Unilever channels savings from advertising into marketing

Unilever's savings in areas such as advertising, production and agency fees contributed largely to its US$337 million spending in branding and marketing over the past two years. Chief executive Alan Jope said during the first quarter 2019 (Q1 2019) earnings call that those reductions in "things that the consumer doesn't see" have brought about investments in "working media and point-of-sale."

According to Jope, there has been "no material increase in media intensity" in Q1 thanks to savings from its efficiency programmes, and the FMCG giant is on track to drive €2 billion of savings from its efficiency programmes every year.

Overall, Unilever saw growth across its beauty and personal care (3.1%), home care (6%), and foods and refreshment (1.5%) divisions. Meanwhile, Unilever's Q1 performance saw "some acceleration" in Southeast Asia. Indonesia, in particular, continues to see mid single-digit growth driven by beauty and personal care division.

Unilever's CFO Graham Pitkethly said Southeast Asia is one of its growth geographies where innovations such as Pond's clay cleansers are addressing a growing trend space. "Our drive to build strong purpose in all of our brands is very evident in beauty and personal care with campaigns such as the recent Lux, SmashTheLabel campaign in China which encourages women to define judgments and express their femininity unapologetically," he added.

Notably in foods and refreshment segment, Magnum has seen per annum growth of 7% over the past three years. This, according to Pitkethly, was led by both the core and new innovations. In Southeast Asia, Unilever has also leveraged the global trend of unicorns with the invention of UniCornetto, which had a "good start" in Thailand and is now being rolled out to more countries.

In its recent annual report, Unilever revealed that it had generated savings in brand and marketing of over €500 million for the whole of last year. This was done by focusing on maximising returns, where Unilever increased expenditure on areas there were driving growth, such as digital media and in-store, whilst reducing spend on production and promotions. Additionally, it made strides in creating more content in-house through its team U-Studios and making its existing assets go further last year. In other news, Unilever's chief marketing officer Keith Weed will be retiring from his role in April after 35 years with the company.