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.