Diageo Chief Marketing Officer Andy Fennell gave attendees of the Cannes Lions International Festival of Creativity today a peek into the drinks giant's ad strategies in various emerging markets, and also shared his personal outlook on working with agencies.
Mr. Fennell, who has been CMO at Diageo since September 2008, said the company gets about one-third of its overall business from emerging markets and expects that fraction will grow to about 50% within the next three to four years.
Diageo has undergone a transformation in the past decade or so, he said, with its advertising direction moving away from translating one big creative idea into different languages to employing wholly different approaches that are relevant to each market. That's a major turnabout considering that only about a decade ago, it was creating the bulk of its advertising out of London and slapping subtitles at the bottom of ads to translate them into different languages.
In China, for example, Diageo is going experiential. Just a few weeks ago it opened up "The House of Walker," a Shanghai-based building that exhibits the history of Scotch in China and allows visitors to purchase rare and collectible bottles of the liquor. It is also partnering with Chinese filmmaker Jia Zhang Ke and video blogger Han Han to serve as spokespeople for the brand.
To market Johnny Walker Red Label in South Africa, the company is altering its packaging. To reach consumers who might not otherwise be able to afford to purchase the Scotch, the company recently released a specially sized, smaller 200-milliliter bottle.
Mr. Fennell referred to Johnny Walker as Diageo's "biggest value creator," with a penetration in nearly 200 countries worldwide. Other brands in the portfolio at Diageo include Captain Morgan rum, Ciroc vodka, Jose Cuervo tequila and Guinness beer.
Yet another unique approach Diageo is using in one of its emerging markets is a soccer-themed game show it's created in Kenya for which Guinness is the sponsor. Contestants compete in a series of trivia challenges and physical soccer skills for a chance at a cash prize.
During his 45-minute talk on the main stage Monday afternoon, Mr. Fennell also briefly touched on his philosophy of working with ad agencies. Shops currently on Diageo's roster -- as well as any agencies out there that would like to be -- might want to take note that he prefers his agency partners build their skill-sets organically over time. "Bolt-on acquisitions don't work," he said. "The winners in the agency world will be those who invest in the core product." He also noted that he's expecting his agencies to place more urgency on figuring out measurement of how their advertising efforts are working.
It may come as a relief to agencies, though, to hear the chief marketer of at least one top 100 advertiser is vocal that shops should be paid well for their work. "I really believe agencies should make good money for great work," Mr. Fennell said emphatically.
According to Ad Age 's DataCenter, Diageo has is the 93rd-largest global advertiser, with worldwide measured media spending of $304.3 million, though overall spending is far higher. In the U.S. alone, the company's overall ad spending is estimated to be more than $500 million.