Dive Brief:
- Pernod Ricard, owner of brands like Beefeater, Absolut, Chivas and Havana, has "dramatically increased" its ad spending with Amazon in the U.K., according to a report in The Drum. The marketer claimed it is the second-largest spirits provider on Amazon, grabbing a 10% market share. During a press briefing, Laurent Pillet, managing director of Pernod Ricard in the U.K. said sales grew by more than 100% with Amazon over the past year.
- Pernod Ricard has also been experimenting with voice through an Amazon Alexa skill in the U.K. that provides cocktail recipes to consumers based on the ingredients they have on hand. Consumers can add Pernod Ricard products to their shopping baskets to purchase later but can't yet conduct the transaction via voice commands. While the company didn't disclose how much its Amazon investments will be going forward, it spends about 1.7 billion euros, or roughly $1.96 billion, on marketing each year, according to The Drum.
- Pernod Ricard is also bringing more of its ad-buying functions in house. During first half 2017, the company reported saving 60 million euros (about $69.3 million) from reducing its reliance on external agencies. Some of its brands are also producing more creative in-house, including whisky brand Chivas, which works with McCann but also has an in-house studio for online content. An in-house team is working on the creative for Pernod Ricard's new partnership with Manchester United as well.
Dive Insight:
Pernod Ricard has its finger on the pulse of few marketing trends, namely in having a larger presence on Amazon, where the spirits maker is seeing a considerable growth in sales. Unlike Google and Facebook, which currently own a far larger stake of the digital advertising market, Amazon can closely link its ads to a point of sale on its e-commerce platform, which has helped to draw the interest of more brands in recent years. Studies have also found that more than half of all product searches begin on Amazon, so ads are often served to consumers once they've already started their shopping journey and are poised for purchase.
Amazon posted revenue of $2.2 billion in its "other" category, which mostly consists of advertising, for Q2 2018, with ad sales jumping 129% year-over-year. The Seattle-based company has recently made several moves to further build out its ad business. Last week, it announced plans to expand a Boulder, Colorado-based advertising hub and teased new tools for marketers related to attribution and video advertising, with the latter being piloted by Kellogg.
Pernod Ricard is tapping into Amazon's other channels as well, including through its voice-powered assistant Alexa. As true transactional voice struggles to find traction with consumers, the spirits marketer is joining others in its category in offering tips and recipes to keep consumers engaged with the technology. Patrón, which is owned by Bacardi, sees 6,000 to 7,000 sessions per month for its "Ask Patrón" Alexa skill, which responds to voice commands for cocktail recipes and facts about tequila. Patrón has accumulated 36,000 users of the skill since its debut two years ago.
Beyond its Amazon strategy, Pernod Ricard is also among a growing number of high-sending marketers that are bringing more marketing functions in-house to save money and wrest greater control over the creative process. A recent study by Forrester and the In-house Agency Forum found that the number of advertisers with in-house agencies has risen to 64% from 42% a decade ago.
Most respondents to the survey said that the increase in-house agencies isn't a threat to external agencies. Chivas, in Pernod Ricard's example, still works with McCann despite producing its online content through an internal service.
