Coca-Cola GB and other major brands voice concerns as Halifax, Co-op, Vauxhall and Virgin Hollidays join ad exodus

Ford leads major companies in pulling advertising

Piers Fawkes, PSFK
  • 7 july 2011

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This article titled “Procter & Gamble, Asda and Tesco consider pulling News of the World ads” was written by Mark Sweney, for on Wednesday 6th July 2011 12.19 UTC

Halifax, Co-op, Vauxhall, Butlins and Virgin Holidays have joined Ford in pulling ads from this weekend’s News of the World following the latest phone-hacking allegations.

Mitsubishi Motors has also moved to pull its advertising from NoW and is donating its ad spend to charity Childline, following a suggestion from a Facebook user. Mitsubishi does not appear in the top 30 list of NoW advertisers.

Boots, the seventh-largest advertiser with the tabloid, said it will “review and monitor customer views” before making a decision. Renault said it will not be committing any advertising until the investigation is complete.

The company will also be concerned that major advertisers including Procter & Gamble, Tesco, Asda, Coca-Cola GB, Orange and Vodafone have voiced concerns about this week’s wave of hacking revelations, with many saying they are reviewing their relationship with the paper.

P&G, the UK’s largest advertiser and home to Gillette, Fairy and Pampers last year spent £204m on marketing in the UK and is the third-largest advertiser in the NoW, spending almost £1.5m annually. It said it shared the “growing concern” the public and politicians have voiced over the phone-hacking allegations this week.

Other companies voicing concern about the phone-hacking revelations and reviewing whether to pull advertising from the News International tabloid include mobile company 3, Halifax, T-Mobile, 02 and Sainsbury’s.

“We are very aware of the situation and share the growing concern amongst the public,” said a spokeswoman for the company. “We are monitoring it closely and will be reviewing our options.”

Mobile company 3, the sixth-largest NoW advertiser spending £1m a year, said it is monitoring the situation and is understood to also be seeking “reassurances” from the paper about current editorial practices.

The News of the World’s estimated £38m annual ad revenue is coming under increasing pressure as a host of other advertisers on Wednesday joined Ford, Npower, Halifax, Tesco, T-Mobile and Orange in voicing concern over revelations including the Milly Dowler and Soham murders phone-hacking allegations. Some are reviewing their relationship with the paper.

Soft drink giant Coca-Cola GB said it was “shocked by the new allegations that have been made”, while Sainsbury’s was quick to distance its brand from the paper, saying “the views and practices of any organisations that carry our advertising do not represent those of Sainsbury’s”.

Asda, the eighth-largest advertiser in NoW spending more than £750,000 annually, also said it was “monitoring the situation closely and understand people’s concerns”. The company said it never had any plans to run ads this weekend. Asda also said that since January it had significantly changed its advertising strategy, cutting back on using Sunday newspapers, and had spent just £34,000 in NoW in 2011.

Vodafone and O2, both top 10 News of the World advertisers spending almost £2m annually between them, both said they are “monitoring” the situation but have not as yet looked to pull ads or review their media strategy.

Tui, which owns the First Choice and Thomson travel companies, said “without wishing to prejudice any investigations in progress, we are reviewing the options, as is reasonable in such unusual circumstances”. The company said it had no plans to advertise this weekend in the Sunday title.

“There has been lots of commentary on who is staying and who is staying out and this weekend will be the real test,” said one senior media buying agency executive who has pulled the advertising for one major client. “We are advising clients not to be in this weekend in particular, we will see after that.”

The backlash against the title also threatens to extend to media owners who run advertising by News of the World – or even companies controlled by News International parent News Corporation, such as BSkyB.

Justine Roberts, the co-founder and chief executive of Mumsnet, said the company had taken the decision to pull the current Sky ad campaign from its website.

“Mumsnet members are pretty much unanimously shocked and disgusted by the News of the World’s actions in hacking Milly Dowler’s phone.” Roberts added she “thought it incongruous that Mumsnet was carrying advertising for Sky at the present time”.

The News of the World spent £7.8m on marketing in the year to the end of April, according to research company Nielsen, with the lion’s share of £6.3m spent on TV advertising.

ITV, the UK’s biggest commercial broadcaster, had not responded to a query on whether it intended to review its relationship with News of the World by the time of publication.

However, there are those in the media industry that believe that some brands are simply jumping on a PR bandwagon by claiming they will pull their ads.

The category of advertiser that NoW has to worry the most losing is retail which accounted for £10.2m, or 26% of the estimated £38m in ad revenue taken by the paper in the year to the end of May, according to media buying agency estimates.

The paper also needs to be wary of a full boycott by telecoms companies, which spent about £6.7m in the past 12 months. O2, 3 and Everything Everywhere are all among its top 10 advertisers, although the first two are only monitoring the situation and the latter has so far put the NoW under review.

Claire Enders, of Enders Analysis, said the loss of one or two advertisers such as Ford will not create a “profitability crisis” but nevertheless warned of the domino effect if “reviews” turn into a boycott.

“The issue will be if further advertisers also pull out, particularly if they are in these few large categories,” said Enders. “Indeed, the grocers and retailers would be a particularly uncomfortable development as they are very high-profile, high-frequency advertisers.”

Looking beyond the top 10 there are a host of retailers in the top 20 including DFS, which spent £608,000; Harveys (£582,000); Dixons Stores Group (£484,000); B&Q (£475,000); and Carpetright (£433,000).

Enders Analysis believes that most brands will end up sticking with the NoW. However, the company admits”there is no doubt there is the risk that big brand advertising could unravel … perhaps a large percentage of that £35m to £40m [annual ad revenue] and therefore probably swallowing the profitability of the NoW itself if it was sustained over a long period”.

Top 30 News of the World advertisers

The top 30 list of advertisers in the News of the World in the year to the end of May, based on unofficial figures from media agency sources.

1. BSkyB £2.1m

2. Everything Everywhere £1.5m

3. P&G £1.3m

4. O2 £1.2m

5. Tesco £1m

6. Hutchinson 3G £1m

7. Boots £900,000

8. ASDA £760,000

9. Vodafone £660,000

10. Shop Direct £640,000

11. DFS £608,000

12. BT £584,000

13. Harveys £582,000

14. Vauxhall £534,000

15. Unilever £493,000

16. Dixon Stores Group £484,000

17. B&Q £475,000

18. Mars £443,000

19. Carpetright £433,000

20. TJ Hughes £404,000

21. Specsavers £392,000

22. SJM Concerts £365,000

23. Kellogg’s £359,000

24. Halifax £329,000

25. M&Co £318,000

26. Carphone Warehouse £314,000

27. Next £314,000

28. Alberto Culver £314,000

29. Scs Furniture Stores £309,000

30. L’Oréal Paris £302,000

31. Debenhams £300,000

32. Beiersdorf UK £298,000

33. Weight Watchers £289,000

34. Dairy Crest £288,000

35. Sainsbury’s £285,000

36. Toyota £282,000

37. Argos £280,000

38. Reckitt Benckiser £275,000

39. Virgin Media £274,000

40. Renault £266,000

41. Fiat £253,000

42. Seaworld Parks and Entertainment £244,000

43. British Gas £234,000

44. Iceland £227,000

45. ITV £220,000

46. New Look £220,000

47. Keyline Brands £218,000

48. William Morrison Supermarkets £215,000

49. Suzuki £214,000

50. Npower £206,000

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