Deoleo’s bankruptcy: A reflection on “uneffective” advertising

Warn to all surfers. Twenty five million euros worth failed investments in advertising are among the reasons why Deoleo, the leading multinational in the bottled olive oil sector fell under  technical bankruptcy.

At least this is what the  audit report on Deoleo fiscal year results 2018 points. The report says literally: “The increase in investment in advertising, marketing and commercial promotions, mainly in in the third quarter of 2018, has not had the expected impact on the sales volume or the gross margins of the Group. ”

The adudit report continues: “Deoleo carried out a € 25 million increase in their capital equity 2018. The money obtained served to increase advertising spending in order to grow in the United States and Italy. But the aforementioned advertising investments did not work as expected. Consumers and customers continued buying generic or distribution labelled products because their price was more advantageous. ”

In view of this categorical statements in an audit report, one wonders, who is catually to blame for.
An ineffective brand advertising ?. Maybe the generic or retiler brand?. The “Marketing Director” who first conceived them?.

Maybe what it really happens is that consumers, despite what any seasoned advertising could sell, are “adproof” whe it comes to a communicatio that promises gourmet while taking the money of the clients’ pocket over the limit they plan or can afford, specially when they have other good quality options at a lower price?.

Perhaps the most brilliant advertisind can’t work propperly  if the price for value ratio is not adequate enough for the market the communication is meant for.

Such cases as that of Deoleo remind us that, for better or worse, the consumer always has the last word. They also constitute a true lesson of humility for a sector who sometimes gazes at their own navel, such as that of Advertising.

Communication, brand image can do much but not all the work.
Because commercial communications, ads and promos, though they are important, contitute one among many of the cogs and wheels that compose the complex machines a company and their busines are. Machines that go further beyond de adverts and media.

Image over the headline.- © Deoleo/Bertolli

Related Eastwind links (Spanish edition):

Deoleo evitará la liquidación gracias a CVC, una operación acordeón y una profunda re estructuración societaria y de su deuda
(Deoleo will avoid liquidation thanks to CVC, an accordion operation and a deep corporate and debt restructuring)

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