Anheuser-Busch Ready to Play New Sponsorship Game

CHICAGOLAWBULLETIN.COM TUESDAY, JUNE 12, 2018

Volume 164, No. 114 Serving Chicago’s legal community for 163 years Anheuser-Busch ready to play new sponsorship game

here’s an innovative ship deal under the new model, new sports sponsor - whether with a team or a league, ship model in town SPORTS MARKETING PLAYBOOK will provide a base compensation that promises to amount with larger investments shake up the industry, to be paid by the company when Tcourtesy of beer giant Anheuser- certain metrics are achieved. Busch. For example, a team’s playoff Based on incentives tied to the appearance or a boost in atten - performances of team and league DOUGLAS N. M ASTERS dance could trigger additional partners, as well as on consumer AND SETH A. R OSE cash from Anheuser-Busch, behavior, the new “pay for per - while the launch of a new digital formance” model aims to ad - platform that engages fans and dress marketing challenges, Douglas N. Masters is a partner at Loeb & Loeb LLP, where he litigates and increases awareness of the com - including the impact of flagging counsels clients primarily in intellectual property, advertising and unfair pany’s brands might be rewarded live attendance and falling televi - competition. He is co-chair of the firm’s intellectual property protection group and with even more sponsorship sion ratings, resulting from the he can be reached at [email protected]. Seth A. Rose is a partner at the firm, money. changing ways fans watch sports where he counsels clients on programs and initiatives in advertising, marketing, The company plans to work in the age of social media. promotions, media, sponsorships, entertainment, branded and integrated with teams and leagues to define The move by Anheuser-Busch, marketing, and social media. He can be reached at [email protected]. their own individualized metrics. a U.S. subsidiary of the global For now, at least, Anheuser- beverage company (and the high-profile motorsport events U.S. has slipped fairly consistent - Busch is applying its new “pay world’s largest beer brewer) An - including the Daytona Speed - ly — not just in recent years, but for performance” model only to heuser-Busch InBev, could be a weeks and numerous Budweiser- for the past three decades, ac - sponsorship deals that are up for win-win proposition for everyone branded events including the cording to Forbes. renewal. It’s testing the waters involved. Budweiser Shootout, Budweiser In a recent presentation at with teams in three different The program tying sponsorship Duel and Budweiser Pole Award. IEG 2018 (the annual sports leagues — the NFL’s New Or - dollars to team and league per - And don’t forget, races of various sponsorship conference put on leans Saints, the MLB’s Los An - formance and to fan engagement lengths, like the Budweiser 500, by IEG LLC) titled “Sponsorship geles Dodgers, the NBA’s is designed to increase the vested 400, 300, 250 and Carolina Evaluation and Building a Sus - Minnesota Timberwolves — and interest of sports teams and Pride/Budweiser 200. tainable Strategy,” Nick Kelly, NASCAR (Anheuser-Busch’s leagues in a sponsor’s success, In addition to Budweiser, An - head of U.S. sports marketing for Busch brand just reclaimed the while encouraging the develop - heuser-Busch uses sports-relat - Anheuser-Busch InBev, identi - position of Official Beer of ment of new social media cam - ed sponsorships in the U.S. to fied some of the key marketing NASCAR in 2017 after Budweis - paigns and consumer experiences promote its Bud Light, Michelob challenges facing the company: er lost the official sponsorship to to promote fan engagement. and Busch brands, among oth - reaching the elusive market seg - Coors Light in 2008.) Details of Sports sponsorships have his - ers. The brewer spends big dol - ment of “cord cutting” and “cord those new deals are being kept torically been a key part of An - lars — an estimated $350 million never” millennials; new con - under wraps thus far. heuser-Busch’s advertising in 2016 — to partner with U.S. sumer “passion points” including Anheuser-Busch hopes its in - model. The company has invest - leagues including the National eSports, the growth of platforms tentionally disruptive new model ed in sponsorships and other Football League, National Bas - and the fragmentation of media; will help it stand out from the in - sports-related partnerships in - ketball League, Major League increased competition from craft tense competition with other volving the Super Bowl, golf Baseball and NASCAR, as well beer; declining attendance at sponsors, particularly other big tournaments, horse racing as a huge number of individual sports events; and sluggish in- beer makers. Basing a sponsor - events and motor sports (includ - teams including approximately venue beer sales. ship strategy on incentives will ing the “Miss Budweiser” fleet of 80 pro teams and more than 50 To combat these factors, the also enable Anheuser-Busch to racing hydroplanes and Ameri - college sports teams. beer maker decided not only to be more flexible and tailor its can Unlimited Hydroplane rac - At the same time, sales of An - seek out new sports sponsorship deals as technology and a new ing league races and heuser-Busch’s biggest beer opportunities, including increas - generation of consumer behavior championships and the “Bud - brands have been declining in ing its presence in eSports, but continues to evolve as well as be weiser King,” the funny car and the U.S, largely due to the rise of also to revamp its core sponsor - more in tune with fans and fluc - top fuel dragster owned and the craft brewing industry and ship model to respond to the tuating fortunes of teams and raced by Kenny Bernstein). changing consumer behavior. evolving sports and consumer leagues. In fact, the Budweiser brand For example, while the Bud - marketplace. The new, incentive-based was the Official Beer of NASCAR weiser brand continues to grow In particular, going forward, model also supports Anheuser- from 1998 to 2007 and sponsored around the world, revenue in the every Anheuser-Busch sponsor - Busch’s focus on creating more

Copyright © 2018 Law Bulletin Media. All rights reserved. Reprinted with permission from Law Bulletin Media. experienced-based marketing and what they look like. We don’t ly emphasized that the new spon - there is no penalty (at least in opportunities — activations that have a lot of experiences built sorship model is not a way to cut terms of direct compensation) engage consumers in an authen - into our deals with teams and sponsorship spending. The com - for those partners that don’t per - tic and unique way that build on leagues. We have a lot of bill - pany intends to spend a compa - form. the existing consumer awareness boards, signage and tickets. But I rable amount on sports Undoubtedly, the disruptive of the company’s brands. don’t need awareness. I need ex - sponsorships as it has in recent new sponsorship strategy will “We want to provide experi - periences.” years, but will use the new model force Anheuser-Busch’s competi - ences only we can provide,” Kelly “What we have been able to do to maximize both the return on tors to re-evaluate their own tra - explained in his presentation. is focus on engagement,” Kelly its investments and the value for ditional models and relationships And that comes with a “change added. “Creating activations no its business partners. with partners. And, it could in philosophy” and focus from one else can create. Bringing As Kelly noted, the company spawn creativity and new direc - awareness to experiential mar - something authentic to a mo - wants to reward partners who tions in the marketing and spon - keting. “Everyone knows Bud - ment where it makes sense to tell perform immediately, rather sorship world that extend weiser and Bud Light. You know our message.” than wait for the contract renew - beyond selling beer to sports the brands, what they stand for Anheuser-Busch has repeated - al period. Kelly also stressed that fans.