How Diageo is proving marketing effectiveness
Diageo has implemented a new marketing effectiveness tool, dubbed Catalyst, that provides instant data to help the company’s 1,200 marketers make strategic and planning decisions.
In this new age of accountability, marketers are being asked to do more with less, to justify their existence by proving ROI and to find the perfect marriage of effectiveness and efficiency without forgetting the great intangible – creativity.
So imagine being in a job where you’re able to ensure every penny you invest is delivering the best possible outcome. Where you can work with a tool that offers rigorous analytics on budgeting and spending decisions without the need for a PHD in advanced mathematics.
Sounds like a utopian dream? Well Diageo is trying to move closer to marketing nirvana with Catalyst, a new digital interface it has developed with partners to provide instant data to help Diageo’s 1,200 marketers across 55 countries make strategic and planning decisions.
Catalyst has dual functionality. Firstly, it pulls together different data sources to determine the right budget for each brand in the portfolio based on potential profit and the performance of previous marketing programmes.
Secondly, it assesses the likely impact of planned activity. The short- and long-term effect of decisions is analysed and presented with recommendations on where to shift marketing budget for individual brands in different regions and in different channels on a week-by-week basis.
Sounds disarmingly simple, doesn’t it? Yet Diageo claims it is the first of its kind in the consumer goods sector in terms of scope, scale and ease of use. It’s also a platform that stands it and its marketing teams apart, it says.
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Andrew Geoghegan, global head of consumer planning at Diageo, tells Marketing Week the company wanted to launch the tool so it could embed data alongside context and knowledge of its markets.
“Catalyst serves as a tool but what we’re really doing is creating a culture and ways of working and thinking that enable everybody who’s involved in using that marketing investment to ensure that every pound, dollar, rupee or whatever it is you’re investing actually delivers the best possible outcome for the business,” he explains.
This data-driven approach to decision making is one taken by almost all large advertisers, especially in FMCG. But it is also one that has come in for some scrutiny, with critics moaning that the proliferation of data is breeding a generation of marketers that might be more accountable but are not as willing to take risks.
What we’re doing is creating a culture and ways of working and thinking that enable everybody who’s involved in marketing investment to ensure that every pound, dollar, rupee actually delivers the best possible outcome for the business.
Andrew Geoghegan, Diageo
However, Geoghegan believes Catalyst allows for a better balance between analytics and intuition.
“Culturally what happens is [Catalyst] becomes part and parcel of our everyday conversation. So rather than preserve it for specialists what we’ve managed to do – alongside the creativity and brand thinking we value so much – is complement that creativity with rigour and understanding of what’s happening in the world. It’s really enabled us to make small investment decisions right up to big portfolio decisions,” he says.
“Catalyst is about culture, it’s about training, coaching and really developing this rigour and measurement muscle alongside the magic and creativity, which we think in many respects is the signature of marketing people.”
Improving the standing of marketing
Marketers have plenty of influence at Diageo. It owns some of the biggest brands in the alcoholic drinks sector, has a CMO, Syl Saller, who sits on the executive board and a former marketer Ivan Menezes as CEO. That means the ‘colouring-in department’ slight levelled at marketers is unlikely to be heard at the Guinness and Smirnoff owner.
The ability to demonstrate they are spending money on the things that drive growth while removing spend that doesn’t have an impact only increases that influence among the company’s executive and general management team, Geoghegan says.
“It’s actually having a profound effect in how people think about what marketing has done. It is that wonderful combination of rigour and creativity. It means people who are consumer-centric, who understand the culture and the environment in which our brands operate, also see that through the lens of business leaders who are driving tangible outcomes with greater certainty than we have done before,” he adds.
“I think it’s really an exciting time to be a marketing professional at the moment and I think that by combining the left and right brain, this is a really exciting advance for marketing, not just Diageo.”
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Where does Catalyst leave Diageo’s media planning partners, which would have been expected to do much of the leg work Catalyst now does? Geoghegan says it allows for speedier execution.
It actually has a really positive impact in deepening the partnerships between us and our media agencies.
Andrew Geoghegan, Diageo
“It is having a profound effect because the system is an interface which our agencies have access to as much as we do and we’ve designed it around that interface. In the past, in a typical market, when we had this information we would hand it off to an external provider who would come back with a proposed media plan which would take three days,” he explains.
“We would then give it to a media agency who would work out what we can do with that in the real world. With [Catalyst], once we get into the execution part of the planning process those handovers happen directly so it enables us to build the plan collaboratively and translate what the brand manager decides to do. It actually has a really positive impact in deepening the partnerships between us and our media agencies.”
Geoghegan declined to provide any numbers to demonstrate success but instead offered a more philosophical view on its impact.
“We have done this to increase the effectiveness and the profit that we get as a result of marketing. The second measurement is about needing a way to create a truly modern marketing function, which is as comfortable with the opportunities technology offers us as it is with more traditional ways of doing hard graft, so that’s the other main change we are seeing.
“It enables us to become a progressive, forward-thinking marketing function with business leaders willing and happy to embrace the change that’s going on in the world,” he concludes.