Unilever pushes digital spend to 20% as it focuses on mobile advertising

FMCG giant Unilever has upped its digital marketing spend from 17 per cent in 2013 to 20 per cent in 2014 as it places an increased focus on targeting consumers via mobile.

Sales at the company increased 2.1 per cent in the third quarter, down from 3.7 per cent in the first half of the year. Meanwhile sales in emerging markets slowed down to 5.6 per cent and by 2.5 per cent in developed markets.

The company’s chief executive Paul Polman told investors on a call this morning that the continued focus on digital marketing has led it reap better return on investment than via mainstream channels.

“We are getting better returns on investment as we direct more of our advertising spend to digital which is now nearly 20 per cent of the total and where the returns are exceeding those of traditional advertising when done well.

“We are particularly focussed on advertising on mobile devices as you know and this is by far the fastest growing media channel.”

The shift in ad spend forms part of a wider cost-cutting measure across its media spend, which includes agency fees and production costs, and also slots into a company-wide drive to lower costs for the business as a whole, an initiative that Polman said is being “accelerated”, but made clear that Unilever will avoid any “disruptive, big bang restructures”.

Europe saw price deflation and poor summer weather compared with last year, particularly within its ice cream category which includes Magnum and Ben and Jerry’s.

Earlier this week, Unilever's global senior vice president of marketing, Marc Mathieu, told The Drum that its global start-up platform the Foundry will help the FMCG giant “stay ahead of the game”.