"We're discussing our upfront strategy," said Laura Klauberg, VP-media, Unilever Americas. "We're weighing all our options in the upfront. The process has existed forever and may have been very appropriate for business as it was conducted 10 years ago. Clearly, the market has changed a lot." Like the others before it, Unilever is citing as reasons for considering a scale-back the difficulty of making upfront buys well in advance of its calendar fiscal year and the fact that its marketing approach has become less TV-centric.
Too early to tell
In recent years, Unilever's media deals have become more complex, including branded content, original content and other types of integration with other media, she said. "There is a lot of complexity to some of the things we're trying to do," Ms. Klauberg said. "And to know this far in advance what those things will be -- because we're really just planning for 2008 as we speak -- it's difficult to know what I'm going to want to do from a programming standpoint, regardless of the channel, whether it's digital, traditional network, cable or even print."
Ms. Klauberg said the market has changed in recent years to the point that it's increasingly possible to do major TV deals year-round.
Realistically, Unilever, like J&J, has advertised brands that appeal mainly to a broad range of women, so they don't have many "must have" TV buys that can't be replaced on another program or network. The situation is different, than say, movie marketers, who crowd into often-hot Thursday-night programming to hit their target demographic of weekend moviegoers, or male-oriented brands that need to lock down time in key sports programs.
P&G still in
Certainly, not all big package-goods marketers are jumping off the upfront bandwagon. Notably, the largest advertiser of all, Procter & Gamble Co., remains firmly committed to the institution. "It's still important to us because we get access to media and deals that we wouldn't get in the open market," said a P&G spokeswoman.
Realistically, P&G, whose executives have made much of the scale-buying advantages a huge $80 billion-plus marketer has, would have little interest in a scatter market in which it can be harder to wield buying clout.
P&G also would appear to have some advantage, given that its fiscal year starts July 1 and its brand budgets and planning for the year are largely finished by the time upfront negotiations start. But the P&G spokeswoman said she wasn't sure the company gets that much advantage from the timing of its fiscal year.
"I'm not sure it matters where your fiscal year is," she said. "Even for us, it still involves projecting one quarter that's outside of the fiscal year. Unless you were to align your fiscal year entirely with the television season, I'm not sure there's an advantage."
Most advertisers are on calendar fiscal years, though there are notable exceptions. Like P&G, General Mills and Clorox Co. start their fiscal years July 1.
Media spending up
Unilever is unlikely to be under any budgetary pressure to pull back on upfront spending. The nearly 6% organic-sales growth rate the company reported last quarter was its best performance in years, and the U.S. personal-care business that accounts for most of Unilever's U.S. ad spending grew 10% last quarter.
The company has been plowing restructuring savings into media spending globally and in the U.S. in recent years, spending $527 million on TV and $808 million overall on media last year, according to TNS Media Intelligence. Its TV spending was up 21% and overall media spending was up 11% last year. And Unilever's TV spending is up a whopping 50% from 2004. But most Unilever personal-care brands continue to be substantially outspent by P&G competitors.