Diageo Plans Global Consolidation

Spirits Marketer to Reshuffle Media Shops on its $200 Mil. Account
NEW YORK–Diageo, the world’s largest marketer of alcoholic beverages, is planning a global media consolidation later this fall involving all its liquor brands. Billings, which in the U.S. come close to $100 million, are believed to be twice that worldwide.
The move, sources said, is triggered by the London-based food and spirits conglomerate’s desire to achieve efficiencies following last year’s corporate reorganization.
Diageo was formed and renamed last year following the merger of Guinness with food and spirits company Grand Metropolitan. In the U.S., Diageo spent about $85 million advertising its liquor brands last year, according to Competitive Media Reporting.
The review is likely to involve roster shops Leo Burnett in Chicago, and Young & Rubicam and The Lowe Group’s agencies in London and New York. Others could be invited, sources said. It was not known how many agencies Diageo is seeking.
Burnett handles Diageo’s International Distillers and Vintners in 41 countries. Burnett’s media arm, Starcom, is the print agency of record for the brands of IDV-owned UDV North America. That task includes the Johnnie Walker Scotch, J&B scotch and Gordon’s gin brands.
Young & Rubicam’s The Media Edge last year became print agency of record for IDV before the merger, with planning and buying chores for its top-selling Smirnoff vodkas, among others.
Lowe & Partners/SMS here handles U.S. creative responsibilities for Smirnoff. Lowe in London, which sources said has already been briefed by Diageo about a global media review, places ads for the brand in Europe. Executives at Diageo in London could not be reached.
Diageo also owns Pillsbury and Burger King, but those assignments are not affected, sources said.
Weiss, Whitten, Stagliano is Guinness’ creative shop, while VSM Media buys the media. Both are based in New York.
All the above Diageo roster agencies declined comment.
In a related development, UDV in Hartford, Conn., has cut its promotional agency roster to two Omnicom shops, Alcone Marketing Group in Darien, Conn., and TLP-East in Wilton, Conn., from more than a dozen, sources said.
Once contracts are inked, the two will handle $30 million in national consumer promotions for such brands as Smirnoff and Stolichnaya vodkas, Johnnie Walker scotches, Jose Cuervo tequila, and Gordon’s, Gilbey’s and Tanqueray gins. Precise brand assignments could not be learned.
–with Scott Hume and Hank Kim