20/03/2017 BBC Business Live


20/03/2017

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Digital advertising can tell you who's watching and when.

:00:15.:00:17.

Are firms being conned by fake views?

:00:18.:00:23.

Also in the programme, two of India's largest telecoms firms.

:00:24.:00:28.

Vodafone India Idea Cellular are merging to become

:00:29.:00:34.

We'll cross live to Mumbai for the latest.

:00:35.:00:39.

And it's a quiet day for corporate and economic news

:00:40.:00:42.

after the excitement of last week's Fed rate rise.

:00:43.:00:46.

We'll look at what's moving the numbers and why.

:00:47.:00:48.

Also in the programme, we'll be visiting the new silk road.

:00:49.:00:51.

It spans 7,500 miles, but how will businesses capitalise

:00:52.:00:54.

on the new train link between Asia and Europe?

:00:55.:00:58.

It's the UN's international day of Happiness.

:00:59.:01:01.

Norway has come out top in the World Happiness Index overtaking

:01:02.:01:07.

Let us know What makes you happy in your job?

:01:08.:01:15.

If people don't know you exist, or what you do, you'll

:01:16.:01:44.

So how do firms make sure they're spending it in the right place

:01:45.:01:52.

That's top of the agenda for the industry's big annual

:01:53.:01:57.

Around the world, across all forms of media it's thought to be

:01:58.:02:03.

at nearly half a trillion dollars a year.

:02:04.:02:06.

But where companies chose to spend their ad dollars is changing.

:02:07.:02:10.

About 38% went on traditional TV adverts last year with 36%

:02:11.:02:15.

This year online ads are set to become the biggest slice

:02:16.:02:23.

But the platforms which host the ads like Google and Facebook

:02:24.:02:28.

are grappling with a big rise in advertising fraud.

:02:29.:02:31.

This comes in the form of bots and software that tricks websites

:02:32.:02:34.

into thinking more people have actually seen an ad which means

:02:35.:02:38.

And this problem is growing, and some of the leading players

:02:39.:02:46.

in the industry are now warning that 20 percent of all digital ad

:02:47.:02:50.

spending is in danger of being wasted on fraud.

:02:51.:02:56.

With me is Our Technology Correspondent Rory Cellan Jones.

:02:57.:03:03.

Rory, this is something you've talked to some of the top bosses

:03:04.:03:08.

about, it's a big deal for the advertising industry isn't it? It's

:03:09.:03:12.

a crisis really. I think it's a subject that's dominating chat at

:03:13.:03:15.

all sorts of advertising meetings and conferences. Don't forget, when

:03:16.:03:20.

online advertising came along, it had huge promise, you would be able

:03:21.:03:23.

to target people precisely, you would know more about who was seeing

:03:24.:03:28.

your ad, then you would be able to measure the performance effectively.

:03:29.:03:32.

Both those things have been brought massively into question by the sheer

:03:33.:03:38.

extent of ad fraud. A survey predicted that out of the $80

:03:39.:03:44.

billion spent worldwide on digital advertising, over $16 billion would

:03:45.:03:47.

be completely wasted and go in fraud. They are getting increasingly

:03:48.:03:50.

desperate about how to tackle it and they are getting very angry with the

:03:51.:03:54.

likes of Google and Facebook. So what is likely to happen? I

:03:55.:03:58.

you can bolt on to your ads to you can bolt on to your ads to

:03:59.:04:03.

reduce this somehow if you are a customer wanting to advertise on

:04:04.:04:07.

Google but actually Google and Facebook are not keen on that?

:04:08.:04:11.

There's pre-big verification software being touted by some

:04:12.:04:17.

agencies as being very effective in reducing fraud to virtually zilch.

:04:18.:04:20.

