EE feels the sharp-end of the opt-in stick

EE is the latest firm to feel the rising wrath of the Information Commissioner’s Office as it is forced to cough up £100,000 for opt-in violations during 2018.

The messages, which were sent back in early 2018, encouraged customers to use a new feature but also to suggest device upgrades. EE claimed the communications were sent as ‘service messages’, but due to the presence of directing marketing, fell afoul of the guidance on electronic marketing put forward by the ICO.

“These were marketing messages which promoted the company’s products and services,” said Andy White, ICO Director of Investigations. “The direct marketing guidance is clear: if a message that contains customer service information also includes promotional material to buy extra products for services, it is no longer a service message and electronic marketing rules apply.

“EE Limited were aware of the law and should have known that they needed customers’ consent to send them in line with the direct marketing rules. Companies should be aware that texts and emails providing service information which also include a marketing or promotional element must comply with the relevant legislation or could face a fine up to £500,000.”

EE might feel a little bit hard-done by here, though it is a pretty clear violation of the rules.

As these messages contained prompts to earn EE a few extra quid each month, they clearly fall into the marketing category. EE would have to secured opt-in from these customers in the past, or in the case of ‘soft opt-in’, existing customers would have had to buy relevant products and given the opportunity to opt-out.

In this instance, the ICO accepted EE had not knowingly broken the rules, though as it did intentionally send out the emails it did not escape a fine. A second-batch of messages were sent out to those who didn’t engage with the first, which probably didn’t help the EE case.

Although this is a relatively minor fine, we expect to see a lot more of these investigations over the coming months. Rules around privacy and data protection are being toughened up, and the regulators need to be seen enforcing them. This fine might not be significant when you compare it to total revenues at the BT Group, but it is symbolic; we expect a few more of these ‘gestures’ sooner rather than later.

Ericsson promotes from within for new marketing head

Swedish kit vendor Ericsson opted to draw on in-house talent to fill the vacancy left by the departure of Helena Norrman.

Ericsson’s new Head of Marketing & Corporate Relations is Stella Medlicott. She has spent the past couple of years performing the same function for the Europe and Latin America  market area and prior to that spent seven years running the marketing for Red Bee Media, the media services business Ericsson acquired in 2013, but tried and failed to sell a few years later.

“With the introduction of 5G we are at an exciting time in the industry,” said Ericsson CEO Börje Ekholm. “Our ability to differentiate our offering, articulate the value we bring to our customers and build strong relationships with our stakeholders will be key to build a strong company position for this next phase of industry development. Stella has the right background, experience and capabilities to lead this work going forward and I am very glad to see her stepping up to this role”.

“I really look forward to take on this exciting new role and to work together with both the global marketing and communications team and the executive team,” said Medlicott. “This is the time where the mobile industry is being transformed through 5G, generating innovation and new business opportunities across industries. Our marketing and communications abilities are key to leveraging our technology leadership in 5G.”

As both comments stress, Medlicott has stepped up to the top marketing job at an opportune time. Not only are we at the start of a new technological cycle in the telecoms world, but Ericsson’s own fortunes seem to be on the up. After the nadir of end of the Vestberg era, Ekholm has steadied the ship and, you never know, might even decide it’s safe to empower Medlicott with a bit more marketing budget.

It’s Red Hat, but not as we know it

Software vendor Red Hat is celebrating the launch of Enterprise Linux 8 and the approval of its acquisition by IBM with a change of wardrobe.

As arguably the best known company to be named after an item of clothing, the hat itself is central to Red Hat’s brand and image, so any decision to muck about with it, therefore, is not to be taken lightly. But when incoming CMO Tim Yeaton chatted to people about the logo he was distressed to hear they found the dude wearing the hat to be sinister and even evil.

Showing some of the qualities that presumably lead to his promotion Yeaton quickly concluded that having an ‘evil’ logo was a potential marketing liability and dedicated the next year and a half to resolving the matter in an appropriately open source way. This exhaustive process apparently came to a simple conclusion: ditch the dude, resulting in the dude-less logo you see above.

