Pernod Ricard’s switch to targeted digital marketing spurs Europe sales
Pernod Ricard’s decision to rein in its ad spend over the last six months to focus on cheaper but what it claims are more effective digital promotions seems to be paying off in Europe with higher sales but less so elsewhere.
The Absolut vodka and Ballantine’s scotch whiskey maker posted a 4 per cent jump in sales to €1.6bn (£1.3bn) for the six months to 31 December across Europe. Sales were buoyed by a 2 per cent jump from Western Europen markets in the period, and a “slight” increase in the UK.
Pernod Ricard says it kept “strict” control of advertising and promotional spend during this time sending its outlay down 2 per cent in comparison to the same period last year. The drinks producer took the decision to pare back marketing costs last summer in an attempt to establish more effective ways of driving sales through a mix of data, branded content, ecommerce and internal expertise.
The shift was spearheaded by the appointment of the group’s first head of digital marketing Antonia Mccahon last September as well the launch of its Digital Acceleration Team (DAT) to integrate digital expertise across its brand teams. The digital drive is being extended to other parts of the business through a company-wide restructure, dubbed internally as “Allegro”, to set up a decentralised model between brand companies and market companies
Pierre Pringuet, chief executive of Pernod Ricard, says improving the company’s operational efficiency and control of resources would remain its priority over the next few months. It is hoped the move to more shared learnings between both its brand and market teams can help turnaround a steep drop in sales in China – its second biggest market.
Sales for the region plummeted 18 per cent year-on-year over the last six months with Pernod Ricard warning demand was likely to remain weak for the remainder of the year. The drop kept global revenue flat at €4.6bn (£3.7bn).