BATES FEELS CHILL FROM DRAFT;LOSS OF MILLER BRAND COULD SNOWBALL INTO REVIEW OF MEDIA WORK

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NEW YORK-Executives at Bates USA, New York, are burning midnight oil by the keg in a last-ditch effort to save the Miller Genuine Draft account.

While Miller Brewing Co. won't say whether a review is taking place, agency sources say Bates; D'Arcy Masius Benton & Bowles, St. Louis; and Young & Rubicam and Ogilvy & Mather, both New York, are vying for the account.

Final presentations are said to be set for mid-September with a decision expected by Oct. 1.

Bates has far more than a $50 million beer account on the line. Bates is Miller's media-buying agency of record, an assignment worth $300 million. DMB&B, which buys for another Philip Morris Cos. division, Kraft Foods, buys about $40 million in media for Miller. While the AOR assignment is not in review, an agency change on Genuine Draft would almost certainly lead to one.

"Bates has every creative in the agency and a bunch of free-lancers working on this," said one executive familiar with the review. Acknowledged a Bates executive: "People are working some long hours, absolutely."

Losing Miller would be devastating for Bates' parent, Bates Worldwide, which lost $400 million in M&M/Mars business earlier this year. Miller Brewing Co. was a charter client of Bates, following its team of people who had created the "Tastes great, less filling" campaign for Miller Lite for McCann-Erickson Worldwide when they formed what was then Backer Spielvogel Bates. The agency lost Miller Lite five year ago. Bates also has several other smaller Miller assignments.

A source at one of the pitch participants described the relationship between Bates and Miller as a "tired marriage." The agency's well-received "Takes you to a very cool place" campaign helped make Genuine Draft one of the few major growing U.S. premium beers until recently.

But sales of what is still the nation's No. 7 beer have slipped the last several years amidst new competition from ice beers, red beers, specialty beers and Miller's own Red Dog with barrelage dropping 6.8% to 6.9 million barrels last year, according to Beer Marketer's Insight.

Some competing beer executives suggest Bates is getting the blame for Miller's own mistake in putting too much attention to new products at the expense of hurting long-term growth.

Young & Rubicam, though, may have an edge. Y&R's exec VP-account managing director Bill Melzer formerly headed DMB&B's St. Louis office and has strong ties to several Miller executives.

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