The evolution of the Red Hat logo coincides with a couple of other pretty significant milestones for the company. Tech giant IBM was recently advised that the US Department of Justice has concluded its review of the Red Hat acquisition and said it’s got no problem with it and as far as the US is concerned this is an unconditional green light. IBM apparently reckons the whole thing will be wrapped up later this year.

Lastly Red Hat recently announced the first major new version of its Enterprise Linux platform – RHEL 8. As a platform designed with datacenters in mind, RHEL is of increasing relevance to telcos as they move ever more of their stuff into the cloud and the edge. Red Hat is positioning RHEL 8 as the platform for the hybrid cloud era and name-dropped lots of other associated buzzwords like containers and devops. We wouldn’t even know which end of the box to open with this stuff, so hopefully this vid as well as some canned quotes will help you understand what the big deal is.

 

Stefanie Chiras, vice president and general manager, Red Hat Enterprise Linux, Red Hat

“Red Hat Enterprise Linux 8 embraces the role of Linux as IT’s innovation engine, crystallizing it into an accessible, trusted and more secure platform. Spanning the entirety of the hybrid cloud, the world’s leading enterprise Linux platform provides a catalyst for IT organizations to do more than simply meet today’s challenges; it gives them the foundation and tools to launch their own future, wherever they want it to be.”

Tibor Incze, technical lead, Red Hat Enterprise Linux, Datacom Systems

“The capacity for Red Hat Enterprise Linux 8 to not only run multiple versions of the same application or database on a specific operating system but to also have a clear and efficient way to manage them is a significant benefit to Datacom and our customers. As we continue to execute on our internal DevOps strategy, we’re also pleased to see improved container capabilities in the operating system and extensive automation, all factors that will help us bring differentiated services to our end users.”

John Gossman, distinguished engineer, Microsoft Azure

“We have seen growth in applications being deployed using Red Hat Enterprise Linux on Azure, including Microsoft SQL Server, for cloud-native, hybrid, and cloud migration scenarios. We’re excited to see what customers will create with Red Hat Enterprise Linux 8 on Azure with continued integrated support from Microsoft and Red Hat, as well as the operating system’s new capabilities to build applications for workloads like AI.”

Arlen Shenkman, executive vice president, Global Business Development and Ecosystems, SAP

“Red Hat Enterprise Linux 8 for SAP Solutions offers high availability capabilities, which are important for SAP workloads, and downtime is unacceptable for business critical applications such as S/4HANA. For more than two decades, we’ve worked with Red Hat on maintaining a stable, open foundation for SAP applications, helping our customers make smarter decisions, faster, across the hybrid cloud.”

Telcos need to seriously think about how to sell to consumers

Following the news that Sky has been slapped on the wrist for misleading claims during a 2018 advertising campaign, marketers need to have a long and hard think about whether they are doing a good job.

The most recent assault against the marketing strategies of the telcos comes from the Advertising Standards Authority (ASA), with the group ruling Sky’s push to suggest customers would be able to receive stronger wifi signal throughout the house because of its routers, was misleading. The campaign features characters from ‘The Incredibles’ franchise, running across TV and through mainstream press.

The campaign was originally challenged by BT and Virgin Media, with both suggesting the claims were misleading as there was no way to substantiate the assertion. And the ASA agreed. In some cases, Sky’s router might be able to improve wifi signal throughout the home, but due to the breadth of different homes, each with their own structural design, it is an impossible claim to justify. The ad was far too generalist and deemed misleading.

“Unfortunately for Sky, its promise of a strong wifi signal all over your house has been shown to be misleading, and while it is by no means unique in falling foul of the ASA, it will be stung by this ruling the regulator has upheld against it,” said Dani Warner of uSwitch.com.

“Broadband providers are no longer allowed to make such exaggerated claims about potential speeds following the ASA’s major clampdown at the end of 2017, so they have had to become more imaginative in how they stand out from the pack with their advertising.”

This is an area the ASA has been quite hot on in recent years; telcos should not be allowed to make such generalist claims, intentionally misleading customers over performance. Especially in an age where advertising can be personalised on such a dramatic scale, at best it is lazy and incompetent, at worst it is directly and intentionally lying.

