Interviews & Articles
Millsport's senior sports business executives are available for interviews, commentary, and analysis on a number of sports marketing and sponsorship topics. To arrange an interview, please contact Chris Anderson at (214) 259-3290.
More Marketing Agony of Defeat in InBev/A-B Deal
Jul 17, 2008
More Marketing Agony Of Defeat In InBev/A-B Deal
by Karl Greenberg
One thing pro sports could always count on was Anheuser-Busch spending big for Budweiser and Bud Light. But now that A-B is under InBev, should sports marketers and media sellers start squirreling away acorns? Given InBev's track record with its (albeit smaller) brands, that might not be a bad idea. A-B--one of the largest sports-marketing advertisers--spends $475 million on advertising in the U.S. annually, of which an estimated $218 million is spent in the world of sports. By contrast, Chevrolet--the second-largest advertiser on sports events--spends $45 million per year in that realm, per Darin Perry, director of sponsorship a Millsport, part of Omnicom's The Marketing Arm. He says that Coors and Miller spent only $172 million in sports combined.
"Now, compare [A-B's spend] to what InBev currently spends on advertising here in the U.S.," he says. "Approximately $58 million annually for brands like Bass, Beck's, Stella Artois and others. It's easy to conclude that the A-B model of 'spend money to make money' will drastically change."
He says InBev and A-B are cultural opposites when it comes to spend, with the former harboring a fondness for cost-cutting and A-B doing the opposite. "Combine this with InBev's traditional opposition to sports spending, and you can see why the sports industry is getting a little nervous."
Perry believes that if InBev stays in form, it will cut A-B's advertising and sponsorship budgets as much as 50%. "If InBev takes a more modest approach, we might see a 25% reduction in sports spending to begin with, and a slower pace of these reductions."
The bottom line is this: The days when A-B outspent everyone to maintain its "King of Sports Sponsorships" crown are likely over.
Robert Passikoff, founder and president of N.Y.-based Brand Keys, Inc., agrees. "I would be nervous if I were selling sports media," he says. "Even before the thing was announced, A-B cut radio; maybe they were looking at the bottom line, but I think they wanted to appear to be more efficient; I don't think there will be as much support for what A-B has been giving to the brand in the past."
He says lack of proven ROI for the kinds of things A-B has done traditionally, such as Super Bowl advertising, will influence InBev's more conservative strategy for its new acquisition away from the approach typified by Coca-Cola's "If it moves sponsor it, if it doesn't paint it red" strategy.
"In the '60s and '70s that might have worked," says Passikoff. "But when you can't tie these efforts to actual sales and consumption, the question is, do you need to do all the sports sponsorships to get the Bud name out there? The answer is no."
Karl Greenberg can be reached at karl@mediapost.com
