Profile: Jeremy Gilley

The man marketing world peace

Go Diddy, the daddy of Ciroc's branding

“There really is nothing quite like vodka,” said my friend Miguel as we clinked martini glasses and then drank them dry. I was in New York last week and a free evening meant that I had time to catch up with one of my oldest contacts in the wine and spirits business.

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Miguel’s point about vodka was a professional rather than personal observation. It’s one of the best-selling spirits in the world. Unknown outside of Eastern Europe before 1950, a consistent compound annual growth rate of 5 per cent has seen it overtake the once dominant Scotch.

And yet, despite its popularity, vodka remains a marketing enigma. Most punters could not tell you what their favourite brand is made from. They remain ignorant of the fact that vodka can be distilled from alcohol derived from potatoes, grain, grapes, or even quinoa, the South American super-food.

What’s more, most people struggle to identify their brand from the rest in blind taste tests. That’s not surprising given that vodka, which means ‘little water’ in Slavic languages, is meant to be odourless, tasteless and clear in colour.

As a result, the incredibly competitive vodka market is quite probably the most brand-centric battle on the planet. Devoid of product differentiation and any artisanal distinction in production, there is nothing other than image and price to sway consumers one way or another as they select from the 300-plus brands currently vying for their attention.

Traditionally the market has been dominated by Smirnoff and Absolut in the premium tier of the category and by Grey Goose in the high margin, ultra-premium category. But things are changing and at a speed even the vodka category has never seen the like of before. Miguel, never an easy man to impress, was using words like “amazing”, “unprecedented” and “incredible” to describe the rise of Ciroc.

To understand his amazement we must wind the clock back to 2007. Diageo, the British-based drinks giant, was experiencing a very painful vodka headache. Its Smirnoff and lower tier Kettle One brands were going like gangbusters, but in the all-important, super premium category it was getting hammered by Grey Goose. Its French luxury vodka Ciroc was struggling to make an impact in the US at a paltry 120,000 cases - barely 3 per cent of Grey Goose’s figure.

Something had to change and in a risky move that many in the industry deemed to be desperation, Diageo called Diddy. The rapper formerly known as Puff Daddy was invited to become spokesman for the brand. But Diddy was not interested in the traditional fixed fee, celebrity endorsement deal. “I’ve gotten to the point where I don’t want to do just endorsements. I want ownership,” he said.

And so a different deal was done. Diddy became the brand manager and chief marketing officer of the brand on a full-time basis. He even had the business cards made. In return he would take a 50 per cent share of Ciroc’s profits each year.

With deal signed, Diddy, working with his own marketing company the Blue Flame Agency, set about fixing Ciroc. While many in the industry sneered at the idea of celebrity endorser turned brand strategist, Diddy turned his sights on the branding basics.

Out went ‘The wine lover’s vodka’ positioning and in came one built around the art of celebration. Diddy also questioned Diageo’s strategy of targeting existing drinkers of ultra-premium vodka who already had strong established loyalty to existing brands. Instead, he went after new, younger drinkers who were just starting to trade up their drinking repertoire.

And then there was the communications. A perfect 360-degree campaign in which events, PR, advertising, product placement, digital and outdoor were seamlessly used to build Ciroc’s reputation for celebration and celebrity. Some of the tactics were highly unusual by traditional marketing standards. For example, Diddy adopted the moniker of ‘Ciroc Obama’ during the 2008 Presidential campaign.

But it worked. Sales are now up 600 per cent since Diddy took charge and while other top vodka brands managed growth of 2-3 per cent last year, Ciroc grew by an astonishing 65 per cent. The brand sold more than 2 million cases last year in the US. That’s still only half that of Grey Goose but the trajectory of the two brands has now been reversed: Goose is flat, and Ciroc is catching up, fast.

For Diageo, the success is a remarkable coup and part of what most analysts agree is a purple patch for the company. For Diddy, the move is likely to net him hundreds of millions of dollars.

When Diddy took the helm in 2007, he was openly derisive of traditional brand building agencies and their convoluted approach: “Everybody has their marketing lingo, but I’m about results”. Many snorted at his arrogance and waited for his inevitable comeuppance. But there has been no hangover. Ciroc is the hottest brand in wine and spirits right now. And that makes Diddy the daddy of branding.

Readers' comments (10)

  • It just shows that you don't need a University degree and textbook to be a world class marketeer, you just need to understand people, something which Sean Combs has succesfully managed to do for years.

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  • It's an excellent move on Diageo's part - celebrity brand endorsement has long been a fairly bulletproof tactic to increase product adoption rates. However, Greg Welburn has made an excellent point about understanding your consumer. With one of marketing's key processes being customer attraction, Diageo identified the need for a new 'hero' in the market - and Ciroc was more than up for the job. Ciroc, coupled with the Diddy brand was always going to win, one doesn't need to look further than Hip-Hop music videos, and the Hip-Hop celebrity culture to understand that.

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  • Great article and fascinating story -- would be interested to know if it really was Diddy driving this or if it was "his people". Kudos to Diageo for embracing Diddy's proposal -- others might not have been so open to a deal structured in this way. Would be interesting to see if the tables can be turned -- brands that are asked by their agents to sponsor up-and-coming celebrities do it as an investment as opposed to a marketing ploy and in return for the cash get a "share" of the celebrities future income?

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  • Fiona's question is a good one and, alas, I can only tell you what I have heard but not had confirmed by Diageo directly:

    The company had nothing to lose so they really did let him take a lot of control in the US over key marketing decisions.

    Now this may be exactly what Diageo want us to think because it bolsters their Ciroc authenticity.

    It may also be exactly what they dont want us to think because it suggests Diddy knows more about branding than them and can succeed where they had failed.

    Anyone from Diageo care to (anonymously) chime in?

    Is Diddy the Daddy of Diageo?

    (try saying that after six Cirocs)

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  • Wow! love it!
    Makes me wonder though, how much of the Ciroc's growth was from Diddy's associate with the brand and how much was from his actual expertise and different approach?
    I suspect and it was bit of both.

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  • It seems the giddying effect a little attention from the rap industry's luminaries has on something knows no bounds, a retweet of the above article by LilKim leaves both Marketing Week and Mr Ritson himself, tickled pink.

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  • Is it a coincidence that Blackberry has now appointed Alicia Keyes to Global Creative Director.

    Vis a vis Diddy, he has been tremendously successful for years, and has been instrumental in building brand Diddy - both musically and with his business pursuits.

    His ability to outreach to celebrities is also phenomenal.

    So it is not so unthinkable that he may have acquired some marketing knowledge on his journey to success. I say well done to him and his team!

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  • Also important to point out that other markets are dwarfed in comparison to the US when it comes to Vodka.

    There are other new success stories (Pinnacle, 3 Olives etc) there that demonstrate that the category is now so big that there still exists opportunity in a category that has been labelled 'saturated' for too long.

    All I would suggest is that whilst Ciroc's rapid rise over the last 5 years is impressive, it is also almost completely dependent upon Combes. Whether or not this represents a sustainable strategy remains to be seen, though for now it is a story that says as much about the US' obsession with celebrity as it does brilliant marketing.

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  • It will be very interesting to see the influence that Alicia Keys has on the Blackberry Brand. Whereas Diddy was able to target a new segment: the younger consumers, Blackberry have already targeted this so where is their next move going to take them...

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  • lncredible article.lts a true testament to Mr Combs.Only a few years ago he started this journey with Diageo ,the phenomenal growth is unprecedent.He is trully the legendary Midas.

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