They are saying make sure that you are actually getting real traffic

:04:21.:04:24.

before you place your ads, that these aren't going to be subject to

:04:25.:04:28.

phoney views, your ads will be viewed by people not computers. But

:04:29.:04:32.

they're saying that Google and Facebook aren't keen on this

:04:33.:04:38.

software. Google have told me we don't allow third party software on

:04:39.:04:41.

our platforms but they claim that they in any case are doing all sorts

:04:42.:04:46.

of stuff. I have a statement saying we took down 1.7 billion ads that

:04:47.:04:50.

violated their policy last year more than double the previous year. What

:04:51.:04:55.

should begans do who wished to advertise online effectively and not

:04:56.:04:59.

want to pay out for ads not being looked at by real people? It's

:05:00.:05:04.

basically a technological war, a bit like the arms race going on over

:05:05.:05:09.

cyber security. They need the best tools available. They are uniting

:05:10.:05:12.

now the advertising industry in a way you have not seen them do

:05:13.:05:19.

before, saying, I heard a threat recently from the big agencies to

:05:20.:05:23.

Google and Facebook, listen if you don't sort this because you dominate

:05:24.:05:26.

online advertising, we are going to have a boycott. That seems unlikely

:05:27.:05:31.

because why would you move away from the biggest platform, but they're

:05:32.:05:33.

making that threat. Interesting. Thank you, Rory. More

:05:34.:05:39.

on that later in the programme. Uber president Jeff Jones

:05:40.:05:42.

is leaving the company A source at the taxi booking company

:05:43.:05:46.

told the BBC the resignation They said Mr Jones was frustrated

:05:47.:05:51.

that Uber was hiring a new chief operating officer

:05:52.:05:58.

and that he was not But according to technology news

:05:59.:06:01.

site Recode, Mr Jones left because of Uber's continued struggle

:06:02.:06:05.

with issues around sexism South Korea has complained

:06:06.:06:08.

to the World Trade Organisation about China, saying the world's

:06:09.:06:12.

second largest economy put restrictions on its goods

:06:13.:06:14.

in response to the installation Chinese authorities have closed

:06:15.:06:17.

stores of South Korea's Lotte Group, but Beijing denies the link

:06:18.:06:22.

between the closures China is South Korea's

:06:23.:06:25.

largest trading partner. Brazil's President Michel Temer has

:06:26.:06:31.

sought to reassure foreign trade partners that the corruption scandal

:06:32.:06:34.

engulfing the country's meat industry does not

:06:35.:06:37.

mean its products are unsafe. In a meeting with ambassadors from

:06:38.:06:40.

Europe, the United States and China, Mr Temer said his government

:06:41.:06:43.

is confident about the quality Top meat-packers have been accused

:06:44.:06:47.

of selling rotten produce for years. Brazil is the world's

:06:48.:06:52.

biggest red meat exporter. UK telecoms giant Vodafone

:06:53.:07:03.

has merged its Indian business with Idea Cellular,

:07:04.:07:06.

India's third-largest network, to create the country's

:07:07.:07:10.

largest operator. Sameer Hashmi is at the company's

:07:11.:07:12.

press conference in Mumbai. Sameer, bring us up-to-date. This is

:07:13.:07:21.

a big deal create ago huge organisation when all the signing is

:07:22.:07:26.

done on the dotted rhine? That is right. -- dotted line. It's

:07:27.:07:34.

a mega-merger. There are still a lot of issues that need to be sorted out

:07:35.:07:38.

and that's the reason why both companies have said that it will

:07:39.:07:42.

take up to 24 months for the merger to complete. Once done, it will be

:07:43.:07:47.

the largest Telecoms company in India with nearly 400 million users,

:07:48.:08:02.

a huge market share in India. There is a huge price war happening. There

:08:03.:08:14.

is a company owned by another company, offering Internet data at

:08:15.:08:17.

dirt cheap prices which has forced big players to come together to cut

:08:18.:08:22.

losses and make money in this highly competitive market. Remember with

:08:23.:08:26.

over a billion phone-users, India is an attractive market but to make

:08:27.:08:28.

money they need to consolidate the size of this market. That's what the

:08:29.:08:32.

companies are trying to do. Thank you very much for keeping us across

:08:33.:08:36.

that. I know you will follow the twists and turns of that as it

:08:37.:08:38.

