Augustine: Notice the point about spending less, yet their sales increased. There is another example from a credit card company where they cut ad spending by 4/5ths (80%) and not only did they see no decrease in new cards acquired, in fact they got more cards acquired and higher spend in the same time period. While this was still a relatively small example that needs time to corroborate, it is a data point to illustrate the utter lack of effectiveness of traditional forms of advertising in this day and age.
As more and more of these examples come to light, it will further accelerate the "mass exodus" of dollars from traditional media -- funny how it's referred to as "measured media" -- to other forms of marketing, including online -- funny how it's referred to as "unmeasured media."
Source: http://adage.com/article?article_id=120644
Big Brewers Gut Ad Spend, Sell More Beer
Exclusive: Miller and A-B Move More Money to Unmeasured Media
By Jeremy Mullman
Published: September 24, 2007
Spend less on measured media, reap more sales.
That's appears to be the lesson from the big brewers, long among the steadiest and most stalwart users of traditional mass media, who are now pouring their ad dollars elsewhere at a froth-inducing rate.
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| Source: TNS Media Intelligence |
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.
They maintain those beer bucks are flowing into less-traditional sponsorship and promotional activities that services such as TNS don't pick up on. Moreover, as a result of the influx of smaller brands into the big brewers' portfolios, more of their ad budgets are being channeled into local media, which the brewers say TNS doesn't measure either.
Successful strategyThe net effect is the disappearance of nearly one in four dollars from measured media. Oh, and one other thing: As measured media has dropped off the charts this year, brewers' long-struggling sales trends have improved.
"We're not walking away from traditional media by any means, but we're using it more intelligently," said Jackie Woodward, VP-marketing services at Miller Brewing Co. "Some of those new uses are not things that TNS is going to measure."
Indeed. TNS figures show Miller's spending fell by $36 million, about 36% in the first half, even though while Ms. Woodward said outlays increased ahead of revenue growth vs. the same period last year.
An example of Miller's new approach, Ms. Woodward said, was a Miller Chill-themed sketch that appeared on NBC's "Late Night With Conan O'Brien" a few weeks ago. The sketch showed Mr. O'Brien's bandleader, Max Weinberg, starring in an absurd, obviously fake Japanese ad for Chill (which, incidentally, is not available anywhere in Asia). Because the ad was embedded in the show -- and, because it didn't say anything remotely positive about the brand, wasn't clearly an ad -- it was unlikely to be detected by media measurers.
Bar eventsOther examples of Miller's tactics: a High Life-themed olympics of bar games in Chicago, co-developed with Tribune Co.'s properties there, that uses a smattering of print and online advertising to fuel a wide array of promotional events, as well as Miller Genuine Draft's "The Craft" concert series.
Beer marketers note that measuring services such as TNS tend to undercount outlays on local media, which is becoming a more crucial part of their strategies as they increasingly depend on import and craft brands that generally don't have national distribution.
"Brands like Stella Artois and Beck's obviously require a lot of local support, and it's not reported accurately, in our opinion," said Mark Wright, VP-corporate media for Anheuser-Busch, which earlier this year took over U.S. distribution and marketing of InBev's stable of import beers. "Actually, it's not my opinion; it's a fact that they have [spending estimates] wrong."
Mr. Wright said A-B's heavy investment in local sports programming -- including its position as the dominant alcohol player in stadium signage -- also tends to be undercounted. He said the only reduction in A-B's spending for this year was based on the absence of the Olympics, of which A-B is a major sponsor, compared with 2006. But that wouldn't account for the $50 million, or 21%, decline reported by TNS.
Shipments upTNS, for its part, said it is measuring the use of traditional media by brewers accurately but that it's not uncommon to see steep declines in measured spending from marketers who target younger consumers, as brewers do.
"It's a broad generalization, but the advertisers and the categories that experience the largest declines are generally the companies whose customers skew younger," said Jon Swallen, senior VP-research at TNS. "Any smart marketer is going to identify where their customers are and try to reach them there."
On the latter point, the brewers appear to be succeeding: According to Beer Marketer's Insights, which was first to report the apparent spending declines, brewer shipments rose 2% during the period in which measured spending cratered, a healthy clip by the mature beer industry's modest standards.
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