Unilever, British-Dutch transnational consumer goods company, announced savings of 30 percent after taking most work in-house.
The company had repeatedly been taking several initiatives to reduce roles of external agencies, taking maximum of its work such as advertisements in-house.
According to the report of the Unilever, revealed in 2017, “In marketing, we are creating more of our own content in house while making existing assets go further. Our 17 U-Studios in 12 countries are creating content for brand teams faster and around 30 percent cheaper than external agencies.”
In 2016, the company also launched its in-house content unit, U-Studios, through which it intended to discover new pathways of engaging with digitally focused consumers as well as fighting the ad-blocking software.
On the company’s fourth-quarter earnings, in July, it cut around US$ 100 million to US$ 140 million in the U.S., as it reduced its agency and production spending.
Unilever made known of its decision to remove half of the creative agencies and 40 percent of the consultancies it is engaged with and largely relies on. Stocks of WPP, major partner of Unilever, fell drastically after the announcement was made public.
WPP has not commented on the impacts on its stocks as a result of the cost cuttings by Unilever. Brands must still be cautious about taking their production in-house. Pepsi and Dove have recently been known for insensitive advertisement and promotion, which are a product of their in-house studios. This may affect the reputation of the company drastically affecting sales, globally.