UK: Diageo makes festively plump investment
The company's UK unit said today (4 September) that it will spend GBP25m (US$50.3m) on advertising campaigns between October and December, as well as on-trade promotional activity in an effort to drive profits over the festive season.
Diageo GB category development director Russell Jones said: "While the actual number of visits to the on-trade does not see a significant increase over the Christmas period, consumers tend to spend longer in outlets, with events such as Christmas parties and celebrations."
Next month, Diageo intends to launch two new Baileys flavours in the UK, one with a hint of mint chocolate and one with a hint of crème caramel, into the on-trade. The flavours, which were previously launched into the off-trade last Christmas, will be supported by a GBP2.5m marketing spend, backed up by a GBP6m investment in the entire brand.
The GBP6m campaign for Baileys will introduce a new serve, 'Baileys and Ice. Shake It', as well as television, press and outdoor advertising, sampling, PR and relationship marketing. The brand will also sponsor the television programme 'Men in Trees', that shall air until the New Year.
Diageo said it also plans to invest GBP3.5m in its Smirnoff No. 21 vodka and Smirnoff Black vodka in the lead up to Christmas, including a GBP1.2m campaign focusing specifically on the on-trade.
In November, Diageo's Smirnoff brand's GBP5m 'Smirnoff Sea' advertising campaign, which initially launched in July, will be flanked a press, digital and POS campaign with the tagline: 'Extraordinary Purity in every drop'.
The brand will also continue its partnership with FHM magazine and reinstate last year's Smirnoff No.21 'Bottle Smash' television advert in December.
Bell's and Bushmill's, meanwhile, will benefit from a GBP1.5m spend encompassing consumer print advertising and relationship marketing over the Christmas period.
The company said that its Bell's brand will be backed by a GBP1m push, spanning the six weeks leading up to Christmas. The campaign, named 'Rich with Flavour, Full of Life' will include on- and off-trade competitions as well as national press and magazine advertising centring on golfing, horseracing, fishing, dog-walking, gardening and celebrating Christmas.
Bushmills Irish Whiskey will be supported by a GBP500,000 press advertising campaign, 'Irish at its Best'. At the same time, the brand will sponsor the Irish Rugby Federation, as well as promote its approaching 400th anniversary of the brand.
Finally, Diageo has also outlined a GBP3m investment for Guinness this Christmas, with an emphasis on the brand's association with rugby. The marketing activity will include a new advertising campaign, with an emphasis on the brand in the UK on-trade.
This month, Diageo rolled out its new Guinness Red variant in the UK. The launch will be supported by in-bar visibility, including Guinness Red founts. The brand will also continue to benefit from its GBP6m August investment linking it with rugby. The heavyweight campaign, including rugby-themed advertising entitled 'Seconds from Greatness', and in-bar POS kits, aims to push the Guinness brand with live rugby in the on-trade over the coming months.
Last week, Diageo posted a lift in operating profit, despite only a minor rise in sales for its latest fiscal year. The global drinks giant said that operating profit for the 12 months to the end of June increased by 6% year-on-year, reaching GBP2.16bn (US$4.33bn). Net sales in the period were up by 3% GBP7.5bn.
Net profit, however, slipped to GBP1.55bn from GBP1.96bn in 2005-2006, as the tax rate between the two periods increased from 8% to 32%.
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