Ad nauseam: how the recession could hit the advertising industry

Susannah Streeter: Hello, and welcome to Switch Your Money On from Hargreaves Lansdown. I'm Susannah Streeter. I'm the senior investment and markets analyst here at Hargreaves Lansdown and, as usual, I am with Sarah Coles, our senior personal finance analyst. Sarah, I think this might be the first time either one of us has had time to sit down over the past few weeks, what with so many announcements and changes over the budgets. Because on top of everything else, of course, we have had the Autumn Statement plus forecasts from the Office of Budget Responsibility and the Bank of England to keep us on our toes.

Sarah Coles: Yes, it's almost nice to take a break and talk it through because, as you say, the bad news has really been flowing thick and fast and it's all going to have really profound consequences both for investors and for businesses.

Susannah Streeter: Absolutely, and one of the sectors that is typically highly exposed during a downturn is the advertising industry, of course, which is what we're looking at today in an episode called, 'Ad nauseam.'

Sarah Coles: Yes, we'll be speaking to Sophie Lund-Yates, our lead equity analyst here at HL about some of the listed companies and how they're coping. Hi, Sophie, so you've got quite a broad mix of companies again this week?

Sophie Lund-Yates: Hi, Sarah. Yes, I'll be looking at the big marketing company, WPP, as well as some of the companies highly reliant on advertising revenue, including ITV and Alphabet.

Susannah Streeter: Thanks, Sophie, really looking forward to it. Yes, as you say, advertising is vital for an awful lot of tech companies as well as the traditional media. We'll be speaking to Gideon Spanier who is editor-in-chief of Campaign, who has his finger firmly on the pulse of the ad industry, and he'll be able to explain just what might lie in store in the coming months. Gideon, welcome to the programme.

Gideon Spanier: Well, thanks. Thanks for asking me. At this time of year, we've got a World Cup, that's a pretty unusual thing and that's a big deal just because advertisers really like advertising during a World Cup, they can reach lots of viewers. Christmas is always a busy time. Black Friday, Cyber Monday, all of that and I believe that one of the words of the year, according to some dictionary compilers, is ‘permacrisis’. I think that probably conveys how a lot of people feel about 2022 and maybe what 2023 will bring.

Sarah Coles: Thanks. We've got loads more to talk about later in the programme plus, as always, we'll hear from HL's head of investment analysis and research, Emma Wall, who will be speaking to James Harries from the Troy Trojan Global Income Fund. So, plenty of things to get our teeth into, but of course the fate of the advertising industry starts in many ways with the economic backdrop. We got even more of a picture of how difficult things are going to get in the Autumn Statement, but before we get into that, we should briefly touch on some of the other tough news announced in the budget for investors, notably that the allowances that investors get before they pay tax on either investment gains or on dividends, were really cut significantly.

Susannah Streeter: Yes, they certainly were. The dividend allowance will be halved to £1,000 in April next year, then halved again to £500 the following April. Meanwhile, the capital gains tax annual exemption will drop from £12,300 to £6,000 in April 2023, and then to £3,000 from April 2024. Quartering these over the next two years will dramatically reduce investor's ability to manage their tax burden by gradually selling assets. And, by doing the same to dividend tax allowances, he's raised the threat of tax for millions of smaller investors.

Sarah Coles: There is a small silver lining though because there's a window of opportunity between now and April to take advantage of your current capital gains tax allowance. You should also consider making it part of general housekeeping every year to try and use your gains. Of course, if you've yet to use your ISA allowance this year, you can save tax by thinking about selling assets outside an ISA, within your capital gains tax allowance, and moving them into the ISA wrapper. That way you don't have to worry about either dividend tax or capital gains tax on these investments at any point. If you're married, or in a civil partnership, you can transfer assets between spouses without triggering a tax charge, so you could handover enough assets for you both to realise gains within your capital gains tax allowances. You can receive dividends within your dividends allowance and you can take advantage of both your ISA allowances each year. Of course, as the Autumn Statement so dramatically showed, tax rules change and any benefits will depend on your circumstances, so make sure you seek advice if you're not sure.

