Unilever cuts marketers and products with agency fees in firing line

By Rosie Baker | 6 December 2013
Unilever Lynx Excite 'Angels Will Fall' TVC by BBH London.

Unilever is slashing its marketer headcount and culling the number of products it sells around the world in a bid to reverse its global slowdown. The company seeks US$500 million in savings next year, and has flagged that agency fees are in the firing line. The FMCG giant has also signalled that it will continue to shift its budget away from traditional channels and into digital.

Unilever CEO Paul Polman outlined the cost reduction plans at an investor meeting in London yesterday. He said the company planned to almost double the savings made on marketing investment from last year.

It will reduce marketing headcount by 12%, or 800 people globally, part of more than 2,000 job cuts planned. It is not known how many of these will be in Australia.

Unilever CMO Keith Weed is reported to have told investors the business will look to use more global concepts in advertising to drive efficiencies and would focus on doing fewer bigger and better quality marketing incentives. He also outlined plans to streamline the marketing processes into six core areas; marketing insight, category and brand strategy, brand marketing plans, innovation and renovation communications, in-market brand management, execution, tracking and optimisation.

The company will reduce its on-shelf SKUs by 30% by the end of 2014, meaning it will sell fewer size and flavour variants.

It will focus on its larger billion Euro brands, of which there are 11, including Lynx, Dove and Surf. Unilver wants to have 15 big hitters.

Polman said there would be further disposals of non-core brands and targeted acquisitions of brands that fit its growth strategy and focus on emerging markets. It is more likely to sell off brands from its food business, which includes Hellmann's and Knorr, than its health and beauty business.

Earlier this week, Unilever also launched a global start-up accelerator initiative inviting digital agencies and start ups to work on seven of its brands. Under the Go Global initiative Unilever will give agencies US$100,000 in cash, mentoring and “in-kind services” to develop customised digital projects in content, mobile, or connected devices. Unilever said it wants to help small digital start ups expand globally as well as increase its efforts in these areas. The brands in the project are Unilever corporate, Clear, Surf, Magnum, Flora/Becel Pro.Activ, Hellmann’s and Vaseline.

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