7 months ago| article
FMCG giant uses three agency holding companies
Jan 22, 2021 04:46:00 AM | Article | Gideon Spanier Share -
Unilever is preparing to call an international media buying review, which is likely to be one of the largest pitches of the year.
Industry sources expect Unilever to carry out the review in many key markets around the world.
A spokesperson for Unilever declined to comment on what it called “speculation” and did not confirm whether it plans a media review.
It is thought the FMCG giant may still be finalising some details.
China is unlikely to be included because WPP picked up the account from Omnicom following a review there in spring 2020.
Unilever, which owns the Ben & Jerry’s, Comfort, Dove, Hellmann’s and Marmite brands, is one of the world’s biggest advertisers and had a €7.27 billion annual spend on brand and marketing investment before the coronavirus pandemic.
Europe made up about 22% of sales, the Americas 32%, and the rest of the world, including Asia-Pacific, Africa and the Middle East, 46%, according to Unilever’s 2019 annual report.
The UK-based group has close relationships with three major global agency holding companies – WPP, Omnicom and Interpublic – in different geographies around the world.
WPP’s Mindshare, Omnicom’s PHD and Interpublic’s Initiative have held the media duties on a longstanding basis but the client has increasingly been looking for a broader relationship.
Speaking at Cannes Lions in June 2019, the, then new, Unilever chief executive Alan Jope publicly noted that the FMCG company was looking to structure relationships with holding companies, rather than individual agencies.
"I know that WPP have got all the talent that we need to solve our brand problems, and so do Omnicom, so do Interpublic. What I don’t want to do is just have a relationship with one narrow vertical just within WPP," he said.
The consumer goods behemoth has previously had a policy of reviewing its media agency arrangements “periodically” and held major global buying reviews, including in 2009, 2012 and 2015.
More recently, Unilever shook up its broader marketing operations in 2017, when it launched an efficiency drive and fended off a bid approach by Kraft Heinz.
The company slashed the number of agencies with which it works, particularly on creative, and set up an in-house content studio operation, called U-Studio, in partnership with Oliver, a specialist in-housing firm.
Like many consumer packaged goods companies, Unilever’s revenues have held up during the Covid-19 pandemic and it has stepped up its efforts in ecommerce as consumers have stayed at home in many markets.
Underlying sales rose 1.4% in the first nine months of 2020.
The company, which champions sustainability, also took a stand against social-media firms by pausing spend on Facebook and Twitter in the US in the second half of 2020 in protest at the “polarised” political environment.
In a significant move this week, Unilever announced a series of commitments to improve inclusion across its operations, including to "increase the number of advertisements that include people from diverse groups, both on screen and behind the camera".
It follows the company's role in spearheading the Unstereotype Alliance, a partnership with other major advertising companies and UN Women to tackle gender stereotyping in advertising.
(This article first appeared on CampaignLive.co.uk)