In a story as old as advertising relationships, it was a sin of omission-a phone call never made-that spelled the end of 79 years of Anheuser-Busch history for DMB&B, St. Louis.
A-B last week fired the agency, moving the Budweiser brand to DDB Needham Worldwide, Chicago. The action came nearly a year after A-B learned from an Advertising Age reporter that DMB&B's TeleVest unit in New York had accepted a media buying assignment from Miller Brewing Co.-without informing either DMB&B's St. Louis office or A-B executives.
The phone call would have asked A-B to approve TeleVest's taking on the relatively minor Miller assignment, a piece of business that came via TeleVest's relationship with the brewer's sister company, Kraft General Foods.
A-B's answer would have been a resounding "No."
Insiders and knowledgeable observers say it was that connection to Miller, rather than Budweiser creative or agency compensation, that ultimately was responsible for the account switch. Mr. Busch, A-B's 57-year-old chairman-CEO, was livid about DMB&B's ties with the enemy-and the more he thought about it, the more irate he became, these insiders say.
As A-B began looking at 1995, and Mr. Busch was presented departmental plans, he may or may not have seen a minor item he didn't like, but finally decided to make the move.
DMB&B executives got the word at a hastily called Sunday afternoon meeting, held Nov. 13 at Lambert-St. Louis International Airport. The messengers were Mr. Busch; Pat Stokes, president of A-B's U.S. brewing subsidiary; and Bob Lachky, group VP-Budweiser brands.
Not present was August Busch IV, VP-brand management. The younger Mr. Busch's role wasn't clear, but there were indications he wanted to keep DMB&B.
Meanwhile, DDB Needham was getting a phone call with the official word that it had won the $110million Budweiser business, though some at the agency knew earlier, when they offered a fee-cutting proposal to A-B. DDB Needham already handled Bud Light and several Busch Entertainment theme parks.
DMB&B was set to make $12 million to $13 million a year from A-B after the brewer cut the agency's fee by $2 million this fall. A-B will pay less at DDB Needham.
The ramifications for what one insider called DMB&B's "betrayal" were becoming clearer at week's end. DMB&B not only lost all its U.S. beer business-Bud, Michelob, Michelob Light, Natural Light, O'Doul's, Red Wolf and Elk Mountain beers-but also its A-B beer business abroad, and apparently corporate advertising too. A-B declined to discuss the fate of the Sea World of San Diego account, now at the agency's Los Angeles office.
Getting the international assignment would be a mixed blessing for DDB Needham. BMP DDB Needham, London, handles Courage Best, Hofmeister, John Smith's Yorkshire Bitter and Miller's U.K. brew, Miller Pilsner, for Foster Brewing Group's Courage Ltd., a $22 million account.
A-B at press time had not decided the destination of the other DMB&B business, representing about $25 million in billings. There were indications A-B would use smaller agencies for most of the assignments, with one beneficiary most likely being Glennon Advertising, St. Louis. Glennon handles Michelob Golden Draft and Golden Draft Light. Grey Advertising, New York, which has worked on projects for A-B, could also be in for some work.
A-B hasn't been fully happy with DMB&B's creative for Budweiser for some time, say insiders (see Rance Crain's column on Page 18).
"They were on creative probation," said one observer. ".*.*. The strength of the long relationship held it together."
After peaking in volume at 50.5 million barrels in 1990, Budweiser sales have slid in recent years, according to West Nyack, N.Y.-based Beer Marketer's Insights, with campaigns changing every 18 months or sooner.
In 1990, it was "Nothing beats a Bud," followed by 1991's "Heartland" campaign. "Proud to be your Bud" was unveiled in April 1993, and ran until just three weeks ago, when the brewer and agency resurrected a longtime tag in "It's always been true .*.*. this Bud's for you."
But Bud's slide continues. Supermarket sales figures through Oct. 15 from Nielsen North America showed the brand declining 2.9% from a year ago.
In contrast, Bud Light, backed by strong work from DDB Needham, has surpassed Miller Lite to be the nation's No. 2 beer.
A-B this year moved its Super Bowl-focused Bud Bowl TV spots from DMB&B to DDB Needham, but insiders say that move was unrelated to last week's action. They note that only one of DDB Needham's spots actually will air on the Super Bowl. Despite delays, DMB&B produced the new Bud campaign and A-B had been happy enough with the agency to recently award it both Red Wolf and Elk Mountain.
TeleVest, however, tested the relationship. Without telling A-B, TeleVest in January accepted an assignment from client Kraft General Foods: additional media buying including some $25 million in non-sports media for Miller. DMB&B's St. Louis office hadn't handled any A-B media buying for several years since A-B began buying national media. In 1992 A-B also took local media in-house. But A-B viewed the Miller connection as a clear conflict.
DMB&B Chairman Roy Bostock acknowledged there had been a delay in informing A-B.
In retrospect, "there wasn't anything to do differently," he said.
The subsequent departures of DMB&B St. Louis President Bill Melzer and Mark Choate, senior VP-group creative director on Budweiser, may have bolstered the elder Mr. Busch's resolve to change agencies.
DMB&B also wasn't helped by personnel changes at A-B, particularly the retirement of longtime A-B marketing executive Michael Roarty and the departure of former VP-Brand Management Tom Sharbaugh to Sears Merchandise Group.
In announcing the split with DMB&B, A-B said only that it wanted the Budweiser brands at a single agency.
"The people at D'Arcy have done a tremendous job in helping us create memorable brand-building advertising," Mr. Stokes said. "While this was not an easy decision, we believe Anheuser-Busch is best served at this time by combining these major brand assignments under one roof."
Mr. Bostock said he was shocked by the news.
"It's like getting jilted by the woman you thought loved you," he said. "It is not the end of the world by any means. It's certainly a blow. [But] there will be brighter days ahead."
Mr. Melzer, now at Young & Rubicam, New York, expressed sorrow and some surprise. "Loyalty is a two-way street," he said. "August has a long memory and he was not happy with [the TeleVest situation] when it initially took place."
Melanie Wells and Laurel Wentz contributed to this story.