Advertisers should follow Vodafone's lead after Facebook and Google failures | Nils Pratley

Telecoms giant is right to stop relying on social media titans to prevent its adverts appearing next to inappropriate content

About time too: a major advertiser has become so frustrated with Facebook and Google’s limp attempts to police the content they publish that it has taken matters into its own hands. Vodafone will no longer rely on website “blacklists” drawn up by the social media titans and its own advertising agency. Instead, to prevent its ads appearing next to hate speech or fake news, Vodafone will issue a “whitelist” of sites on which it is happy for its commercial messages to appear.

The new approach is sensible. Indeed, it’s a wonder that major advertisers have been so slow to protect themselves from Facebook and Google’s failures. Vodafone spends £400m a year on online advertising. Even if 99% of that money ends up being directed to reputable sites, the other 1% can do serious damage to a brand while also generating revenue for some hideous websites.

Advertisers’ reluctance to take the initiative may stem from two factors. First, the worry that drawing up “whitelists” and employing human judgment is a more expensive way to advertise. Second, a sense that Google and Facebook’s machines are too big and powerful to challenge.

Vodafone, let’s hope, has shattered both ideas. Yes, it’s a big advertiser that can afford to carry a few extra costs but it is surely right when it says algorithms, designed to carve up demographic categories, are simply not up to the job of making editorial judgments. It also seems to have little difficulty in laying down the new terms of trade to Google and Facebook.

Other advertisers should follow Vodafone’s lead – and, if not, explain why they’re happy to turn a blind eye when even small portions of their advertising budgets end up funding some of the internet’s most gruesome offerings.

Shawbrook would be better going private

Shawbrook is the challenger bank that has been a challenging investment at times for its shareholders. Floated at 290p in 2015, the shares fell as low at 130p a year ago after the referendum result – Brexit was deemed by the market to be unhelpful for UK buy-to-let lenders. Then came Shawbrook’s confidence-rattling revelation of lending “irregularities” in one division.

In the circumstances, you might have expected the board to embrace the takeover approach from Pollen Street, already a 38% owner, plus fellow private equity house BC Partners. That was the way the plot seemed to be heading when Shawbrook agreed to open its books. But the board has now rejected four offers, deeming the bidders’ final pitch at 340p a share, or £868m, to be an undervaluation.

One admires the independent directors’ determination to squeeze Pollen Street for every last drop of value. In the end, however, resistance is likely to be futile since acceptances are already 45% and many of the other shares are already in the hands of arbitrage funds who are only there for the final bump in the bid. The real question is whether the bidders manage to pass 75%, at which point Shawbrook would be delisted.

It would be a shame to see the ranks of quoted challenger banks depleted. But, actually, Pollen Street and BC make a fair point. The strength of the Brexit storms are unknowable for specialist lenders and may be better combated away from a public market that tends to demand lending growth in all circumstances.

It’s possible that Shawbrook, whose returns on equity have been strong when it has avoided cock-ups, will sail through happily. But the bidders aren’t making a risk-free bet. It’s probably best to let Shawbrook go private.

Bailey stays on trend at Burberry

The annual report would have been a good place for Burberry to explain what on earth the job of “president” involves. Christopher Bailey, the outgoing chief executive but continuing chief creative officer, will have presidential status from next month but the demands of the role remain obscure.

The “evolved structure”, which will see Marco Gobbetti become chief executive, “will allow me to redouble my focus on design for this next phase, and on making products and telling stories that inspire our customers”, Bailey tells shareholders in the report. But isn’t all that designing stuff covered by the creative gig?

Maybe the un-corporate title is just there to remind everyone who is really boss. The remuneration arrangements suggest the same. Bailey, who has just picked up £10.5m as a delayed retention bonus, will be able to earn an indicative maximum of £7.6m in the coming year. Gobbetti will be chasing a whisker less at £7.3m.

A difference of £300,000 is a rounding error at those levels, of course – but maybe it simply wouldn’t do for the president to be denied bragging rights.


Nils Pratley

The GuardianTramp

Related Content

Article image
Tech watchdog's takeover powers might tame Facebook and Google at last | Nils Pratley
The UK’s Digital Markets Unit is likely to have powers to protect startups from the giants, and about time too

Nils Pratley

08, Dec, 2020 @7:59 PM

Article image
YouTube is like the wild west – why won't Google pay to clean it up?
The tech giant has apologised for ads appearing next to extremist videos – but it needs to take action, not just rely on users

Nils Pratley

20, Mar, 2017 @6:58 PM

Article image
Sir Martin Sorrell: Facebook row hasn't deterred advertisers
Ex-WPP chief says marketers are turning to Instagram and predicts more digital growth

Mark Sweney

26, Dec, 2018 @1:34 PM

Article image
Google and Facebook under scrutiny over UK ad market dominance
Competition watchdog to investigate potential abuse of power and control of user data

Mark Sweney

03, Jul, 2019 @3:25 PM

Article image
Google and Facebook bring in one-fifth of global ad revenue
Two companies increase their advertising duopoly by earning a combined $106.3bn, nearly double the figure of five years ago

Julia Kollewe

01, May, 2017 @11:01 PM

Article image
Big Four banks benefit from regulator's featherlight approach
CMA inquiry’s tweaks leave customers waiting for real a FinTech revolution as Vodafone’s organic view finally comes good

Nils Pratley

17, May, 2016 @5:37 PM

Article image
Google, Apple and Microsoft report record-breaking profits
‘Perfect positive storm’ for big tech as pandemic fuels huge quarterly sales and stock market gains

Rupert Neate and Dominic Rushe

27, Jul, 2021 @8:54 PM

Article image
Google and Facebook fuel UK ad boom despite print slump
Spending on advertising to pass £20bn for first time in 2019 as digital market booms but traditional media declines

Mark Sweney Media business correspondent

29, Nov, 2018 @12:01 AM

Article image
Is it time to break up the tech giants such as Facebook? | Larry Elliott
Amazon, Facebook and Google are as dominant as Standard Oil and AT&T were. But breaking them up is not going to be easy

Larry Elliott

25, Mar, 2018 @12:14 PM

Article image
Facebook’s share price slump is justified by uncertain outlook | Nils Pratley
User growth is slowing and profit margins are shrinking - no wonder the share price is diving

Nils Pratley

27, Jul, 2018 @9:05 AM