Unilever Puts $6B-Plus Global Media Account in Play
Steve’s breakdown: Two things: 1) It’s not clear where the review will be based out of 2) The last time this happened it took six months for the review to be completed.
LONDON, UK: Any hope of a quiet Christmas break for media agencies has been scuttled as Unilever is launching a global review of its $6-billion-plus global media account just over two years after completing the last one, the company announced today.
The massive review, which will include both media planning and buying, is set to begin in January, less than a year after Luis Di Como succeeded Laura Klauberg as senior-VP global media and two years after Unilever completed its last media review. That review, with heavy involvement from Unilever’s procurement function, began in July 2009, concluded in January 2010 and focused on media buying. Those assignments were left largely unchanged, with WPP’s MindShare continuing to handle Unilever business in North America and Western Europe, Omnicom’s PHD getting the work in China and Central Europe and Interpublic’s Initiative handling the work in Latin America.
Unilever has invited incumbent agencies Mindshare and PHD to pitch, and will include a few “carefully selected” competitors in the mix. The focus is on Unilever’s biggest markets: North America, France, Germany, Spain, Russia, India and China. Unilever spent $6.62 billion on worldwide measured media in 2010, according to Ad Age DataCenter‘s recent Global Marketers Report.
“We want to make sure that we continue to have best-in-class agency partners to deliver Unilever’s vision: to double the size of our business while reducing our environmental impact,” Mr. Di Como said in a statement. “We will be looking at strategic planning and in-market execution capabilities from our agency partners.”
Mr. Di Como said Unilever’s new “Crafting Brands for Life” marketing strategy and “determination to continue leading in the digital marketing space” also “drive us to ensure that we are working with the best agencies to deliver our ambitions. The exercise is also in line with company policy to review media agency relationships periodically.”
With the “Crafting Brands for Life” approach, Unilever is seeking to step up the creativity of its advertising as it also focuses on sustainability and the shift of the its business toward developing markets, Chief Operating Officer Harish Manwani and Chief Marketing and Communications Officer Keith Weed have said in recent appearances.
A Unilever spokeswoman said in an email that two to three years is the “normal timescale” for the company to review its media. Unilever spent around $8 billion on advertising and promotion globally last year and has forecast spending to remain around flat this year, despite organic sales growth that topped 7% the past two quarters. But that follows a 14% increase in spending last year, rising commodity costs and rising prices aimed at recovering some of those costs. Ad Age DataCenter estimates have it spending $6.62 billion on media in 2010.
Speaking during an investor conference on Unilever’s third-quarter sales results last month, Chief Financial Officer Jean-Marc Huet didn’t specifically address questions about the direction of the giant’s marketing spending. But he said Unilever continues to spend about two thirds of its outlay on advertising and one third on promotion, adding “we’re driving more effectiveness, so we are getting more of a bang for the buck” and that there had been “not much change to what we’ve said in the second quarter” about spending being flat this year as Unilever tries to “increase the quality” of its spending.
The media review also follows a substantial restructuring of Unilever’s management and extensive re-assignment of management earlier this year into eight regional “clusters” globally, which included splitting up the former Americas region, whose media operations Mr. Di Como formerly headed, into North and Latin America. Unilever’s global brand development group, which had been under a single leader, was restructured into four groups — personal care, foods, refreshment, and home care.