Adweek reported Unilever cut marketing expenses by roughly 30 percent through increased in-house production, which also cut the marketer’s need for outhouse advertising agencies. A report claimed, “In marketing, we are creating more of our own content in house while making existing assets go further. Our 17 U-Studios in 12 countries are creating content for brand teams faster and around 30 percent cheaper than external agencies.” Bet the quality is not significantly worse than the dookie shat out by White advertising agencies too. Adweek closed by warning, “Still, brands should be cautious about taking creative work away from trained advertising professionals. Pepsi and Dove learned this lesson the hard way, releasing respectively the now-infamous tone-deaf Kendall Jenner ad and a Dove soap spot that was deemed racially insensitive from their in-house studios.” Sorry, but White advertising agencies generate way more culturally-clueless crap than in-house enterprises.
Unilever Claims to Cut Marketing Spend by 30% After Taking Production Work In-House
Continues trend among America’s biggest spenders
By Lindsay Rittenhouse
Unilever, which has taken repeated steps to combat increasing pressure on the consumer-products space, announced in its 2017 annual report last month that it had cut marketing expenses by about 30 percent after taking more of its ad work in-house and reducing the roles of its external agencies.
“In marketing, we are creating more of our own content in house while making existing assets go further,” the report read. “Our 17 U-Studios in 12 countries are creating content for brand teams faster and around 30 percent cheaper than external agencies.”
Unilever unveiled its in-house content unit, U-Studios, in 2016, saying at the time it would use it to find new ways to engage with digitally focused consumers while simultaneously countering the rise of ad-blocking software.
It is not clear what duties U-Studios took from Unilever’s external agencies or how the company is going about managing them. The company did not return a request for comment.
However, Unilever’s revelation plays into a larger trend of budget-cutting among America’s biggest spenders—a trend agencies have been increasingly wary of. Procter & Gamble, another CPG giant, said on its fourth-quarter earnings call in July that it had cut approximately $100 million to $140 million in digital advertising spend due to brand-safety concerns and also reduced its agency and production spend by an unspecified amount.
Apple’s Beats Electronics, the brand formerly known as Beats by Dre, also has been making moves to take its creative account in-house, sources told Adweek in January. Carl Johnson, CEO of the brand’s lead global creative agency, Anomaly, confirmed that his agency no longer handled as many creative duties as it once did, saying it “decided to take a breather from executing work with Beats.”
In October, international consultancy R3 released a report showing that the size of the average U.S. creative account win shrunk 38 percent last year compared with 2016 due to in-house studios taking on more work. Following that report, Pivotal Research senior analyst Brian Wieser told Adweek that he does not expect brands to stop shifting marketing efforts in-house anytime soon.
Unilever itself revealed last year it would put a cost-cutting plan in place, removing half of the creative agencies and 40 percent of the consultancies from its roster. After the announcement, WPP, the largest global advertising holding company and a major Unilever partner, saw its stock plummet.
A week ago, WPP suffered its steepest stock drop in nearly two decades (14 percent) after reporting weaker-than-expected 2017 financial results. On an earnings call, WPP CEO Martin Sorrell admitted 2017 was “not a pretty year” and attributed his company’s woes to cuts by historically big spenders like P&G and Unilever.
WPP did not return a request for comment on how Unilever’s most recent cost cuts have affected it.
Still, brands should be cautious about taking creative work away from trained advertising professionals. Pepsi and Dove learned this lesson the hard way, releasing respectively the now-infamous tone-deaf Kendall Jenner ad and a Dove soap spot that was deemed racially insensitive from their in-house studios.
3 comments:
The first thing that happens when the Unilevers and Procter & Gambles of the world slash budgets is that all the holding company agencies immediately raid the black, Asian and U.S. Hispanic agencies' accounts. They move all the ethnic work into white ad agencies by any means necessary, promising brands that they themselves are "Total Market" multicultural experts.
So who's going to get the short end of the stick and suffer the most?
The only agencies left that employ POC, and are about to get the few crumbs they had left sucked up by French and British and American holding companies that prefer to employ white folks.
I literally had this happen last week. A multicultural ad agency that has been my client for close to a decade now has a new holding company owner. A big multicultural job came up and surprise, none of the real decision makers or graphics vendors working on it are ethnic all of a sudden. Just white.
So fuck each and every one of those holding companies. It’s just another scrap of a job to them, but to me it was my livelihood.
And they hire one POC whose only job is to represent them and their shitty work. If they'd only made a real investment in diversified talent, they wouldn't need to steal opportunities from them now.
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