develops. Most Asian markets lower

:08:39.:08:39.

at the start of a new week - following on from the rises last

:08:40.:08:42.

week after the Fed Rate decision and easing of fears over

:08:43.:08:45.

the election in the Netherlands. Wall Street also ended

:08:46.:08:48.

lower on Friday. European markets look like this

:08:49.:08:51.

right now on what's likely to be a quiet day for corporate

:08:52.:08:54.

and economic news. Samira has the details about what's

:08:55.:09:03.

ahead on Wall Street Today. Last week they were busy raising

:09:04.:09:12.

interest rates, this week beneficials will be business write

:09:13.:09:15.

speaking at events around the country. The Federal Reserve will be

:09:16.:09:20.

giving opening remarks at a research conference and A Fed official will

:09:21.:09:26.

also be speaking. Nike will be reporting earnings on Tuesday and

:09:27.:09:31.

the company is struggling with increased competition from Under

:09:32.:09:35.

Armour and Adidas in North America. Nike still holds a big part of the

:09:36.:09:39.

footwear market but rivals are gaining strength. And finally on

:09:40.:09:47.

Thursday, the world's biggest video game retailer, Game Stop, will be

:09:48.:09:53.

reporting earnings. Lower sales of video game titles will likely hurt

:09:54.:09:56.

the company's earnings. Joining us is Jessica Ground, UK

:09:57.:09:59.

Equities Fund Manager, Schroders. Good morning, nice to see you. A new

:10:00.:10:10.

trading week but it feels flat after the flurry of last week's activity.

:10:11.:10:24.

We had a Fed Rate decision. Japan is closed, not much going on. Deutsche

:10:25.:10:27.

Bank grabbing attention for the wrong reasons again. Fill us in

:10:28.:10:33.

about Deutsche Bank? Deutsche Bank has been a long-running saga. German

:10:34.:10:40.

industry has always been fantastic, very high returns, but banks have

:10:41.:10:44.

always really struggled to get good returns and this has been Deutsche's

:10:45.:10:52.

suring up of the balance sheets, selling off Asset Management. To

:10:53.:10:58.

Europe. We heard a lot of economic data, the unemployment figures and

:10:59.:11:01.

growth figures. Inflation this week. What are we expecting? It's not

:11:02.:11:07.

going to be great. We have got weaker sterling and higher oil

:11:08.:11:11.

commodity prices so that naturally is going to be inflationary. We

:11:12.:11:15.

import a lot of things so that will be coming through in food, as well

:11:16.:11:19.

as petrol. Interesting though that the dollar is weakening over the

:11:20.:11:24.

weekend. We are looking today at the pound dollar, the pound buying quite

:11:25.:11:29.

a bit of collars unusually today -- dollars. Quite unusual. The Fed yes,

:11:30.:11:34.

an official rate rise, but then people feeling it was quite dovish,

:11:35.:11:41.

so the Fed saying they are going to be watching, doesn't need to rise a

:11:42.:11:46.

lot very quickly. The Bank of England though is more hawkish and

:11:47.:11:49.

really saying it's going to be watching the inflation figures very

:11:50.:11:53.

closely. And briefly, I'm looking at the

:11:54.:11:56.

board there, there's not a huge amount to get excited about. Sally

:11:57.:12:00.

touched on the fact that we had all the excitement last week. What is

:12:01.:12:04.

the next thing to look out for? European elections. Just really

:12:05.:12:13.

policy uncertainty in the US and UK won wondering how much uncertainty

:12:14.:12:17.

there will be. Europe has been staging a good economic recovery,

:12:18.:12:19.

people will be wanting that to continue.

:12:20.:12:21.

We'll watch that closely. Nice to see you. Thank you.

:12:22.:12:27.

Still to come on the programme: We'll be visiting the knell Silk

:12:28.:12:34.

Road, spanning 7,500 miles, but how will businesses capitalise on the

:12:35.:12:40.

link? Stay with us for that. You are with us now on business live news.

:12:41.:12:47.

More now on Europe's largest gathering of

:12:48.:12:50.