Susannah Streeter: Thanks, Sarah. But tax aside, the news many people will have taken from the statement were those details from the Office for Budget Responsibility about the forthcoming recession. It warned that incomes aren't keeping pace with inflation and, when you put that together with rises in interest rates and the expected fall in house prices, it means individuals and businesses will have less cash to spend or invest and less confidence to do so. It warned as well that we are already in a recession and it's likely it will last just over a year with a 2% fall in GDP, so economic output. During that time, unemployment will rise to 4.6% in the autumn of next year.

Sarah Coles: Yes, and this is actually marginally less pessimistic than the Bank of England, which expects that recession to continue to the end of next year. But either way, it's a pretty miserable outlook for the economy. And, of course, advertising has tended to be incredibly sensitive to economic downturns. So, if you go back to the global financial crisis and the subsequent recession, around a year into the downturn, advertising spend was down 16% and there's an awful lot of worry around that the same thing will happen again.

Susannah Streeter: Yes, so in the face of signs of a global slowdown with major central banks raising rates to get a rein on rampant inflation, it seems companies are tightening their belts when it comes to splashing out on new campaigns or digital marketing. Drought warnings are being repeatedly flagged on ad spending with an array of tech firms reporting earnings coming in below expectations. We're going to delve a bit more into this with Sophie in a moment on an individual stocks basis. But looking at the overall picture, it's clear that rising inflation, in the form of high energy, transportation or labour costs, is making some firms more conservative with spending. But it is likely to be a pretty uneven playing field, with some companies with big brand products more able to pass on higher costs to consumers and determined to keep marketing campaigns in full flow, wary it could eat into sales if brand awareness falls.

Sarah Coles: So, this has an impact on traditional media. Traditionally, Christmas is a bumper time for adverts and this was expected to see the smallest growth in almost a decade, which excludes the lockdown Christmas of 2020. So, TV spending is expected to be flat, while newspaper and radio advertising spending will fall. Spending should hold up slightly better in cheaper digital advertising, particularly on search and advertisers targeting Amazon. However, tech companies are facing their own challenges.

Susannah Streeter: Yes, they certainly are. The malaise in the tech sector has been well documented of late with a number of prominent companies laying off workers en masse as inflationary headwinds take hold, and the management teams overestimated that changes in consumer behaviour witnessed during the pandemic would hang around for longer. We've seen this feed into some of the listed companies, so it does seem like a really good time to bring in Sophie Lund-Yates, our lead equity analyst, to discuss some of these companies among others. So, Sophie, let's start with Alphabet.

Sophie Lund-Yates: Hi, Susannah. Yes, so when talking about advertising in today's world, we, sort of, have to talk about Alphabet, which is the parent company of Google. Put simply, these days, if you want your website or ads to be seen and have high engagement, nine times out of ten, you'll need to pay to advertise on Google. The tech giant had advertising revenue of over $56 billion just last quarter alone as an idea of just the sheer scale. I don't think there's really, kind of, too much debate when it comes to saying digital advertising is increasingly important for the world of marketing, but that doesn't mean that the likes of Alphabet are immune to the ongoing economic weakness. In times of difficulty, as you were just discussing, marketing teams often cut their spending to protect profits if demand is falling. Now, with Alphabet, ad growth has slowed from the headier days of last year when it benefited from post-pandemic reopening and a surge in consumer spending. Double digit growth from this, kind of, new base, which is what we saw last quarter, most certainly shouldn't be dismissed. But the fact Alphabet's momentum has come off the boil should be a warning for advertising revenue everywhere. Overall, I feel that Alphabet has some strong growth opportunities, especially when you look at the potential with YouTube ads, but the market is going to remain highly sensitive to the next set of results.

Susannah Streeter: That's Alphabet then Sophie, what about WPP? It's a pretty enormous company in the marketing world, isn't it?

