consumers believe brands should disclose their use of AI-generated content and should carefully regulate their AI-driven campaigns, according to new research from IPA and Opinium.

Opinium surveyed 2,000 adults in May 2023 about their attitudes towards future interactions with AI. Almost three-quarters of consumers believe brands should be transparent in their use of AI-generated content. Three-quarters of respondents say they wish to be notified when they are not dealing with a real person and 67% say they believe that AI should not pretend to be human or act as if it has a personality. Almost three-quarters of consumers say they believe AI should be regulated, with humans held responsible for it.

Five years ago, more than half of consumers thought AI should be allowed to make it known if it disagrees with them. In 2023, this fell to 42% of consumers. Just over half of respondents in 2023 say AI should have the right to report them if they are engaged in an illegal activity – down from 67% in 2018.

The survey also shows a 25% decrease in the number of people who think they should be polite and exhibit good manners when interacting with virtual assistants, from 64% in 2018 down to just 48% in 2023. Less than a quarter of survey respondents believe robot rights should be introduced, a decrease from 30% in 2018.

Josh Krichefski, president and CEO EMEA and UK at IPA, says: “AI provides incredible opportunities for our business. As these findings demonstrate, however, the public are understandably cautious about its use – and increasingly so in some areas. It is therefore our responsibility to be transparent and accountable when using AI to ensure the trust of our customers.”

Clear Channel UK launches first neurodivergent-friendly advertising scheme

Advertising and infrastructure company Clear Channel is looking to make advertising more accessible and inclusive for neurodiverse customers. The ‘Different minds, better outcomes,’ campaign has launched in collaboration with brands including Strongbow, Heineken, Arla, Keep Britain Tidy and LeoReader.

The campaign features simplified artworks, increased colour contrast and fonts without capitalisation or serifs that are said to be friendlier for neurodiverse consumers.

An estimated 20% of the UK population is considered to be neurodiverse and these campaigns will be easier for them to read, based on insight from the ADHD Foundation’s Neurodiversity Umbrella Project. Each piece of content created through the scheme will include an umbrella symbol to signal that it has been made with neurodivergent consumers in mind.

Dr Tony Lloyd, CEO at the ADHD Foundation’s Neurodiversity Channel, says: “More and more we’re seeing society change how it views neurodiversity. Creating communications and campaigns that are accessible for neurodivergent minds is instrumental part of becoming a more inclusive society.

“Clear Channel has been a long-term partner of the Umbrella Project and ADHD Foundation Neurodiversity Charity and we’re excited to see how this latest campaign will inspire change within the OOH advertising industry to ensure its output reflects a society that celebrates neurodiversity.”

European Commission calls for break up of Google’s ad tech business

The European Commission has shared a statement explaining its objections to Google’s advertising technology business, two years after it opened its investigation into potential breaches of EU competition rules.

The Commission says Google Ads is the “dominant” publisher for advertising servers in the European markets and accuses it of “abusing” this position by favouring its own advertising services, advertisers and online publishers.

The accusations could eventually lead to a fine equivalent to 10% of Google’s annual global turnover – this would be the largest penalty ever issued by the Commission. Last year, Google’s advertising business generated $224.5bn in revenue. The Commission could also call for Google’s to sell parts of its advertising business.

Margrethe Vestager, executive vice-president in charge of the Commission’s competition policy, explains: “Google has a very strong market position in the online advertising technology sector. It collects users’ data, it sells advertising space, and it acts as an online advertising intermediary. So Google is present at almost all levels of the so-called ad tech supply chain.

“Our preliminary concern is that Google may have used its market position to favour its own intermediation services. Not only did this possibly harm Google’s competitors but also publishers’ interests, while also increasing advertisers’ costs. If confirmed, Google’s practices would be illegal under our competition rules.”

Google now has time to respond to the Commission’s accusations. It also has the option of asking for a closed hearing in front of the Commission’s anti-trust officials before they announce a decision. The full process could take more than a year.

Dan Taylor, vice-president of global ads at Google, says: “The Commission’s investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the EC’s view.”

