In a seismic marketing shift, word-of-mouth is becoming the guiding credo at the $2.8 billion liquor giant as it pours all its energy into generating talk around its blue-chip brands including Jim Beam bourbon, Sauza tequila and Courvoisier cognac. And while Beam Chief Marketing Officer Rory Finlay said ads can be one means to get that chatter going, building -- and sustaining it -- takes a lot more. "Advertising is not dead; it's really important," he said. "But it's more about fanning the flames [of word-of-mouth] than anything else."
Just so there's no doubt that Mr. Finlay and his boss, CEO Tom Flocco, have put Beam essentially in the word-of-mouth business, the company plastered this 20-foot-long message outside the CMO's Deerfield, Ill., office: "Building brands people want to talk about."
Taking all comers
Putting its money where its word-of-mouth is, Beam also has created a low-seven-figure funding pool designed to fund worthy, conversation-generating ideas from anyone at the company, whether they work on a bottling line, crunch numbers in accounting or sweep the floors.
Distillers -- essentially barred for decades from mainstream channels such as network TV -- have long touted the virtues of on-premise and word-of-mouth marketing, and have leveraged their progress in those channels to take market share away from beer over the past decade. But Mr. Finlay and others familiar with Beam's plans say this will take that focus further.
"I haven't seen a company that's as upfront and stamped-on-the-forehead about being a word-of-mouth company like Beam," said Paul Rand, president-CEO of Omnicom's Zocalo Group, a word-of-mouth firm that is working with the liquor company. "This is a fundamental shift in the way they're doing business."
How the move will affect Beam's advertising budget is unclear. Beam boasts an estimated $100 million global media and promotions budget.
Stunts and promos
The play will definitely affect creative. Mr. Finlay wouldn't disclose details but said Beam is introducing revamped creative on about 75% of its global brands this fall to give them more talk value. While executives at Fortune Brands told Wall Street analysts last month there would be "double-digit increases" in brand spending during the second half, it's hard to tell how that will shake out among measured media and unmeasured means to get the jabber going. Beam does plan a glut of (it hopes) talk-generating stunts and promotions that won't necessarily stem from its marketing department.
Mr. Finlay wouldn't say how all of this will play out this fall, but he pointed to several past Beam initiatives he said best represented its new approach. One is boutique bourbon Maker's Mark's brand-ambassador program, which cultivates brand fanaticism by identifying and rewarding so-called "brand evangelists" with invitations to VIP events, inside-the-distillery info and even a chance to get a bottle of bourbon from a personalized barrel. "They're the best in class at cultivating brand fans," Mr. Finlay said. "They've been able to get an incredibly high amount of talk."
He also pointed to a Sauza tequila promotion in Canada that saw brand workers pull a 10-foot, lemon-lime-colored couch alongside lines of bored consumers waiting to get into crowded nightspots. Laphroaig whiskey has given each of it 250,000 brand ambassadors a square foot of Islay, the Scottish island where it's distilled.
Mr. Finlay also repeatedly pointed out that promotions and stunts such as those won't be replacing Beam's traditional advertising -- produced by roster agencies Energy BBDO, Chicago, and Publicis Dialog -- so much as changing the intent of it. "We spend a lot of time thinking about why people talk about brands," he said. "A brand that's dynamic is much more interesting to talk about than one that sits in the corner shouting at you."