Sophie Lund-Yates: Yes, it certainly is and it's a London listed marketing giant as well, so we're back to, kind of, UK shores for this one. So, WPP is a multi-national communications, advertising, public relations and technology company. Essentially, through its multiple businesses and agencies, it offers pretty much every marketing need you can imagine. There are lots of clients on the books, as again you can imagine, including big names like Coca-Cola, L'Oreal, Unilever. Although it's a British company, WPP has revenue from all over the world, so North America makes up over a third of business when looking at the 2021 financial year. I'd say that I've been pleasantly surprised by progress at WPP. It's put in a lot of effort to turn itself into a more agile and digital-focused company, which is hard to do with a beast this large. Impressively, looking at the latest update, revenue is up almost 11% on pre-pandemic levels. WPP now expect full year underlying revenue to grow between 6.5% and 7%. I mean, that's compared to previous guidance of 6% to 7%, so it's nudged things up slightly. It's also nudged down the expected improvement in operating margin and that's from 0.5 percentage points to a range of 0.3 to 0.5 percentage points, and WPP is putting that down to investments in people and technology. It won't come as too much of a surprise, the uncertain global economic backdrop really shouldn't be ignored. WPP's more focused structure will help it if conditions sour from here, but it wouldn't be immune to a sharp global downturn. There are a lot of external forces at play the group simply can't control.

Susannah Streeter: Let's move on now to ITV which has been undergoing quite a transformation in many ways?

Sophie Lund-Yates: Yes, it has certainly been busy. But ITV, at its core, has a lot more exposure to traditional advertising than the likes of Google, say, with the group still relying heavily on advertisers paying to advertise on TV. This is a declining industry though as we shift away from TV guides and onto streaming. To combat this, ITV is undergoing a huge strategy shift including bulking out its digital presence with video on-demand and streaming efforts of its own. These are admirable and seem to be growing, but I would say I'm yet to be convinced ITV can take enough of the digital pie to thrive. As a bit of perspective, the group's advertising revenue fell 2% to £1.3 billion in the third quarter, and that's despite that growth that I mentioned in digital advertising revenue. So, ITV has a stronghold on the traditional broadcast market in the UK and there is no denying that. I'd also say that if it's grand digital plans come good, then the valuation could re-rate substantially, but 'if' is doing a lot of the work here though.

Sarah Coles: Thanks, Sophie. It looks like the impact of the advertising slowdown has really been felt in so many different companies. So, let's take a look at the horizon ahead to assess how many dark clouds are gathering and where chinks of light can be found with Gideon Spanier, editor-in-chief of Campaign, which is the publication covering everything to do with advertising. Hi, Gideon, are you seeing any signs of slowdown?

Gideon Spanier: Well, that's a good question. There are bits and bobs all over the place. I mean, from the, sort of, start of the pandemic until now, the first year or so of COVID, there was a lot of digital activity because people were stuck at home and they couldn't go out. For the big tech companies, which also are the biggest advertising platforms like Google, YouTube, Meta, Facebook, Instagram, they really saw a big surge in revenue. People spent a lot of the time on these places as well as Netflix which, at the time, did not carry advertising. The big thing that's happened in 2022, which is interesting, separate if you like from the Ukraine war and some of the big macro-economic trends, is that digital has hit a bit of a ceiling. You've seen actually YouTube have its first ever decline in quarterly revenue in the quarter to September. Meta, the parent company of Facebook and Instagram, that's also for the first time seen revenue go into decline. This is really interesting. We're trying to work out what has happened. Is our consumption of digital media peaking? That's a global phenomenon. When you come to the UK, I think there definitely is talk of recession, but in all those cases 2021 was an absolutely amazing year, a tremendous bounce back. Higher than before the pandemic in terms of advertising revenue, so whatever is happening in 2022 should be seen against a backdrop of a strong recovery from the pandemic.

Sarah Coles: Presumably though with the recession lying ahead, I mean advertising is one of those things that does tend to be slightly sensitive to downturns. Will there be specific brands that you're more likely to see coming to the fore? The sort of things that tended to hold up during previous downturns?

