Diageo Shuffles Ad Agencies on Tequila Brands

Spirits Maker Taps Grey for Don Julio, Drops JWT From Jose Cuervo

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NEW YORK (AdAge.com) -- Spirits giant Diageo is changing up the agencies that work on its tequila brands, handing duties for Don Julio to WPP's Grey, New York, after a review and yanking the Jose Cuervo account from sibling JWT after a year, executives familiar with the matter said.

Don Julio is the second brand Diageo has awarded to Grey -- a roster shop since 1994 -- this year. In March, Grey won the Ketel One vodka account after a pitch, and the marketer is said to be pleased with the work.

The incumbent on the Don Julio account, MDC Partners' Kirshenbaum Bond Senecal & Partners, did not participate in the review. It continues to handle Diageo's single-malt Scotch brand Singleton. Executives said Grey beat out three New York-based independent agencies: Droga5, Taxi and Blue Flame, the marketing agency owned by Sean Combs, aka P. Diddy.

Separately, the spirits giant is changing agencies on its Cuervo brand, pulling the account from JWT after just a year and only one major national campaign, "Living Notoriously Well," that broke last fall. One source familiar with the situation cited creative differences for the split.

JWT remains on Diageo's roster, working on the Bailey's and Smirnoff brands.

Whether the marketer will now call a review for Cuervo remains unclear. A Diageo spokesman declined to comment on the account moves, and agency representatives either declined to comment or could not be immediately reached.

Tequila has generally been a hot category in recent years, but last year the category saw divergent trends at different price points. Both superpremium and low-end brands grew robustly, but premium and above-premium brands saw sales declines. The bulk of Cuervo's business is in the latter, more challenged categories.

According to TNS Media Intelligence figures, Diageo has dramatically slashed its U.S. marketing budget; in 2008, it spent more than $160 million marketing its portfolio of booze brands, which include Johnnie Walker whisky, Guinness beer and Captain Morgan rum, but in the first half of 2009, its only spent $44 million on domestic measured media.

Diageo has claimed that the deflation of media pricing has allowed it to slash spending without dramatically reducing its exposure or hurting sales.

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