What is worth noting is that Sky can potentially boost signal throughout the home, though additional equipment would be required to make this possible. This is not mentioned during the advertising campaign however. The ASA ruled that some of the claims made in the ad could be substantiated, however it is no longer allowed to run in its current form.

Sky incredibles

This is of course not the only area where telcos are being challenged in the world of advertising. ‘Fibre’ claims are another, the ‘up-to’ metric has been removed and the telcos are being forced to detail speeds during peak times. Another factor to consider is the up-coming 5G service. Do any of the telcos have a clue how they are going to sell the service to consumers, as we do not believe the idea of ‘bigger, faster, meaner’ will not work, at least for the first few years.

Starting with the ‘up to’ claim, this is one which plagued the consumer for years. Masses of customers were duped into buying promised services which could only be delivered to a fraction. Thankfully, the ASA changed rules, forcing the telcos to be more accurate in how they communicate with potential customers.

Not only did this ruling mean the ‘up to’ claim had to be avoided, but it also forced the telcos to claim speeds during peak times. This also more readily informs the consumer of services which they are likely to experience, as opposed to the dreamland which most telcos seem to think we live in.

The term ‘fibre’ and ‘full-fibre’ has also been challenged, though telcos can still get away with some nefarious messaging. Irrelevant of whether there is fibre in the connection, and there generally always will be at some point, the ‘last mile’ is where the difference is made to broadband speeds. If it is copper, you will never get the same experience as fibre, however, telcos are still able to mention fibre in advertising.

The ASA has done some work to clear this up, in all fairness, though we still feel there is opportunity to abuse the trust of the consumer. And the telcos have shown that when there is an opportunity to be (1) at best lazy or (2) at worst directly misleading, they will take it.

The final area which we want to discuss takes us into the world of mobile and 5G. The telcos have always leant on the idea of ‘faster, bigger, meaner’ to sell new services to customers, or lure subscriptions away from competitors, but 5G presents a conundrum for the marketers; do consumer need faster speeds right now?

EE

4G delivers a good experience to most, and if it doesn’t, there generally is a good reason for this (i.e. congestion, interference, remote location, indoor etc.). 4G will continue to improve both in terms of speed and coverage over the next few years, and as it stands, there are few (if any) services which supersede what 4G is or will be capable of.

Another factor to consider is the price. Many consumers will want the fastest available, even if they don’t need it, but the premium placed on 5G contracts might be a stumbling block. EE has already hinted 5G will be more expensive than 4G, though details have not been released yet. In the handsets segment, consumers have shown they are more cash conscious, especially when there is little to gain through upgrades, and this is heading across to the tariffs space as purchasing savviness increases.

“I don’t think there are many great telco brands out there most consumers see them more as a utility,” said Ed Barton, Chief Analyst at Ovum. “T-Mobile USA is an exception with their customer champion, ‘un-carrier’ positioning but there no branding even approaching the effectiveness of, say, Apple’s.

“If 5G is sold only as a faster G, sales will be slow and it’s up to the entire ecosystem to create the apps, services and use cases which can only exist because of 5G network capabilities. These will probably rely on some combination of edge computing, high volume data transfer, low latency and maybe network slicing. An early use case is domestic broadband however as 5G networks evolve the use cases should proliferate relatively quickly.”

If consumers are becoming more cash conscious and have perfectly agreeable speeds on their 4G subscriptions, the old telco marketing playbook might have to be torn-up. The big question is whether the ideas are there to make the 5G dream work. Differentiation is key, but few telcos have shown any genuinely interesting ideas to differentiate.

Priority

One excellent example is over at O2 with its Priority initiative. Through partnerships with different brands, restaurants, gig venues and companies, customers are given freebies every week (a Nero coffee on a Tuesday) or special discounts periodically (£199 trip to Budapest). It leverages O2’s assets, the subscription base, allowing O2 to add value to both sides of the equation without monstrous expense. This has been a less prominent aspect of O2 advertising in recent years; perhaps the team is missing a trick.

Another, less successful, example of differentiation is getting involved with the content game. BT has been pursuing this avenue for years, though this expensive bet has seemingly been nothing more than a failure, with former CEO Gavin Patterson heading towards the door as a result.

