Just one year after launching, Unilever’s in-house agency U-Studio has a presence in over 20 countries.
Little has been revealed about the U-Studio division since it began piloting last September, although one analyst – Greg Paul from consultancy R3 Worldwide – speculated at the time that the FMCG-giant was looking to rapidly expand globally.
The agency was established to develop “utility and informational digital content” such as how-to videos, infographics, articles, product information, while Unilever simultaniously slashed some 3,000 agencies it worked with in half.
Speaking to The Drum around 12 months after U-Studio had been set up, the brand’s SVP of marketing Aline Santos summed up its work as “quick-fixes, easy, digital – you know, [things like] posters” but stressed that the “strategic thinking” still lay with its key agencies, including MullenLowe, JWT, and Ogilvy.
She refused to be drawn on how quickly it had scaled and how many people had been employed, saying “it was all relative” to the volume of work at any one time.
“It’s very dynamic, it’s fluid; we don’t have fixed numbers,” she said. “It’s not to say ‘we have 20 people’ or we have ‘200 people’ it depends on the phase, and it depends on the project.”
Despite the ambiguities, the ripple effects have been felt across the global ad industry, with Havas Group chief Yannick Bollore calling out Unilever’s move to in-house elements of the marketing mix, and thus reduce fees, as one of the underlying reasons for a drop in its revenue in the UK for the first half of 2017.
On a call with analysts to discuss its third-quarter earnings this week, Unilever’s chief financial officer Graeme Pitlethky talked up U-Studio’s rapid growth and said, simply, that it’s mirrored the company’s need to deliver greater savings from marketing investments and spend “less money creating advertising” and “more money showing advertising in a more effective way.”
Investment and return on from traditional TV advertising was “quite predictable,” he said, where the ROI it can expect from digital investments – where upwards of one-third of its total budget is going – “are much, much more wide.”
“All we can do is continue to invest very heavily in building capability in that new marketing space,” he said. “It is now in over 20 countries... we are doing our own digital advertising and content creation in-house.”
He went on to say that alongside the U-Studios are “people data centres” – also in upwards of 20 markets – which were described as “pretty market-leading” in securing consumer insights from social listening and “scrapping up data from around the digital landscape.”
“That’s now in 20 markets and cover 40 languages. We think we’ve got a world-class programmatic capability in our ultra-platform,” he continued.
“We recognize the significance of the changes and we want to lead in those changes, invest behind them and make sure that we are as capable as anybody in this new landscape.”
Addressing issues around viewability, verification and brand safety, Pitkethly praised the ongoing efforts of chief marketing officer Keith Weed and others in the industry for creating “proper stewardship and leadership roles” to combat fraud.
Additional reporting by Rebecca Stewart.