Unilever's Bold Move: 50% of Ad Spend to Social Media and 20x More Influencers – Will It Work?

In a major strategic pivot, Unilever's new CEO, Fernando Fernandez, has announced that the company will allocate 50% of its media budget to social channels and engage with 20 times more influencers. This shift comes after a period of significant changes for Unilever, including the announcement of 7,500 job cuts to save €800 million and an increase in marketing investment, with brand and marketing investment rising to 15.5%.

The Shift to Social-First Advertising

During a conversation with Warren Ackerman from Barclays, Fernandez emphasized that modern consumers are suspicious of traditional corporate messaging, prompting Unilever to adopt a social-first advertising model. This change aims to focus marketing efforts in strong markets like India and Latin America, with Fernandez stating, “I want one influencer in each of them.”

Industry Implications

The implications of this decision could significantly impact the social media ecosystem. Claudia Ratterman from Gartner notes that while 50% spend on social media is aggressive, it may not prompt similar actions from other companies immediately, as most allocate only about 6% of their budgets to influencer marketing. Adjustments to budgets will be made based on campaign results.

Potential Distribution of Budgets

Influencer marketing agencies are likely to benefit from this increased spending. Unilever's media assignments are spread across various agencies, particularly those in India and Latin America, which may see a surge in business. Dom Smales from GloMotion Studios predicts increased competition among influencer agencies, emphasizing the need for specialization and smarter influencer offerings.

Timing and Market Readiness

Signals indicate that the industry is ready for increased social spending. Studies show that 53% of marketers plan to invest more in influencer content, positioning social media as a critical marketing channel. However, Unilever’s previous hesitance toward influencer marketing due to concerns over fraud highlights a significant ideological shift.

Challenges Ahead

Despite the maturity of the influencer marketing industry, challenges remain, particularly around attribution and measurement. Jane Ostler from Kantar warns that brands may face difficulties in controlling influencer outputs, which could harm consumer relationships. Additionally, there is a risk of social fatigue if the market becomes overly commercialized.

To avoid over-commercialization, agencies must innovate and prioritize authentic connections with consumers. As brands navigate this new landscape, the focus should remain on entertaining and informing audiences, ensuring that social channels evolve as the entertainment networks of the future.