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A Small Drop In Bud's Barrel


What is happening with Anheuser-Busch (BUD), proprietor of Budweiser and other iconic Middle American beer, mirrors much of what's up with big marketing and media right now. There's the pursuit of the elusive 25-year-old Everyman. There's the struggle to recalibrate how the brewer sells big brands in stupendous volumes amid the vicissitudes of an uncooperative and fractionalized market. And there's the inevitable big-sounding bet on new-school advertising and platforms. Or at least it sounds big. Next to the brewer's overall media budget, though, not so much.

Anheuser-Busch and its rivals are fighting a gradual un-beering of America. In 2005, the last year for which there are data, U.S. beer sales fell, again. The top two beer companies—Anheuser-Busch is the biggest—lost share, according to figures cited by BusinessWeek's corporate sibling Standard & Poor's. Historically, category-leading companies such as Anheuser-Busch pushing middle-of-the-road fare have succeeded by keeping a ferocious mass-marketing machine fully cranked. That's what household giant Procter & Gamble (PG), for one, still does. But most of Anheuser-Busch's customers are the young men widely believed to be disappearing from standard media channels.

WHICH IS WHY Anheuser-Busch will shell out $30 million on Bud.TV, its well publicized bid to create video programming on its own Web site. It also inked a deal with nascent social networking site MingleNow for a promotion called "clink," in which users post photos toasting one another with beer. Tony Ponturo, Anheuser-Busch's vice-president for global media and sports marketing, says that $30 million will be roughly the annual cost for building and maintaining Bud.TV. Ponturo also says the company is "reengineering" its ad mix this year, even while overall spending will stay roughly flat with 2006, when, according to TNS Media Intelligence, the company spent $509.2 million on media. The changes, Ponturo says, will shift dollars away from nonsports TV and boost digital spending by around 50% this year. Consider, though, that in 2006, Anheuser-Busch spent $386.9 million on TV. So the total spending on Bud.TV is less than 8% of last year's TV budget. By contrast, Microsoft (MSFT) is shifting its marketing dollars around far more aggressively. Senior Vice-President Mich Matthews told attendees at a recent marketing conference that over the next three years Microsoft will move most of its ad buys into the digital realm. "Interaction," said Matthews, "is even more valuable than exposure."

Interaction is a slippery beast for a beer company, though. Beer Institute guidelines governing marketing to underage audiences require would-be Bud.TV visitors to navigate a relatively involved—though by no means foolproof—registration and age-checking process. Ponturo says that only 10% of all visitors to the front page are registering. (This has not stopped 23 state attorneys general from complaining about age concerns.) MingleNow's clink photos will be monitored to ensure that drunken shenanigans won't dominate, although Tom Shipley, Anheuser-Busch's senior director for global industry development, implies that those guidelines may not apply to the pictures that fans post.

As with so much else that the largest players attempt online, Bud.TV and clink are admirable enough initiatives, although, thanks in part to industry guidelines, no one will mistake them for the most fluid and forward-leaning precincts of the Web. So what of the other biggest advertisers, those who spend hundreds of millions on ads, monitor those buys obsessively, and pore over reams of data before shifting a penny? They win ink for online ad plays while placing over 90% of their budgets offline. Maybe big brands find that old, clunky marketing of eras gone by still—gasp—works well enough.

For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia

By Jon Fine


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