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Unilever seeks advertising efficiencies

News, 21 January 2015

LONDON/ROTTERDAM: Unilever, the FMCG giant, achieved significant efficiencies in the cost of producing its advertising during 2014, and indicated this process will continue in 2015.

Reporting full-year results, the company said that, as a result, it had been able to "increase our share of spend whilst maintaining brand and marketing investment at 14.8%".

Paul Polman, its CEO, set great store by the company's marketing efforts. "We continue to invest behind our brands, increasing our share of spend relative to competitors in all four categories [personal care, food, refreshment and home care]," he said in a webcast.

"Of course, it's not just what we spend but how we spend that really matters," he added, noting that Unilever was the most-awarded advertiser at Cannes for the second year, and had taken a top Effie award for a third year.

Particularly successful in these terms was a campaign for Dove, the personal care brand. The much-lauded "Sketches", where an artist drew female subjects based on both a self-description and the views of people who had met the subject only recently, became a viral hit, as well as winning a Grande Effie and a Cannes Creative Effectiveness Lion.

"It's no coincidence that in the Kantar ranking of top global FMCG brands this year, Unilever has more brands in the top 50 than any other company in the world," Polman stated.

During the course of the year Unilever was shifting more of its marketing budget into digital – reaching 20% of the total in the third quarter, when Polman observed that digital, when done well, produced a better return on investment than traditional media.

At the same time, he had revealed that non-working media spend, including production costs and agency fees, had been reduced, saving the business £100m.

The need for such measures was underlined in the full-year results, which showed a slowdown in demand for Unilever's products in emerging markets, where it generates more than half of its sales. China was hit particularly hard, as trade destocking led to a 20% sales decline in the fourth quarter.

Polman was not overly optimistic about the coming year, either. "We do not plan on a significant improvement in market conditions in 2015," he said.

Data sourced from Unilever, Marketing Week; additional content by Warc staff