Unilever leverages clout in $1.2B Euro review

By Published on .

[London] Unilever, which has traditionally clung to local agency relationships, is acknowledging the logic of leveraging its considerable media muscle with a review of its $1.2 billion media-buying business across Europe-and is inviting two non-roster media specialist networks to join the pitch.

Unilever would not confirm who will compete against the incumbents-WPP Group's MindShare and Interpublic Group of Cos.' Initiative-but the new contenders are believed to be Omnicom Group's OMD Europe and Aegis Group's Carat, according to executives familiar with the review.

"The review does not signal dissatisfaction or criticism of the current agencies," said a Unilever spokesman, "but rather a further drive by Unilever to maintain its leading edge position in how it manages media." The review begins in June; a decision is expected in the fall.

`project 40'

Until now, Unilever has favored individual country reviews, with only MindShare and Initiative participating. Initiative has the business in 11 European markets while MindShare handles Germany and Italy. On a global basis, Unilever's billings are split almost equally between the two networks. The European review, overseen by Alan Rutherford, Unilever's global media director, has been dubbed "Project 40" within the company because its aim is to save 40 million euros annually, about $48 million.

Unilever's first-quarter 2004 financial results were disappointing, especially in France, Germany and the Netherlands. Sales of the company's top 400 brands rose just 1.3%, and pretax profit fell by 8%.

Executives close to the business suggest those numbers are forcing Unilever to look for ways to save money and get back on track with its "path to growth" program.

Media planning, which is shared between Initiative and MindShare, is unaffected. None of the media agencies would comment.

Most Popular
In this article: