Unilever Conveys Plans to Continue – Not Cut – Social Media Spend -- Pivotal Research

At the annual IAB Leadership Meeting – an event primarily composed of digital ad sales executives rather than marketers – Unilever’s Chief Marketing and Communications officer Keith Weed provided comments regarding its commitment to spending its advertising on “responsible platforms” and “responsible content” with “responsible infrastructure. More specifically, he stated the following:

• Unilever will “not invest in platforms that do not protect…children or which create division in society. (They) will prioritize investing in responsible platforms that are committed to creating a positive impact in society”
• “Unilever is committed to tackling gender stereotypes in advertising…and championing this across the industry”
• “Unilever will only partner with organizations who are committed to creating better digital infrastructure, such as one measurement system and improving the consumer experience, from targeting to delivery”

Although he noted that the ills associated with those platforms are more than industry issues now and are impacting society, he stated that the industry is “sleepwalking on progress.” As in the past, Weed noted Unilever’s approach to these issues has been to work with media owners in attempting to contribute towards solutions to the problems (last year when substantial numbers of brands pulled spending from YouTube in response to brand safety concerns, Unilever indicated it would not).

Importantly for investors, contrary to many of the headlines which ran in the press prior to the speech, comments provided on stage did not suggest that Unilever would be pulling its spending from Facebook and Google. If anything, those comments suggested that Unilever will stay the course so long as Facebook, Google and others continue to make efforts to improve their platforms.

We note that these comments were generally consistent with observations we have found recently, which indicates that marketers are unlikely to cut their spending because of concerns about the social ills of social media. However, spending will change if consumer behaviors on those media change, and spending will further be impacted by practical limits to growth in budgets for advertising, which for us remains as a key concern on the growth potential for digital media companies we cover.

Our price targets and recommendations on each of Alphabet, Facebook, Snap and Twitter are unchanged, with a Hold rating on Alphabet and Sell ratings on the other three companies.

RISKS. Core risks for digital advertising companies relate to: 1) high degree of rivalry given an absence of barriers preventing new competition from emerging 2) overly high and increasing capital needs to remain competitive and 3) government regulations and consumer pushback related to management of consumer data and respect for privacy.

FULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE: Internet Advertising 2-12-18.pdf

Click the social buttons above or below to share this story with your friends and colleagues.

The opinions and points of view expressed in this content are exclusively the views of the author and/or subject(s) and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated writers.