Gideon Spanier: Well, that's really interesting, the question about what we can compare between previous downturns and the one that is now coming or is happening. You're right that typically advertising spend is one of the first things that's cut. But talking about digital advertising and data driven marketing, I think more than ever brands do have an ability to track whether their advertising spend is driving sales, and there is a stronger link now between the advertising and the spend. If you think about things like just if you're on an e-commerce website, if you're doing your grocery shop and you do it online, they can see quite carefully, quite easily, how a promotion can lead you to buy, right now. So, there are a lot of people in the advertising industry who don't want to see advertising spend decline, right? So, they are making the case quite strongly, serious people, that there's a slight decoupling between advertising spend and, if you like, GDP, that brands need to advertise because this is a potentially high inflation recession. If you are a brand, you need to persuade the customers to pay a premium for your brand which means you keep advertising. So, it's going to be very interesting in 2023 and some of the early predictions are that advertising revenue will continue to rise. Maybe not in real terms, maybe not ahead of inflation, but you won't see a decline. That's what some of the forecasters say.

Sarah Coles: So, in terms then of the click-ability and track-ability, do you think that there will be more of a focus on the, sort of, tech advertising going into this tougher period?

Gideon Spanier: Well, actually, it's again interesting because people say to me, 'Well, really talking about the differences between digital and traditional media, that doesn't really make much sense anymore.' The two have largely fused and online consumption is by far the biggest way that we consume media. So, if I was to try and think about trends, ITVX, their new streaming service launches on 8th December and, really, they are trying to make ITVX your primary destination even more than the ITV main channels on your TV. They can then use that data to target advertising, and it's free and in a cost-of-living scenario where people are mindful of where they spend their money, they don't want to necessarily pay and subscribe to a streaming service. So, a free non-subscription service, that's really interesting. I think you are seeing continued online consumption, but I think the internet has been around really for twenty plus years. A lot of 'traditional media platforms' are now digitalised. I think you'll just see a continued trend towards more online consumption and brands. If you're, let's say, a manufacturer of soap powder or some other consumer goods, you're probably not going to sell tonnes and tonnes through e-commerce, but you will through the online grocery stores and so on, through your partners. So, I think one other interesting trend to watch out for is you're seeing companies like Tesco and Boots use their online shopper data and they're offering to match it to the advertiser's data. So, if you are a manufacturer of soap powder and you want to target people who buy your existing brand, or who don't buy it, you can now do that and you're seeing what's called retail media advertising growing a lot.

Susannah Streeter: Of course, for a traditional media this is part of a longer term decline, isn't it?

Gideon Spanier: Well, I think that if you talk to most brand and marketing experts, they would tell you you need a mix of different channels. If you do everything in one place, you know, you're probably going to sound a bit one note and I think that there are a huge number of people who listen to commercial radio every week. I think it's in the region of 35 million people. There are a huge number of people who watch commercial television, even if some of it's on demand and so on. These are vast audiences and a good example is, I'm A Celebrity...Get Me Out Of Here! That has been getting 11 million, 12 million audiences which is a big, big audience. It's also the Christmas season, if you are a big retailer, whether it's, again, a John Lewis or Boots who've been making Christmas ads. You might have seen the ASDA one featuring Elf. If you like the, sort of, traditional way of reaching audiences still works, and I'd add one more thing. Radio and television and, to an extent, newspapers, they're all regulated in some way and you only have to look at Elon Musk's takeover of Twitter to see that aspects of the internet are just not very well regulated. Advertisers think quite carefully about where they want to place their message and when they can't be sure about what the environment is.

Susannah Streeter: Do you think we've already seen a change to Christmas advertising?

Gideon Spanier: So, it's a good question about Christmas. Probably starting in about 2009, John Lewis has, sort of, set the bar with their Christmas advertising and it's really led to something of a renaissance in storytelling in advertising. I've spoken quite a lot about digital advertising and tracking how that advertising can lead to a sale. But the John Lewis method, which has been about emotional storytelling, more and more brands have certainly been inspired by. That can range from Boots this year, having someone wearing magic spectacles and being taken to, you know, a more joyful world. You've got M&S, which has had Dawn French and a, sort of, fairy, literally, tale. I actually think that the trend overall has been quite positive. I think the John Lewis ad, which features a child who is going to be fostered arriving at the family of her foster parents, is a really charming and very different, and quite serious ad, and has won a lot of plaudits.