The UK's advertising market is worth around ?200 billion.

:12:51.:12:54.

With targeted advertising coming under fire for adverts placed next

:12:55.:12:56.

to extremist material, what are the other challenges facing

:12:57.:12:59.

Edwina Dunn is the chief executive of Starcount

:13:00.:13:05.

and she was co-founder of Dunnhumby, the firm behind the Tesco Clubcard.

:13:06.:13:10.

A very good morning to you. Let's talk about what you do with the data

:13:11.:13:16.

because clearly you are an expert in all of this and know what consumers

:13:17.:13:20.

are doing, how and where they shop, and that is the joy of digital

:13:21.:13:24.

advertising and marketing, you have more information about customers

:13:25.:13:27.

than ever before? Yes, that is right. Actually, when

:13:28.:13:33.

we started work with Tesco on Clubcard 20 years ago, people said

:13:34.:13:37.

that targeted marketing would never be relevant because Tesco is a mass

:13:38.:13:43.

market brand. And so no-one really could conceive the idea of sending

:13:44.:13:47.

differentiated messages to millions of consumers. But it worked and it

:13:48.:13:52.

propelled them from, you know, almost third place in the market to

:13:53.:13:58.

market leader by a massive percentage. I feel where we are in

:13:59.:14:03.

the market right now is in a similar position. People are saying, you

:14:04.:14:08.

know, digital and being able to reach millions of people means that

:14:09.:14:14.

there's no role for selective or targeted advertising. People get

:14:15.:14:20.

everything. I think it's the time that it's going to shift now and

:14:21.:14:24.

there are going to be some companies out there that are really clever in

:14:25.:14:30.

how they actually selectively offer up content and messages.

:14:31.:14:34.

And that, to some of us listening, might be a worry because we are

:14:35.:14:38.

finding out that you are becoming much more clever at targeting us and

:14:39.:14:43.

using the data that you do receive about us and we are concerned about

:14:44.:14:47.

where that is going and how it's used? I think the fact is, consumers

:14:48.:14:54.

have gotten used to free stuff. People, mainly getting some idea of

:14:55.:14:58.

what they're interested in. That combination of wanting free stuff

:14:59.:15:03.

and knowing them, that puts huge demands on companies to actually be

:15:04.:15:05.

smarter with data. Flavoursome All of the technology

:15:06.:15:15.

has been rear view mirror, analysing what people did. The future will

:15:16.:15:17.

be... Sorry to interrupt. Now, you might not pay

:15:18.:15:31.

much attention to them, but white - fridges,

:15:32.:15:46.

washing machines and dishwashers Turkey's biggest white

:15:47.:15:48.

goods company, Arcelik, operates in more than 100 countries

:15:49.:15:55.

including the United States. But now they want to

:15:56.:16:00.

expand into China. China's retail market became

:16:01.:16:05.

the world's biggest last year, worth $4.89 trillion,

:16:06.:16:07.

overtaking the US. It's now valued at $4.82 trillion,

:16:08.:16:15.

but high-end home appliances Sales have fallen in the past few

:16:16.:16:17.

years and there are worries that Arcelik is Europe's third largest

:16:18.:16:21.

home appliances company. As the Silk Road is revived

:16:22.:16:30.

with the new train link between Britain and East China,

:16:31.:16:34.

does that really open Hakan Bulgurlu is Chief

:16:35.:16:37.

Executive of Arcelik. Welcome to Business Live. Thank you.

:16:38.:16:49.

Now, you are a Turkish company. You have been around for many years and

:16:50.:16:52.

you've been with the company for sometime yourself. And you're very

:16:53.:16:58.

established in many countries around the world including China, but for

:16:59.:17:02.

your company, how big an opportunity did does this new link provide for

:17:03.:17:09.

you? I personally firmly believe that the economic growth engine of

:17:10.:17:13.

the world is shifting to the east together with the enlarging middle

:17:14.:17:18.

classes I think South East Asia and the Indian subcontinent will take a

:17:19.:17:23.

larger share of global GDP. Arcelik we're trying to position Beko our

:17:24.:17:31.

brands. Turkey has a long-standing tradition of trading on the Silk

:17:32.:17:35.

