Digital media key for Diageo in Asia Pacific

30 September 2010

SINGAPORE: Diageo, the spirits group, is directing a quarter of its Asia Pacific adspend to new media, to engage the region's emerging "digital generation."

The company's organic revenues rose by 1% over its most recent financial year in APAC, during which period marketing expenditure climbed 3%.

Among Diageo's leading products locally are Johnnie Walker Black Label, The Singleton and Guinness, all of which enjoyed double-digit growth.

"We have delivered this performance through continued investment in the right routes to market, backing the right brand market opportunities and driving our customer marketing agenda," said Gilbert Ghostine, president, Diageo Asia Pacific.

"We will continue to increase marketing spend behind the core brands, leverage innovation, drive super deluxe gifting, grow our sales capabilities, improve margins … and build on our strategic partnerships."

Diageo estimates 50m people enter the alcoholic drinks category every 12 months in Asia Pacific, a development working alongside a surge in new media use, yielding a "digital market generation".

"I believe we have got the business in great shape to leverage the growth opportunities for the increasing middle classes, the increasing beverage alcohol consumer base and the increasing importance of digital that this region presents," said Ghostine.

"We've kept our connections with our consumers and we have been unconventional. Now, 25% of our A&P is invested on digital. So we are connecting with the new consumers."

Ghostine quoted statistics suggesting Asia's share of worldwide wealth will reach 20% by 2014, when its proportion of luxury returns should hit 40%.

"Across the region we see premiumisation as a trend that is here to stay," said Ghostine.

"Even in smaller markets like Thailand, where the global recession has seen a general shift to lower price brands, we are having success in trading consumers up."

China is set to become the largest single outlet for high-end goods by 2014, contributing 29% of demand, and Diageo is enhancing its presence by staking a claim in the Baiju industry, worth 500m cases a year overall.

"We are very excited about China. When we look into our archives, our first advertising in China for Johnnie Walker was aired in 1938, so we have had a long-term commitment for China," said Ghostine.

"We are the only global spirits company that is competing at a big scale in Chinese white spirit - that is, Baiju - and on international spirits."

Data sourced from The Shout/Diageo; additional content by Warc staff