The communications briefing: WPP sees profits sink amid restructuring costs

PR news this week, with thanks to Early Morning Media 

Industry

Brexit ‘chaos’ holding back marketing spend
David Pemsel, CEO of Guardian Media Group, said that UK companies are holding back on marketing spending because of the uncertainty surrounding Brexit. Speaking at the Incorporated Society of British Advertisers’ annual conference in London, he added: “We just need some clarity now. It’s beginning to impact our ability to plan in the medium-term”. His comments reflected similar statements from other executives, including ITV CEO Carolyn McCall, who said last week that businesses were cutting marketing budgets to preserve profit margins as they spend more on Brexit contingency measures.
Bloomberg

Facebook to shift focus to privacy
Mark Zukerberg announced that Facebook will in future focus on private messages rather than publicly shared content, moving away from its original aim of getting users to share everything publicly on their timeline. Mr Zuckerberg said he had found that whereas once people liked to speak with friends online in the digital equivalent of a town square, they are now increasingly preferring the “digital equivalent of the living room”. In a blog post, the Facebook boss outlined his vision to transform Facebook into a "privacy-focused platform," saying there would be a focus on privacy, reducing permanence and secure data storage. He noted that Facebook would not "store sensitive data in countries with weak records on human rights like privacy and freedom of expression."
Wall Street Journal

WPP sees profits sink amid restructuring costs
WPP saw profits drop sharply as it continues to restructure the business following former boss Sir Martin Sorrell's abrupt exit last year. Pre-tax earnings were down almost a third last year to £1.46bn. Sales were down 0.4%, against guidance for a 0.5% fall, whilst operating margins dropped 1.1%, against an expected 1% to 1.5% decline. New chief executive Mark Read said the firm was at the start of a "three-year turnaround plan", adding "It's early days in what we need to do but I would say the initial signs are promising”. WPP – which owns major agencies such as Ogilvy and JWT – has been selling off assets to raise money. It said it had sold 36 divisions since last April, helping to strengthen its balance sheet.
BBC News   Shares

It’s all in the timing
A recent study on pitching effectiveness released by Tel Aviv-based PR productivity platform Propel claimed that the best day to pitch a reporter is Tuesday – with the worst being Friday. The study analysed more than 2,100 email pitches sent to more than 1,500 reporters by PR staff. Sixty-two per cent of those sent on a Tuesday were opened, with 59% opened on a Wednesday. Furthermore, pitches sent between 12 and 1 pm were 90% more likely to be opened than pitches sent between 9 and 10 am. The worst days to share an idea with a reporter are Fridays and Mondays, with just 35% and 43% opened respectively.
O'Dwyer's

Edinburgh's Stripe profiled
To mark International Women’s Day, the Evening News profiled Edinburgh communications agency Stripe, which boasts an entire female board, an 80% female team and a trophy cabinet crammed with over 60 awards. Since 2006, the firm has welcomed 27 "Stripe babies," with 92% of parents returning to work, and CEO Juliet Simpson said the 2014 Commonwealth Games contract was a “standout” for the firm, adding: “We were managing sponsorships for IRN-BRU, Strathmore and John Lewis as well as working for the Games themselves. It was 14 long days of events, photocalls, stunts but the team came together to deliver brilliant results."
Edinburgh Evening News

Political

ICO receives details of pro-Brexit ad campaign
Facebook provided the ICO with the details relating to a £257,000 pro-Brexit advertising campaign pressuring Theresa May to “chuck Chequers”. The campaign, run by a website called Mainstream Network, encourages users to email their local MP asking them to reject Mrs May’s Chequers negotiating stance, and is believed to have reached between 10m and 11m Facebook users. Whilst efforts to uncover the identities of the person or people behind the campaign have been unsuccessful, Facebook confirmed it had given the body information about ads run in connection with the Mainstream Network Facebook Page in a letter to Damian Collins, head of the Digital, Culture, Media and Sport Committee (DCMS). Richard Allan, Facebook’s vice president of policy solutions, wrote that whilst it would be “inappropriate to provide personal data of our users to any third party absent a lawful basis for such disclosure” in response to a request from the DCMS for information explaining who had paid for the adverts, it was now up to the ICO to make any data public.
The Independent

