CHICAGO (AdAge.com) -- When Rory Finlay took over as senior VP-chief marketing officer of Beam Global Spirits & Wine in early 2007, he faced a daunting challenge.
Beam, the world's No. 4 spirits player, boasted iconic brands such as Jim Beam, Sauza, Maker's Mark and Canadian Club, but it lacked the budget to go ad-for-ad with its much larger competitors Diageo, Pernod Ricard and Bacardi.
Mr. Finlay's solution was to put Beam's entire ad budget -- it spent $28.4 million on U.S. measured media last year, according to TNS Media Intelligence -- behind building word-of-mouth buzz for its brands. To make his point, Mr. Finlay put the company's new mantra, "Building Brands People Want to Talk About," in 20-foot letters on the wall outside his Deerfield, Ill., office. Mr. Finlay explained at the time that the effort wasn't intended to replace advertising so much as to refocus it.
Another key initiative has been an effort to apply more stringent advertising standards at Beam. While the spirits industry's standards insist that 70% of the audience for any ad or activation be of legal drinking age, Beam now uses a 75% standard.
An 18-year veteran of Wm. Wrigley Jr. Co. who spent his last two years there leading its Life Savers and Altoids brands, Mr. Finlay reports directly to Beam's CEO, Matthew Shattock, and collaborates with its sales, operations and commercial teams around the world. He also leads Beam's roster of agencies, which include Energy BBDO, Publicis and Starcom.
Mr. Finlay, 47, recently sat down for an interview with Ad Age at The Gage, a Chicago gastropub, and shared thoughts on Beam's progress over a Jim Beam Black-and-ginger ale.
Ad Age: In August of 2007, you went public with a plan to put Beam Global's entire media budget in the service of creating word-of-mouth buzz about your brands. Where does that effort stand today?
Mr. Finlay: From that point to now, we've come an awful long way. We spent a good part of the first few months working out what we mean by talkability, and how do we engage the public in conversations. So we put together what I call the Beam way of marketing. What really distinguishes it is how we communicate that message. We talk about brand behavior, which is really what the brand says and what the brand does. And then we look at how you articulate that through a creative message, whether it's in a bar, or on TV, or in digital.
Ad Age: This approach has been pretty visible with your flagship brand, Jim Beam, which has been busy protesting Nascar penalties and making statements about how Tribune Co. shouldn't sell corporate naming rights to Wrigley. Those efforts created some discussion, but is there a risk with all the acting out to get people talking that it becomes hard for a brand to have a consistent message?
Mr. Finlay: The work we did around (Nascar driver) Robbie Gordon and Wrigley Field was really the first foray into Jim Beam behavior being about doing the right thing. What we've now done is spend a lot of time with these guys who love Jim Beam. There's a very, very, very strong bond in what these guys talk about. And Beam is the bonding element.
Ad Age: How do you exploit that?
Mr. Finlay: We looked at Australia, which is a huge market for Beam. We realized that we can take some great stuff from Australia. "The Girlfriend" (which featured a gorgeous woman waxing poetic on her love of men with hairy backs who forget to buy flowers and spend all their time watching sports with friends) was a logical thing to do. So we had a social-media program called "The Remake" (in which consumers remade the ad themselves and posted their videos on the brand's website). Absolutely unbelievable. We had over 300 video entrants. Right now, we're over 2 million views without YouTube support. It was picked up on Huffington Post, Jon Stewart. In terms of amplifying the whole idea of talkability, it, in my book, worked.
Ad Age: And what are the measures you look at in trying to determine if a program was successful?
Mr. Finlay: I want people to be proud to drink Jim Beam. I want people to say, "That's my brand." I want people to walk up to a bar with a circle of friends and say, "Give me a Beam and Coke." What we now have is a great example of building brands people want to talk about, rooted in a core insight and driving conversation and talkability and, at the end of the day, responsible consumption of Jim Beam.
Ad Age: When you launched this word-of-mouth-driven approach, social media was really in its infancy. Facebook, Twitter and YouTube seem like things that could really have a multiplier effect for starting these conversations, but you and most of your rivals have been quite cautious about using them. Why?
Mr. Finlay: Consumers are pretty smart. The moment you move out of being the real deal, they will call you out. And again it comes back to: What's the behavior of a particular brand? Look at how you use that medium. Either the consumer uses it to spread the word about what's going on, or you try and use it in brand building. The biggest success we've had right now is in accelerating word-of-mouth.
Ad Age: I suppose another thing you're up against with this talk strategy in a recession is the idea that word-of-mouth is inexpensive. Is it harder to get those marketing dollars out of the boardroom?
Mr. Finlay: Short answer is actually no. The long answer is, as I said, we've spent a lot of time figuring out how to get people to talk, and then, most important, how to get your message behind it. Things like that Jim Beam "Girlfriend" ad let us go back and say, 'Here's what we did and here's what we got,' and there's a lot of validity around that. We're not the biggest spirits player in the world, so if we just go replicate what a Diageo or Pernod Ricard does, we're not going to break through.
Ad Age: Given the variety of price points you sell at, and the importance in monitoring consumer-spending patterns, how are you staying on top of the economic situation?
Mr. Finlay: About six weeks ago we hosted an economic summit at the University of Chicago, and the intent was to get a large group to spend a day looking sternly at what's going on out there. We're seeing, from the spirits standpoint, a lot of resilience, but there are shifts going on. There's more at-home consumption. There's trading from super-premium to premium. You're seeing growth in standard brands. Clearly, consumers are really looking more for value.
Ad Age: One big trend we had seen was spirits taking away drinkers from beer as consumers traded up to more expensive beverages, but now that appears to be reversing somewhat. Do you find yourself competing more with beer in this climate?
Mr. Finlay: There's an opportunity, actually, to access the beer occasion.
Ad Age: The beer guys say the same thing about spirits.
Mr. Finlay: Yes, but if you look at the long-term trends, beer has been on the decline and spirits have increased. A large proportion of consumers coming into legal drinking age are actually going straight to spirits, because of cocktail culture or what have you. Now the economy has slowed that down a little bit. But I do feel the beer occasion is an opportunity for us... Look around this place. What are people drinking? It's the beginning of the night, after work, so there's a lot of beer and wine. That's a lot of opportunity for cocktails.