Carlsberg, Diageo, 2016 in review: 5 things that mattered this week

From FMCG companies ditching promotions en masse to the Marketing Week team taking a careful look at the highlights of 2016, we have selected the five things that mattered this week.

2016 in review

December has arrived, which only means one thing at Marketing Week HQ – it’s time to take a look back at the craziness that’s called 2016. To make things as easy as possible, we have trawled through this year’s best campaigns and divided them up into two helpful parts. You can find them here and here. But that’s not all.

We have also taken a closer look at who has had a particularly good (and bad) 12 months. While it was seemingly the year of the underdog and on-demand services, media agencies, sugary soft drinks and Samsung didn’t share the same success.

FMCG giants are pulling price promotions

sales_promotions_750x460

Early November, numerous FMCG giants such as Procter and Gamble, Mondelez and Unilever all spoke out about putting promotional spending under the spotlight. And now it seems the data finally backs this up.

An IRI study has shown that FMCG brands in the UK are increasingly shunning price promotions in favour of focusing on brand building through advertising, as promotional marketing has become “far too expensive”.

The UK sells more FMCG products on promotion than anywhere else in Europe, with 49.8% of all food products and 58.6% of all non-food products sold on promotion. In the latest year, according to IRI, this has declined by 2.6 share points to an overall average of 51.5%.

What Accenture and Karmarama’s deal means for marketers

Woman hands connecting two jigsaw puzzle pieces against sunset sky.

Earlier this week, consulting giant Accenture announced the acquisition of creative agency Karmarama.

The deal, announced yesterday (29 November), will see Karmarama join Accenture Interactive, part of Accenture Digital. Karmarama is the third largest independent agency in the UK, with clients including Unilever, Just Eat and the BBC. Details of the deal were not disclosed.

On the surface the move will help Accenture stand out from rivals such as Deloitte but Whipple says it is also part of a shift to prioritise technology, commerce, content management and advertising as one rather than focusing on a specific segment. The aim, the company says, is to create and deliver integrated customer experiences to brands in the UK and beyond.

But it will also open up new opportunities for brands looking for a one-stop shop for all their marketing needs. ISBA’s media chief, Mark Finney says he believes this creates new opportunities for clients.

He explains: “Their clients will potentially have the choice of hiring management consultancies for the whole journey and may not have to rely on choosing other providers.”

Carlsberg unveils premium rebrand to battle falling sales

Carlsberg rebrand

Beer sales in the UK are falling, and Carlsberg is determined to fight back by unveiling a “premium” rebrand of its Carlsberg Export product.

The beer brand says this is the “first step” towards revitalising its Carlsberg flagship brand with the relaunch, planned for February 2017, accompanied by a £15m marketing push designed to connect with millennial drinkers.

“We now have a situation where people tend to trade up to something more premium. It’s a bit more special, and you might not have bought it if you were drinking more frequently,” says Carlsberg UK’s vice-president of marketing Liam Newton.

“We see this in the world and craft beer segment and we expect them to continue to grow. That’s important because standard and premium lager is the key recruitment ground for people who ultimately trade up into premium.”

Diageo is adapting to changing night life habits

Smirnoff Diageo brand

The numbers don’t lie – night clubs are disappearing fast. In the UK they have almost halved in in a decade, dropping from 3,144 clubs in 2005 to 1,733 in 2015. There has also been a drop in alcohol consumption, with 80% of adults making some effort to drink less alcohol, according to a report by audience agency Protein.

In light of this changing consumer behaviour, Diageo, which owns brands such as Smirnoff and Bailey’s, is on a mission to adjust its business strategy accordingly. While it still considers the on-trade and off-trade very important to the business, the company has also identified new “chameleon spaces” through which it can reach different audiences. These can include pop-up events, festivals and other locations besides night clubs.

It is also looking at non-alcoholic options. “We are looking at consumer behaviour to guide what’s happening. We have a few tricks up our sleeve that I can’t talk about right now, but we’re definitely looking at it as a big area to address,” says Diageo’s head of culture and entertainment Leila Fataar.

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