Twitter sued by music publishers in the US

The National Music Publishers’ Association (NMPA) has filed a lawsuit against Twitter, seeking more than $250m in damages. The NMPA claims Twitter “permits and encourages infringement” for profit.

Filed in Nashville, the suit says Twitter gains “huge profits from the availability of unlicensed music without paying the necessary licensing fees for it”. It also claims that Twitter has an “unfair advantage” over competitors including TikTok, Facebook, YouTube, Snapchat and Instagram, which all pay for music licenses.

The NMPA, which represents publishers including Sony Music Publishing, BMG Rights Management and Universal Music Publishing Group, also claims the situation has not improved since Elon Musk purchased the social network in 2022. “On the contrary, Twitter’s internal affairs regarding matters pertinent to this case are in disarray,” it claimed in a statement, citing recent downsizing of departments dealing with content reviews and policing the site’s terms of service.

The NMPA has also alleged that Twitter “routinely” ignores repeat copyright infringers and known infringement. The suit lists almost 1,700 songs that NMPA claims have been infringed by the site.

Under Musk’s ownership, Twitter has cut around 75% of the site’s workforce, including team members working on moderating content on the site. In 2021, Twitter was said to be negotiating with music publishers including Universal, Sony, and Warner but talks are thought to have stalled since Musk’s purchase.

Wednesday, 14 June

Heineken launches new campaign embracing its tricky spelling

Heineken is celebrating its 150th anniversary by embracing those who can’t spell its name correctly.

The Dutch beer brand has long seen its name misspelled and mispronounced over the years but in a new campaign, created with Le Pub, it claims that it doesn’t matter what you call it as long as you’re having a good time doing it.

The new 90-second TV commercial will show a range of different Heineken drinkers butchering its name in a variety of different ways – featuring former Formula 1 world champion Mika Häkkinen – and will launch globally this week.

In addition to the TV spot, Heineken will also be rebranding its social media account and website pages with some of its favourite misspellings and colloquial nicknames, as well as partnering with Dr Chris Brauer of Goldsmiths, University of London to construct a new brand tracking metric to become the first beer brand to have ‘delivering good times’ as part of the way it measures its annual performance.

Bram Westenbrink, global head of Heineken, says: “We’re open-minded about the way that our consumers refer to us, how they spell and nickname us, and how they drink Heineken because we know this doesn’t really matter.

“Throughout our 150-year legacy, we have learnt that good times are not about getting it right, but the conditions, locations and people we are able to enjoy a beer with.

“So, this campaign is a celebration of that universally shared experience, and the joy quality socialising and human connection can have for people, one way or another.”

Interest rates could go up again as wages continue to rise

Wages grew at a record rate in the twelve months to April – but still fall some way short of inflation.

The Office for National Statistics (ONS) said average earnings grew at 7.2% over the last 12 months – a rise of 0.5% over the same figure recorded in March.

But the Bank of England considers wage inflation a key part of the economic struggles affecting the UK and may use the data as a reason to increase interest rates once again when it meets next week.

There have been twelve consecutive rates rises as the BoE looks to combat inflation.

Wider employment figures from the ONS also showed the unemployment rate was at a better-than-expected 3.8% something attributed to a 250,000 increase in employment over the three months to April.

ONS director of economic statistics, Darren Morgan, said: “With another rise in employment, the number of people in work overall has gone past its pre-pandemic level for the first time, setting a new record high, as have total hours worked.

“While there has been another drop in the number of people neither working nor looking for work, which is now falling right across the age range, those outside the jobs market due to long-term sickness continues to rise, to a new record.

“In cash terms, basic pay is now growing at its fastest since current records began, apart from the period when the figures were distorted by the pandemic.

The new comes as it was announced that the UK economy returned to growth in April by 0.2% with the rise predominantly attributed to strong trade at pubs and bars.

Microsoft sees gaming merger blocked by US courts

Microsoft’s merger with Activision Blizzard has been temporarily blocked in the US.

The US Federal Trade Commission (FTC) had requested the temporary restraining order when it appeared that the $69bn (£56bn) deal between the two giant tech firms could be concluded as soon as this week.