Countess of Wessex campaigning against war zone abuse
To mark International Women’s Day, Sophie, the Countess of Wessex, is partnering with Angelina Jolie in a bid to help victims of conflict-related rape, sexual violence and exploitation. The royal and former PR, who married Prince Edward in 1999, will champion the work of the Preventing Sexual Violence in Conflict Initiative, which was set up by the Oscar-winning actress Jolie and former foreign secretary William Hague to tackle stigma, support survivors and prevent conflict-related sexual violence around the world.
The Daily Telegraph

Campaigns

Freddo ads croak it… amidst junk food backlash
The Advertising Standards Board banned ads for Cadbury’s Freddo chocolate bar for breaking rules designed to limit children’s exposure to junk food. The Advertising Standards Authority (ASA) investigated two complaints, one from The Children’s Food Campaign (Sustain), that a poster, seen on a bus stop near a primary school, the cadbury.co.uk/freddo website, two YouTube videos featuring imagery of Freddo the Frog, and a downloadable comic and audio book, were ads for products high in fat, salt or sugar (HFSS) and directed at children. Cadbury said the poster was mistakenly placed within 100 metres of a primary school due to an error by site owner JCDecaux, but did argue that the books were not ads for an HFSS product, and were intended to be read by parents whilst not being directly targeted at children.  Whilst a new report by the Advertising Association (AA) indicates that declines in children’s exposure to adverts for products with high fat, salt or sugar contents have had no measurable impact on obesity levels. Restrictions on junk food adverts have a huge economic impact and fail to address the problem of childhood obesity, the advertising industry body has said. The report argues that the presumed link between advertising and obesity is “misplaced” and that ad bans impact “large swathes” of economic activity in the industry.
News & Star   City AM

Reputational risk

Royal Family issues new social media guidelines
Kensington Palace issued new social media guidelines, in an effort to “create a safe environment” and curb the number of vicious abusive comments addressed in the past months to Meghan Markle and Kate, the Duchess of Cambridge. The guidelines warn social media users they risk a series of penalties, ranging from the deletion of their messages, blocking their accounts to the intervention of law enforcement authorities. Comments may not be “defamatory of any person, deceive others, be obscene, offensive, threatening, abusive, hateful, inflammatory or promote sexually explicit material or violence”, and must not “promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age”. In January, the Palace said it has noticed an increasing number of sexist comments, racist slurs and personal attacks targeting especially Meghan and Kate. 
Daily Express

 Michael Jackson estate amidst PR blitz
Channel 4’s screening of the Leaving Neverland documentary, which details alleged grooming and child abuse by Michael Jackson, prompted a campaign to shore up his legacy and multimillion-pound empire. Jackson’s estate is run by John McClain, who originally tried to block the release of the documentary by issuing a $100m lawsuit against HBO, which broadcast Dan Reed’s film last weekend in the US. Music industry expert Eamonn Forde said: “This is a new era for artist estate management, because this is about containment rather than maximising the profile of a deceased artist", adding: “To an extent, estate management is about building a narrative around an artist; they are the directors of the narrative.”
The Guardian

Technology

Game, set and match for dynamic ads
Yospace’s Paul Davies explained how dynamic ad insertion during the Australian Open last month worked to enhance the tournament for viewers. Broadcasters used the method, which typically works by detecting an ad break and making a call to the broadcaster’s ad server, which then responds with instructions on which ads are to be stitched in to each user’s stream. The ad has been prepared ahead of time so that it matches the encoding profile of the main broadcast stream. This means ad content is delivered by the same method as the live content (tennis in this case) and a continuous, uninterrupted stream is delivered to the viewer’s OTT device. To complete the process, a lightweight SDK embedded in the player – within the broadcaster’s app – on the user’s device fires tracking pixels back to the ad server when an ad is viewed.
Broadcast

This briefing has been prepared by Early Morning Media.  If you are interested in a customised bespoke news briefing for you or your client across any vertical, please contact Charles.Webster@earlymorningmedia.co.uk

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