Diageo marketing boss: ‘I was sick and tired of wasting strategy money’
Ballesty
Diageo marketing and innovation chief Adam Ballesty has predicted more companies will want a single agency to handle both their creative work and media buying after admitting he was “sick and tired” of having his strategy interpreted differently by a variety of agencies.
His comments came as the alcohol beverage giant beds down its newly-struck agreement with Leo Burnett, with Diageo confirming in July that it had dumped media agency Ikon Communications and appointed the creative agency to oversee its media account in addition to its creative work.
While only two weeks in to the new arrangement, Ballesty told Mumbrella it will be “phenomenal”.
“My vision is to create and deliver the one strategy through the one partner,” he said. “What was happening was that we were having one strategy interpreted three or four different times in different channels by different partners.
“What I was sick and tired of was paying for strategy and not seeing my hard-to-get dollars being used to create love and fun for our brands and with our consumers and customers.”
Asked if Diageo’s move was likely to be replicated, Ballesty said: “Yes, I reckon that once they see what we are bringing to life and the ease of bringing it to life. I know a lot of them are thinking about how they get this done.”
While the Mediavest arm of Starcom Mediavest will be the registered media company, the strategy, channel planning and “important chunky bits of media will come out of Leo Burnett”, he said.
Diageo’s approach comes as the industry faces mounting marketing challenges amid declining levels of alcohol consumption, which are at their lowest level for 15 years.
Ballesty said the market has been “flat or stagnant for some time” as companies have struggled to combat the declining consumption levels of alcohol.
“On all our core brands, Bundaberg, Johnnie Walker and Smirnoff, we have not seen the growth that we have seen in previous years so it has not been all singing and dancing,” he said. “In pockets there has been growth but there have also been pockets where it has been flat and pockets of small decline.
“I always say that doing ok is not ok. When you have iconic brands we should be blowing the doors off every year.
“People are drinking less and my personal view, and it is something that we are trying to quantify now, is that there is a lot more choice on how to spend a dollar. On Friday night when I was growing up you either went to a movie or the pub. But people don’t have to go past their phone to entertain or be entertained now. There is just more choice.”
Drink has been replaced by food as the centrepiece of an evening, Ballesty added, which has further diminished the appetite for alcohol. But
“The food culture of today is fantastic and I see that as a fantastic opportunity,” he said.
Innovation has fuelled what growth there has been, Ballesty said, with Diageo “now making rums that are best in class”.
“We have a range called the Master Distillers Collection and that liquid is now award winning at the big spirit shows around the world,” he said. “Bundaberg at that premium end of town is getting its liquid credentials and we are looking at export opportunities and how to get even more value out of that brand globally.”
Steve Jones
1. Clarify agency roles
2. Establish ways of working
3. Write tighter/more single minded briefs
4. Remember 1-3 are the job of the marketing team
Just because the above model is easier, doesn’t mean the output will be better…
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Dear Adam, its called a full service agency – used to be popular…. maybe it will again?
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He should say he was sick of managing agencies. Same thing.
Bold move and I hope it translates to sales growth.
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Media agencies are 100% to blame for client confusion. Get back in your box.
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“On all our core brands … we have not seen the growth that we have seen in previous years”. Fewer king-hit deaths too.
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Apparantly there are now some agencies that are offering creative and media planning and buying services under one roof. Imagine that!
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‘Declining levels of alcohol consumption…’
That’s a good thing
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Surely I’m not the only one old enough to spot the cycles of Full Service and Specialist Agencies? Clients go back to full service, either become disgruntled with one part of the full service agency or the people leading the account break out and form their own agency. Then specialist agencies become the ‘thing’. Then those specialist agencies are snapped up by the big guys, or clients get tired of having 3 or 4 points of contact. So clients move back to full service. And so the cycle goes……
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“…“sick and tired” of having his strategy interpreted differently by a variety of agencies.”
When you have more than one agency, bring the agencies together when discussing strategy. That way, you are all on the same page and they will likely translate it the same.
What is with the aversion of getting differently-skilled and focused agencies together in one room? I believe they call it collaboration.
(This doesn’t mean that agencies are not to blame for part of it, but marketers aren’t blameless.)
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Its interesting that some of the best work in the world comes from brands who work with multiple partners (Nike for example). It comes down to how you lead and direct the teams and how they collaborate together to get the best out of this way of working. It’s harder but the end result is better.
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They’ll be back
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Consumer mindset is changing, traditional advertising or media agencies will not be equipped to meet changing consumer trends. Wasting time and money
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not only is having one agency relationship easier and more productive to manage for marketers, it really provides the client with a highly accountable partner with a lot of skin in the game. All well and good to say you bring everyone together but the reality is they all scrap for their slice of the pie and that becomes a painful mess. Bring it all under one roof I say.
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You can see the reasoning behind it, is it the right answer? Probably not, but it’s a change. Whether that is backwards or forward, it will drive a different mindset.
Media agencies have been given a lot of power because in the past the media was hyper relevant. In todays world and certainly the future, the media connection is becoming less effective and less important.
Certainly an approach we are getting asked for more and more by our partners.
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