Speaking last week, Laurent Pillet, Managing Director for Pernod Ricard UK told Digiday, “Amazon is a platform for both sales and advertising for Pernod Ricard,” and an effective one, too.
“Over the last year we’ve dramatically increased the amount of media we buy on Amazon. On top of the media we buy, we’re also looking to sell more on Amazon. In 2017, our sales on Amazon grew by 100% and we’re now the second largest spirits provider for the site, with a market share of 10%. That’s far more than we have in traditional markets.”
Though Pillet avoided explaining which specific ad products his company was spending on, he said its combined package had been “very effective” as a platform. Amazon remains a relatively small, young player in its ad space, but its advantages are obvious. When a customer sees an ad and then buys it, Amazon knows that there’s a real person behind the profile and whether real money has been spent.
Brands are taking note. In July, CFO Brian Oslovsky, told analysts that the advertising program is “now a billion-dollar business for us and growing very quickly”. Its fastest growing segment, growing at 139% in the first quarter of 2018, the ad business has remained measured in its approach with a conservative ad load, however.
Elsewhere, Pernod Ricard UK is examining further developments in its media strategy. First, through in-housing, the company says it saved €60m in the first half of 2017, notably by becoming less reliant on agencies for programmatic buying.
CEO Alexandre Ricard asked, if the expertise is out there, “why pay commission?”, in comments reported by the Drum. “We can do it ourselves. Not only is it less expensive but it’s more efficient because we know what to target, how and when”. What he is willing to pay for is “creative, disruptive ideas”.
The meaning for agencies, meanwhile, is unclear. Ricard said his expectations of media agencies were shifting to providing value through “disruptive creativity.” Naturally, business values creativity in principle, but agencies have ongoing struggles to bill for this kind of skill. For more on this, read WARC’s in-depth report: How agencies can become more useful.
Sourced from Digiday, The Drum, WARC