$30 Mil. ‘Mini-Consolidation’ Could Pave Way For Larger Contest
NEW YORK–Seagram Americas has kicked off an informal review to consolidate media buying for at least four of its major liquor brands.
The agency search–described by one source as a “mini-consolidation”–puts about $30 million in billings up for grabs. Sources said the contest could be expanded to include other Seagram alcohol brands. The total ad budget for The House of Seagram is around $100 million.
The brands included in the review, sources said, are: Seagram’s Gin, Chivas Regal, Crown Royal, and Captain Morgan rum.
TBWA/Chiat/Day in New York handles media buying and planning for Seagram’s Gin and Chivas, which are both backed by about $6 million in annual spending. Grey Advertising handles buying and planning for the $9 million Captain Morgan account and the $8 million Crown Royal business. Both agencies also handle creative duties for those brands, but those tasks are not in play. Media duties on TBWA/C/D’s $30 million Absolut business are not included, sources said.
At press time, both roster agencies were participating in the pitch and at least one outside shop was involved, said sources. Ogilvy & Mather here, which handles buying for Seagram’s Martell Cognac brand, did not appear to be involved.
A representative for Seagram in New York declined to call the discussions a review.
“We’re just meeting with our roster agencies to discuss what we’ve been doing for the past few months and to see what we’ll be doing in the future,” said Jennifer Crowl, a Seagram’s representative. She denied that outside shops would be included in the talks.
Executives at TBWA/C/D, Grey and Ogilvy declined to comment.
The early stages of the discussions confused at least one agency executive. “They’re talking about a consolidation,” he said, “but it only includes half their billings.”
The brands that could come later include V.O. Canadian whisky, Glenlivet scotch, Godiva liqueur or the new Sundsvall vodka, creative for which is handled by Arnold Communications in Boston.
The move comes on the heels of archrival Diageo’s plan to consolidate global media buying. Diageo, the world’s largest marketer of alcoholic beverages, plans to place an estimated $200 million in billings at one agency later this year.
The trend among liquor companies of buying consolidation is sparked by the desire to achieve efficiencies.
Seagram has also held alliance talks with Allied Domecq, which fell through earlier this year. –with Hank Kim and Michael McCarthy