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Budweiser still big on Super Bowl commercials, at least for now
[January 31, 2009]

Budweiser still big on Super Bowl commercials, at least for now

(Chicago Tribune Via Acquire Media NewsEdge) CHICAGO _ You can mark the years of Super Bowl play by the teams on the field, or the Anheuser-Busch commercials on the screen.

Super Bowl XXIX? That's when three frogs sequentially croaked "Bud," "Weis," "Er." Super Bowl XXXV? That's the year Cedric the Entertainer got a bit too excited and doused a hot date in beer. Last year? A Dalmatian guided a washed-up Clydesdale horse back to greatness, all set to the tune of "Rocky."

As usual, Anheuser-Busch will be a huge advertiser for the big game Sunday, trotting out commercials featuring the latest adventures of its venerable Clydesdales and a spot starring Conan O'Brien. The company's advertising agency, DDB Chicago, has been toiling over them since last summer, poring over hundreds of scripts.

The question is, will they have as big of a workload next year and thereafter? The sale of Anheuser-Busch to InBev last year for $52 billion has led some beverage and ad industry analysts to predict cuts in Bud's massive ad budget.

Belgium-based InBev is known for aggressive cost-cutting, not aggressive marketing. An Anheuser-Busch executive says neither Bud's ad spending nor ad strategy has changed. But the deal, reached in July, only closed in November.

"The InBev guys really haven't put their stamp on the company yet," said John Greening, who long worked at DDB Chicago on Anheuser-Busch accounts and now is a professor at Northwestern University's Kellogg School of Management. "It's a whole new game."

It's a whole new economy, too. Since the Anheuser-Busch deal was unveiled, recession has spread globally, ratcheting up pressure to cut costs of all kinds.

Anheuser-Busch has long had a commanding share of the U.S. beer market, and Bud Light is far and away the most popular beer brand. The company's marketing prowess has been a key factor in its success, and DDB Chicago has been part of that marketing effort since the 1970s.

Spuds McKenzie sprang from the minds of DDBers. Ditto for the "I love you, man" spots in the 1990s; the "Whassup" campaign a few years back; and, more recently, the "Dude" commercials for Bud Light. "They've had a very good run," Greening said.

Anheuser-Busch is one of DDB Chicago's biggest clients, and DDB is the lead agency for the Bud and Bud Light brands. The ad shop is the "mothership" for Anheuser-Busch's creative work, said Barry Burdiak, who heads DDB's Budweiser work. As for the big brewer, "they are a deep passionate lover that needs a lot of attention."

Indeed, Anheuser-Busch spends a lot of money on advertising, $381 million alone for the first nine months of 2008, according to TNS Media Intelligence. It's not clear how much of the brewer's ad budget goes into DDB's billings.

For the Super Bowl, Burdiak and Mark Gross, who heads up DDB's Bud Light efforts, usually start work in early fall at their offices in the Aon Center, though ideas may be hatched well before that, as they were this year. By mid-January, DDB has produced 12 to 18 rough-draft spots, which are shown to test audiences in three cities, usually Dallas, Los Angeles and Atlanta. Anheuser-Busch makes the selection in late January.

It's a costly ad play: 30-second Super Bowl slots go for about $3 million, though Anheuser-Busch pays somewhat less because it buys so much time. It's rare that any televised event could be big enough to justify rates of more than $1 million for 30 seconds, Greening said. In fact, a World Series spot of that duration cost just $392,000 last year, according to TNS Media Intelligence.

But Anheuser-Busch figures the Super Bowl is worth the investment: Spots premiered at the game will run for months, even years in the case of some ads featuring the Clydesdales. Plus, Super Bowl ads get all sorts of free media buzz, culminating in USA Today's post-game ad ranking. Anheuser-Busch won for the 10th consecutive year in 2008.

For the first time in a long time, PepsiCo, not Anheuser-Busch, this year will be the Super Bowl's biggest advertiser. Including spots for its Gatorade, SoBe Lifewater and Cheetos products, PepsiCo will have 5 to 6 minutes. But Bud is back with its usual truckload of advertising, filling 4{ minutes with seven separate spots. All but one were created by DDB Chicago.

Anheuser-Busch "has a rich and deep brand marketing legacy and culture," Credit Suisse analyst Carlos Laboy wrote last summer when the brewer accepted InBev's takeover offer. InBev, on the other hand, has been known as a marketing laggard, its growth coming mostly from buying other beer companies and then slashing costs.

Still, InBev's Chief Executive Carlos Brito said last summer that the company wouldn't let up on Bud marketing. And Credit Suisse analysts say they believe InBev has gotten religion on marketing. "Our last two meetings with management have indicated to us that brand building has finally become a top priority at the highest levels of the organization," they said in a January report.

Bob Lachky, Anheuser-Busch's creative director, said "there's nothing changing" in the company's ad strategies under the new ownership.

Still, some analysts expect retrenchment, particularly given the grim turn in the economy since the deal was agreed upon. "They didn't figure Joe Sixpack would be unemployed," said Tom Pirko, president of beverage industry consultant Bevmark.

While the beer industry is relatively recession-resistant, troubling signs have been brewing in recent months across the globe.

In the United Kingdom, beer sales sank 8.3 percent during the fourth quarter compared with a year earlier, according to the British Beer and Pub Association. Diageo, maker of Guinness, recently said it is delaying an $842 million expansion at an Irish brewery because of the economic downturn. And in the United States, MillerCoors' sales declined 2.3 percent during the fourth quarter.

With the troubled economy and the massive debt InBev took on for the deal, the company will likely revert to its cost-slashing ways, some analysts say. "They have to dig into advertising at some point," Pirko said. Greening agreed, and said the relationship between Anheuser-Busch and DDB could change too.

The agency has long had a strong relationship with not only Lachky, but also the historic stewards of Anheuser-Busch, the Busch family, Greening said. Indeed, August Busch IV often personally reviewed DDB's ads.

"Now that the Busch family is not making the calls, I don't know how strong that relationship is," Greening said. But he added, "I don't why they'd walk away from (DDB) given what DDB Chicago has done."


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