How AI helps Diageo target audiences and navigate regulatory waters
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NEW YORK — Diageo has significantly increased its investments in artificial intelligence (AI) for precision marketing, which has helped the company navigate challenges around regulation and generating return on investment (ROI), an executive said during an Advertising Week New York session on Tuesday. In addition to detailing the alcohol giant’s AI investments, panelists discussed how data and AI are closely related.
“We're currently building out our data capabilities, especially starting from marketing,” said Joshua Nafman, vice president, data and operations at Diageo. “How do we make better decisions? How do we drive down costs? How do we increase effectiveness?”
Nafman was joined by Mark Zagorski, CEO at DoubleVerify. The two discussed AI implementation, the tech’s place in brand safety and the growing importance of data for integrated marketing.
Addressing challenges
While nearly all advertisers face some sort of challenge when it comes to the digital marketing landscape, Diageo faces some challenges unique to the alcohol segment, including regulatory limitations surrounding where and who it can advertise to. The company needs to reach its market without appearing next to any content aimed at those below the legal consumption age for alcohol, a problem it refers to as inventory optionality.
“We can't market, and wouldn't want to market to anybody under the legal drinking age,” said Nafman. “So that means who we can communicate to and how we can do that…we're really challenged on that.”
Another challenge Diageo faces, like many other advertisers, is media inflation. More channels can lead to increased costs. At a time when marketing budgets face mounting pressure, figuring out how to cut costs, not raise them, is key. As marketing channels continue to splinter and diversify, that goal becomes more difficult to achieve.
A challenge specific to AI that Diageo had to address when implementing the new technology is the hype and expectation around AI, according to Nafman. Investing in technology can be extremely expensive. Data can be misused and end up not delivering the return expected of it.
“As soon as you touch data or AI, my expectation is that my media costs will actually skyrocket…my ROI just isn't there. And we've made a lot of mistakes doing this earlier on,” said Nafman.