The allocation of the $55m budget follows a three month review of the company's media planning and buying arrangements. Previously, Optimedia held the bulk of the European business, but Zenith handled the U.K. and various other agencies other individual countries. The final contest was between Optimedia and Zenith. The contract is effective January 1, 1998.
Optimedia, which has been responsible for 60% of the European budget for the past two years, retains that assignment and picks up additional business in the U.K. (worth $19m), in Central and Eastern Europe and in several other markets. Zenith retains the U.K. Allied Domecq retailing account of around $3.2m.
"This was a really thorough review, involving the marketing directors of all markets," says Patrick Burton, group media manager. "Over the past three years we have begun to see some real benefits of working with a single media specialist network and now we intend to extend these benefits across the markets which previously were not using Optimedia."
The review was instigated by the company's divestment of businesses in the U.K. over the past three years, a move that saw the U.K.'s share of its media billings dwindle. The former Allied Lyons sold its cakes and tea business Lyons Tetley three years ago and has just sold its interest in brewer Carlsberg-Tetley. It acquired the Spanish Domecq business for $1.2bn in 1995, creating Allied Domecq, a business focused solely on wines and spirits and retailing.
"Six or seven years ago, we were spending $81m in the U.K. and were the country's third or fourth biggest advertiser," says Burton. But "the U.K. has stopped being our biggest market and now the influence comes much more from mainland Europe." The company allocates around 30% of its ad budget to Spain, Domecq's home market.
Optimedia benefited in the contest from the fact that its above-the-line network, Publicis, handles the creative for most of Allied Domecq's pan- European accounts, including Ballantine's whisky, the company's biggest brand. However, Zenith, and Saatchi & Saatchi before it, has a relationship with Allied dating back to the 1970s, says Burton. "It was a big decision for us. You don't lightly give up a relationship like that."
Central and Eastern Europe, where little has been spent so far, is marked out as "quite a priority" for Allied, according to Burton. Simon Lloyd, chairman of Optimedia, says Allied has been going "step by step into Eastern Europe, feeling its way and looking for distribution," but he believes the region could see significantly more investment over the next few years.
Allied Domecq's international brands include Beefeater Gin (biggest market: Spain), Teacher's (main market: Germany) and Tia Maria (biggest market: the Netherlands) and Presidente brandy, claimed to be the biggest selling brandy in the world. It also owns various brands that are big in their local markets, such as Jacobi 1880 brandy in Germany.
Copyright September 1997, Crain Communications Inc.