Unilever’s chief marketing and communications officer has warned agencies that they “haven’t moved fast enough” and need a new business model if they are to survive in the digital economy.

Speaking at the IAB conference this morning (7 June) he said: “The big challenge is that the world is moving very fast and my experience is that agencies just haven’t moved fast enough.”

Unilever is one of a growing number of FMCG brands re-evaluating their relationship with agencies. Unilever has already halved its agency roster and brought some aspects of creative in-house with the launch of U-Studio in 2016.

Procter & Gamble has done similar, and Weed argued that the moves show agencies need to reinvent their business model and think more like a company than a creative.

He explained: “I would argue that agencies need to create fit for purpose, competitive models in this competitive world.”

Comparing agencies’ pricing to Unilever’s, Weed argued that consumers would be outraged if the company continually changed the price of PG Tips to reflect the cost of production. “What I have to do is create a business model that’s the right price for consumers and then work back and agencies need to work out what advertisers need to produce competitively and work back to build a business model,” he said.

Sourced through Scoop.it from: www.marketingweek.com