Unilever to review £680m European media business

LONDON – Unilever is reviewing its £680m European media buying account and is inviting non-roster networks to pitch for the business.

The FMCG giant has put the incumbents, Initiative and MindShare, on alert and will invite rival networks to pitch against them. Insiders expect that Carat and OMD Europe will be invited to pitch, but the process is in its early stages.

The review, which will be led by Unilever's global media director, Alan Rutherford, is said to have been dubbed Project 40 by Unilever because it is aiming to achieve savings of €40m. Media planning is not included in the review.

Sources suggested that Unilever's decision to look at a European consolidation was due to a recent disappointing results announcement. The company's first-quarter turnover and profits fell, threatening its "Path to Growth" programme and putting more pressure on all areas of the business to achieve savings.

Unilever traditionally runs its media agency arrangements on a local market basis. Initiative has the business in 11 western European markets including the UK, Ireland, France, Spain and Portugal, holding around £400m of the European billings. MindShare handles Unilever in Germany and Italy.

The review follows recent local reviews in European markets, including the UK. Initiative went through a lengthy review process of the UK business in 2002 and is 14 months into the contract, after winning a pitch against MindShare and Carat.

Three years ago, Unilever consolidated its Spanish account into Initiative, which also picked up the business in three Nordic regions at around the same time. MindShare has held the German business for several years without a review.

Globally, Unilever's billings are split roughly 50:50 between MindShare and Initiative. MindShare has the $700m account in the US and Initiative holds the Latin American business. The two share the business in Asia.

Two years ago, Unilever signed a pan-European agreement with the outdoor company JCDecaux, committing more than £60m in spend across 22 countries on street furniture, billboard and transport advertising.

A Unilever spokesman said: "Unilever has informed agencies it will be reviewing how it manages its media buying across Europe and which agencies it employs. Currently, MindShare and Initiative share the one billion euro account. The review does not signal dissatisfaction or criticism of the current agencies, but rather a further drive by Unilever to maintain its leading-edge position in how it manages its media."

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