The FTC opposes the planned merger believing the deal could “substantially lessen competition” in the sector.

But Microsoft believes the agreements it has put in place to keep Activision’s largest properties on competing platforms for a guaranteed ten years does enough to assuage those fears.

A two-day hearing will now take place on 22 June where Microsoft will have the opportunity to put its case forward to the court as to why the merger should be allowed to go through.

It has been a long and protracted road for the deal, which was first announced back in January 2022, and the deal was blocked by the UK competition authority but was passed by the EU.

“We welcome the opportunity to present our case in federal court,” said Microsoft president Brad Smith in a statement about the restraining order.

Leaked memo from Reddit CEO claims protest will fade away

Reddit CEO Steve Huffman has described the recent protests by users at Reddit as “noise that will pass” in a leaked memo to staff obtained by The Verge.

Thousands of Reddit communities have gone dark since Monday in protest at the company’s plan to start charging developers to access its application programming interface (API) which will make it prohibitively more expensive to run third-party apps to browse the social media site.

In the memo, Huffman claimed the protest hadn’t had “significant revenue impact” on the business and even went as far as to warn staff to be “mindful of wearing Reddit gear in public” as a precaution against being abused by frustrated users in public.

He continued: “There’s a lot of noise with this one. Among the noisiest we’ve seen. Please know that our teams are on it, and like all blow-ups on Reddit, this one will pass as well. The most important things we can do right now are stay focused, adapt to challenges, and keep moving forward.

“We absolutely must ship what we said we would. The only long-term solution is improving our product, and in the short term we have a few upcoming critical mod tool launches we need to nail.”

The protest is set to finish today but many communities have said they will continue until the planned change is reversed.

How users will react to Huffman seemingly doubling-down remains to be seen.

Ballantine’s put RZA in da front of new campaign

Scottish whisky company Ballantine is teaming up with hip-hop superstar RZA for a new campaign.

Ballantine’s, the second largest Scotch whisky company in the world, is set to release a series of limited-edition items to celebrate the partnership which will be available from their online store.

The first item in the collection will be a bespoke C6 record player, designed by RZA himself, and a Montero speaker. The partnership will continue over the summer and will include music, food, fashion as well as more items from its exclusive capsule collection.

The campaign will be rolled out to global markets across Ballantine’s owned and earned channels.

RZA, who was the producer, rapper and creator of the iconic 90s hip-hop group Wu-Tang Clan, is seen by Ballantine’s as the perfect brand ambassador as the two share a legacy of “excellence, a love of music and good taste”. It hopes the partnerships will inspire those who identify with the RZA to stay true to who they are.

Mathieu Deslandes, Ballantine’s global marketing director at Chivas Brothers, adds: “At Ballantine’s we believe that everyone is unique, original and worth celebrating. RZA is well known for doing things his own way, a mindset that reflects the spirit of Ballantine’s, inspired by our pioneering founder George Ballantine.

“Combining our passions of music and whisky, we’re excited to announce the first exclusive drop, the limited-edition Ballantine’s x RZA Crosley record player, and can’t wait to show you what else we have in store.”

Tuesday, 13 June

Twitter’s new CEO sends first memo, outlining plans for ‘Twitter 2.0’

Linda Yaccarino, Twitter’s recently appointed CEO, laid out her plans for ‘Twitter 2.0’ in her first tweet and memo since taking on the role a month ago.

Twitter is “on a mission to become the world’s most accurate real-time information source,” she says, mirroring the agenda set out by owner Elon Musk.

In a thread of tweets, which was also sent to staff, Yaccarino says Twitter needs to become the “global town square”, which would “drive civilisation forward through the unfiltered exchange of information and open dialogue about the things that matter most to us.”

Musk has been critical of Twitter’s policies when it comes to moderating content, as he argued for free speech on the platform.

His policies so far – which include reinstating previously banned accounts – have caused the platform’s ad revenues to drop drastically. As former NBCUniversal ad sales lead, Yaccarino will be tasked with turning this around as CEO.

Vinted to sponsor ITV’s Big Brother

Ahead of ITV’s reboot of the reality TV show Big Brother, second-hand clothes selling platform Vinted has been announced as the headline sponsor for the show.

