Archive for July 17, 2008

This Bud’s for Belgium + Brazil

July 17, 2008 2 comments

The million dollar question, of course, about the purchase of Anheuser Busch by InBev (wiki profile here) (along with the long-outstanding legal disputes about the Budweiser trademark) is…

Crushed Budweiser CanWill Anheuser-Busch still be the beast of sports marketing? The “official beer sponsor” designation, in-arena deals, as well as all of those ubiquitous commercials, bring in serious revenue to sports leagues:

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.”

Cuts in revenue streams for sports leagues? What? And in a time of economic stagnation? That won’t be a positive effect.

On the other hand:

“What we see in Anheuser-Busch is its marketing expertise, and that’s one of the pillars of why they built such great brands,” [InBev Chief Executive] Brito said.

What that means, of course, is still to be seen. Marketing expertise is one thing, but Budweiser threw lots of money out to saturate the market with their commercials. And it worked; people think of Budweiser when they think of American beers. Will it become “unAmerican” to drink a Budweiser Tall Boy? Will the better beer at basketball games? Fewer subway ads featuring hip, semi-brown nearly-racial people?

As long as Brazil doesn’t all of a sudden only have Bud when I get down there. Because if that’s the case, I will write a stern letter to my congressman. Yeah, I said it. I’ll put InBev/ Budweiser on notice.