The 146-year-old company taps into its heritage in an effort to dent the sales of its two closest, family-run competitors: the country's leading brewer, Anheuser-Busch Cos. (141 years old), and No. 3 Coors Brewing Co. (128 years old). The seven spots are Miller's first corporate branding effort in years. Most recently, ads have focused on individual brands at the second-ranked brewer: Lite, Miller Genuine Draft and Miller High Life.
Three spots will break this week, including one that tells how 19th century immigrant Frederick Miller founded the brewery with yeast he carried from Germany. The remaining four will follow this year or next, said Pat Moertl, senior brand manager responsible for High Life and brands that don't carry the company name. Background shots are filled with actual Miller employees and operations.
WPP Group's Ogilvy & Mather Worldwide, New York, handled with assistance from Core, St. Louis, one of the independent shops that assists Ogilvy with its beer ads. "[Miller needed] to regain its brewing credentials and not just be perceived as a marketer," said Rick Boyko, co-president of Ogilvy, New York. Miller took the heritage tack because "they didn't have a beer baron alive who could walk around and talk about where it was from," he said.
Distributors hailed the branding work, saying Miller needs to highlight its history. "Beer is driven by image. You can only do so much on the entertainment side. At some point, you've got to do something that ... tells people why they're drinking your beer," one southern distributor said. "Nowadays it seems like no one uses the attributes of the beer [in ads]."
Executives said they doubted upscale consumers would be turned off by the ads' blue-collar, Milwaukee tenor. "When people see the ads, they feel that genuineness and honesty. It lets people see behind the fa‡ade," said Marc Kempter, managing partner at Core and son of a veteran Anheuser-Busch worker. "For guys, it [shows] what would it be like to be inside the brewery. It's not a factory that makes boxes or Twinkies. There's so much magic wrapped up in beer."
Though most Miller ad money is dedicated to its core brands-Lite, MGD and High Life-the quality spots will rotate into already existing ad schedules for those brands. In the first three months of this year, Miller spent $58.4 million on measured media-up 21% from the $48.2 million from a year earlier, according to Taylor Nelson Sofres' CMR. A Miller spokesman earlier this year said the 2001 ad spending could reach the highest point since the mid-90s, when measured media topped $263.6 million. The brewer, he said, plans to spend at least 20% more on marketing in 2001 than last year. According to CMR, Miller spent $191.4 million on measured advertising in 2000.
The upswing signifies the brewer's confidence in its TV effort. Initial Lite work, by Ogilvy, and MGD work by WPP's J. Walter Thompson Co., Chicago, had been panned, but distributors now say they are pleased with the reel and that it's a good time for a quality campaign that seeks to show Philip Morris Cos.' brewing unit has heart. While Busches and Coors still run their family businesses, the last Miller to own a significant share of the company sold in 1966 to W.R. Grace & Co., which eventually sold to Philip Morris.
"When we say that our heritage extends nearly 150 years, we hope that really strikes people that we are in fact older ... and have a richer tradition and heritage than they might have originally thought," Mr. Moertl said.
Miller's second-quarter operating income was down 12% to $168 million due to higher marketing spending and volume declines of its top two sellers: Lite and Genuine Draft. Operating revenue for the quarter was $1.2 billion, down 1%.
Anheuser-Busch last week released second-quarter results showing operating income for April through June up 8% to $808 million. Net income was up 10% to $524 million, while second-quarter revenues were $3.4 billion, up 4%. Coors last week said second-quarter operating income was $72.1 million, up 1%. Net income was $49.9 million, up 3%, and revenue was $692.7 million, up 3%.