Goodman Fielder to boost digital spend 400%

By By David Blight | 23 March 2012
John Broome.

Goodman Fielder's Freshbake division has unveiled plans to more than quadruple its digital budget in the next two to three years, off a base the company admits should be significantly higher.

According to Goodman Fielder’s marketing director of Freshbake, John Broome, the FMCG giant’s baking division will increase its digital budget from 10% of its marketing pie to 40%.

While Broome would not reveal the exact marketing budget of the Freshbake division, he did say Goodman Fielder’s annual overall marketing spend is between $30 million and $40 million, and that the Freshbake division accounts for about 40% of Goodman Fielder’s multi-billion dollar annual revenue. This points towards an increase in digital investment of several million dollars over the next few years.

“At the moment, Goodman Fielder’s digital budget is too low,” Broome said. “Digital is about 10% of our media spend. I can see that quadrupling in the next two to three years, up to 40% of budget. That’s a bold thing to say, but I think there are things going on now with channels like Facebook that are playing much more closely to our needs than they ever have before.”

Broome stated that given digital media’s relative cost-effectiveness compared to traditional media, there are plenty of opportunities to be leveraged.

“The digital and online world is growing up fast. It is now offering us opportunities to get the same level of reach as TV, and that’s a fantastic outcome. Now that is available to us, you will see a swing in media budgets from FMCG companies towards the online space.”

He said the company will not only be increasing the importance of digital, but will also be upping its overall marketing budget. While Broome would not comment on the exact increase in overall marketing spend, he said significant investment will occur in the coming years, with digital a core focus.

“Baking, whether it’s Goodman Fielder or anyone else, is a highly operations-driven business, it’s a hugely complex enterprise,” Broome said. “There is a definite desire from Goodman Fielder to become far more consumer-centric, but you are going up against decades of operations focus, and it takes time to turn yourself into a marketing-centric organisation.”

Broome’s plans for digital investment follow a period of weak financial performance for the company. In the six months to 31 December, Goodman Fielder’s profits fell 76.9% to $21.5 million, down from $93.1 million in the prior corresponding period. Revenue for the company fell 3.7% to $1.3 billion.

Some of Goodman Fielder’s strongest Freshbake brands include Helga’s, Wonder White, Nature’s Fresh and Mighty Soft.

This article first appeared in the 23 March 2012 edition of AdNews. Click here to subscribe for more news, features and opinion.

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