I read with interest about the Kraft Heinz attempt to acquire Unilever. Having worked for both companies (directly for one, indirectly for the other) I believe I can see both the attraction of such a move and the implications for brand marketing as a whole and traditional advertising in particular. Heinz has long been a company that is said to count every marketing penny at least three times before it spends any. As a result its brands are low marketing investment, cash goldmines. Unilever (in general) follows a different model with huge TV add spend, yet limited hard proof of what each pound spent is delivering. If your answer to this is (ad) attribution modelling I say most models used regularly are painfully over simplified and anyway correlation is not causation. Well funded companies like Kraft Heinz can therefore grab cash cow brands and turn them onto profit goldmines by cutting back on just some of the TV ad over spend. Now the M&A market has caught onto this, it will be a wave sweeping through the consumer ad driven, big brand industries, especially fmcg. And therefore traditional dumb (ie unproven) ad spending will fall significantly in these sectors. Who agrees?
What’s the future of business?
I’ve been puzzling this through for too many years so thought I’d start to share the thinking of myself and friends on this topic here for general erudition. In my career I estimate I must have discussed this topic under various guises more than 40 000 times and with more than 10 000 people of all levels. So if I havent learnt something worthwhile from that, feel free to call me an idiot! 🙂 Please feel free to add, subtract, concur or strongly disagree, however you see fit.
The Future of Business? 