50% of Unilever’s ad spend will go to social media. Will an influencer-first strategy work?

At that point, Unilever was already going through significant change. Last year it announced 7,500 job cuts in an effort to save some €800m. Meanwhile, it has been upping marketing investment: financial results last year revealed that its brand and marketing investment (BMI) rose to 15.5% (up from 13% two years prior).

Last week, Fernandez hit the ground running by announcing a sweeping re-think of how his Unilever will think about marketing. In a conversation with Warren Ackerman of Barclays, he said that modern consumers are “suspicious” of traditional corporate messaging, and so the firm will switch to a social-first advertising model. That move will see media spend on social channels rise from about 30% to 50% of its budget, and it will look to work with 20x more influencers.

Suggesting also that the FMCG-giant will concentrate marketing efforts on its strongest markets including India and Latin America, Fernandez said: “There are 19,000 Zip codes in India. There are 5,764 municipalities in Brazil. I want one influencer in each of them.”

What comes next?

Shaking up its marketing investment to this degree will have a knock on effect for the social ecosystem. If any other clients of Unilever’s scale followed suit, we’d be looking at a bonanza. But will they?

“To this scale – 50%? Most likely not,” Claudia Ratterman, director analyst at Gartner tells The Drum. Why? Because, for most, 50% would be quite the jump. Gartner’s CMO Spend Survey in 2024 found that around 6% of budgets go into influencer marketing (though the total for all social activity will be higher). So, rather than waiting for Unilever’s massive peers to jump immediately on the bandwagon, Ratterman says, expect them to be watching on carefully.

And Ratterman cautions against taking the move as Unilever’s last word on the matter: budgets go up and down, and minds can be changed. “While the 50% is aggressive it can be scaled down based on results,” she says. “We know when a campaign is working or not in real-time. Adjustments to these budgets and strategies will be made based on results.”

Where might the money go?

Still, influencer marketing agencies will be licking their lips. Unilever’s media agency assignments are already quite dispersed, with global ties to each of the six major advertising networks and accounts largely dished out by local markets. So the spoils of that extra spend may be quite dispersed among agencies – and Fernandez’s focus on India and Latin America may mean that specialist shops in those areas are particularly well positioned to gain from the move.

Dom Smales, founder of one of the first influencer talent agencies in the UK (and now chief executive of GloMotion Studios), says that the macro result of a big influx in cash will be increased competition among influencer agencies: “The increase of budget and activity from one of the world’s biggest talent buyers will mean there may be even more mouths around the table to be fed.” The upshot? A market that favors specialization. “I think it means agencies have to get smarter about what their ‘influencer’ offering is. This kind of focus on the channel means that competition to spend that money will intensify and solutions have to perform.”

Dominic McGregor, one of Social Chain’s founders, says specialists in social commerce, particularly on TikTok, will be a major growth area with this uplift of spend. In fact, McGregor says, he expects such massive growth in this area that it might be the big bet that underwrites Unilever’s whole social strategy. Unilever, McGregor speculates, might be “looking at this as a step towards using TikTok as a transactional platform. To do that, you need to have a lot of content and a lot of relationships to start selling products at high volume… [It is] potentially using this as a learning curve and building relationships; seeing which influencers perform well, so that when they come fully to social commerce, they’ve got a data bank of who performs”.

Why now?

Plenty of signals show the industry is primed for a step-change in social spend. Last year, Kantar’s Media Reactions 2024 study found that 53% of marketers planned to invest more in influencer content this year, with only TV and streaming having higher expected spends. Similar research from Forrester last year found 66% of B2C marketing decision-makers planning to invest more in creator/influencer marketing this year. In 2023, Goldman Sachs pegged the global creator economy for a fresh explosion into $480bn total value by 2027.

There are, of course, plenty of brands already well on that social-first path: the direct-to-consumer revolution has given us a raft of success stories where social and influencer spend accounts for far more than 50% of budget. From those brands’ perspective, McGregor says, “the big boys are just catching up” – held back, he argues, by a media environment that has long struggled to truly understand social.

Still, this is a conspicuous ideological shift for Unilever. Despite the existing 30% spend in the area, it has previously kept the influencer channel at arm’s length: it was among the loudest voices calling attention to influencer fraud back in 2018, and set careful limits on the creators it would work with (for example ruling out those who had bought followers). Later, in 2022, it set careful rules limiting collaboration with creators who appeal to anyone under the age of 16.

The change here is simple, says McGregor: while ad fraud was “rife” back in 2018, “that has since been really addressed by the platforms”. Gartner’s Claudia Ratterman agrees: “The influencer marketing landscape has evolved and is now quite refined. Organizations now have access to advanced platforms and tools that make campaign management, analytics, and fraud detection much more efficient.”

Is the market up to the challenge – and what are the risks?

For Ratterman, the influencer industry’s success in tackling fraud is evidence that it’s a business coming into maturity, and is primed for the challenge that a fresh influx of spend would provide. “Many marketing agencies have honed their skills in influencer marketing, making it easier to execute large-scale campaigns. I say the influencer marketing space is more than ready.”

But that doesn’t mean the onward road will be straightforward. The bête noire of influencer marketing has long been attribution; don’t expect it to go away overnight, says Jane Ostler, executive vice-president of global solutions marketing and thought leadership at Kantar. “The market has been around for a while but is still immature in terms of measurement,” Ostler says. “Does the content that creators produce work for brands in the short and long term? Does it drive sales and brand impact? Who controls the briefing, the use of the brand’s assets, and the guardrails around content, at scale? This will require extensive management and expertise.”

Similarly, anyone thinking of following Unilever’s lead will do well to remember the value exchange of influencer marketing work, says Ostler: 50% spend on influencers would mean 50% spend over which you don’t have complete control. “With brands having little control over influencers’ output, partnering with creators can result in damage to the relationship they have with their consumers if their endorsements are inappropriate or less than transparent… Understanding creators and how to get the best out of them will be key.”

Another risk of a massive social push, Ratterman of Gartner says, is ‘social fatigue’. Influencers are being recognized for their ability to make authentic connections with consumers, and to make those connections work for commercial partners. But if we open the taps for a more commercialized social environment, that prized authenticity may be in jeopardy: “Will that have an impact on effectiveness? Most likely unless we keep evolving our strategies to meet consumer behaviors.”

This concern is shared by almost every analyst we spoke to. Smales, for example, cautions that in a new social gold-rush, agencies will have to innovate formats and relationships to avoid over-commercializing: “The social channel as a whole will have to get more sophisticated and more creative to make sure that consumers don’t just get bored by creators plugging products. The focus should be on entertaining and informing the consumer/audience first. So: use that extra spend to come up with more entertaining ways to connect with influencers and audiences.”

“Social distribution will be the entertainment networks of the future. Brands just have to get smarter to cut through the ever-growing volume of noise.”