Unilever curtails ad production, agency relationships

Dive Brief:

  • On a recent conference call, Unilever CFO Graeme Pitkethly announced a major cutback in its advertising strategy including a 30% decrease in ads produced and a 50% reduction in its agency relationships from the current 3,000 worldwide, as reported by MediaPost Communications.
  • While the shift sounds dramatic, it’s not clear if it will actually impact ad buys. Pitkethly said Unilever produces more ads than it ever actually uses in campaigns and the new strategy includes using better ads for longer periods. The exec also insisted the plan wouldn’t compromise the company’s overall advertising and marketing strategy.
  • Unilever spends more than $7 billion globally on advertising yearly.

Dive Insight:

The news arrives as the latest sign that companies are actively re-thinking advertising strategies. While Unilever will produce fewer ads, a report last month said the CPG company is increasing its spend on digital shopper marketing after proving the return on investment for display ads. The news comes amid a broader restructuring at Unilever, which is putting its spreads business up for sale after rejecting an offer by Kraft Heinz to buy the company, per the Media Post article. 

As digital spending across all channels surpasses linear TV and younger demographics show a propensity to be cord cutters or otherwise watch video content on digital devices a number of major brands have put agency relationships under review, consolidating these relationships in some cases and taking advertising activities in-house, especially for specific digital channels like social media.

However, all is not well in digital marketing, either, with a number of major brands pulling ads from YouTube over concern that they can't control where their messaging appears. The lack of standardization in metrics and measurements across digital media is causing a number of brands to reconsider their digital efforts, with some redirecting budget to TV.  

Filed Under: Trends Video Corporate News