Fewer Budweiser ads for sports events
InBev paid $52 billion for Anheuser-Busch. But that kind of debt is weighing the company down, so funding for TV commercials during sports events is being slashed. Adam Allington reports.
Alex Rodriguez of the New York Yankees chases down the ball during a game against the Boston Red Sox on August 18, 2006 at Fenway Park in Boston, as Budweiser advertisements display in the background. (Jim McIsaac/Getty Images)
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Kai Ryssdal: Among those who're facing some risk with InBev's new payment policy are its ad agencies. The ones who still have contracts with the company, anyway. InBev has cut way back on its marketing budget since the Anheuser-Busch deal last fall. And that includes those Budweiser ads you see during a lot of sporting events. From KWMU in St. Louis, Adam Allington reports.
Adam Allington: Even if you don't like Budweiser, even if you're not a beer drinker, you're probably familiar with all those classic Bud ads.
BUD AD: Whazzup! Whazzup! Real men of genius, I love you man.
Fresh on the heels of its $52 billion joint venture with InBev, the new brewing behemoth is cutting costs everywhere it can, including what many consider to be Anheuser-Busch's core strength: marketing and advertising.
TOM PIRKO: Right now Anheuser-Busch InBev is desperately in need of funds. Their bankers are sitting on their shoulders saying, "gimmie, gimmie, gimmie."
Tom Pirko is a beverage industry analyst for Bevmark. He says InBev significantly overpaid for Anheuser-Busch, and ramping back ad spending is a good move.
PIRKO: There comes a point you simply have to consider what you're getting for your money. If you see 25 AB ads, what's difference between seeing 25 and seeing 12? Very little if anything.
Last year Anheuser-Busch purchased 100 different TV ads. That number is expected to be cut in half for 2009.
Anheuser-Busch President Dave Peacock says the brewer is also reconsidering some of those exclusive sponsorships it has in sports.
DAVE PEACOCK: We learned that we were almost overly reliant on sports, and we needed to shift some dollars to other things, like digital media, cable television, networks like Discovery Channel, History Channel, what have you, to reach some of these consumers that weren't as much sports enthusiasts.
But don't look for Budweiser to completely abandon its cozy relationship with sports. Anheuser-Busch still has sole TV sponsorships for the next three Super Bowls. And Bud advertisements will still blanket the outfield walls and scoreboards of ballparks across the country.
BALLPARK: Ice cold Bud Lite, cold Bud Lite here!
Watching the Cardinals and Phillies this week in the stadium bearing the Busch family name, if ever there was a place to take in the spectacle of sport and beer, this is it.
But, Brian Johnson and his friends don't think people buy Bud because they like the ads.
BRIAN Johnson: No, I think people buy it, because they like it. I don't think ads have anything to do with it. People buy it because of a taste preference, I think.
ALLINGTON: So if the taste stays the same you'll keep buying it?
Johnson: Yeah, sure.
ALLINGTON: Do you guys like Bud?
Johnson: Ahhhh...I'll drink it.
Even if consumers aren't fans of say regular old Bud or Bud Lite, many still have a soft spot for the brand.
Jeremy Vesta and his friends say they like the ads but not so much the beer.
JEREMY Vesta: The ads are better but I don't necessarily even drink Budweiser, so it doesn't necessarily affect me. I love their ads and I'll watch them on YouTube, but I'm not gonna buy their beer.
Anheuser-Busch topped all sports ad spenders again last year with more than $277 million spent.
But the days of Bud's full court press and every major sporting event may be coming to an end. Anheuser Busch has told NBC it plans to cut its advertising outlays in half for the next two Olympic Games.
In St. Louis, I'm Adam Allington for Marketplace.
Comments
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From Brooklyn, WI, 05/07/2009
It seems to me that AB doesn't advertise to get people to change the beer they drink- and your story supported that. They do, however, advertise to influence the choice of beer for teens and young adults who are beginning to drink, so they can build brand loyalty before teens start drinking. Think about the appeal of many of AB's ads to younger audiences - no one over 30 will switch to Bud because of some cute frogs. AB's point of purchase (POP) ads are equally appealing to young men and often feature "toys" like ATVs, boats or other sport-related items that are associated with high-risk (and therefore attractive)endeavors.
From greenbush, ME, 05/07/2009
Hi
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