I would say the tone has been relatively positive and I think that, on a wider point, it's easy to forget this. There were still a surprising amount of coronavirus restrictions during 2021 which made making Christmas ads this time last year, well, in fact airing them, quite difficult. We actually had the Omicron scare, a lot got cancelled. This year, I think Christmas is back a bit and I quite like the ads this year. I think it's quite a decent crop.

Sarah Coles: So, we've talked a little bit about what's to come next year. Do you think there are any particular trends that people should watch out for?

Gideon Spanier: When it comes to the UK market, without making any party political points, there seems to be a bit more stability than there was, say, in September, which helps. Advertisers and companies generally like stability. It's an interesting time. You've got, as we said, these digital giants, which are global but the UK's an important market, seeing something of a bump in the road. You've got Netflix and Disney+ introducing advertising and that's super interesting because it's saying that a pure subscription model, or a pure advertising model, might not be best. It's good to combine both. I'd expect mainly online consumption to continue. Therefore, a lot of what brands will do will be about connecting their own advertising to their websites and apps, and then making sure that the big storytelling, which they might do through TV, radio, out-of-home poster sites, all of that, sort of, connects up. I think it's all about connecting so that your message is more consistent and hopefully, you know, interesting to the consumer. After all, the most important thing about your advertising is you want to engage and be remembered so that when it comes to that moment when the customer is looking to buy, they think, 'I'll buy that brand, not the other one.'

Susannah Streeter: Thanks very much, Gideon. It is going to be really interesting to see who weathers the storm, but I really appreciate you talking to us today.

Gideon Spanier: Thanks for asking me.

Susannah Streeter: And if you're enjoying this podcast, please do let us know what you think and do subscribe wherever you get your podcasts. You get a fresh new episode in your inbox as soon as it's ready.

Sarah Coles: So, let's bring in Emma Wall now, our Head of Investment Analysis and Research here at HL. She's been speaking to James Harries from the Troy Trojan Global Income Fund.

Emma Wall: Hi, James.

James Harries: Good morning.

Emma Wall: So, this podcast is all about the power of advertising and that got me thinking about brands, and how we invest in brands. Warren Buffett called it an 'economic mode', it is a protection around a company which makes them a good investment, and that's the sort of thing that you like to invest in the portfolio, isn't it?

James Harries: Absolutely. At Troy, what we're trying to do is buy businesses that we think are high quality, and the way we define that is that they have sustainably high returns on capital. Of course, what you're eluding to is that that shouldn't necessarily be the case because if a company has higher returns, then other companies bid them away. So what you have to have is a particular attribute, or quality, that enables you to sustain high returns, and these can be a number of different things. It can be the fact that you're the low cost producer, or you have efficiency at scale, or you have a depth of distribution, but one of them is an intangible asset and, in this case, a brand. What that enables you to do is effectively create loyalty amongst your customer base and, frankly, charge a higher price than otherwise would be the case.

Emma Wall: I have to say, because this is investing, that nothing is guaranteed. The brand can be eroded, not least by things like environmental, social and governance factors. We've seen some companies who were previously on top of their game, sort of, fall foul of the consumer. But what about ones that you think do have that intangible asset? Perhaps you could, sort of, share with us one of the companies that you think fits the bill.

James Harries: We're trying to invest in resilient companies that we think you can say something sensible about in terms of what they might look like in a five, seven, ten-year view, and a company like that will be something like Pepsi. I mean, Pepsi is a fantastic business. Although it sounds like it makes carbonated soft drinks, it's in fact a snacking business. It made an acquisition a number of years ago and it's the dominant snacking business. Snacking is quite a popular pastime in the US and, therefore, having a dominant franchise, which includes brands such as Lay's, they have Walkers in this country, Doritos and so on. The combination of being dominant, plus having very well recognised brands, means that it's just a wonderful business. It has extremely attractive returns on capital employed, long runway for growth, high incremental returns on capital, and it's the sort of business that you can be fairly certain will be around on a five, seven, ten-year view.

