Diageo marketing increase pays dividends with global sales growth

Diageo marketing splurge pays dividends as sales follow suit

Diageo’s marketing spend for the last year jumped by 8% to over £2bn, contributing to sales of £12.9bn, up 5.8% from last year.

Marketing investment surged worldwide to £2,042m (up from £1,882m) with the North American market leading the charge with 11% growth, which combined with the use of new analytic tools to improve the effectiveness of each pound spent to boost investment returns, the drinks giant has revealed.

In the Asia-Pacific region, the comparable rate of growth was put at 7%, buoyed by increased investment in Chinese white spirits, Johnnie Walker and scotch malts across China as well as its "#ChallengeAccepted" campaign for Royal Challenge in India.

Marketing growth increased by 6% both in Europe and Turkey as well as Latin America and the Caribbean, with the former driven primarily by Guinness' sponsorship of the Six Nations.

Finally, African marketing investment rose 3% on the back of the relaunch of Guinness Foreign Extra Stout as well as investment in Tusker marketing and media.

The results also claimed an operating profit of £4bn, an increase year-on-year of 9.5%, driven by organic growth.

Announcing Diageo's preliminary results for the year ended 30 June 2019, chief executive Ivan Menezes said: "Diageo has delivered another year of strong performance. Organic volume and net sales growth was broad-based across regions and categories, with new product innovation being a strong contributor. We expanded organic operating margin ahead of our guidance and increased investment behind our brands ahead of organic net sales growth.

“Our focus on quality sustainable growth is backed by a culture of everyday efficiency that enables us to invest smartly in marketing and growth initiatives while expanding margins.”

Diageo has invested heavily in updating its drinks packaging as part of an ongoing arms race to win the attention of consumers.

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