Anheuser-Busch relies on sports marketing

ST. LOUIS -- Tony Ponturo will watch the Super Bowl on Sunday from a luxury suite in Detroit's Ford Field.

Yes, he insists, it will be work.

"It's always difficult to convince people of that," Ponturo joked. But a quick description of his time in Detroit conveys why it's no ordinary trip the ball game. Ponturo will be stationed next to the "red phone," a hot line he will use to monitor the game for his employer, Anheuser-Busch Cos. Inc.

As vice president of sports marketing, Ponturo pays close attention to details most fans never notice.

The angle of the sun, a moment of static during live television feeds, and the visibility of the Budweiser blimp. Ponturo's employer will pay about $5 million a minute to advertise during the event, which is expected to draw 90 million viewers. Ponturo has used the red phone to negotiate replaying ads or getting one more shot of the blimp.

Stakes will be high this year for Anheuser-Busch. The company announced Wednesday that profits were down 18 percent during 2005 while beer sales were virtually unchanged. The coming year looks so uncertain that executives declined to predict how much beer they will sell.

But Anheuser-Busch's advertising spending this month makes one thing clear. The company will stick with its tradition of linking its name to professional sports.

Ponturo wouldn't get specific, but said Anheuser-Busch will spend between $50 million and $75 million in February on sports-related advertisements. The big outlay comes in part because of lucky timing in the sports world. The Olympic Winter Games get underway in Italy just after Super Bowl Sunday.

"It's critical in the beer industry. It's a marketing game for the big brewers," said Benj Steinman, president of an industry newsletter called Beer Marketer's Insights. Firms like Anheuser-Busch sell a brand name and an image just as much as they sell fermented hops, he said.

Beer sales could use some help. For the year that ended Sept. 30, beer shipments nationwide were down half a percentage point from the year before, according to Steinman's newsletter. Anheuser-Busch's shipments were below the industry norm, down 2.3 percent in that time, according to the newsletter.

While an advertising fight has heated up between Anheuser-Busch and its biggest competitor Miller Brewing Co., the biggest threat for both companies comes from wine and hard liquor, said Gary Hemphill, managing director of the Beverage Marketing Corp. in New York.

"Consumers have moved up to products that they perceive as being higher quality," Hemphill said. A resurgence in classic cocktails such as the martini along with a health-conscious move toward red wine has pushed beer down the menu of alcoholic drinks, he said.

In light of the dismal beer market, Anheuser-Busch is rethinking its marketing strategy, Chief Financial Officer Randolph Baker told stock analysts this week. The brewer will tailor more of its ads for ethnic communities and local tastes, he said.

On Sunday, Anheuser-Busch will dedicate one if its ads to a new initiative that promotes beer overall, instead of any particular brand. Co-sponsored by the Beer Institute trade group, the ad will help launch a new Web site called "Here's to Beer." The idea is to win customers back from wine and spirits by "romancing" beer and praising its role as a social drink, according to Anheuser-Busch.

Ponturo said the firm will move more advertising dollars toward the Internet instead of traditional outlets like network television.

But Anheuser-Busch's advertising spending this month makes one thing clear. The company will stick with its decades-old tradition of linking its brand name to professional sports.

Ponturo wouldn't get specific, but said Anheuser-Busch will spend between $50 million and $75 million in February on sports-related advertisements. The big outlay comes in part because of lucky timing in the sports world. The Olympic Winter Games get underway in Italy just after Super Bowl Sunday.

Anheuser-Busch is the exclusive beer sponsor of the Winter Olympics, a position it plans to fully exploit, Ponturo said. The company is building a six-story tall pyramid in Italy it has named Club Bud, where it will throw parties and concerts during the games. One of the first events will be a bash with the U.S. Snowboarding team. Beyond the winter games, Anheuser-Busch expects to spend around $300 million this year on sports advertising, sponsoring the World Cup of soccer, the Daytona 500 and NASCAR racing.

The reason for sticking with sports ads is simple, Steinman said. The crucial customer base for beer makers is males between the ages of 21 and 34 (call it the brewer's legal version of the much sought-after 18 to 34 demographic, which would include minors too young to drink).

Of all the new fangled ways to reach young males -- from iPods to niche Web sites -- televised sports remain a crucial tool, Ponturo said.

"Beer drinkers love sports," he said. That's why the company will attach its name to the major events this winter, Ponturo explained.

"You're going to have to hide in a cave," to miss the ads, he said.

Ponturo was cagey about the message Anheuser-Busch will use to in its ad campaigns, keeping some mystery before the ads are unveiled. He said the Bud Light ads will continue to feature humor while Budweiser ads will show the iconic Clydesdale horses to emphasize tradition. One spot features two hikers who try to calm an angry bear by offering him a cold Bud Light.

The company will tweak its model of sports promotion, Ponturo said. This year Anheuser-Busch will make its ads available on the Internet, where they can be downloaded for later viewing on iPods or cell phones.

The company will also spend more on exclusive parties like those held at Club Bud in Italy, or an invitation-only concert in Detroit Super Bowl weekend with rap star Snoop Dogg.

"It's more of a mix, so you don't get lost in all the clutter of all the choices," Ponturo said.

Can all the ads actually boost sales in a flagging beer market?

Ponturo said he'll know in March.