Internet gets bigger slice of Unilever pie

Paul McIntyre, SMH.com.au, March 27, 2008

UNILEVER Australia will shift more than $10 million a year out of mainstream media advertising by the end of next year in a bid to match the company's North American target for 20 per cent of its advertising budget to be allocated to digital media platforms.

The packaged goods giant's swing to online advertising is a response to rapid growth in the amount of time people are spending online: the latest Google estimates for Australia show the internet takes up 25 per cent of individual media consumption time, although the sector attracts just 9 per cent of advertising. A report last week by Nielsen Online showed Australians for the first time were spending more time each week on the internet (13.7 hours) than watching TV (13.3 hours).

Unilever would not say what percentage of its media budget was spent on the internet, but said spending had quadrupled in the past 12 months and was expected to double again next year.

The move by Unilever Australia follows the announcement by GM in the US two weeks ago that it would allocate half of its media budgets to digital channels within three years.

Unilever's digital strategist for Australia and New Zealand, Nicole Still, said the rapid increase in the amount of time consumers spent online was forcing the company to move its media budgets around more aggressively. The GM move, she said, was overdue.

"For the US market, it's long overdue. It's likely competitors like Toyota have already surpassed that [GM figure]. It's moving at such an accelerated rate."

The reworking of Unilever's media allocations here follows a series of successful digital marketing projects for the company. In the latest, for Streets Cornetto, social media sites were used to reach a million people and generate more than a million video views before the company deployed any online or mainstream media advertising.

"Seven of the top 15 websites in Australia are controlled by consumers, not by traditional portals like Fairfax or ninemsn," Ms Still said. "We knew if we could tap into this space of consumer-controlled content where they could be entertained and take it on themselves, we could build great reach before we could buy advertising in that space."

Although banks, insurance companies, airlines and hotels are big buyers of online media because of their transactional emphasis, packaged goods companies have been hesitant to divert traditional media funds used for brand building to the internet.

Ms Still said online search advertising could play an important role for packaged goods brand marketing by using it as a branding option rather than a consumer response generator.