When Keith Weed became the first marketer appointed to the Unilever board last March, it was a coup for marketers across the world, as they fight for greater recognition within their organisations.
Ten months into the job, Weed, who is responsible for all marketing, communications and sustainability strategies at the multinational conglomerate, feels he is making a difference. He wants Unilever, which is second only to Procter & Gamble in global adspend, with a $7.4bn (£4.7bn) budget, to demonstrate as much skill as scale.
The Unilever veteran looks remarkably energetic at the company's new regional headquarters in Singapore as he talks about taking the company's business-unit leaders on a trip to Silicon Valley, launching ventures in crowdsourcing, and driving innovation in mobile.
- What are you doing to drive non-traditional thinking within Unilever?
The stimulus for change is all around marketers right now. The digital revolution we are living through is truly a revolution. It's hard to believe that only six years ago, Facebook and YouTube didn't exist. They are such a big force now.
The fact that Lady Gaga's videos have been viewed more than 1bn times online, or that (video-game) Halo: Reach achieved $200m in sales within 24 hours of its launch, just shows the scale we are dealing with and the speed at which it is moving.
I believe one of the ways that marketers remain fresh and keep innovating is by living in the space. I encourage all of our marketers to go out and live in it. If they're not involved in gaming or Facebook, I tell them to get involved. The world is moving very fast in that direction, and we will only succeed if we get ahead.
One of the things I did in the second month I was in this role was to take the heads of our global categories (our category executive vice-presidents) and the head of my media team to Silicon Valley to see the likes of Facebook, Yahoo!, Apple, Microsoft and Amazon. The purpose was to get better insights about how we could take our business forward. I also met up with venture capitalists on that trip.
I can tell you that one of the big things yet to hit us is the full force of mobile. Right now there are more new people connecting to the internet through mobile than PCs. So while we've got 1.7bn people online globally, we've got 5bn mobile phones. And, if you actually look at the new connections to the internet, it's all coming through mobile.
They say every time is a new time. That's true. But I think this era is exceptional because of the twin trends of digitisation and globalisation, and the fact that they are both feeding off each other.
- The potential is exciting, but we hear that every year is going to be the year of mobile. Why will 2011 be different?
Every new area has people who over-call it and under-call it. The shift to mobile is happening right now. A real switchover will happen when we have a deep penetration of the smartphone. There's still a lot to do before we get to that stage.
Everything we do starts and ends with consumers. We need to understand what consumers want and how can we satisfy what they want better than anyone else. The end point is that they decide to buy our brand rather than someone else's.
A good example of that would be the 'Wake-up call' campaign for Axe (the brand name used for male-grooming brand Lynx outside the UK and Australia). That was an application on a normal phone. When you move to smartphones, it becomes very different. I believe Apple's iAd is a truly interactive space. It's advertising like you have never seen it before. You go into the ad and you can navigate your way deeper and deeper. We were the first advertiser on iAd. We broke the launch of Dove for Men in the traditional way - in the middle of the Super Bowl. We took it on to the iAd and it became interesting and involving - beyond just the straight ad.
If I compare that to the time when I was a brand manager and a media plan was a piece of paper with flow charts and bars, and we used to debate whether we should burst TV or drip it, I appreciate the skills needed in media planning these days.
- Procter & Gamble has had huge success with Old Spice. What is Unilever doing globally with Axe to combat that?
Innovation in this area will always go backward and forward between the companies who are investing. Axe is the leader in this area - you can see that by looking into some of the work we've done in the US. We've actually stimulated response to Old Spice because Axe has dominated the digital area for some time. There's going to be equal innovation from us going forward, but I can't give you details yet. I do think they did some good work with Old Spice. It's inspiration for everyone and shows what can be done in real-time marketing.
- How much are you spending on digital globally?
It varies hugely from country to country. It can be up toward 30% (of our marketing budget) in some countries and as low as 2% in others. It depends on where the consumers are. Although I'm a great driver of digital in the company and have put a big focus on it since starting this role last year, I don't have any particular love for digital.
I am, however, a firm believer that we need to be where the consumers are. If our consumers are online, we must be online. They know us well in the TV world, in newspapers and magazines, and they need to know us equally well in the digital space. 'Digital' is a very unhelpful title. It's about as helpful as 'traditional'. By 'digital', I mean social media, mobile, search, video, gaming and ecommerce.
- Is video the future?
People often ask me whether TV is dying. Let's be clear: we spend a fortune on TV. We're the second-biggest advertiser on TV in the world. We're going to continue with that for many years. Having said that, even when you move into the internet you see that people aren't sitting there just reading pages of text; they are watching video.
(So) the moving picture is alive and well. In fact, it's growing significantly. We are seeing that people are watching a huge amount of video online. No, it's not the traditional 30-second TV commercial, but there are plenty of other forms of video.
The challenge for companies like us is in content. I've heard various estimates of how many TV commercials are made a year and, depending on whom you believe, it's somewhere around 100,000. Yet if you look at the appetite for video online, the demand is nearer 5m a year.
The difference between the two is that your TV commercial costs you a few-hundred-thousand dollars. It takes six months to produce, and you can't produce 5m of them.
But if we can unleash content elsewhere, then I think there is a way to help feed this tremendous demand for more intriguing and engaging content.
- Is consumer-generated content the most cost-effective way to feed this demand for video?
I'll give you an example to answer that. We recently did a crowdsourcing, consumer-generated event, where we briefed out commercials for 13 brands to consumers. There were 24,000 briefs downloaded globally and ultimately 460 films were made. The winning commercial was from a lady in Japan (Ryoko Kwanishi), for Vaseline.
