Alan Jope, Unilever’s chief executive officer, discussed this subject on a conference call with investors where he outlined the company’s results from the first half of 2020, and its strategic priorities going forwards.
One point of emphasis for Unilever’s marketing investment, he reported, is to maintain market share and volume in what could become an austere economic climate for many consumers.
“We know from experience of many crises over the years that protecting volumes during a recession is the key to long-term competitive growth,” Jope said. (For more, read WARC’s in-depth report: Unilever focuses on e-commerce, brand purpose and market share in new business reality.)
Elaborating on this topic, Jope drew on statistical evidence from previous times of economic distress in order to support this approach.
“In fact, brands which grow volume during recessions tend to grow value share over the subsequent five years 1.4 times faster than those that don't,” Jope said.
Unilever’s leading brands, he further noted, have witnessed an uptick in penetration, suggesting they are in a strong position that could be further bolstered by marketing.
“We've seen strong recent increases in our household penetration for our brands which are now just over 50% of our business,” said Jope.
Unilever’s branded marketing investment (BMI) was down 100 points in the first half of 2020, but is expected to rebound in the second half of the year.
“We have adjusted spend in channels, geographies and categories where local conditions meant that investment would have been wasted, but have diverted investment to support the many growth opportunities,” said Graham Pitkethly, Unilever’s chief financial officer.
“For example, we've used more agile asset-creation techniques, and re-edited existing advertising to be more relevant for the current environment.”
The company, he added, was “in no way” constrained on its investment plans, but had deliberately sought to keep some of its powder dry while navigating the challenges of Q2.
“In the second half of the year, we plan to invest heavily as lockdowns ease and consumers learn to live with COVID-19,” said Pitkethly.
“We expect significant investment to support brand campaigns and product innovations tailored to this environment.”
Sourced from WARC