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Diageo calls first global review of $2.3bn media business

12.05.2016
Diageo calls first global review of $2.3bn media business

Drinks giant Diageo has become the latest major international advertiser to announce a review of its global media agency arrangements.

Diageo, which owns the Smirnoff, Guinness and Johnnie Walker brands, is understood to be preparing to review its entire estimated $2.3bn global media arrangements.

The firm works with a number of agencies in different regions, including Omnicom Media Group’s PHD and Dentsu Aegis Network’s Carat. It is not known if Diageo is looking to consolidate its media into a single global network.

Diageo had not responded to requests for comment at the time of publishing. However, a spokesperson reportedly said: “This review is about ensuring we are set up for the future and have the right agencies that can deliver in the fast-paced, globally integrated digital media landscape.”

In November 2014, Diageo hired L’Oreal’s APAC media director Stephanie Bell as its head of global marketing procurement. Prior to joining L’Oreal in 2010, Bell spent nearly a decade in roles at WPP’s GroupM and Mindshare, and has also held roles with Zenith, Carat and Saatchi & Saatchi.

It is believed that the company will look to cut back on marketing costs, and in particular on agency fees. Presenting Diageo’s half year results in January, chief financial officer Kathy Mikells said the firm had achieved £40m ($58m) in “procurement efficiencies”.

Mikells added: “We have been improving the efficiency of our marketing spend for a couple of years, and now we are definitely building a capability here. […] For example, we renegotiated media costs in North America, Europe, Brazil, Mexico and Australia.

“We’ve become more stringent and demanding when reviewing production cost and agency fees.”


Source:
http://mandmglobal.com/diageo-calls-first-global-review-of-2-3bn-media-business/