It’ll be a full 360-partnership across ads, product placement, app sponsorship, social and indents around the programme.

Vinted and Big Brother hope the partnership will revolutionise the pre-loved fashion industry by generating awareness and understanding of fashion consumption.

“Big Brother is one of the biggest, best-loved and most iconic shows on TV and we knew we were offering advertisers an unparalleled opportunity to be part of the brand-new series. I’m thrilled that Vinted will be growing their exposure through our headline sponsorship and showcasing the power of pre-loved fashion to viewers,” says Bhavit Chandrani, director digital and creative partnerships at ITV.

“Our mission has always been to make second-hand the first choice, and this collaboration allows us to amplify our message and empower even more people to embrace pre-loved fashion,” adds Kęstutis Tyla, senior director of offline marketing at Vinted.

He adds: “By teaming up with Big Brother, a show that in its founding, broke convention and celebrated social and cultural progress, we want to instigate conversations about breaking the norm when it comes to shopping and consumption.”

Vinted follows in the footsteps of competitor Ebay, which is sponsoring ITV’s Love Island series for the second time this year.

San Miguel launches summer TV campaign

Beer brand San Miguel is investing in a multi-million pound TV ad, ‘Here’s to the Seekers’ as it hopes to drive sales by highlighting its Spanish roots.

The brand, part of Carlsberg Marston, is aiming to cement itself as the Spanish beer of choice for the UK market, the business says.

The ad will run across Sky, ITV and Channel 4, alongside several outdoor campaigns across London, Manchester, Birmingham, Leeds, Liverpool, Cardiff and Brighton, which it hopes will reach 10 million drinkers. It’ll also air on video-on-demand as well as social.

“Here’s to the Seekers perfectly encompasses the Spanish seeking spirit of adventure. We know our audience value experiences more than ever, with 59% of UK adults stating they enjoy escaping reality in their leisure time. The Spanish way of life; living with passion and spontaneity resonates with consumers and Spain was voted the most popular holiday destination in 2022,” says Dharmesh Rana, director of marketing, World Beer at Carlsberg Marston’s Brewing Company.

He adds: “The ad tested well with World Beer drinkers, giving us confidence that our new campaign will have a positive impact to drive the rate of sale of San Miguel for our stockists.”

Meatless Farm falls victim to vegan meat decline

Vegan food company Meatless Farm has stopped trading and released its staff as it becomes the latest victim of the industry’s decline.

The brand, which was stocked in UK supermarkets, failed to weather the storm impacting vegan meat brands as the space tightens. At the business’s peak in 2021 it reached sales of £11m.

The brand sold its products in the US, China and across Europe after establishing in 2016. It is now being advised by insolvency firm Kroll.

The “stagnation” in the market is leading from the US which is impacting the global picture, Tom Rees, Euromonitor industry manager and food researcher told the BBC.

Meatless Farm had a 1.2% market share in 2022. For context, Beyond Meat’s was 3.3%, according to Rees.

Monday, 12 June

Danone boss calls for raised taxes on high fat, sugar and salt foods

Danone’s UK boss has called for the government to introduce a higher rate of tax on foods which contain a lot of salt, sugar or food.

Danone produces brands such as Volvic, Activa and Alpro. Its president for the UK and Ireland James Mayer said government invention is needed to facilitate a healthier food industry. He argued many UK food firms have not shown “enough appetite to change”.

“We’ve reached a point where meaningful intervention from the government is a necessary course of action,” he said, speaking to The Observer.

He argued that the rate of VAT should be linked to the “health credentials” of products. Under current rules, most grocery products are exempt from VAT apart from a few, namely ice cream, soft drinks and some biscuits.

Until 2007, Danone owned a snacks and biscuits division, producing brands such as Tuc and Prince. However, it divested this, selling to what is now Mondelez. Around 90% of its portfolio in the UK is now not high in fat, sugar or salt (HFSS).

The government has already implemented some rules around the sale of HFSS products, including where they can be displayed in stores. A ban on buy-one-get-one-free offers on these foods is due to be introduced in October. However, a rule banning these ads from pre-watershed TV has been delayed until late 2025.

