More than 2 billion consumers and an $8 billion marketing budget: Inside the mind of Unilever’s chief marketer
Unilever has the second-largest marketing budget in the world, spending €7.7 billion ($8.4 billion) on brand and marketing investment, according to its 2016 annual report, and it is chief marketing officer Keith Weed's job to make sure the business gets enough bang for its buck, persuading 2.5 billion people a day to use its products.
One of Weed's biggest concerns is getting people to watch its ads online, for brands from Axe in the U.S. to Bushells Tea in Australia, in a world where people have many distractions, and Weed is particularly worried about how the advertising industry – and Unilever's suppliers - decides whether something has actually been viewed or not.
Current standards from the Media Ratings Council suggest that someone being able to see half a screen for two seconds would count as a "view" online. Weed is pushing for 100 percent of the pixels on a screen to be seen to count as a view. "Can you imagine seeing half of a TV screen for two seconds and we'd say that is a TV ad view? I certainly wouldn't consider it as such," he told CNBC and other journalists at a briefing last week at the start of the Advertising Week Europe conference in London.
Unilever's strategic buys
But arguably Weed's concerns are broader than this. How does a business, which is currently undergoing a strategic review following Kraft Heinz's failed takeover bid in February, make sure it keeps up with technology and does not go the same way as Kodak, for example, which saw frequent restructuring after the market fell out of the traditional film market?
"In fast-changing markets, not everyone is changing at the same speed and that's why of course you see companies just dropping out, the Kodaks [for example]. I was just reading that in 1998 they had 170,000 people and had 65 percent of the world's film market. And three years later the film market disappeared. It's extraordinary," he told CNBC at a one-to-one briefing last week.
Unilever has bought companies such as Dollar Shave Club and skincare brands Dermalogica and Ren, partly so it can learn about new ways to do business. Weed also runs the Unilever Foundry, its foray into start-ups, and chairs its digital ventures arm, which buys five to 15 percent of businesses such as image technology company Olapic.
"These are companies that have leading-edge approaches in different aspects of doing marketing and I haven't bought 51 or 100 percent of the companies because we don't want to take an ownership position, what we do want to do is have our fingers on the pulse of what's going on," he told CNBC.
Will we see Unilever start selling other products direct to consumers soon, or via subscription, as with Dollar Shave Club? While these business models are "very interesting," because they give the company data on consumers' buying habits, Weed says it is too soon to say when or whether Unilever will start selling other brands in this way. Its strategy is to get close to the businesses it buys before applying what it learns.
"We learnt from Ben & Jerry's [the ice cream company it bought in 2000] and we moved out into other areas as well, and then surprise surprise, you will see everything from sustainable vanilla in Wall's vanilla ice cream as much as you see it in Ben & Jerry's. So [we] learn one way and then apply broader," Weed said.
Digital experiments
Unilever has also put its 5,500 marketers through digital training to make sure everyone is up to speed with trends, to make sure a "lost generation" of marketers in their 30s and 40s can keep up with "digital native," consumers who are communicating via WhatsApp and Snapchat.
"This isn't a level playing field, in fact the complexity and fragmentation gives huge opportunities for the smart [business]… it's those most willing to adapt that will survive," Weed told CNBC.
One way the company is experimenting is with advertising made programmatically. It created vignettes of ads in Latin America for Axe, and used automated technology to make 150,000 permutations, shown to people based on what they were interested in and resulting in a campaign that was 115 percent more successful than the standard, Weed claims.
But he cautions against using data to target people in a creepy way, such as when an ad seems to follow someone around the internet after they've viewed a product online.
"If I can use data to give you something really useful, as and when you want it, then you say 'that's clever, how did they do that?' and that is the thing that we are trying to focus on."
Sexism in advertising
The ad industry should also expect an update on Unilever's #Unstereotype initiative, which aims to tackle sexism in marketing, at June's Cannes Lions advertising festival.
"There is still some toe curling advertising out there… and if we do poor quality advertising as an industry, people will switch off advertising.
"What I am trying to do is build our brands in the most engaging way. But what we've certainly learnt is if you can't see it, you can't be it. So if we only portray women in the kitchen holding up packaging as nothing more than a display for products, rather than the complete diverse characteristics of either gender, I think it is very much harder for people to see what they can be."
Weed would not comment on speculation that the business is considering selling Flora margarine as part of its strategic review.