Shop shakeup anticipated at Allied Domecq

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Liquor giant Allied Domecq Spirits & Wine North America is expected to initiate a massive agency shift of its accounts, representing $55 million in U.S. ad spending, as it centralizes marketing at its U.K. headquarters.

The world's No. 2 liquor marketer wants to de-emphasize branding in favor of more targeted retail and sampling efforts, a trend top marketers and agency leaders agree will accelerate as traditional advertising plays a smaller role in the marketing equation going forward. At last month's AdWatch conference in New York, produced by Advertising Age, Taylor Nelson Sofres' CMR and UBS Warburg, the consensus of attendees was that marketers need to take a more consumer-centric approach (AA, July 1, P. 1). Allied's change in strategy may also reflect management's eagerness to impress Wall Street in advance of a New York Stock Exchange listing July 31.

Allied spent more than $55 million on measured media last year, according to Taylor Nelson Sofres' CMR, much of that with Omnicom Group's BBDO Worldwide, Chicago. The agency currently handles core brands Kahlua, Stolichnaya vodka and Beefeater gin, though it is not expected to continue to handle them.

"They've been retained on the basis of their capabilities as a creative shop, and they are a terrific creative shop," said Kim Manley, Allied's chief marketing officer. He declined to talk about agency shifts but said past agency consolidations had increased efficiency and brand heft. Mr. Manley, who joined the company as chief marketing officer in late 2001 from rival Diageo, has led the shift from branding to promotions. BBDO could not be reached for comment.

"We have definitely taken, in the back end of this year, [steps] to invest in on-trade promotional activity and events" rather than TV and print, Mr. Manley said, citing an internal rethinking of strategy.

The change, expected before Allied Domecq's fiscal year ends Aug. 31. It is uncertain how it would affect Cordiant Communications Group's Bates Worldwide, which recently won Malibu rum's $65 million global creative account and also handles the company's Ballantine's and Tia Maria brands. Allied purchased Malibu rum two months ago from Diageo. Cordiant's 141 Worldwide, London, picked up consolidated below-the-line business. The fate of Interpublic Group of Cos.' dRush, which handles Sauza tequila and Courvoisier cognac, is also unknown; dRush could not be reached for comment. Bates declined to comment. Executives have met with agencies over the last few weeks to discuss arrangements.

North American advertising and promotion spending increased 5% in Allied's last fiscal year (ended Aug. 31, 2001), according to the company. CMR figures reveal Allied spent $10.5 million for the first four months of 2002.

contributing: lisa sanders

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