Bud-TV Launches Today After Its Super Bowl Introduction And If The Idea Works Then Television Will Be Crying In Its Beer

Philip M. Stone - February 5, 2007

Anheuser Busch begins a really novel idea today that has television executives gritting their teeth – it is launching a multi channel Internet television network, Bud TV, all with original programming, and if the site captures its target male 21 – 27 year-olds then television could well lose an awful lot of advertising as other sponsors climb onto the Bud wagon.
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Budweiser’s prime beer drinking targets are males 21- 27. It knows it can get that age group via the big network television live sports events (it has signed up for the Super Bowl through 2011 and it spent some $18 million Sunday on nine ads), but all that money spent at night on network entertainment programs – is that really drawing in the beer drinking crowds?

It thinks it can do better, more cost effectively by launching its own global internet television network, starting with seven different channels with further growth planned.

And the cost for the project? Tony Ponturo, vice president, global media and sports marketing, says that $30 million has been budgeted to get the project going, but already there are concerns at the overruns of producing original programming and probably by the time the year is over the cost will be more like $40 million. But still, that’s a drop in the ocean to the overall $1 billion marketing budget of which around $600 million goes on television.

So the next obvious question is whether this is new money or it’s coming from that television spend? “It is more likely to come from prime and late night, both network and cable television,” Ponturo told iMedia Connection last year.

And the reasoning? “The networks are not particularly focused on really the male 21 – 27 year old. So, we are more interested in taking some of that, call it national entertainment dollar, and putting it behind specific programming that we would feel confident is totally skewed to that audience.”

The idea of producing one’s own programming isn’t new. Carmaker Audi has its own satellite television channel in the UK; and Procter & Gamble has for years produced some of US television’s most famous soap operas targeted at women. P&G senior management have been saying for some time now they want to get more into media that is measurable and it continues to dabble increasingly with digital projects. P&G’s ad budget is more than $4 billion – just think what it could do with 10% -- $400 million – by introducing its own multi-channel Web TV network. And just think what would happen at the networks if much of that spend came from their pockets.

Bud TV plans to add some 15 new segments weekly. Although its initial programming was expensive to produce – some $20,000 -$25,000 a minute – it is trying to get that cost down to more like $6,000 a minute. To make everything worthwhile it wants a seven digit monthly unique audience, and anything less would be considered a failure. It could probably earn money to meet costs by selling advertising to third parties who also crave that audience, but in the first instance the site stays entirely Bud.

Bud is not going after the hard sell with a lot banner ads and the like, rather it wants the soft sell of being the place young men congregate to see programming targeted at them. Trouble is, with the Internet just how young might those men really be?

The company has hit that head-on. Register for its site and you are asked your age and your postal code. The company has bought the Aristotle’s Integrity identity-verification system and by using various databases it checks out the age of everyone who wants to register, and this writer – actually far older than the target audience -- passed the test.

Assuming the young males find the programming enjoyable then Anheuser-Busch could well be on to something. But there are many “ifs”. Can the programming be brought in at a cost that makes the project viable? Just how fickle is an Internet audience these days – here today, gone tomorrow to yet a better idea elsewhere? And most important of all – even if the programming attracts hefty audiences, will it move beer?

Anheuser-Busch is not alone in choosing major sporting events and complementing that with a digital strategy. Look at Sunday’s Super Bowl ads and do you recall any that did not make reference to a web site? When you’re paying around $120,000 a second including production costs, you want more than just 30 seconds of fame. You want people to gather on your web site and keep the buzz alive all week, and then some.

And if you’re looking for an example of a classic product launch in this digital age, look no further than Toyota’s launch of its new Tundra pickup truck that goes on sale today. Detroit owns 90% of the pickup market and yet Toyota wants to move 200,000 trucks this year. It budgeted $100 million for the launch and bought two Super Bowl 30-second placements. In addition, the company is also launching its biggest-ever digital campaign. It’s going to make good use of magazine print, mostly in outdoor and B2B magazines, but it has also taken a four-page gatefold ad in the Sports Illustrated swimsuit edition plus it is putting its own content on SI’s web site showing some of the models with the Tundra.

It’s also going big into personal appearances with some 550 events and is particularly targeting the Hispanic market where it will appear at more than 70 events. Pick-up trucks are the one product that Americans seem to prefer buying from Detroit. Toyota may not be Detroit, but it is hard at work convincing everyone it isn’t Japanese. The truck is built in the US.

Time Inc. will be best pleased, incidentally, by that SI buy, having been burned the past couple of years by Detroit cutting well back on its magazine spend. And it doesn’t care if Toyota is Japanese or not!

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