Road. Today with China's investment in one belt, one road policy and the

:17:36.:17:39.

giant infrastructure projects that are going in both in South East Asia

:17:40.:17:46.

and the Indian subcontinent I believe there will be lots of

:17:47.:17:49.

opportunities. We have established a manufacturing base in Thailand with

:17:50.:17:54.

sales subsidiaries in many of those countries, but also acquired a

:17:55.:17:58.

company in Pakistan which has a very firm future with the 200 million

:17:59.:18:04.

trong population. How difficult is to penetrate those markets? We

:18:05.:18:10.

talked about China. I imagine there is so much competition in the Asian

:18:11.:18:14.

economies where they're making. I mean some companies have been making

:18:15.:18:18.

white goods for again rations and they are very well established?

:18:19.:18:24.

Competition is very severe. Differentiating is the key

:18:25.:18:31.

factorment we invest in innovation. We have a research facility in

:18:32.:18:34.

Cambridge which we're proud of. The only way is to differentiate, water

:18:35.:18:42.

efficiency, preventing food waste. In these developing economies

:18:43.:18:44.

because are important aspects of the product. We believe we're better

:18:45.:18:51.

than the competition and as Arcelik we're used to doing business in

:18:52.:18:54.

difficult to do business places. We find it easier than the comp t. Talk

:18:55.:19:00.

me through the trade flows. We are used to seeing products and services

:19:01.:19:09.

come from west to east, but that's changing? We have 18 factories in

:19:10.:19:16.

seven kuvenlts countries. We believe that the manufacturing footprint is

:19:17.:19:20.

going to be important going forward. So for South East Asia, Thailand and

:19:21.:19:28.

for the Indian subcontinent, we are in Pakistan, but other markets will

:19:29.:19:31.

be important too. White goods are large so you need to manufacture

:19:32.:19:37.

close to the market itself. Consumer insight is critical. Each market is

:19:38.:19:41.

very different to the other and you have to integrate the consumer

:19:42.:19:45.

insights into the product themselves so you have to be local. You're

:19:46.:19:50.

local and you're global and you're diversified globally which I imagine

:19:51.:19:54.

is very important for you as a company in terms of weathering the

:19:55.:19:58.

economic storms that are taking place in various economies, when it

:19:59.:20:02.

comes to the politics with the president in Turkey, how is that

:20:03.:20:06.

affecting how you go about your business and what's going on in

:20:07.:20:14.

Turkey with the immigration crisis. You are based, founded and you have

:20:15.:20:20.

thousands of employees? I believe Turkey's future is very sound. The

:20:21.:20:24.

economic growth, the demographics are very positive. There are

:20:25.:20:27.

challenges. Chiefly immigration as you mentioned. But also, the

:20:28.:20:34.

politics with Europe may cause temporary fluctuations, but the

:20:35.:20:37.

partnership is so deeply rooted, Europe and Turkey both need each

:20:38.:20:41.

other, not only for the market, but for a manufacturing base. Let's talk

:20:42.:20:45.

about inflation because it is one of the things we're told will go up. We

:20:46.:20:49.

have seen the fall in the value of the pound. That means stuff we

:20:50.:20:52.

import from overseas, what effect does it have on you because we're

:20:53.:20:56.

told white goods is something we will see a rise in? 2.5 million

:20:57.:21:03.

appliances are sold in the UK. Brexit caused some fluctuation with

:21:04.:21:06.

currency which will have inflationary pressure. We expect

:21:07.:21:10.

that toe maybe temper demand for sometime going forward. However, the

:21:11.:21:18.

UK's prospects are, if you look at the G7 economies growth, on going

:21:19.:21:23.

growth targets. The UK is projected to grow faster than the G7 economies

:21:24.:21:28.

so we aim to double our business here over the next five years. We're

:21:29.:21:32.

market leaders in terms of units and value, but we believe the economy

:21:33.:21:36.

will do just fine. Come back in five years when you've doubled the

:21:37.:21:38.

business and we'll speak to you again. Hopefully.