This is not to say content cannot be a differentiator however. The content aggregator business model is one which leverages the exclusive relationship telcos have with their subscribers, streaming-lining the fragmented content landscape into a single window. Again, it uses assets which the telco already has, adding value to both sides of the equation. It also allows the telcos to get involved in the burgeoning content world without having to adopt a risky business model (content ownership) to challenge the existing and dominant members of the ecosystem.

In France, Orange is a making a place for ownership of the customers ‘smart ecosystem’, offering new services such as storage and security, while the same play is being made by Telefonica in South America through Aura. These offerings will offer differentiation, as well as an opportunity to make more revenues through third-party services. It’s a tough segment, as it will put them head-to-head with the likes of Google and Amazon’s digital assistants, but it is a differentiator.

By having these initiatives in place, marketers have something unique to go to market with, enticing consumers with promises which are genuinely different.

Three is a company which is taking a slightly different approach, hitting the consumers appetite for more data as opposed to speeds. Here, the team is leaning on ‘binge-watching’ trends, offering huge data bundles, but you have to wonder whether this is sustainable in the long-run when it comes to profitability and customer upgrades. There is only so long a company can persist in the ‘race to the bottom’.

Go Binge

“There are too many claims in an attempt to stand out in a crowded market,” said Paolo Pescatore, Tech, Media & Telco Analyst at PP Foresight.

“This is not the first time and wont be the last. It will only proliferate with the rollout of fibre broadband and 5G services. Consumers are happy to pay for the service they’ve signed up for, not to be misled. In essence, telcos are struggling to differentiate beyond connectivity. There’s a role for a provider to be novel and provide users with value through additional services and features.”

With the ASA chipping away at what marketers can and cannot say, as well as the traditional playbook becoming dated and irrelevant, telcos need to take a new approach to selling services to the consumer. The winners of tomorrow will not necessarily be the ones with the best network, O2 currently sits at the bottom of the rankings but has the largest market share in the UK, but the telco who can more effectively communicate with consumers.

5G offers an opportunity for telcos to think differently, as does the emergence of the smart ecosystem. Other product innovations, such as AI-driven routers, which can intelligently manage bandwidth allocation in the home, could be used as a differentiator, but it won’t be long before these become commonplace.

At the moment, all the bold claims being made by telcos, each competing the game of one-up-manship, are merging into white noise. The telcos have lost the trust of the consumer, many of which has cottoned onto the claims being nothing more than chest-beating. The telcos need to get smarter, and it will be interesting to see whether there are any unique approaches to capture the imagination of today’s cash conscious, technologically aware and savvy consumer.

Failure to do so, and the telcos might as well start calling themselves utilities.

Three UK’s guerrilla marketing strategy backfires

Challenger brands need to try harder to get noticed, but this approach can sometimes backfire, as Three UK found out this week.

Three is hoping to build on its #PhonesAreGood campaign, launched in October last year, that took a tongue-in-cheek look at all the negative press around smartphone addiction by imagining some historical scenarios that would have been changed for the better with the involvement of a smartphone.

One of those scenarios concerned King Henry the Eighth, who notoriously got through six wives by the time he called it a day. The joke is that if he’d had some kind of dating app at the time he might have been able to make up his mind about them prior to marriage and thus a couple of them could have been spared the chop.

In the build up to Valentine’s Day some bright spark in Three UK’s marketing department thought it might be a laugh to promote this part of the campaign with a tweet entitled ‘Shag, marry or behead’. This was presumably a nod to the ‘kiss, marry, kill’ game and maybe even the phrase used by history students to remember what happened to Henry’s wives: ‘Divorced, beheaded, died; Divorced beheaded survived’.

Now you don’t have to be the most committed social justice warrior to know that Twitter is not the place for nuance or humour and anything that can be taken offence to will be. While the tweet was clearly a joke, there was always the possibility that it could be perceived as some kind of trivialising or even endorsement of domestic violence by someone.

That someone was apparently mumsnet member Jeanhatchet, who flagged up the tweet on the site’s forum. “The 3 mobile network are laughing at domestic homicide in this tweet, Jeanhatchet wrote. “In many of the women killed as a result of intimate partner violence blunt force trauma to or being stabbed in the head is a feature.

