Anheuser-Busch InBev has decided to outsource U.S. media buying to an agency, putting in doubt the future of its in-house media unit. The brewer has not yet picked an external partner, but expects to complete its ongoing agency review in October.
"We always strive to be the best in all we do, and earlier this year we decided to benchmark our connection strategy and execution," Jorn Socquet, the brewer's U.S. VP-marketing said in a statement. "After this thorough process, we concluded to partner with a media agency to lead our connection strategy, media planning and buying. This decision will guarantee that Anheuser-Busch will stay at the head of industry with innovative and breakthrough connection planning in a vastly changing media landscape."
He added that "we have notified our employees of the changes and are currently looking at how to align our internal resources against this operational change."
The brewer did not detail exactly what the move means for Busch Media Group, which has been in operation since the early 1990s. People familiar with the operation say the group includes about 50 people who handle national and local buying. It is possible that the brewer would move some BMG employees to whatever agency it picks.
A-B InBev is the nation's 22nd-largest ad spender, shoveling out $1.56 billion for U.S. advertising on brands including Budweiser, Bud Light, Michelob and Stella Artois in 2013, according to the Ad Age DataCenter.
The brewer began whittling away at BMG's responsibilities in late 2011 when planning and research duties were outsourced to Publicis Groupe's Starcom.
Starcom was forced to defend the account earlier this year when A-B InBev launched a formal media review that is still ongoing but expected to end soon. The decision to outsource buying came as a part of the review. Agencies that survived an initial round of cuts include WPP's MediaCom, Omnicom Group's OMD, Publicis Groupe's Spark, which is part of Starcom Mediavest Group, and Dentsu's Vizeum, according to multiple people familiar with the matter.
Busch Media Group has been put under the microscope before, but the unit has always survived. Benefits of having an in-house team include the ability to keep the brewer's media rates secret, as well as running buying through employees who know the business well, according to people familiar with the group.
But A-B InBev could be trying to gain favorable financial terms with an agency in an attempt to make the move pay off. For instance, the brewer is known to seek 120-day payment terms with its vendors.
The media changes are occurring under a new leadership team. Mr. Socquet joined the brewer's U.S. division in January after running marketing in Canada since 2010. He recently elevated Lucas Herscovici, the former VP of U.S. digital marketing, to a newly created role called VP-consumer connections, which includes oversight of media, as well as digital and sports marketing.