Do marketers and shareholders inhabit the same universe? Some shareholders are clamouring for Unilever to be broken up following its failed £50bn bid for GSK’s consumer business (a pretty generous price if truth be told as its sales are far less than the bid price.)
Others are demanding the heads of chairman Nils Andersen and CEO Alan Jope, who took over from Paul Polman a few years back, continuing Polman’s purpose-driven crusade. This has won Jope numerous plaudits among the marketing fraternity (and those agencies hitching their wagon to “advertising for good”) but cuts less ice with shareholders fretting about its flagging share price.
Unilever has reorganised itself into five divisions since, suggesting big disposals are being considered. It reports annual results later this week.
Fundsmith’s Terry Smith started the tumbrils rolling a couple of weeks back with his well-aimed pop at Hellmann’s but one doubts that even he foresaw the possibility of one of the UK FTSE’s biggest companies (valued at around £100bn) being broke up in what, if it happens, would almost look like a fire sale.
So did the marketers get it wrong all along? Unilever has claimed this its “purpose” brands are the fastest growing but, reasonably, they can’t all have a purpose beyond being useful and profitable. Unilever shareholders obviously didn’t think its marketing magic was capable of making GSK’s consumer business worth £50bn, let alone the £60bn minority shareholder Pfizer was said to be holding out for for.
So can marketing, with its tendency to modishness, drive a big company like Unilever? Or is to just a nice add-on when the share price is rising?
Supporters of marketing might point to Unilever’s long-time rival P&G which has, seemingly, mollified shareholders by spending substantially more on marketing while cutting back its digital spend and the number of agencies it works with. But this is hardly a result for the wider marketing community.
There does seem to be a big disconnect between what marketers and agencies want (companies that they think are good for the world and a seat at the top table) and shareholders.
A collapsed Unilever wouldn’t be good for either party. CEO Jope, though, may pay the price.