“The most worrying thing is …. how did this marketing meeting go? What views were expressed about killing women? How that was funny and would sell more contracts and phones? Imagine those men who sanctioned this and how common their views are that it never registered as a marketing disaster? https://twitter.com/threeuk/status/1095740892919541761?s=21” Three seems to have taken down the offending tweet by here’s a screenshot of it courtesy of Jeanhatchet. Google is also still acknowledging the original tweet.

3 UK deleted tweet

 

3 UK deleted tweet Google

That was enough for the Manchester Evening News to get involved, which committed not one but two dogged hacks to the job of writing up this mumsnet post and the rest of the claimed ‘flurry of complaints’ around Three’s tweet. Even their combined efforts weren’t enough to ensure the faithful representation of the discussion thread they were copying-and-pasting, however, with one of Jeanhatchet’s early comments wrongly attributed to  Lolkittens5, to whom she was responding.

Hot on their heels was Labour MP James Frith, who apparently spent most of yesterday working himself up in to an impressive froth of righteous indignation. “This is a disgraceful ad,” he opened. “Misogynistic and violent towards women. The disgrace of it. I hope you’re fined big time for this with proceeds sent to women’s refuges. Utterly shameful @ThreeUK”

Three, of course, tried the standard ‘we are sorry for any offence caused’ defence but, as is nearly always the case, it was too little too late. Apparently emboldened by the 30 likes and four retweets his initial Twitter salvo received Frith doubled down, including the textbook move of calling for an apology and then rejecting it when it was made. He concluded by vowing to grass Three up to the ASA before wrapping up his busy day by retweeting a story about how great his constituency is.

Unperturbed Three announced a new marketing initiative today around London Fashion Week. It’s claiming to have launched the world’s first 5G mixed reality catwalk, It ‘uses innovative start up Rewind and its Magic Leap mixed reality technology alongside Three’s 5G network, which will see the designer’s inspirations come to life on the catwalk,’ according to the press release.

Somehow this involves the son of singer Liam Gallagher and actress Patsy Kensit, who is apparently a world-renowned model and, as you can see below, has inherited his father’s petulant resting face. Perhaps this is intended to distract from Three’s rather weak 5G claims, with vague talk of IoT and AR the only substantiation offered.

3 UK Lennon Gallagher

“Today we are turning up the volume on 5G and bringing it to life for the first time in the UK, right here in the heart of the fashion world,” said Shadi Halliwell, chief marketing officer at Three. “By giving students access to the next generation of mobile technology, they will be able to push the boundaries of learning, innovation and sustainability to create in a way that’s never been possible.”

Halliwell, who presumably signed-off on the problematic tweet, will be hoping this new initiative will be free from controversy, or maybe not. It’s possible that the tweet was made in the hope of a bit of viral exposure, but that seems unlikely when you consider how quickly it was deleted. One thing, at least, Three will have gained from the experience is the knowledge that guerrilla marketing is a very high-risk strategy these days.

Omnichannel is a real thing after all – Nielsen

It is becoming increasingly difficult to capture the attention of customers nowadays, but short-attention spans and multiple screens might turn out to be an advantage.

Omnichannel marketing and experiences are up there with the buzziest of buzzwords, and while some might believe it is nothing more than a consultant’s invention to justify their existence, there might be some substance to it after all.

According to the most recent Nielsen Total Audience Report, more US adults are engaging content on multiple devices simultaneously. In fact, 45% responded to the survey stating they always or very often have a second device on the go while watching TV. This might sound like a disaster for cash-conscious marketers, though the savvy ones could use it to their advantage.

In terms of what people are doing on the second device, 71% said it was related to what had been viewed on the TV, 41% were messaging friends or family about the content, while 35% said they were looking up a product or service which had been advertised on TV. It is very difficult to link TV advertising back to direct opportunities and revenues, though this research suggests there is some credibility to this omnichannel buzz.

And despite smartphones and tablets evolving to mini-cinema screens with their image quality, the TV is still king.

