According to a article at Advertising Age today, the three biggest brewers are spending less these days on traditional advertising, such as television, print and radio.
From the article:
According to TNS Media Intelligence, top brewers cut measured media spending a whopping 24%, about $131 million, during the first six months of 2007, following a 12% cut during 2006. At the same time, the brewers insist they haven’t cut spending at all — and in many cases have increased it.
What that means is that the dollars they are spending are being spent on things that traditional media folks don’t usually keep track of, such as sponsorships, promotional activity, product placement, bar events, concerts, stadium signage, specific sports promotions and local media. Part of that is simply to focus advertising on the dozens of test brands, the stealth micros and the alternative products that all three, though particularly Anheuser-Busch, have been experimenting with lately to compete with the craft segment, which is the only beer segment that’s been showing robust growth over the last few years.
So is this the traditional advertising world starting to panic? They talked to death about the big brewer’s forays into advertising on the internet and what that’s meant for them. They’re also equating trying to reach a younger demographic as another reason for the sharp declines in traditional ad buys. Does that mean since the younger generation has gotten wise to advertising, we’ll see traditional forms of it decline as a whole as they age? Somehow that seems doubtful, especially since in my humble opinion people aren’t really getting any smarter and advertising is certainly becoming more scientifically based. As a result, it’s hard to swallow the notion that young people are too savvy for advertising to work on them.
Citing a Beer Marketer’s Insights statistic that beer shipments from the big guys rose 2% at the same time traditional ad revenue fell, AdAge concludes that the non-traditional advertising must be working and even may be the key to that growth. They do qualify the 2% figure as “healthy,” at least “by the mature beer industry’s modest standards.”
But I seem to recall that the shipments figure is almost always around 1 to 2%, every year, no matter what. Maybe somebody has those figures in hand, but that’s certainly my memory. Other statistics like revenue, market share, and others have been fluctuating more, but not shipments, which have been fairly steady. At any rate, it seems hard to draw a conclusion from that statistic, even if my memory is faulty.
What really concerns me, if indeed what the article is suggesting is true — and the big three are throwing their massive resources at local media and cheaper, more targeted marketing — then they’ll be infringing on the only kinds of advertising and marketing craft brewers have been able to afford. Only a very few of the biggest microbreweries have been able to afford television advertising and even then it’s been limited and on cable networks. Regional and smaller breweries have only been able to afford the occasional print ad or radio spot, relying instead on guerrilla marketing, word-of-mouth and local community involvement. It will be very hard for them to compete with the big brewers’ ad budgets if they adopt a similar strategy.