Ex-Unilever CFO says it's now harder to justify marketing and media spend to investors

Unilever's former chief financial officer, Graeme Pitkethly, says it has become “more difficult” for companies to justify marketing to investors. 

Speaking during a session at this week's Campaign Live alongside Keith Weed, former chief marketing officer at Unilever, the discussion centred on the CMO-CFO relationship. Weed described it as one based on “mutual respect”. “[Pitkethly] would not have let the marketing group play as much as we did and experiment with in-housing and some of the media relationships we did, if he did not believe that we were spending money wisely," Weed said.

“If he does his job well in finance, I can’t criticise him, because he’s doing a good job there. And if we do a good job in marketing, then we come together and that’s when the relationship builds.”

But, Pitkethly added, it became progressively harder to justify marketing to “everybody” during his near-decade long tenure as CFO at the FMCG giant.

“It has become more difficult for everybody. It’s become difficult for CFOs and marketeers because everyone looks at advertising promotion spending or brand marketing investment spend as a percentage internally.”

For investors, he said that the “fragmented” media landscape and the “cost structures associated with that” had changed so much over time.

“The sad thing is that the economics of that have been very challenged and trying to find someone who has got the time to spend really understanding it, I’m afraid, has dropped."

Pitkethly had to justify marketing spend during his nine-year tenure, even setting Byron Sharp's How Brands Grow as assigned reading to his finance team.

But Unilever did face challenges during Weed and Pitkethly's time. The FMCG company defended itself against a £115bn bid from Kraft Heinz, bore the brunt of investor Terry Smith's public comments about the company "[losing] the plot" and reinvented its media plan.

The pair realised they were creating too much content for their brands and not keeping campaigns live long enough to create impact.

Pitkethly said: "I won't share with you the percentage of our advertising which was wearing out, because I still find it really embarrassing."

Weed added: "You don’t want to wear your ads out, but you do want to wear them in because, [if not], the only person that has seen them is you, your brother, your sister, your mum, your dad and your friends, and not the consumer, because you haven't put enough money behind it."

The team then had to "force change" and Weed praised Pitkethly, saying that he was a "real part of the genuis", adding that he "championed" the ethos that "if you invest we grow, if we grow and get scale, it just keeps going around".

The panel was moderated by Gideon Spanier, Campaign's UK editor-in-chief.