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The Drum’s Daily Briefing: Google considers charging & Disney cracks down on password sharing


By Gordon Young, Editor-in-Chief

April 5, 2024 | 7 min read

Our quickfire analysis of the brand, marketing and media stories that might just crop up in your meetings, brought to you today by editor-in-chief Gordon Young.

Google home screen

Google is considering charging for AI-powered search

Google to charge?

In what would be one of the biggest shake-ups of its business model ever, Google is considering charging for AI-powered search.

This would be the first time the search engine has put any of its services behind a paywall, and it illustrates the level of disruption natural language-based search is expected to have on its advertising-funded model.

Although engineers are currently building the functionality to allow the company to charge for services such as Gemini AI senior managers have not made a final decision to implement the change.

If it went ahead it is assumed the legacy search system would continue to be free.

Source: Financial Times

Spring water shitshow

Nestlé will be manning the crisis PR pumps today after the French health authorities suggested some of the Swiss giant’s brands, including Perrier and Vittel, contain fecal matter.

A leaked investigation by France’s food safety body, reported in Le Monde yesterday, warned that it had found widespread contamination in some of the company’s brands.

However, despite the contamination, French Government sources said they had found ‘no health risk’ in the bottled water.

The row builds on an earlier controversy in which Nestlé was accused of using illegal purification treatments only meant for tap water. Nestlé concealed for years the fact that it used such methods, even hiding filers in electrical cabinets to fool health inspectors.

Source: Le Monde

The power of advertising

Doubts about advertising’s power to impact consumer behavior have been dispelled by a B&Q campaign that launched in February.

The DIY chain campaign included a commercial depicting a woman ready to sledgehammer a wall, paint a hallway and undertake other tiling and refurb jobs, along with the now iconic line, ‘You can do it when you B&Q it.’

First used 40 years ago, the company’s marketing director Tom Hampton said it is one of its “most distinctive brand assets.”

Checkatrade, the UK online platform, has found evidence it is motivating people to tackle DIY jobs. Since the advert aired, it has recorded a 15% increase in emergency callouts, which could be caused by the need for its professionals to remedy bungles DIY projects

Source: The Telegraph

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Brand tip from Ping Pong

Ping Pong, a Chinese restaurant chain, is in the process of redefining brand value.

It has decided to replace the tip with a so-called brand charge. It has removed the option to pay a 12.5% service charge from bills and is asking customers for an optional 15% brand fee instead.

In a statement, it said: “The brand charge covers additional costs related to operating a franchised brand and imposed by the Ping Pong brand-holder, including franchise fees and other brand related expenditure.”

The company claims to have increased staff salaries to compensate them for the loss of any tips. But the changes come ahead of new legislation this summer that will force restaurants to pass on tips to workers.

The Ping Pong change, widely reported this morning, will circumvent the new law. No doubt the company would have hoped its ‘brand fee’ had not generated so much media scrutiny.

Source: The Times

Disney and the Magic Money Tree

Disney+ is to follow Netflix and start cracking down on password sharing from June.

Chief executive Bob Iger suggested the move could make a significant contribution in terms of getting the streaming channel on to a more sustainable footing. He told CNBC: “We already have the technical ability to monitor much of this. I am not going to give a specific number except to say it is significant.”

The move comes after Disney fought off an attempt by investor Nelson Peltz to win a seat on the board.

The saga caused significant media interest, with Iger saying: “With the distraction now behind us, we can focus 100% of our attention on our most important priorities: growth and value creation for shareholders and creative excellence for our consumers.”

Source: CNBC

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