Nielsen Graph

While the smartphone and other digital devices are clearly having more of an impact on our habits, these trends have not been prominent enough to drag us away from the TV in the living room. Some marketers might prefer the more accountable digital routes to reach customers, but the TV is proving to still be one of the most effective ways to get the message across.

It also suggests that while the landscape is rapidly shifting and evolving, some things never change; 9pm is still the best time to get your brand in front of the consumer.

It does seem there might be some credibility to this omnichannel engagement strategy; sometimes the marketing consultants do get it right, even if it is slightly unpalatable to say.

Xiaomi apologises for misleading UK consumers

Chinese smartphone vendor Xiaomi says an apparent £1 smartphone offer was meant as a raffle, blaming marketing message lost in translation.

At its launch event in London, Xiaomi announced that for a limited period, users would be able to buy Mi A2 and Mi 8 Lite,  both launched earlier this year, for only £1 from its web-shop. When the time came however, social media was flooded by complaints from frustrated hopefuls who have failed to scoop the jackpot.

Some users decided to take the matter into their own hands. Phil Williams from Stockport managed to dig out the browser script as well as checked the online shopping platform’s developer page, and shared his findings on Twitter.

It turned out that the script was written in the way that as soon as a user clicked “Buy Now”, the browser would return an “out of stock” message, without going through the loop to check the inventory status.

Tweet on Xiaomi stunt 1

Tweet on Xiaomi stunt 2

Tweet on Xiaomi stunt 3

Xiaomi’s official response came in three days later, claiming that it was a lost-in-translation blunder. The so-called “flash sale” in essence was a raffle draw, and only ten smartphones (five pieces of each model) were made available for the lucky ones across three days. Xiaomi explained that “Of the thousands who clicked ‘buy’ simultaneously, our system will randomly select the winners”. However on the Terms & Conditions page linked to the promotion, it was spelled out clearly under “£1 Flash Sale” that “Products available under this sale are limited in quantity and are given away on first-come, first-serve basis.”. Xiaomi has not responded to Telecoms.com’s request for clarification of the contradiction.

There are potentially two issues surrounding this case. At the launch event we never heard any mention of lucky draw type of “flash sale”. Rather the message given was very similar to a “Black Friday”-type of “deal”. The misleading promotion message could fall foul of the Advertising Standards Agency. A more serious issue relates to GDPR. All those entering the raffle needed to log in with their Mi account. This would mean that Xiaomi should not keep their data more than the raffle period if the accounts were created specifically for this purpose. It would be interesting to see if this rule is being followed.

Vodafone has one of those gratuitous brand repositioning exercises

Few things seem to illustrate corporate folly more than blowing tons of cash on brand positioning, but that doesn’t stop them persisting with it.

The latest to take the plunge is UK-based operator group Vodafone, which has embarked on its first major brand spasm since the introduction of the ‘power to you’ strapline in 2009. This time some expensive brand consultancies have helped the company come up with the idea that technology ‘…will play a positive role in transforming society and enhancing individual quality of life over the years ahead.’

To represent this digital utopia Vodafone has gone for the new strapline: ‘The future is exciting. Ready?’. The ‘Ready’ bit seems to be especially important, so much so that Vodafone is going to force the English version on all its markets regardless of their spoken language. So in Spain, for example, it will be “El futuro es apasionante. Ready?” as opposed to “El futuro es apasionante. ¿Listo?”

“We believe there are very good reasons to be optimistic about the future as emerging innovations in science and technology begin to have a profoundly positive impact on society,” said Vodafone Group Chief Commercial Operations and Strategy Officer, Serpil Timuray. “Vodafone has a long and proud history of bringing new technologies to hundreds of millions of people worldwide, enhancing quality of life and transforming the workplace. Our new brand positioning is intended to embody Vodafone’s mission and purpose to help our customers and communities adapt and prosper as these remarkable new trends reshape the world.”

To back up this wide-eyed optimism Vodafone commissioned some research that concluded people are really optimistic. Vodafone is also doing a minor tweak to its parenthesis logo, which was first unveiled back in 1998, but the brand timeline video below serves mainly to illustrate how little it has evolved since then. Lastly there’s a video ad that Vodafone plans to inflict on us before long to hammer home the message.