Emma Wall: And it's all about, as you say, the predictability of those returns. As I said, nothing's guaranteed, but what you're eluding to there is businesses that you think the income is dependable because they may be less economically sensitive, for example, which at the moment is really important because the economic outlook from here doesn't look so great.

James Harries: Well, that's dead right. I mean, we have a number of challenges, do we not? I mean, as you say, the economic outlook doesn't look fantastic and yet equity markets, arguably, are still not especially good value. That's the, sort of, macro level, but at the micro level there's a further point, that we are now in a different world, whereby we now have a cost of capital, so to speak. So interest rates have gone up and, therefore, companies have to actually pay something for capital that they use in their business. This has a really profound influence because it essentially means that, in the last fourteen years, which I think when we look back will be seen as a bit of an aberration, this long period of zero interest rates and quantitative easing, what that meant was that there were lots and lots of businesses that were able to raise money very cheaply and, therefore, chase market share rather than profitability. But in this new world, if you like, or actually it's a return to the old world, then many of those sorts of companies are going to fall by the wayside. In that case, it's going to really be, sort of, the return of the incumbents, the established, tried and tested businesses which have built up well loved and well recognised brands over a number of years. We think they are extremely well placed to weather the most difficult economic outlook, but the more favourable microeconomic outlook in which they now find themselves.

Emma Wall: Do you have another company example? So, you've given us Pepsi there with some of those recognised snacking brands. Who else, sort of, falls into this bucket of strong brand equals good investment?

James Harries: We have a decent allocation to branded consumer goods, and Pepsi will be one of those, but brands don't just relate to consumer staples. One of the things, or it's easy to overlook, is that brands aren't simply a logo or a name on a packet of crisps. They're actually a way by which companies can get consumers to have a particular view about the company as a whole. It's almost like a share of mind. You have in your brain something that says, 'When I think of Coca-Cola, I think of a particular thing.' But it isn't just in staples, so I would say a company like Nintendo is a really good example. So Nintendo is a company we own in the portfolio. We think this is an outstanding investment opportunity today. You know, it has absolutely, unbelievably durable intellectual property, and when I watch my own boy play Nintendo as I did when I was a child, and he's playing the same games. It's remarkable really, their evergreen global franchise. It's just some of the most successful, global franchises that the gaming world has ever seen, such as Mario and Legend of Zelda, and Pokemon and so on.

We think Nintendo, effectively, is priced like Nokia and is actually much more like Apple. So the current console that Nintendo has is called the Switch. It's one of the most successful consoles of all time. Investors worry that the next iteration of the Switch, which is going to be called the Switch Pro and is going to be launched at some time next year, might be a flop. Some of their consoles have been a flop in the past and, therefore, the shares, in our view, are very inexpensively valued. But the difference today is we have an individual account with Nintendo. Therefore, rather than just simply taking a piece of plastic off the shelf and playing it, and then putting it back on the shelf, you now actually have a platform which they upgrade the software via Wi-Fi, on which you download games. So the margins are enhanced as a result of that. But, crucially, also they effectively have an installed base of over 100 million people, who have a relationship, a direct relationship, with Nintendo. Therefore, the persistency of the current customer base to the next Switch Pro, we think, will be far more persistent than the market is currently valuing. All of this is underpinned, of course, as we're discussing, by the Nintendo brand, which when you think of that, you think of family friendly, evergreen, well recognisable gaming franchises.

Emma Wall: James, thank you very much.

James Harries: Thanks very much indeed, Emma.

Susannah Streeter: Well, that was Emma Wall, Head of Investment Analysis and Research here at HL, speaking to James Harries from the Troy Trojan Global Income Fund. Please bear in mind that these are the views of the fund manager and are not individual stock recommendations. You're listening to Switch Your Money On from Hargreaves Lansdown.

Now, of course, it's time for the quiz. Unsurprisingly, we'll be focusing on advertising. We'll start by going back in time, Sarah, to the first ever advert. So, are you ready?

