Pernod Ricard is still willing to pay “big money” for creative content despite cutting the number of agencies it uses and in-housing more media buying and content production.
The company has been bringing data-collection and content in-house since February last year and is pleased with the results, saying the move led to increased productivity and cost-savings. Doing media buying internally has also led to improved efficiency, but CEO Alexandre Ricard says that does not mean it will compromise on creativity.
“Media buying we can do ourselves and is less expensive but I still have a high expectation of media agencies and where they add value is creativity. We are being more efficient and although money spent on media agencies has gone down we are using that money to directly invest in ourselves,” said Ricard, speaking during Pernod Ricard’s full-year results meeting this morning (30 August).
“I will pay big money for creative, disruptive ideas,” he added.
One way it is doing that is by upstaffing internally. Chivas Brothers, for example, now has its own team and studio responsible for creating content for the brand. That comes with its own challenges, however, with Ricard saying the “next step will be to create more synergies between brand campaigns”.
We are being more efficient and although money spent on media agencies has gone down we are using that money to directly invest in ourselves.
Alexandre Ricard, Pernod Ricard
The company is also investing more in Amazon as it sees it both as a media and an ecommerce platform – Pernod Ricard is the second biggest drinks seller on the site.
Laurent Pillet, CEO of Pernod Ricard UK, added that the brand is also investing more in experiential marketing, citing the newly-opened Jameson Distillery in Dublin as an example.
He explained: “We are spending more money on brand experiences. Consumers are not just looking at what they consume but how to consume. Experiences at scale is a clear focus for us and we are working on not only how we bring experiences for thousands of people on several sites but also how do we monetise it.”
Jameson is also set to get a boost as Pernod Ricard will also be launching the first TV campaign for the brand in seven years next week. The £1.2m campaign includes a 40-second ad, created by TBWA Dublin, that shows the story of a robbery in Johannesburg where only crates of Jameson were stolen.
Based on a true story, the spot will be aired for the first time next Thursday (6 September) and will run for four weeks. The campaign is aimed at a younger male audience and will also comprise social media, online video and print advertising in The Metro.
The campaign launch follows Pernod Ricard’s pledge to spend 50% more on its key brands in the run-up to Christmas.
How innovation is driving growth
Overall, Pernod Ricard saw sales growth accelerate in the fiscal year to the end of June, up 6% year on year compared to 3.6% growth a year ago. Sales were €8.99bn, while organic profit came in at €2.36bn, up 6.3%.
In particular, Pernod Ricard’s Scotch business is boost performing, while at a brand level, Jameson and Martell performed well throughout the year, both up 14%, which the company in part credited to innovation.
The company also plans to capitalise further on the gin trend after the success of its Beefeater Pink Gin released in March. Sales at its standalone gin unit were up 3% last year and it is now growing by 7%.
Louise Ryan, managing director of Pernod Ricard’s gin hub, said: “Innovation will pay a key role in driving growth. The numbers don’t reflect the real impact of Pink Gin as it didn’t launch that long ago.
“Pink is the beginning of innovation at the gin hub. We have a number of innovations and the best is yet to come. It’s been a good year but lot more to look forward to.“
Overall, Ricard said the company was pleased with its performance and promised more innovation next year.
He added: “The biggest area of satisfaction across the board is not specific to delivering the numbers it’s that we’re starting to see the consumer-centric strategy that we put in place three years come to life and deliver.”