Diageo Launches $2 Billion Global Media Review

Price (2/21/08): 81.67 Annual Dividend Per Share: $2.67 Dividend Yield (2/21/08): 2.50% S&P STARS Rank (2/21/08): 4 STARS (buy) Diageo (DEO) engages in producing, distilling, brewing, bottling, packaging, distributing, developing, and marketing spirits, beer, and wine worldwide.Steve’s breakdown: Don Julio and Bulleit look like the brands they will be spending more on so check into those creative accounts if your not in the media side.

NORWALK, CT: Spirits marketer Diageo is conducting a global media agency review, the company has confirmed. The firm spends an estimated $2.3 billion a year on media.

Dentsu Aegis Network’s Carat handles the largest portion of the assignment, including the U.S., which it won after a review in 2010. The agency declined to comment on the new review.

Diageo issued this statement: “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.”

The company’s large portfolio includes six big global brands–Johnnie Walker, Smirnoff, Tanqueray, Guinness, Captain Morgan and Bailey’s—and numerous regional offerings.

Company sales have been sluggish in recent quarters and the company reported flat organic net sales for fiscal 2015. When the company reported those results, CEO Ivan Menezes stated, “Our [Fiscal]15 performance reflects the challenges we have seen on top line growth. However, it does not diminish my confidence in what we can achieve in F16 and even more so beyond that.”

In its 2015 annual report the company disclosed that ad spending was down in North America,  “as we drove procurement savings on media and agency fees in marketing while maintaining our share of voice.”

According to Kantar Media Diageo spent $105 million on measured media in the U.S. last year, down from $147 million in 2014.

Total marketing investment in North America was reduced by 4%, the report indicated.  “Advertising remained focused on Cîroc, Crown Royal, Smirnoff, Captain Morgan, and Johnnie Walker, and increased on Don Julio and Bulleit to support new programmes.”


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