Profile: Regional markteing chief of Diageo James Thompson

As Asia-Pacific CMO for global alcohol brand Diageo, James Thompson is sitting on a regional marketing budget of some US$250 million. But what sounds like a mouth-watering prospect for any ambitious agency comes with an important caveat from Thompson: “The agency is no longer king.”

In an age of tightening adspend and growing strength of internal client marketing teams at larger multinationals, Thompson is clear about where the power lies. “We put teams of agencies together and the best idea wins and that agency is going to lead the project for us,” he says.

This is not to suggest Thompson devalues the agency contribution - quite the contrary - but he is clear that the traditional client agency model needs to change. “Nobody gets the work through their business card any more. We need excellence from each discipline and we need teams.”

While putting competing agencies in the same room - literally in some cases - could cause some consternation, Thompson says the process, which at first “did not go down well at all”, has gradually become accepted. “If people can leave the egos at the door, - and that includes us - the idea becomes central. And if we can come up with something that touches people’s lives, then everyone is excited and wants to take part.”

This attitude has certainly been noted by his agency partners, who are motivated by the new
ways of thinking that Thompson proposes. “James is an exciting client to work with because he has such a keen intellect,” says Charles Wigley, chairman for Asia at BBH. “He challenges and pushes because he wants to get the very best work out.”

David Mayo, president of Ogilvy & Mather Advertising, Asia-Pacific, agrees: “Tough love works with agencies, and James knows how to manage them.”

Thompson’s approach to agency relationships is typical of his overall attitude towards marketing. Although relatively new to Asia - he took up the APAC role at the start of 2007 - he is a time served Diageo marketer, joining the company in 1994 to work on Guinness after a ten-year stint at Unilever. Prior to arriving in Singapore to head the region, he was the global lead for Diageo’s vodka and rum brands. During his time with the company he has developed a marketing philosophy that values innovation, leftfield thinking, and even risk; he looks favourably on maverick, entrepreneurial brand managers, something he has been keen to introduce to Asia.

“Our business is a balance between driving the things that we know power growth and experimenting and taking risks on things that are quite different,” he says. “I am finding myself constantly championing risk and experimentation and, with my investment hat on, figuring out how much we can afford to back the risk. It is an interesting tension between prudence and risk, but we are getting better at walking that line.”

Adds Mayo: “James is a person in search of the new, the excellent and the unseen. He is a curious guy and expects people around him to have the same alchemistic view of the world as him.”

In a short space of time Thompson has put his mark firmly on the Diageo portfolio, especially among its most iconic brands. Johnnie Walker Black Label, for instance, during the past fiscal year recorded net sales volume growth of 12 per cent across Asia Pacific and net sales volume growth of 50 per cent in Southeast Asia.

Much of this he attributes to an improvement in the company’s marketing capabilities. “I think that
the quality of marketing in our company over the past two to three years has grown exponentially in Asia,” says Thompson. “The quality of the work with our agencies is much better. A few years ago our standards weren’t up with the best in Diageo, but now they really are.”

What has changed? Surprisingly, it is not the talent at his disposal - Diageo has roughly 150 marketers across the region; rather it is the high standards and expectations he has demanded from his team, both internally and outside the company.

But building on this growth in Asia will not be easy. Diageo faces stiff competition in the region from local brands, as well as global rivals such as Pernod Ricard. Thompson’s philosophy is that there is more than enough to go around.

“The great news about Asia is there are so many new consumers - depending on which cut you take between 55 million and 75 million new legal drinking-age consumers coming into the market every year. I am not afraid of going head-to-head with our big competitors on the old battle grounds, but I actually think trying to meet the needs of new consumers and helping them make their own choices is part of our challenge and opportunity.”

One task will be to differentiate his brands in the market. And the challenge is not just from other alcohol brands, in some countries it is more about responding to long-held drinking habits and building new consumer segments and new drinking occasions, not so much changing habits, but creating something new.

“People in China are more receptive to new things. There is a mindset of openness, there is a willingness of the generation born after the 1970s to look outward and to redefine itself. The market there, and some other countries in Asia, is ripe for brands that come along and put a flag in the ground and are clear about what they stand for.”

With this in mind, Thompson has been placing emphasis on building brand experiences for consumers. “It is not about talking to consumers, it is about people participating,’ he says. In Korea, for example, Diageo recently created a ‘Keep Walking Fund’ for Johnnie Walker, whereby applicants could win a slice of 500 million won ($445,000) to help fund their dreams. The initiative also ran in Taiwan and Thailand. “At the ceremony people broke down in tears. It was far more than an ad campaign - it stood for something in people’s lives.”

Diageo has also been shown as a category leader in new media, evident most clearly in Asia with the Johnnie Walker ‘Join the pact’ campaign, although Thompson makes the point he doesn’t see a distinction between digital and non-digital.

“The whole debate about percentage of budget spent on digital is sterile,” he says. “All marketing now is in the digital world. What we need is share of heart, not voice, and people’s hearts exist in the digital world. If you take away the TV safety net from brand managers and say you can’t advertise on TV you get better ideas.”

With this rapid pace of change within the media and advertising industry, as well as shifting consumption habits, Thompson argues the marketing industry is set to be more exciting than at any time in the past 10 to 15 years, with marketing managers at the centre of decision-making. At the same time, it means marketers will need to be more connected than ever before with media and consumers.

“It means we are going to need people who are mavericks and who are not afraid to lead, as opposed to looking in the rear view mirror. Internally, we need to make sure we are valuing people like that more. We know we work in a corporate environment so I am not pretending that is already sorted, but I hope we are ahead of the game.”

James Thompson CV

• 2007 Chief marketing officer, APAC , Diageo
• 2004 President of global marketing for vodka, rum and ready-to-drink businesses — Diageo
• 2002 Senior VP , Priority Brands — Diageo North America
• 1999 VP , marketing — Guinness Bass Import Company, USA

Personal File

• Lives Singapore
• Family Married for over 20 years to Kiurstan and has two teenage children
• Phone iPhone and BlackBerry
• Interests Skiing and football (he is a supporter of West Ham FC). Also plays piano and flute.
• Favourite alcoholic drink Johnnie Walker Black label

This article was originally published in the November 2010 issue of Campaign Asia-Pacific.