If I could show you the quality of these pieces of content, you'd see that there's a huge opportunity for people who want to engage with our brands, and for us to create more economically based content for the future.
- Should agencies feel threatened?
I'm a great believer in ad agencies, and a great fan of them. They generate the true creative leaps and are custodians of our brand equity. I don't think it's a case of one or the other, nor do I think that crowdsourcing will have an impact on them. I see it as a form of open innovation.
For example, we work in R&D with professional research labs and our own internal development teams. But we also do what's called 'open innovation', where we encourage people to come forward with ideas. We supplement the work that's done by the labs and our teams.
I don't imagine a crowdsourcing event coming up with a new brand, or a huge creative breakthrough. But I can see it fulfilling the desire for many hours of content online in a way that I can't imagine we could do economically otherwise. In this environment, what might happen is that agencies find new ways to help create content for it. They are equally intrigued by it.
And, frankly if a company like ours isn't investing in new areas like iAd or crowdsourcing, we won't carry on being a leading company. I'm a believer in experimenting, innovating and ensuring that we are not just a step ahead of the consumer - so when they get there we are already there - but that we are also a step ahead of our competition.
- You're also heavily involved in the social-media space. Has there been enough progress in understanding the ways it creates value and ROI?
The measurement of ROI in this area is a big issue for us. We have different ways of measurement, some of which are more experimental than others. The good news is that I have enough evidence that says most of the time we can prove better ROI online than in TV. It is much more measurable.
And you can react. So, if things aren't working as well as you would like, you can use real-time feedback with a dashboard of data and make adjustments during a campaign. It used to take days to pipe out a commercial to a TV station and weeks to read the results. You didn't have the ability to change, which you can now do in the new world. The most important thing we have to consider is what we are trying to achieve from the different approaches.
For us, social media is very much word-of-mouth, and I'm looking for engagement and advocacy. Our measures are more about people spending time with the brand. Social media is much more active than the passive 'lean back' media of TV. Here, people are leaning forward and taking part in something.
- Agencies are battling in the branded-content area. In some cases, brands are taking the lead. Who should own this space?
I don't know is my honest answer. In the spirit of experimentation, I'm trying all approaches. It will certainly be interesting to see how it plays out. I hope, ultimately, that we see a more economically viable branded content offer coming through our agencies.
The model we use is the paid, owned, earned model; so for us, paid is, obviously, print, TV, search - anything we pay for.
The owned is Unilever.com, Axe.com, Dove.com and other sites that we own. That's where we are generating content and are a media owner. That's where consumers are coming in and interacting with us directly. The earned part is people talking about us and engaging with our brand because we're doing something interesting, such as viral.
Out of that, the owned and earned space is growing considerably - for the normal player, it would be at the expense of paid, but for us, it is actually in addition to it.
We will continue to be big supporters of advertising, but we do need advertising agencies to be more innovative in a changing world.
- Does the current agency model work effectively for brands?
It works for us, but it is evolving. If you take the example of digital, there are three models that are going right now, and I personally can't call which one is going to win in the long term.
One model is that the big traditional advertising agency does the whole of your communication creativity, what people call 360 or integrated. Then, there's the holding company - a WPP, for example, which has agencies within it that specialise in digital. We see holding companies that have digital agencies and they use it across the spectrum. Or there are the completely standalone digital agencies. Our existing agency works alongside them and we manage the interface.
Those three models are alive and well, and we use all of them. The easiest thing would be to deal with one agency, which can lead and integrate, but, frankly, I will go for the best before the easiest. Right now, we are working with the best people we can, and if that makes it a little more difficult for us to integrate with, then we need to manage that.
- If you were to set up an agency today, what kind of model would you create?
We did set up an agency many years ago, called Lintas, which is now Lowe. Why did we set it up? It was because we couldn't find someone who could help us do what we needed to do then.
The reason I am involved in content development and functioning as a media owner is because I still don't have anyone giving me all the answers that I would like to see. It will happen. There's innovation going on and there are a lot of people out there struggling and striving to sort out this very issue.
- What's the key to building a successful client-agency relationship?
Trust is the most important because with trust you get true creativity, experimentation and innovation. It's very hard to take risks if you believe the person you are working with doesn't trust you.
Second, time and experience. I believe that having long-term relationships with agencies is the best way. If we're having a problem with an agency, the first thing I do is look at changing the people - either within the agency or our team - before I'd change the agency.
Last, it's creativity and delivery. At the end of the day, we are here to build brands that are preferred over those of our competitors. It is about winning preference. To do that, we need to have brands that have more creative, differentiated advertising, which not only stands out and gets noticed, but also engages and builds relationships.
Atifa Silk is editor-in-chief of Campaign Asia-Pacific, where this interview first appeared.
- It spent £135m on advertising in the UK last year, down from £146m in 2009, and was the third-biggest-spending advertiser in the UK in 2010, behind Procter & Gamble and BSkyB, according to Nielsen.
- Unilever's global advertising budget is $7.4bn (£4.7bn).
- The company invested EUR891m (£771m) in R&D globally in 2009.
- Its products are sold in 170 countries.
- Unilever's brands include Persil, Dove, Hellmann's, Lynx, Marmite, Pot Noodle and Knorr.
- It recently completed a EUR1.2bn (£1bn) cash buy-out of Sara Lee's European personal care and laundry business, which includes the Radox brand.
Sources: The Nielsen Company, Unilever