Diageo attributes soaring profits to marketing spend boost and premiumisation strategy
Charlotte RogersDiageo says its premiumisation strategy is paying off, as its high-end brands contributed to 71% of organic net sales over the year.
Diageo says its premiumisation strategy is paying off, as its high-end brands contributed to 71% of organic net sales over the year.
CMO Cristina Diezhandino says the business will lean on its brands’ “phenomenal” connection with consumers to weather the storm of inflation this year.
Diageo increased marketing investment by 27% in the six months to the end of last year, ahead of sales growth, as it looks to build the business for the future.
After shedding a “higher order” purpose and refocusing the Baileys brand based on customer insights, Diageo has learnt a lot about how to build a distinctive brand consumers love.
On a mission to drive a 50% increase in market share by 2030, Diageo claims to have an “unprecedented” degree of confidence in its marketing investment thanks to effectiveness tool Catalyst.
Scotch whisky brand Johnnie Walker is thriving thanks to a combination of sustained investment, a switch to localised marketing post-pandemic and rich insight ensuring its long-term ‘Keep Walking’ platform remains relevant to consumers.
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The fact consumers are no longer “wrapped around the monoculture of television” presents a real problem for advertisers, according to Diageo’s global marketing effectiveness director Kiel Peterson, who believes personalisation backed by data will be key.
Greater confidence in measuring effectiveness, combined with a rising level of creativity, has convinced the drinks giant to increase its marketing spend as it looks to become a DTC market leader.
Experiential marketing has been on hold in the pandemic but, while expensive to invest in, experiences are important to consumers, so brands should let their imaginations fly again.
When Cristina Diezhandino took over as Diageo’s CMO last summer she saw it as an opportunity to rethink “the future of marketing” and introduce six pillars to rally the drinks giant’s 1,200-strong team.
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