Forrester IT Forum: Diageo sees virtual world as key to real-life success

Diageo is treating the social networking phenomenon as more of an opportunity than a threat as it tries to adapt its advertising model to reach out to the emerging generations of consumers, the company's chief information officer (CIO) and business process director told delegates at Forrester Research's IT Forum EMEA 2007 in Edinburgh today.

But, alongside the benefits on offer, Diageo also recognises that operating in a virtual world can present its own unique challenges too, such as people pretending to be what they're not, specifically when it comes to age and alcohol.

The company, which is the umbrella brand behind favourite tipples such as Baileys, Guinness and Smirnoff Ice, says that it now has a presence on Second Life and is happy for employees to use similar non-corporate tools to responsibly promote the company's offerings, particularly as they can't access the site from the company's network. Just so long as they stay within certain boundaries.

"My niece is apparently a digital native and I am, apparently, a digital immigrant," he said. "We are not allowed to advertise in many markets so the channel we have is digital. So the fusion of marketing and technology [as reference by Forrester chief executive George Colony during his keynote] is here today."

"Am I worried? Yes," he said in response to a question from the audience asking him how he felt about the growing trend for employees using tools that the IT department have no control over to either do their work or spread the company word.

"But I turn it around into an opportunity and a challenge. We have a phrase in Diageo that's 'As good as you get at home.' People operate outside these boundaries and we can be quite relaxed as long as they stay within the marketing code. Clearly we can't market to minors so we ask is that avatar an under age avatar or an appropriate avatar? The worry isn't around technology and robustness, it's around corporate governance and reputation."

Dargue also used another example to highlight how the world of marketing is making the most of digital technology, this time citing a game based on the popular US TV show Desperate Housewives.

"You can open a fridge and see Unilever's Slim Fast in there. They have got product placement, not in film but in the digital world," he said.

Dargue attributes much of the success achieved so far to the people within the business. "[It's down to] having the right people to have the right discussions. The current board in Diego is very tech savvy and we know that they're the unpulled lever to achieve the next set of results. We've got a great set of sponsors and once you've got that only ambition will stop you."

The company is clearly embracing the transition from information technology to business technology, an area highlighted by Forrester during another keynote address earlier today. As such, it is keen that companies just starting out on their journey pay attention to what has gone before, specifically when it comes to things like offshore outsourcing.

"I think we can leverage our current strengths in new areas. We know how to run outsourcing and offshore deals with a complex array of partners," he said.

"HR [and other departments] all heading towards business process outsourcing (BPO) would do well to learn from our experience and our scars."

Dargue added: "How do we become open minded and experimental but keep eye on the risks?

"...You have to provide the basics first like getting costs and complexity under control.

It's not 'I don't like this world so I'm going over here.' If you believe there to be a risk to your reputation do not do it as it will wipe out more money than you will ever get back from sales projects."

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