Budweiser’s World Cup football sponsorship has helped sales and given its marketing more focus, which could do the brand more good than iconic ads, says David Benady
Budweiser’s UK sales have been boosted this summer by its association with the FIFA World Cup, but the brand is fighting to regain its crown as the self-proclaimed “King of Beers”.
The brand has appointed DDB London to handle its account in Ireland (MW last week), but in the UK, Bud has struggled to recover the powerful position it held during the mid-1990s. Brand owner Anheuser-Busch’s (A-B) results for the first half of 2006 reveal “lower earnings” from the UK.
But according to UK marketing director Jim Gorczyca, its “you do the football, we’ll do the beer” strategy, which supported its World Cup sponsorship, coupled with hot weather, has resulted in strong sales. “Budweiser UK sales have exceeded expectations during the World Cup and June has been a record month,” he says.
After a slow-burn UK launch in the 1980s, Budweiser had a successful spell the following decade with its “Genuine Article” ads promoting Levi’s-style Americana, helping it become a top-selling bottled beer in UK pubs and bars. But in the late 1990s, stiff competition came from flavoured alcoholic beverages. Between 2002 and 2004, it lost a fifth of its share of the lager market for the on- and off-trades, with sales falling to &£508m from &£631m, according to Mintel.
More recently sales have been hit by brands such as WKD and the revitalisation of standard lagers with the launch of chilled versions. At the same time, premium lagers have suffered generally (Stella Artois has also been hit by this trend) as drinkers indulge in longer drinking sessions with weaker beer.
Some observers argue that Bud’s UK position is further undermined by a marketing strategy so diffuse and uncoordinated that the brand has lost its identity in the crowded long drinks market. However, the seeds of a revival could be evident in a more single-minded focus on football. Bud’s volume market share has improved at 5.2%, up from 4.6% last year.
Bud has created some highly popular advertising over the years, such as campaigns in the late 1990s featuring frogs and lizards. Then in 2000 came the widely acclaimed “Whassup?” ads, showing a bunch of young American guys shouting the phrase down the phone. However, “Whassup” became a favourite war cry of British lager louts – and was even adopted by young children – negatively associating the brand with anti-social drinking.
In a bid to repair the damage, Budweiser launched the “True” campaign, aimed at an older age group and focusing on relationships. But this made the brand appear rather middle-aged and did little to build its popularity with its core 18- to 24-year-old target market.
In the meantime, Bud has poured money into a varied sponsorship programme. It had a stint sponsoring darts, backs the Formula 1 Williams team and sponsors a music festival, Bud Rising.
A World Cup sponsor since 1986, Budweiser has also sponsored the Premier League since 2002. But it wasn’t until it hired Rainey Kelly Campbell Roalfe/Y&R last year that it started promoting its football ties more heavily with the “Soccertainment” ads lampooning American attitudes to football.
Some observers struggle to see how the strategy gives Bud acceptance in the UK, but it is thought to have been well-received in some quarters. Bud’s ability to poke fun at its American roots is seen as an antidote to anti-US attitudes prevalent in the UK in recent years and the related backlash against US brands.
But many believe Bud is capable of building a more powerful position by focusing its marketing activity. One rival source says: “Bud throws money at events and sees what sticks. It is like wallpaper, you expect Bud to be there.”
The industry observer says evidence of A-B’s lack of understanding of the UK market was seen in the launch of the low-calorie Bud Light variant in 1999, which was promoted as a beer that doesn’t give you a beer gut. “For UK beer drinkers that is irrelevant: imagine the piss-take you would get in the pub from your mates if you ordered it,” he says. Bud Light was withdrawn shortly after launch.
But the source accepts that “nobody ever laughed at you for ordering a [regular] Bud” – a prime consideration in the UK lager market. Others add that Bud’s decision not to have a strong presence on draught in the UK is a problem.
Bud’s challenge now is to build on its World Cup sponsorship by allowing UK-based ad agencies to do the marketing, while it does the beer.â¢
When you consider our fondness in the marketing and communications business for advanced thinking techniques (for example, Dr de Bono’s Lateral Thinking and Jean-Marie Dru’s Disruption), we are an unbelievably conservative lot. The sad truth is that little has changed since I joined up 40 years ago. We are still using the military analogies (objectives, strategy, target) of Second World War battlefields. We are still slowing down creativity by copying Noah and housing copywriters and art directors two by two.
My suggestion this August – the beach is always a great place to think – is that we should all conspire to change some of the rules. So you get real value from this issue of Marketing Week, I am going to offer nine revolutionary proposals. I hope you think them worth considering, and come up with a tenth. If it is a particularly challenging one, I will write it up in my next column.
So to start/ give creative work the same priority that food gets in restaurants. Do an agency tour in one of the great palaces. Just how much creation is going on? What is the ratio between input and output? Frightening isn’t it? Hot agencies produce idea after idea. How can you make your agency hot again?
Forget nine to five and turn agencies and marketing departments into 24/7 operations. It’s happened in news organisations, in broadcasting, print and internet media. Marketing is truly global; as you turn on your computer in the morning, someone the other side of the world is turning theirs off. E-mail never stops, and there is no reason why brands or agencies should either.
Follow integration to its logical conclusion and put agencies back together again. In the 1960s I worked in an agency called Pritchard Wood & Partners. We did the full 360 degrees (or as much of it as had been invented then) under one roof. Media talked to creative. The production people talked to art directors and the guy responsible for checking where the 48-sheets were sited. Account people project managed across the spectrum (PR, sales promotion and so on), and it seemed to work fine. Most clients prefer managing one agency to a score of them.
Scrap meetings. A few questions for you: just how many meetings do you attend in the average week? Are they productive? Do they solve problems? Wouldn’t you be more effective if you insisted on having at least an hour a day (preferably more) to think?
Copy football and pay star agencies like stars. I am not sure where remuneration is going, as procurement experts run the rule over endless spreadsheets of people hours. But the assumption is that in a creative business inputs should determine cost. Surely that’s wrong. Value should be a function of outputs and outcomes. The agencies that demonstrate repeated success should command a higher price. Simple.
Build your marketing around FMOT (first moment of truth) and work backwards. I know I’m in danger of obsessing about starting planning at the point of purchase – but you know it makes sense. When we look at established brands with high awareness and established loyalty plans, the potential return from stimulating impulse purchase could be far higher than simply carrying on with trying to influence awareness and desire.
Change the rules on conflict. There is a real difference between state secrets and normal commercial detail. Yet agencies are traditionally precluded from working for competitors. Upstream and downstream from agencies there does not seem to be a problem. Manufacturers market whole stables of competitive products. Retailers sell them. Isn’t there a way we can liberalise the market to enable the best brands to access the best talent?
Revisit the in-house agency concept. Don’t dismiss it because it hasn’t worked in the past. Most major companies have set up media units and marketing procurement. Would it not make sense to internalise some of the strategic, creative and project management functions as well? These in-house units would not be rivals to external agencies. For the most part they would be implants from them.
Fight the regulators. Why as an industry are we so supine in the face of regulators, pressure groups and legislators? It is unacceptable that the freedom of expression in the media is not available to marketers and agencies. I’m not suggesting we should shelve decades of self-restraint and insistence on the truth but, until such time as alcohol and confectionery (to name just two “villains”) are banned from sale, what is wrong with promoting them, and allowing consumers to judge for themselves?
David Wethey is chairman of Agency Assessments International