Between the Lines: Ad agencies walk the plank

Captain Morgan, the Diageo rum brand, is moving its business out of Grey London (page 1), and the beneficiary will not necessarily be another ad agency.

Instead, the likelihood is that advertising spend will be diverted into DM and online, following a pattern set recently by other Diageo brands, such as Johnnie Walker and Baileys, which are both investing heavily in digital media.

The tightening of regulations governing alcohol advertising on TV is having an impact on above-the-line spends, but the ability of drinks companies such as Diageo to build ongoing relationships and interactive experiences with customers is also becoming important. It is a worrying trend for ad agencies, which might now be charged with launching a brand but not guaranteeing its future.

Ad agencies have much in their armoury and will fight back with creative solutions to evade legislation against categories such as alcohol and food, but, in the end, it could be direct marketing and digital agencies that become the major beneficiaries of a changing market.

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