:21:39.:21:45.

Thank you for coming in. The CEO of Arcelik. Fascinating.

:21:46.:21:52.

In a moment we'll take a look through the business pages but first

:21:53.:21:55.

here's a quick reminder of how to get in touch with us.

:21:56.:21:58.

The Business Live page is where you can stay

:21:59.:22:00.

ahead of all the day's breaking business news.

:22:01.:22:02.

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:22:03.:22:05.

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Get involved on the BBC Business Live web page

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You can find us on Facebook, BBC Business News.

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Business Live on TV and online, whenever you need to know.

:22:24.:22:30.

This is in Bloomberg. It is international world happiness day

:22:31.:22:42.

and they have got a story, but Bloomberg put the money spin on it

:22:43.:22:47.

that money doesn't buy happiness. This research tried to quantify how

:22:48.:22:51.

unhappy money might make you. It looked at how happy people were in

:22:52.:22:55.

2006 in America and how much money you'd have to be earning in order to

:22:56.:22:59.

make up for how more unhappy you were now. So basically, USDP is

:23:00.:23:06.

$53,000. To make you happy, you need $133,000, it would have to go up

:23:07.:23:11.

that much. People are more unhappy maybe because they're earning more

:23:12.:23:14.

money because they perceive there is more corruption in society, all

:23:15.:23:18.

these soft issues rather than just economic wealth.

:23:19.:23:21.

Shall we talk about what the viewers have been saying to us about

:23:22.:23:25.

international happiness day. We asked the question what would make

:23:26.:23:29.

you happy at work. Ben said working with me. Anyway, Gary says,

:23:30.:23:41.

"Fridays." Gary, I'm with you. Yohan says, "Helping others achieve their

:23:42.:23:45.

goals." Another viewer says, "The fact that he has retired." Judith

:23:46.:23:51.

says it is about the joy of seeing employees reach their potential and

:23:52.:23:55.

shine. Judith sounds like a nice boss. Assuming she is a boss.

:23:56.:24:05.

Judith, who do you work for? General Motors tries a subscription plan for

:24:06.:24:10.

cadillacs? You buy a service from the company. A cadillac turns up at

:24:11.:24:14.

your door, if you don't fancy that one, you call up and change it to

:24:15.:24:19.

another one. You drive it? It is not a chauffeur. It is like a power by

:24:20.:24:26.

the hour! You pay... It is taking it another step forward. You just

:24:27.:24:31.

really are buying mobility services of a company and Ford and Volkswagen

:24:32.:24:35.

have looked hard at this idea. We'll provide you with whatever you want,

:24:36.:24:39.

a motorbike, a taxi or a car, or whatever you want just to move you

:24:40.:24:43.

around. The car companies will just own the relationship with the

:24:44.:24:46.

customer and get away from the messy business of making cars. This is

:24:47.:24:50.

fascinating. In five or ten years, we'll look back and the idea of

:24:51.:24:54.

buying a car that sits for the majority of time outside your house,

:24:55.:24:58.

empty and unused is a waste of money. Odd. You will start paying

:24:59.:25:03.

for what you use so paying by the hour for your car. It will work out

:25:04.:25:07.

cheaper in the long-term. Unless you've got a rare cadillac, the car

:25:08.:25:12.

you buy just loses value the money you park it on the drive. As soon as

:25:13.:25:19.

it drives off the show room floor. You need fewer parking spaces and

:25:20.:25:26.

fewer car parks in city centres. For the car insurance industry, what

:25:27.:25:29.

does it mean? They will insure the car and they don't need to insure

:25:30.:25:32.

you. Nice to see you. Thank you for that. Thank you for your company

:25:33.:25:37.

today. Keep smiling! It is international happiness day. We're

:25:38.:25:40.

very happy. We will see you soon. Bye-bye.

:25:41.:25:52.

Hello. Good morning. Spring is going to be taking a bit of

:25:53.:25:54.

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