MILLER BREWING CHANGES ADVERTISING STRATEGY

Lost Share and New Research Give Rise to a Different Marketing Vision

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CHICAGO (AdAge.com) -- Despite spending hundreds of millions of dollars over the last decade on advertising featuring a host of ex-jocks, a quirky guy named
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Dick and a bevy of brawling babes, Miller Brewing Co. has accepted that its name means little to the average beer drinker.

It's a tough admission for the marketing brass at Miller's Milwaukee headquarters and for SABMiller, the brewer's South African owner, but the company has realized that the humor and babes model on which it has relied has failed to differentiate it from Anheuser-Busch. The Miller name has become so generic that even when consumers have liked an ad, they've mistaken it for a Budweiser commercial, Miller executives confessed.

Driven by creative
"We found ourselves more focused on form than substance," said Bob Mikulay, executive vice president for marketing at Miller, which spent $245 million in measured media on its brands last year, as compared to Anheuser-Busch's $411 million. "We were driven by creative as opposed to strategy." Mr. Mikulay, who once worked for Miller's prior owner, Philip Morris, said that when the cigarette company promoted Marlboro, it did so by talking about its intrinsic brand values.

The brewer is now trying to change its strategy, beginning with a package of three trademark spots designed to make consumers realize they have a choice, and that choosing Miller is a "good call."

Ready to break the week of Nov. 3, the first spot aims to set the tone for re-establishing the Miller name. Created by the New York and Chicago offices of WPP Group's Ogilvy & Mather, the spot uses a series of quick cuts to show how an "everyman" tries on different clothes, a different car and a different cubicle to assert his individuality. A voice-over explains people don't need to settle, and that's why Miller created the first light beer that tastes great and the first cold-filtered beer in Miller Genuine Draft. The spot closes with the tagline "Miller. Good call."

Hispanic spots
Austin, Texas-based independent Latinworks has created spot for Hispanic consumers that targets new Americans and plays up the notion of striving for more. The spot follows a man as he arrives in America and walks through a city, while a voice-over says, "We make the effort to go beyond everyday beer." Later in the commercial, as the man arrives at a backyard fiesta, the voice-over punctuates the choice with the common Spanish idiom "It's better than celebrating with water," and the Spanish tagline "Siempre vamos por mas" or "Always striving for more" appears on the screen.

A third spot, from WPP's Y&R, Chicago, cleverly uses a domino metaphor to reinforce the choice position. Lines of people in train stations, offices and restaurants fall in succession like a complex domino puzzle as a voice-over talks about not following the crowd. One man in a bar stops the puzzle by moving out of the way to reach for a bottle of Miller Lite from a bartender.

Three to six additional spots produced by the agency trio and independent Wieden & Kennedy, Portland, Ore., which handles advertising for Miller High Life, are in the works. They support the Miller brand effort as well as Miller Lite and Miller Geniune Draft, according to a spokesman.

'We had forgotten'
"We had forgotten why people drink our beer," said Mr. Mikulay, from his Milwaukee office. "We needed to remind ourselves that consumers need a compelling reason to try and use your product -- otherwise consumers go with the default choice, the market leader. It sounds very basic, but we had forgotten that."

Galvanized by a new discipline enforced personally by Miller Brewing's president-CEO, Norman Adami, Miller executives for the past 15 months have taken a "fundamentally different" approach to understanding how Americans choose their beer, Mr. Mikulay said.

Mr. Adami tapped a team of consultants from McKinsey & Co, and Kevin Keller, professor of marketing at the Tuck School of Business at Dartmouth College, to guide the deep dive into the habits and lifestyles of the 21- to 27-year-old set. They conducted qualitative and quantitative research, going into bars to ask consumers why they chose a certain beer. Executives, including Mr. Mikulay, would frequently ask consumers to try a Miller brand beer and articulate what they liked or wanted in a beer.

Each time the team would return with findings, Mr. Adami would question how they got to the results and the team would go back and dissect their research. "There were lots of debates," a spokesman said.

Foreign to Miller
Mr. Mikulay and other executives freely acknowledged that the strategic work they were conducting wasn't new in the marketing world, but it was very foreign to Miller. "We're moving from a mindset of fighting decline and feeling overwhelmed by the spending power of the No. 1 spender in the category to [a mindset] about choice."

On the evolutionary scale of marketing Miller is "standing, but still hairy," described one executive close to the brewer. The executive gave strong credit to Mr. Adami and the McKinsey team for driving the much needed discipline to move from an advertising mentality to a marketing mentality.

Not that Miller hasn't previously attempted to make that transition.

"The issue of creating a compelling brand proposition for Miller Brewing is something Miller has wrestled with for a long time," Mr. Mikulay said. As far back as January 1996, Miller attempted to regain ownership of its name when it launched a flagship premium Miller after High Life was repositioned as a value brand. That brand failed and Miller went back to its advertising model.

Executives again tried to establish what "Millerness" means last year while working with Y&R, which unveiled video vignette to distributors that never gained enough corporate support to advance. It also turned out to not be proprietary enough to set Miller clearly apart.

'Catfight'
This past summer, Miller unveiled its "Catfight" ads for Lite that raised the ire of women's groups, but also reprised its "tastes great, less filling" proposition. "What got lost" in the hoopla over the spots is that "we brought back the product-intrinsic message," Mr. Mikulay said. Miller benched the girls and followed with a series of product-focused ads that favorably compared its Lite brand to Anhesuer-Busch's Michelob Ultra low-carb beer and Bud Light. Since then, sales have rebounded -- much to the surprise of Miller and Wall Street. Mr. Mikulay said sales continue to show growth.

No. 1 Bud Light in 2002 held 17.8 % of the U.S. beer market while No. 4 Miller Lite held 7.4%, according to trade publication Beer Marketer's Insights. Similarly, Anheuser-Busch controls 48.9% of the U.S. beer market, up from 48.5% in 2001, while Miller's share fell to 19% in 2002 from 19.6% the year before. U.S. sales volume of Miller Lite, which accounts for about 40% of Miller Brewing's output, fell 2.5% in 2002.

Miller executives are optimistic they have the right strategy rooted in research, but they also are cautious not to wave the victory flag just yet.

"I feel really good about where we are," Mr. Mikulay said. "We have much work to do but I feel very bullish about this initial step."

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