Home Online Advertising Unilever Overhauls Advertising And Innovation For Post-COVID World

Unilever Overhauls Advertising And Innovation For Post-COVID World

SHARE:

Unilever’s sales and marketing channels are shifting rapidly during the pandemic, and these changes will be a permanent part of the business, executives told investors on the company’s earnings report on Thursday.

“Online shopping, especially online grocery shopping, will not revert to pre-COVID levels once social restrictions are no longer in place,” said CEO Alan Jope.

In the past three months, the company has reshaped its marketing approach. Unilever stopped out-of-home advertising altogether. And it’s “eased back” into print, TV and other channels depending on the country or state’s lockdown status, he said.

“But by contrast, our brands are communicating digitally,” he said. One priority online has been to get people to consume grocery supplies – essentially to clear out pantry items after many US households stocked up. Jope cited barbecue and staycation cooking ideas as areas the company has promoted, along with the Unilever-owned Recipedia site, which integrates with Amazon Alexa devices and grocery delivery.

“We have changed almost all of our advertising messages, both the content and the media choices,” he said.

And though Unilever’s ad budgets are smaller, the company has “kept some powder dry” to ramp up in the second half of the year, said CFO Graeme Pitkethly. Overall spend is down partly because media rates have dropped by 20% to 25% across the board, and as much as 40% in places.

The company also overhauled its innovation bets, Jope said.

Unilever already cut 20% of its innovation brands, which are smaller, local or often niche startup brands, he said. More trimming could come in Q3.

The company dramatically increased some innovation investments, including a small hand sanitizer business with two manufacturing sites, Jope said. Unilever now has 60 sites producing sanitizer, and the business is already larger than the market leader’s 2019 output.

The manufacturing itself is also changing on the fly, he said. Different pack sizes and brands sell online, which is where Unilever is diverting resources and production.

“We are ensuring that our innovation and marketing activity are well designed for ecommerce,” he said.

Despite the quick changes and acceleration in ecommerce, Unilever’s sales declined 0.1% from the same period last year. The stock price jumped more than 7% after the earnings report, because even flat sales are better than expected for CPG giants this quarter.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

There are encouraging signs that the acceleration isn’t done. Ecommerce sales grew 49% year over year in the first half of 2020, but were up 62% in Q2.

But Unilever, which didn’t issue new revenue guidance due to uncertainties in commodity prices and the coronavirus, will increase investments conservatively, according to Pitkethly.

“We will perhaps all need to be prepared for a sort of two steps forward, one step back dynamic in the months ahead,” he said.

Must Read

Nope, We Haven’t Hit Peak Retail Media Yet

The move from in-store to digital shopper marketing continues, as United Airlines, Costco, PayPal, Chase and Expedia make new retail media plays. Plus: what the DSP Madhive saw in advertising sales software company Frequence.

Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Albertsons Takes Its First Steps Into Non-Endemic Advertising, Retail Media’s Next Frontier

Albertsons is taking that first step into non-endemic advertising next week via a partnership with Rokt to serve ads to people who have already purchased groceries.

Marketecture Buys AdTechGod (No, Really)

Marketecture has acquired AdTechGod – an anonymous ad tech Twitter poster turned one-man content studio – and the AdTech Forum, an information resource hosted by AdTechGod and Jeremy Bloom.

Why The False Advertising Lawsuit Against Poppi Is Bad News For RMNs

This week’s dispatch explores the new trend of false advertising class-action suits in the food and CPG industry and how the evolution of online, data-driven retail media could exacerbate the problem.