The unit responsible for producing advertising content for Unilever was newly established in 2016 as U-Studio.
In its 2017 business results report, Unilever claimed that it saved 30% on agency rental costs by creating, producing advertisements and reducing the role of outside agencies.
“In marketing, we are working hard to create content ourselves. Room 17 U-Studios operating in 12 countries of Unilever is on a mission to create content for corporate brands at a faster rate and 30% cheaper than outsourcing “.
Unilever revealed that the company’s content production division was U-Studio operating since 2016. At that time, the division was born with the aim of finding new ways to engage consumers while fighting off Increase of ad blocking software.
It is not clear what the detailed tasks U-Studios performs on behalf of outsourced agencies and how Unilever is managing the group. The company has not yet commented on this matter.
However, Unilever’s revelation of U-Studios shows the trend of saving money on advertising that many of America’s biggest corporations are doing – which really worries agencies. P&G – another consumer goods giant also announced at its fourth quarter meeting that it has cut spending by about $ 100 – $ 140 million on digital advertising spending over brand safety concerns and also cut spending. for dealers and manufacturers.
In October, the international consulting firm R3 released a report showing that the average number of advertising agency contracts decreased by 38% last year compared to 2016 as corporations are self-employed. work over. Following the report, Pivoltal Research chief analyst Brian Wieser also said that he doesn’t think brands will soon stop moving to self-produced advertising content.
Unilever also revealed last year that it plans to cut agency costs by half and hire consultants by 40%. After the announcement, WPP – the world’s largest advertiser and Unilever’s major partner saw stocks decline miserably.
A week ago, WPP also saw its worst stock decline in two decades after its disappointing 2017 financial report release. During the meeting, WPP CEO Martin Sorrell admitted that 2017 was “not very good” and said the cause of this situation was because the “blistering” customers of the company such as P&G and Unilever both cut down on advertising spending. .
Even so, brands should also be wary of organizing the content production themselves. Pepsi and Dove have received valuable lessons when launching “homegrown” advertisements that stirred public opinion.
Van Dam / Adweek
* Source: Young intellectuals