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Emboldened by new data, Diageo steps up marketing spend
May 9, 2017 / 7:23 PM / 7 months ago

Emboldened by new data, Diageo steps up marketing spend

LONDON (Reuters) - Diageo, the world’s largest spirits company, is stepping up its marketing in the United States, starting in the second half of this year and again next year, armed with a new programme of data analysis that lets it spend more smartly.

FILE PHOTO: Bottles of Johnnie Walker whisky move along on the production line at the Diageo owned Shieldhall bottling plant in Glasgow, Scotland March 24, 2011. REUTERS/David Moir/File Photo

Diageo is working hard to improve performance in the United States, its biggest profit centre, particularly around Smirnoff vodka, which is still losing market share despite improving sales.

“The United States is very important for Diageo ... and one of the first priorities for reinvestment,” Chief Executive Ivan Menezes told reporters on Tuesday after meetings with analysts and investors.

A new method of gathering and analysing data is giving Diageo a better idea of the returns it is making on various investments, allowing the company to switch money around more quickly.

“That better data and information really gives us much greater confidence in where we should be upweighting our spend,” said Chief Financial Officer Kathryn Mikells. “And candidly where we would look to cut back our spend.”

The increased marketing will be concentrated on its main brands, including Smirnoff vodka, Johnnie Walker whisky and Captain Morgan rum. Next year the company will also spend more on marketing Scotch whisky, its biggest product category.

The company said it achieved about 80 million pounds of savings last year in procurement, including by reducing the number of advertising agencies it works with in Europe from 36 to two. The company expects to increase procurement savings this year.

Menezes also said that performance in the company’s beer business would improve this year, recovering after first-half problems in Nigeria and a tax change in Kenya.

Reporting by Martinne Geller; Editing by David Goodman

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