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The King Changes the Rules

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Indeed, several other marketing titans, including Unilever, Procter & Gamble, Bayer, and Kellogg Co., are also working to consolidate and streamline their advertising efforts. In a first-quarter survey of a global panel of chief marketing officers, independent research firm Forrester Research Inc. found 71 percent are working with smaller budgets this year, with more than half of respondents reporting cuts of 20 percent or more.

In Anheuser-Busch’s case, the changes appear to be influenced more by directives from new parent company Anheuser-Busch InBev. Already known for its lean approach to budgeting, Belgium-based InBev is working to repay the $45 billion it borrowed to buy America’s largest brewer last November.

Keith Levy, Anheuser-Busch’s vice president of marketing, said the company’s marketing budget is about the same as last year’s, minus extra spending linked to last summer’s Beijing Olympics. Trade publication Beer Marketer’s Insights put Anheuser-Busch’s 2008 measured media at about $533 million.

Levy acknowledged, however, that while the brewery previously had the luxury of employing a larger roster of agencies and sourcing a lot of ideas, it is now taking a more calculated approach.

“We continue to view marketing as a key lever to drive revenue for the company, and we continue to invest in it,” Levy said. “But we want to leverage our size and scale and become a more effective and efficient company, and we want to manage our brands more tightly.”

In an interview in July, brewery president Dave Peacock spoke of the company’s renewed focus on hard information to drive efficiency and effective execution in all areas of the business.

“We are more disciplined. We’ve improved our process of looking at data on a consistent basis and taking action on it,” Peacock said. “That’s what makes the military and other great organizations successful: targeting the right information and following up with specific action plans.”

Anheuser-Busch’s approach to marketing is no exception. Levy said the company pretests advertising more rigorously today to ensure a higher level of precision in reaching its audience with an effective message.

“The freewheeling, let’s-give-it-a-try attitude is changing,” said Jeff Goodby, co-chairman and creative director at San Francisco-based Goodby Silverstein & Partners, the agency responsible for Budweiser’s run of commercials featuring Louie the Lizard. “I think things are scrutinized and calculated a lot more now.”

Steve Hunt, chief creative officer of Cannonball Advertising and Promotion in the St. Louis suburb of Webster Groves, confirmed his agency is still doing work for Anheuser-Busch, but declined to discuss how this year’s changes have affected the firm. The same goes for Mike O’Neill, chief executive of Switch, a firm whose origins trace back to the brewery itself when it was an internal organization known as Busch Creative Services.

But Shaw’s Litwicki said no one here has been immune to the changes.

“A-B has always been good at listening to agencies with good ideas. But now you’ve got to do more back-end research,” Litwicki said. “The way they make decisions is a lot more mathematical. It used to be enough to do brand building and create an image that would ultimately drive sales. Now they also want to see the component that will actually incentivize the consumer to pick up the product. When you come in with those solutions, they are very receptive.”


Christopher Tritto writes for the St. Louis Business Journal.

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