Travelodge to be put up for sale for £1.2bn

Budget hotel chain Travelodge is reportedly being put up for sale by its hedge fund owners, with a price tag of around £1.2bn.

GoldenTree has held meetings with investment banks to explore a sale of the chain, reports The Sunday Times.

Travelodge competes in the budget hotel business with larger rival Premier Inn. Both have enjoyed the effects of the staycation boom which has continued after the pandemic.

Last year, Travelodge reported underlying sales of £909.9m, a 25% increase on pre-pandemic levels. Room occupancy rates were also higher than pre-pandemic levels.

The chain consists of 595 hotels, and it has ambitions to open another 300, after enjoying a surge in demand. Premier Inn currently has around 900 hotels in the UK.

Greggs on track to roll out 150 new shops

Bakery chain Greggs has said it is on track to meet its target of opening 150 new shops this year, and sees further scope for expansion in areas like the South West.

The company’s CEO Roisin Currie said the roll-out is “going to plan” and that the company is looking to areas where it has less presence.

“Obviously we are a brand that started from the north and the natural growth of the business from there means there are some parts of the country, such as in Cornwall and the South West, where we see more scope to open sites,” she told PA news agency.

She also expressed optimism that warmer weather would drive footfall, and therefore, sales during the summer. The bakery chain has also expanded its menu, introducing new items such as a chicken shawarma flatbread. Currie said these are “all doing very well”.

Despite a challenging economic environment, Greggs has claimed its low-cost proposition is “compelling” to consumers during the cost of living crisis. Last month it reported it had seen sales surge by nearly a fifth over the start of 2023.

Thousands of Reddit communities to ‘go dark’

Thousands of communities on the forum social media platform Reddit will be unavailable today (12 June) in protest at how the site is being run.

Some 3,500 of the biggest communities on Reddit, known as “subreddits”, will be placed on private mode by their moderators. The platform relies on unpaid, voluntary moderators to keep its subreddits going.

This is in protest against the platform beginning to charge developers to access its application programming interface (API). The free access to the API has allowed developers to create third-party apps as an alternative to Reddit’s official one.

Reddit was launched in 2005, but did not have an official app until 2016. Because of this, users had to rely on unofficial apps such as Apollo, Narwhal, Relay and Infinity. Many users prefer to still use these apps, because of different features or aesthetics, and that they are not subject to the unpopular changes Reddit makes on its own app.

Some of these apps have indicated they may have to shut down or start charging users to keep up with costs when they are introduced.

Most of the subreddits involved in the protest plan to “go dark” for 48 hours; however, some say they will remain private until the platform agrees to reverse its planned changes.

Reddit CEO Steve Huffman addressed the action in a post to the website last Friday.

“We respect when you and your communities take action to highlight the things you need, including, at times, going private,” he said. He added that Reddit needed to be “a self-sustaining business”.

Timpson Group sees post-pandemic rebound

The family-owned Timpson Group has seen a post-pandemic rebound, with a resurgence in demand for its dry-cleaning, key cutting and photo processing services.

Timpson Group owns photo processing chain Snappy Snaps, Johnsons dry cleaners and a small group of pubs, as well as the key cutting and shoe-mending service shops which share its name.

The group doubled its comparable profits in the year to 1 October 2022, to £36.5m. Sales rose around 40% to £297.4m.

The company’s chair Sir John Timpson said the company had a “fantastic year”, after sales of watch-mending, key cutting and photo processing all rebounded post-pandemic.

He said he expects to see similar trends this year.

During the pandemic, there was “no one was going to work, parties or getting married. There was no reason to get anything dry-cleaned apart from a duvet,” Timpson said.

However, while most of the group’s services have returned to strength post-pandemic, Timpson bemoaned a long-term decline in the group’s shoe-repair business, which was accelerated to people wearing more casual shoes post-pandemic.

“The best part of the shoe repair business is people wearing really nice shoes to go the city, and that’s still not back as it should be,” he said.

The company plans to open 40 new outlets this year.