Last updated: September 18, 2011 6:13 pm

Facebook strikes Diageo advertising deal

Facebook has struck a multimillion-dollar advertising partnership with Diageo, owner of drinks brands including Smirnoff and Guinness, in the latest move by the social networking website to form closer ties with marketers.

The deal will see the two companies share skills and pool resources to figure out new ways to harness the chatter among Facebook’s 750m users.

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Diageo is particularly keen to tap Facebook’s large audience in emerging markets such as Brazil, where the two companies occupy the same office building in Sao Paolo.

Diageo has been using Facebook for advertising and promotions for more than a year and has found through Nielsen basket-scanning research that certain campaigns for brands including Smirnoff and Baileys boosted offline purchases by as much as 20 per cent in the US.

“We’ve now said, how can we ramp this up and make it something completely innovative that sets us apart from our competitors,” said Kathy Parker, Diageo’s senior vice-president of global marketing and innovation.

“Facebook are working with us to make sure that we are not only fan collecting but that they are actively engaged and driving advocacy for our brands. We are looking for increases in customer engagement and increases in sales and [market] share.”

Diageo, whose brands have 12.6m fans across the website, has committed to spending more than $10m on Facebook ads in exchange for early access to forthcoming features and consultancy to make its campaigns “social by design”.

Andy Fennell, Diageo’s chief marketing officer, is joining Facebook’s “client council”, an advisory board of marketers from the likes of Coca-Cola and Interpublic’s McCann Worldgroup that will hold its first meeting in New York on October 3.

In the last year Diageo has increased its budget for digital marketing by 50 per cent to just under 20 per cent of its total media spending.

Social networks are its top area of investment in digital, ahead of display and search, indicating the allure for brand-building that Facebook offers for advertisers who have traditionally focused on offline media such as TV.

Diageo is one of a handful of large advertisers, including P&G, American Express and Wal-Mart, to which Facebook provides access to a “SWAT team” from its marketing, research and product engineering groups.

“We can’t do it for everyone – we are a small company,” said Carolyn Everson, Facebook’s vice-president of global marketing solutions.

“When I see a client that shows they can really think differently about their business, I marshall my resources and give them a team of our best thinkers in the areas they need.”

Facebook is working with 97 of the world’s 100 global marketers but the social network has a “lot to learn” about how best to serve international advertisers, Ms Everson said. She hopes the partnership will create case studies from which other brands can learn.

“Facebook is proving itself as one of, if not the, branding platform of choice online,” said Ankur Shah, chief executive of Techlightenment, a London-based digital marketing agency. “The idea that an advertiser can encourage the proliferation of a positive brand message is phenomenal.”

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