Big Alcohol giant Diageo has been increasing its marketing spending and innovations to drive more sales of its products.
The Big Alcohol giant increased its marketing spending by 51% since 2017. In 2022 the company has already spent $3.1 billion to promote the use of its alcohol products, this is $2.1 billion higher than six years ago.
This heavy alcohol marketing has worked in favor of Diageo but is harming people and societies. Diageo’s sales and profit have both risen during this time period. Net sales increased by 28% to $17.7 billion leading to $5.2 billion in profit for the 2022 financial year.
Use of new, innovative data and technology to target people with alcohol ads
Diageo is using new and innovative data and technology tools to target more and diverse groups of people with very specific marketing. This means Diageo’s tools and capacities to invade people’s lives and most private spaces with alcohol marketing is increasing and the alcohol giant is making use of the capabilities to push their alcohol brands on people in pursuit of ever more profits at the cost of people’s health and well-being.
Three of the main tools used by Diageo are:
- Catalyst: An internal marketing effectiveness tool.
- Sensor: A tool to help measure the relative effectiveness of Diageo’s media spend across digital platforms.
- Demand Radar: An Artificial Intelligence tool that models various demand. Deployed in 63 countries, covering over 90% of Diageo’s net sales value and marketing investment.
These tools are used by Diageo to target people more specifically with their marketing leading to increased alcohol sales. The return on investment (ROI) from Sensor itself was 30% in the United States (U.S.). The tool was just launched in the U.K. and will be rolled out in other countries by 2023.
Alcohol marketing directly increases alcohol sales and use. This is evident in a case study in Diageo’s 2022 Annual Report. Enhanced marketing of Diageo’s brand Crown Royal’s sponsorship of the NFL led to a 17% improvement in ROI in the first half of 2022. This means the enhanced marketing using the newest tools was able to increase sales of this Diageo brand.
The new tools enabled Diageo to make the marketing content more relevant and invasive to specific target groups. The brand made several versions of the sponsorship advertisement and targeted people based on different occasions such as preparing for football parties and according to geolocation. People who were in cities where the brand had existing team sponsorships were targeted with personalized advertisements.
Diageo expansions to maximize profits
Planning to push alcohol products in even newer ways to turn more people into alcohol consumers, Diageo launched The Diageo Collaboration Center, which is a facility dedicated to analyzing consumer behavior so that Diageo can sell even more alcohol products in the future. The facility is located in Diageo’s campus in Stamford, Connecticut.
Furthermore, to reach more people on a personal level and cash in on growing alcohol e-commerce, Diageo built the Malts.com platform. IWSR predicts a 66% increase in alcohol e-commerce in the next five years reaching $42 billion by 2025.
Research shows that when people personally connect to brands there is a higher chance they will purchase more from the same brand. This new platform is a “direct-from-distillery” offering. This allows people to buy across brands and provides a central hub to plan visits and book tickets to its “brand homes” in Scotland. In 2022 the website was relaunched in five locations as a premium offering.
This is a prime example of an alcohol giant using data and technology to increase alcohol availability.
As Movendi International previously reported, Diageo is also further expanding into traditionally more alcohol-free communities and countries, such as in India. Apart from heavy and aggressive marketing, Diageo uses the following strategies in pursuit of market dominance in India:
- Engaging in road safety programs;
- Advocating for the weakening of local alcohol policies under the guise of increasing Indian States’ ease of doing business rankings; and
- Intervening and influencing tax policies.
Diageo has been embroiled in many unethical practices, including misleading marketing, breaching climate regulations, tax schemes, and likely more.
Sources
ADWEEK: “The Tech Driving Diageo’s $3 Billion Marketing Spend“
Diageo: “Annual Report 2022“