The story of Unilever's media pitch

After a convoluted process, MindShare emerges triumphant, Ian Darby writes.

In May this year, Alan Rutherford found himself laid up at home after a nasty skiing accident. It was a brief, if unwelcome, respite from the pressures of his job as Unilever's global media director and the longest he had spent at home in some time.

But as the get-well wishes came in, Rutherford was making the most of his imposed pause for thought by plotting a bitter pill of his own. As his strength returned, he fired the starting gun on a European review of Unilever's Euro one billion media account.

For Initiative, which held the business in the majority of the markets originally part of the review, the news was a serious blow. Not only would the pitch consume the agency only two years after the UK office had been through an arduous review of the business.

Unilever also made it clear that the pitch was intended to achieve eye-watering cost savings in the media buying process. The review quickly became dubbed "Project 40", because the savings were put at Euro 40 million.

At the same time, Unilever's own beleaguered financial performance was beginning to emerge and the pressure was mounting on its central management teams following poor group financial results. The stakes for everyone in this review were clearly going to be very high.

Initiative was told it would pitch, unsurprisingly, against WPP's MindShare, which held the business in Italy and Germany. But a wild card was thrown in: the two Unilever agencies would pitch against Carat for the prize.

As it turned out, the pitch was to be one of the most convoluted, political and dramatic in the history of European reviews. Millions of words were churned out to cover hundreds of thousands of pages of pitch documentation.

Intensive presentations were held around Europe. Candles were burnt at both ends. To all three of the companies pitching, the Unilever business represented a business-changing, even life-changing booty.

But many of the most serious tensions were within Unilever itself. Sources suggest that Germany and Italy, the markets which used MindShare, were both resistant to the pitch. Italy was eventually excluded from the review while Uwe Becker, Unilever's local media manager in Germany, is said to have been actively opposed to the process.

Many local markets that used Initiative are also said to have been reluctant to change; Unilever is thought to be looking at internal savings by making redundancies among its local media teams. In the end, the process seems to have descended into conflict between Rutherford at the centre, determined to bring change, and local markets determined to preserve the status quo.

Then two weeks ago, Unilever's office in The Netherlands is said to have sought a halt to the pitch to investigate rumoured irregularities in Unilever's process. A final decision seemed as far away as ever.

Finally, late last week, Unilever arrived at the decision to consolidate the business into MindShare. The move is a huge blow for Initiative, especially in the UK and France, and it has lost around Euro 700 million of business.

And while the pitch was initially for media buying only, Unilever has also decided to move the planning into MindShare. Rutherford said: "MindShare has answered our brief in terms of cost, quality, insight and innovation linked to a strong vision for our business and brands."

Observers suggest Unilever will struggle to achieve the global cost savings of £84 million that it is striving for, arguing that its discount in key markets is already stretched to the limit. For now, though, MindShare can celebrate. Unilever's £196 million UK spend rockets the agency to number one, with total billings of £772 million. However, WPP failed to get its hands on the £40 million Unilever UK outdoor account, which was retained by Concord.

Initiative still works for Unilever in 38 markets but MindShare is in the ascendancy, having captured the US account in 2000 and holding a large proportion of the business in Asia. And there's no doubt that the implications of Unilever's decision will resonate for years to come.

PITCH TIMELINE

April: Unilever announces disappointing first-quarter results. Net profits are down 15 per cent.

May: Alan Rutherford, under pressure to achieve savings, calls European media pitch.

August: The deadline for agency bids and pricing proposals, 25 August, is followed by presentations early September.

October: Original date for the pitch result (week commencing 18 October) is passed after local market opposition to Rutherford's decision.

5 November: Unilever confirms MindShare's appointment.

THE MAJOR PLAYERS

UNILEVER

Alan Rutherford, the media director at Ogilvy & Mather Europe before taking the Unilever job in 1998, was the main mover behind the pitch. Driven by a need to make cost savings and a desire to stamp central authority on Unilever's European media, Rutherford met early opposition from local managers in markets including Italy and Germany. Unilever's new chairman, Patrick Cescau, became involved when agency chiefs lobbied him.

WPP

MindShare's team was led by Phil Teeman, the managing partner on Unilever, and Giulio Malegori, the chief executive of MindShare Europe. Sir Martin Sorrell, WPP's chief executive, also provided input.

INITIATIVE

Mike Tunnicliffe, Initiative's executive vice-president, led its Unilever pitch. The agency's president in Europe, Philippe Bernard, was also involved at various stages while David Bell, the chief executive of its holding company, Interpublic, joined some last-minute negotiations.

AEGIS MEDIA (CARAT)

Carat was seen as an early frontrunner in the process after promising presentations from the Aegis Europe chief executive, Jerry Buhlmann, and local managers. The Aegis chief executive, Doug Flynn, was also involved in negotiations.

MEDIA AUDITS

Unilever's auditor, with its global account director, Martin Sambrook, running the business, faced stories in the German trade press accusing it of irregularities on the local Unilever business. However, Media Audits remained on the account.