Diageo boosts marketing spend to reflect effectiveness
Global drinks giant Diageo increased its marketing budget by 23% last year on the back of clear evidence of effectiveness.
CEO Ivan Menezes told Marketing Week that improved analytics tools had also led to a significant quality improvement in the creative output of the group’s brands, and that this has been reflected in growing market share. Its overall results for the year to 30 June saw Diageo’s sales grow by 8.3%, to £12.7bn, and an operating profit of £3.7bn.
“If you look at our marketing reinvestment rate over the last few years it has ticked up. Why we do it is that we have much more confidence in measuring the effectiveness of our marketing,” Menezes said. The group credits analytics tools Marketing Catalyst, Edge 365, Demand Radar and Diageo One for this confidence.
“The quality of our marketing has improved continuously. The creativity at work from our marketing teams continues to surprise me very positively. That’s a big factor, because it’s not just the dollars, the money. It’s the actual consumer insight and the creative execution against it. And all of that is working well for us,” he added.
EasyGroup extends brand into three new areas
Brand extensions always carry a risk to them – being known for doing one thing well doesn’t necessarily mean consumers will want to know you for doing something else. As brand consultant Helen Edward advises, the most important consideration is whether the brand has a “right to play” and a “right to win” in a new area.
EasyGroup is hoping it can carry its credentials as a “no frills, low cost” brand into three new categories, with the launch of EasyFood, EasyTaxi and EasyMarketing.
With EasyFood and EasyTaxi, the group is entering two of the most competitive markets in the UK right now, setting itself up as a rival to well-established brands including Just Eat and Deliveroo in the food delivery space, and Uber in the ride-hailing category.
Nevertheless, founder Jeewan Sagu told Marketing Week that he is confident EasyGroup can undercut its rivals and give them a “run for their money”.
And there’s no doubt the brand has a right to play in the food delivery and taxi categories, with the transport credentials it has built through its most famous business, EasyJet.
However, a “right to play” is less easy to establish for the brand in the launch of EasyMarketing, a marketing agency for small- to medium-sized brands. It may well be a brand extension too far.
However, if one of these new launches does ultimately fail, Edwards says the risk to the master brand is relatively minimal, as long as it moves on quickly.
“You don’t want to have consumers saying for years that EasyJet is okay, but their delivery service is rubbish,” she pointed out.
Activision Blizzard latest brand called out for ‘toxic’ culture
It was only a few weeks ago that craft beer brand BrewDog found itself in the spotlight for all the wrong reasons, accused by former staff of a “toxic attitude” and fostering a “culture of fear”. Now, video games company Activision Blizzard has joined BrewDog in the firing line.
Following a two-year investigation, the state of California is taking Activision Blizzard to court over a host of upsetting allegations, including gender pay discrimination, a culture of rape jokes and sexual harassment, and a failure to ensure confidentiality for those employees who complained. Women of colour were deemed worst affected by the alleged behaviours.
In short, the company behind Call of Duty, World of Warcraft and Candy Crush has been accused of cultivating a “frat boy culture”.
Activision Blizzard isn’t the first video games company to find itself scrutinised for its treatment of employees – in 2019, Riot Games agreed to pay out $10m to women who had worked at the company in the previous five years to settle a lawsuit over alleged discrimination.
But momentum seems to be gathering, with employees increasingly taking a public stand against brands that enable toxic cultures.
As with BrewDog, Activision Blizzard’s initial response was not well received, as the business accused California of producing “distorted” and “false” complaints. As a result, many employees took a day off in protest.
Will the news significantly affect the company’s short-term sales? It’s unlikely. Unlike the craft beer market, Activision Blizzard produces products that cannot be replicated by any other company.
But will the business’s brand health and corporate reputation be affected, as BrewDog’s was? Absolutely. And with numerous studies proving diverse workforces build stronger businesses, Activision Blizzard will want to make sure it publicly addresses its issues and works to build a culture that is inclusive to all.
Shortlist for Marketing Week Masters Brand of the Year revealed
Asos, Camelot, Channel 4, KFC and Tesco make up the shortlist for 2021’s Marketing Week Masters Brand of the Year, with all five able to react at speed and with purpose to the events of the past year, meeting the challenges of lockdown and social distancing.
Asos overcame early supply chain problems to establish itself as an ecommerce leader, enjoying a 24% uptick in sales over the half year to February 2021, hitting a record £1.9bn, with profits increasing by 253% to £106.4m.
For National Lottery owner Camelot, a rejuvenated marketing strategy was anchored around its £600m response to the pandemic and a campaign to mark its 25th anniversary, represented by its most successful ever BrandIndex score of 8.1 in 2020 (up from 1.9 in 2019).
At Channel 4, CMO Zaid Al-Qassab oversaw a revamp and expansion of the marketing and viewer experience division and the appointment of Amber Kirby as marketing director. There was also the successful development of a number of strategies, including the first pregnancy loss policy for staff.
KFC continued its run of highly effective and successful campaigns, including ‘RateMyKFC’ and ‘We have it from here’, which found just the right balance between mickey-taking and reassurance during uncertain times for everybody.
Last year’s winner Tesco enjoyed another year of growth and brand strengthening, with its group like-for-like sales grow 6.3% to a total of £53.4bn, much of that down to a doubling down on its value proposition, with extended price match promises and reward card offerings.
Now it’s your chance to have a say in who is crowned the winner.
Lego names new UK head of marketing
Lego Group has named Isabel Graham as head of marketing for the UK and Ireland, replacing Marius Lang who has moved to become general manager for Benelux.
Graham has worked for the brand for nearly 10 years, most recently as head of marketing in the Nordics, in addition to holding marketing and brand director roles in the US and working for Lego’s in-house agency.
She will assume responsibility for marketing strategy and execution in the region, and be tasked with leading Lego’s UK focus on customer-centricity. Global CMO Julia Goldin has been working to instil this factor across the organisation in the belief that “brands that are focused on their audience always win”.
“Isabel has shown exceptional marketing and leadership capabilities during her previous roles and I’m excited to have her join our team,” says Christain Pau, general manager of Lego in the UK and Ireland.