Unilever marketing changes fail to deliver sales growth

Unilever has been going through one of the marketing “transformations” we read so much about – taking more work in-house, cutting agency costs (and therefore use) and using influencers and the like – but it doesn’t seem to be working.

The consumer goods giant said this week that it will miss its growth target for the year – somewhere at the lower end of three to five per cent – with less than three per cent expected for 2019 and the same for the first half of 2020.

This is hardly an auspicious start for new CEO Alan Jope, who succeeded long-serving Paul Polman. CMO Keith Weed has also moved on to be replaced by in-house choice Conny Braams.

Jope says: “Due to challenges in certain markets, we expect a slight miss to our full-year underlying sales growth delivery. Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance.”

The markets in question seem to be fairly wide selection: south east Asia and parts of Africa with trading in North America said to be “challenging,” which can be a euphemism for dire.

Markets outside Anglo-Dutch Unilever’s heartland of Europe have long been the company’s drivers of growth so this announcement rang alarm bells, with Unilever shares falling six per cent.

All the old consumer goods giants have had their troubles recently as economic growth slows and younger consumers turn away from established brands. Kraft Heinz is in dire straits while even the mighty P&G, Unilever’s main competitor, has had problems although its latest numbers showed a tentative return to growth.

But any company dependent on brands needs to nurture them and, arguably, Unilever which has taken a knife to its marketing costs and put its faith (partly) in in-house studios has gone too far.

When did you last see a good Unilever ad, let alone a campaign? is a question frequently asked in adland. There are still some, of course, like Marmite from adam&eveDDB. but it’s a reasonable question to ask and it isn’t just sour grapes from under-used ad agencies.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.