Sarah Coles: Oh, always ready for a quiz.

Susannah Streeter: Do you know what the first ever written ad was for? Was it a stone age etching advertising masonry skills, an Egyptian slave holder trying to find a runaway slave, or medieval maps offering food and lodging ideas?

Sarah Coles: Oh, well, do you know, I do really like the idea of a fancy stone etching because there's actually some Victorian houses near where I live with loads of different kinds of fancy stone work, which were, kind of, used as a catalogue for rich Victorians to walk past and pick the one they wanted. So I think I'm going to go with that fancy stone etching.

Susannah Streeter: It's actually option two. The first ever written ad was found in the ruins of Thebes in Egypt. It was a papyrus created in 3000 BC by a slaveholder trying to find a runaway slave, while also promoting their weaving shop. You should have known that, Sarah.

Sarah Coles: It sounds like someone trying to get the absolute maximum for their ad spend there and trying to get everything in at once.

Susannah Streeter: Right now, slightly further forward in time now, Sarah. What did the founding father of modern advertising sell? Was it Pears soap, Ken-L Ration dog food or the first Oxo cube?

Sarah Coles: Well, this is actually more around my kind of historical knowledge, although I do reckon Ken-L Ration sounds a bit made up. So, I'm going to go either Pears, which obviously had all those cheesy Victorian bathing paintings, or Oxo, which I know from the Oxo tower, but I'll go for Pears.

Susannah Streeter: You are right. It was in fact Pears soap, and the founding father being Thomas James Barratt who apparently said, 'Any fool can make soap. It takes a clever man to sell it.' He was just such a clever man making Pears soap possibly the most famous brand of the 19th century. Oxo, the Oxo cube, began life as a meat extract developed by Justus Von Liebig, but it wasn't re-branded as Oxo until nearly the turn of the 20th century, while Ken-L Ration was a real name for dog food, but it started being sold after World War One, so there we go.

Okay, next, this is an easy one. We had to mention the iconic series Madmen based on characters in the ad industry. If you can tell me where the series was set and what year the series was set in when it kicked off, I'll give you two points.

Sarah Coles: Oh, well, you say it's an easy one, but, to my shame, I've never seen it. But I do know it was set in New York, and I do know it was some time in the 60s, so I'm going to go down the middle and say 1965.

Susannah Streeter: Easy-peasy. Yes, it is New York, and the right decade, but it's the wrong year. The series kicked off, in fact, in 1960, but you can still visit plenty of iconic locations in the city where the series was filmed, like the Grand Central Oyster Bar where Don gets Roger drunk before a business meeting at the restaurant, so there you go. If you're ever going there, it's worth a trip.

Okay, finally, and almost entirely up to date, the modern Christmas advert was reinvented by John Lewis with its first Christmas tear-jerker, but what was the first one? Was it the little boy who was counting down the days to give his parents their present, the young girl who sends a telescope to a man living on the moon, or the woodland creatures waking the bear for Christmas?

Sarah Coles: Now, I do know this one and I do love all of those. It was, in fact, I think, the little boy who couldn't wait to give his parents a present.

Susannah Streeter: You are right, although I'm sure most parents are still waiting hopefully for that day to come.

Sarah Coles: I know I am. It has to be time for some payback surely soon.

Susannah Streeter: Let's hope so. So, that's all from us for this time, but before we go, we do need to remind you that this was recorded on 24th November 2022, and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice. You should seek advice if you're not sure what's right for you. Investments and any income will rise and fall in value, so you could get back less than you invest, and past performance isn't a guide to the future.

Susannah Streeter: This is not advice or a recommendation to buy, sell or hold any investment. No view was given on the present or future value, or price of any investment, and investors should form their own view on any proposed investment.

Sarah Coles: And this hasn't been prepared in accordance with legal requirements designed to promote the independence of investment research, and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research. However, HL has put controls in place, including dealing restrictions, physical and information barriers, to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So all that's left is for me to thank our guests, Gideon, James, Sophie, Emma, and our producer, Elizabeth Hotson.

Susannah Streeter: Thank you so much for listening. Goodbye.