Diageo warns ‘quality of reach’ is becoming ‘incredibly challenging’

Top marketers at Diageo and HSBC have warned that “one size fits all” approaches will no longer work for advertisers, as they face an ever-changing climate in wake of the pandemic.

Speaking at the IPA’s Effworks Global 2021 event this morning (12 October), Diageo’s global marketing effectiveness director Kiel Peterson said the pandemic has created a conundrum for brands, as “quality of reach” is now going to be “incredibly challenging” as consumer behaviour has shifted dramatically.

“We see very clearly people moving out of cities, they are being isolated into very tiny pockets, and there’s this idea that things will morph into a digital world. People are no longer congregating in urban areas and taking the same forms of mass transit and seeing the same advertisements,” said Petersen.

He also noted people are no longer “wrapped around the monoculture of television” at home and are instead encasing themselves in small “digital echo chambers” as streaming and social media rise.

“It’s becoming very hard with that echo chamber to build quality problem-based reach, so there are real implications for us as advertisers,” said Petersen.

Personalisation will be key

Personalisation in digital marketing will be a key tool as the digital world grows. While Diageo has made some progress Petersen said the drinks giant is still “absolutely on the bottom slope” in this regard.

“We will inherently become more personalised so one of the ways we’ve been talking about it at Diageo is to have this mindset of possibility across our marketing organisations around the world,” he explained.

“As we go through our planning cycles keeping centre of mind possibilities is important because things have changed so much faster than I think anyone anticipated.

“But at the same time the importance of data and really pointed quality consumer research is going to be incredibly important to leverage in personalisation.”

He also pointed to how the drinks giant developed a consumer foresight tool called ‘Radar’ which used footfall data to view how consumers were remerging in the economy so it could allocate the “right amount of money” in marketing.

Diageo marketers also had a job on their hands in defending the continued investment into marketing despite the on-trade being forced to shut.

“Our team had a huge job on our hands to defend investing in marketing at a time where all of these wonderful pubs around the UK were locked down, and no points of means to serve our consumers,” said Petersen.

One size doesn’t fit all

HSBC UK CMO Becky Moffat agreed the landscape has shifted and highlighted how the pandemic has created a broad spectrum of consumers that is by no means “even or equal”. As a result she said marketers need to have “empathy” and not assume “one size fits all” when conjuring marketing strategies.

“It never was [one size fits all] but it’s even more important now to consider that as we move forward and to really understand how things have changed. We just need to be very focused on who we ask, and what their [specific] reoccurring problem is rather than having a very generic approach,” said Moffat.

The importance of data and really pointed, quality consumer research is going to be incredibly important to leverage in personalisation.

Kiel Petersen, Diageo

According to Enders Research released today (12 October) the pandemic has indeed brought a divide in consumers.

Households that are able to work from home all week are able to save an average of 25% to 30% of weekly income. Those working from home are saving due to less take up of out-of-home activities such as the gym, hairdressers and on-the-go foods.

Low-income households, meanwhile, including essential workers required to travel to work, furloughed workers and the unemployed, are more likely to have seen their savings fall during the pandemic, due to reduced earnings and ongoing costs of travel to work.

Under lockdowns HSBC UK launched products and campaigns to “make an actual difference”, said Moffat. An example of this is its ‘Vicious Circle’ activation, which showcased how those with no fixed address are unable to open a bank account and face being frozen out of assistance with housing and benefits.

“When the pandemic first hit it became less about how do you protect yourself, but to turn all your energy to supporting your existing customers,” said Moffat.

She pointed to HSBC’s brand health declining in the past as a warning when it was less connected with consumers, but the brand is now on the mend with more purposeful messaging.

“There is an increasing expectation among customers that large corporates need to stand up and play their part in making the world a better place,” said Moffat.