Diageo CMO Andy Fennell: 'I want to see the core product in the agency change'

In the second part of our two-part interview, Diageo's chief marketing officer talks about the changing role of a marketing director, and what he expects from agencies.

Andy Fennell: Diageo chief marketing officer
Andy Fennell: Diageo chief marketing officer

- Given your marketing challenges, what type of agency do you need today?

 There's one thing that we will always need from our agencies - brilliant creative ideas. That's what we are buying - big ideas, full of flair to surprise our consumers. At Diageo, when we work with an agency it is the number one priority. Sure, account servicing and all that stuff is relevant. But the reason we buy an agency's service is because of its creative flair.

That said, we can no longer segment the different aspects of an idea in the way that we used to. We need agencies that can see the totality of our engagement with the consumer, whether that is blogger outreach, social networking conversations, long-form content or more traditional advertising. Almost always, we need agencies collaborating with each other around what we end up showing to the consumer.

There are very few, if any, agencies that are able to do everything. So, we need our lead agencies to be able to see the whole idea and collaborate with partners in order to deliver to the consumer something that joins together and makes sense. We talked about integrated marketing for years. It's been a buzzword in agency land. Now it is absolutely required. If it's not integrated, the consumer rejects it.

- What's the one change you'd like to see within your agencies?

I want to see the core product in the agency change. I want to see agencies hire different kinds of skills into the heart of their creative machine. I don't believe in a holding company just buying different shops and serving it up as an integrated solution. If these shops all have different profit centres, they aren't integrated.

I get excited when I see agencies invest in new skills in the core creative product. The winners will be the ones that see how consumers are going to engage with brands in the future and buy-in the skills to change their core product. The losers will be those who think they can offer up an integrated service just through acquisition. They can't.

- Are your agencies innovating and taking the lead in new media and content?

Some are. But I don't think we can rely on agencies entirely for the new relationships we need. It's important to me that Diageo has direct relationships with Silicon Valley. The strategic partnership that we have with Facebook is a Diageo relationship, not an agency relationship, because it is across all of our brands. It's the same with Google, Yahoo and Apple.

It's also how we work with production or entertainment companies, such as Black Entertainment Television in the US, with whom we've created a six-programme TV series for Smirnoff. The direct relationship with the content creators protects the interests of our brands. I'm very open to our agencies having those ideas. I just don't want to rely on a single agency having sufficient relationships to capitalise on opportunities.

- How is the role of your marketing directors evolving?

They now need different kinds of relationships. I expect our marketing directors to know the guy who works in the music industry, the TV company or the tech firm, to ensure we are hearing ideas directly.

When I was a brand manager, if you had your ad agency and your media agency in the room then you were pretty much done. Every two years, you phoned the design agency. It's just not like that anymore. Everything is a lot more fluid. The marketing directors are still accountable for performance, building marketing, and great consumer insights. But how we get to those things has changed.

My job has also changed. I still meet with CEOs of ad agencies regularly, every week. But they used to be the only ones I'd go and see. Now, I'm meeting with people from an eclectic and diverse set of disciplines.

- If it's all about getting consumers to participate, do you still need big campaigns?

Not big advertising campaigns, but we need big brand ideas. When you have more and more people collaborating, you need a big idea to hold it together. The difference now is that you don't start with an ad campaign. You start with an idea that allows people to participate - so we talk about 'participating platforms'. A recent example of that is in Kenya, where Guinness is 50 per cent more expensive than any other beer and has high market share.

It also has a long-established relationship with soccer. We've got to keep the marketing fresh so the team there produced a TV programme, which was a peak-time football quiz and talent game show. We asked people to text in a code and received five million texts - amazing participation. We used advertising to big up the promotion but we didn't start there. We started with Kenyans participating with Guinness and football. In the past we would have done some ads and tried to spin them into promotions, PR and in-store. We now need to start with how the consumer participates.

- What would you pay for a good idea? 

We're experimenting with a few different ways to pay our agencies, reflecting the fact that the world has changed. We had a good system in the past heavily weighted to bonus for delivery of performance - both in terms of the qualitative judgement of creativity and the financial performance of the brand.

I now acknowledge that expecting everything's free as long as you pay for the execution doesn't work in this new world. So, we are experimenting with new ways of remunerating. Of course, in the year of experimentation, our agencies shouldn't get paid less, so whatever we do has to be protective.

I want agencies to make money because I want them to hire the most creative people to work on my business, but I also need them to deliver work that sells more or allows us to take a higher price. We can't build brands without brilliant relationships.