From the moment last June when Seagram Americas ran a commercial for Crown Royal whiskey on a TV station--the first liquor advertising to run on an English-language station--the company has been at the center of a firestorm.
Arthur Shapiro, exec VP-marketing for Seagram Americas, talked exclusively with Advertising Age Media Editor Chuck Ross.
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Mr. Shapiro: When the industry stayed off TV, it was because there were three networks and one TV set per household. Today, there are 2.5 sets per household and, in some places, hundreds of channels. What he's missing is that these days advertisers can target their messages to adults.
The notion that alcohol advertising will go to kids is incorrect, given the number and depth of TV stations available in the average household.
AA: The president also went to great lengths to say FCC should just look into liquor TV advertising, not beer and wine.
Mr. Shapiro: I don't know what his motive is, and it would be inappropriate for me to speculate. However, I received a copy of a letter, also dated April 1, from the National Council on Alcoholism & Drug Dependence. This isn't an alcohol-friendly organization, to say the least. One part of the letter says, "The president and the FCC should not, however, overlook the fact that our airwaves have long been awash in beer commercials that make drinking seem like a harmless activity enjoyed by people who are always happy, attractive and successful. It would be a mistake to only focus on distilled spirits advertising, because this would send a wrong message that these beverages are more alcoholic than beer or wine."
AA: You agree?
Mr. Shapiro: Of course.
AA: Do you think that with this new pressure from the White House, Reed Hundt will be able to get enough commissioners to investigate the issue?
Mr. Shapiro: I just don't understand what jurisdiction the FCC has in this area, and it appears two [FCC] commissioners agree with me.
AA: The president had already gone on the record opposing liquor ads on TV. Why do you think he chose now to bring up the issue again?
Mr. Shapiro: I can only speculate. Mr. Hundt has been attacked in Congress and by some of his other commissioners for the stance he's taken on alcohol advertising. Perhaps the president, and more importantly, the vice president, decided this was the time to rush to his defense.
AA: So far, do you rate your venture into TV advertising a success?
Mr. Shapiro: Television and radio advertising work. And while our testing has been mixed in terms of results, the fact of the matter remains: On balance, we think it's worth continuing to pursue. And we're going to continue it; it's no longer a test. But considering we still have an issue of access, it's still in a non-full-steam-ahead mode.
AA: In terms of access, does getting on two dozen or so stations make a marketing campaign?
Mr. Shapiro: I'm not going to comment on the number of stations we're on. But I'd also say it's not the breadth of markets that's important as much as the coverage within a market.
We're not going out to be on "NYPD Blue" or the Super Bowl--we're not looking for national exposure. We're looking market by market, spot and local. I'm in a regional and even a local business.
AA: When and during what kinds of programming do you think ads for spirits should run?
Mr. Shapiro: Let me put it this way: We have a long history of responsibility in print advertising. I kill more ads than I let run. I say, "Is this inappropriate?" Or the second question, more frequently asked, "Is this likely to be perceived as inappropriate?"
So we're very cautious where our print ads and outdoor run. We have rigid, strict guidelines. We're not about to move away from those responsibilities when it comes to television.
But the minute I publicly enunciate what my requirements and restrictions are for television--which I can assure you [are] more stringent than anyone else's--suddenly the playing field is no longer level. If I say that we'll never go on a show with X% of audience under 25, that becomes a requirement for me that beer [marketers] don't have. That's not fair.
AA: Have you been surprised by the beer industry's reaction to your entry into radio and TV advertising?
Mr. Shapiro: While I wouldn't have expected the beer industry to embrace us, I was surprised by their anger, annoyance and vehemence against us. I was blown away by the lack of support we received from the beer industry--because we either have a First Amendment, and we have the freedom to advertise legal products, or we don't.
I think anything that happens as a result, the beer industry has no one to blame but itself.
AA: So you're saying the beer industry wants it both ways? They want to advertise their products on TV and radio but they don't want to see Seagram doing that?
Mr. Shapiro: And then they go crying when Advertising Age and The Wall Street Journal look at [the] age composition of when ads are being run. I didn't start that fire. . . .
Maybe I'm naive, but in my fantasy I would have thought that this is an issue where responsible advertising of products of alcohol, regardless of the type, would be the norm. Not, "Hey, we're the soft guy, so we should be on, but watch out for the hard guys, they shouldn't be." That's just illogical.
AA: What about the corollary comment station executives make that they are afraid of losing beer money if they take spirits ads?
Mr. Shapiro: [The] fear of loss of business revenues from other forms of alcohol . . . [is] really unfounded.
It's easier to make a decision based on saying, "I'm not going to do this and stick my neck out, and I'm going to find reasons for turning it down."
[In] the eight markets that ran the radio [commercials] for Lime Twisted Gin, the grand total of complaints from the general public was six. And half of those six were, "How come [the station] took the ad?" They were requests for information and not necessarily negative. . . .
The only thing that gives me some comfort is that sounder, more intelligent minds continue to prevail, and some people have begun to realize, "Wait a minute, I'm looking to grow my business and here's Seagram ready to do some advertising. Here's Schieffelin & Somerset ready to do some advertising. Here's Allied Domecq ready to do some advertising. Do I want to miss the opportunity for this increased revenue?"
Little by little, people are saying "No, I don't want to miss out on that."
AA: What about the charge leveled by some that Seagram's real agenda here is to get beer kicked off TV, or at least get it restricted?
Mr. Shapiro: Isn't it stupid to think we would want beer off television so they can outspend us 3 to 1 in print? Why would I want to do that?
AA: We've tracked some of the advertising Seagram has run, and you've been in some sports, including college football.
Mr. Shapiro: No, sir. We have never run [ads] in college football to my knowledge. No, sir.
AA: Would you object if a government entity came up with rules about when liquor advertising could run?
Mr. Shapiro: If there was to be an edict that said all alcohol advertising--beer, wine and spirits--can only be within this period of time, that would be fine. As long as it was universally applied.
AA: Rep. Billy Tauzin (R., La.) has said he hopes the spirits industry will voluntarily come up with these guidelines. Is that something Seagram would be interested in?
Mr. Shapiro: I want to get on with my job of marketing and promoting my brands. Whatever it takes to give me access [to ad media], so long as it is fairly and equally applied across the alcohol spectrum, I'm in favor of it.
AA: Where does Seagram go from here?
Mr. Shapiro: The next stage is for the spirits industry and Seagram to start bringing the message out to the radio and television people. To basically say that you're not just talking about Seagram money, you're talking about a lot of other money. And you're making an unfair and artificial distinction.
We need to start dealing with the Radio Advertising Bureau, the National Association of Broadcasters, and ask, "What's the problem?"
AA: What do you want to tell them?
Mr. Shapiro: Why it's a smart business move for them, to give them assurances that at the end of the day, they have total control over what ads get run and what doesn't get run.
AA: Can you take us back and tell us why you first decided to break the ban?
Mr. Shapiro: It's a story I've never told anyone. Back in 1995, we started to do some serious, heavy-duty strategic planning. I was pushing us to think outside the box. One of the issues we looked at was that there was no decline in overall alcohol consumption, but there was a severe decline in spirits consumption relative to wine and beer.
We began to realize that the mere fact [that] we as a spirits industry restrained ourselves from going on the air was basically a statement to the public that we were different. . . .
We conducted focus groups and found the public didn't seem to have a notion that said any type of alcohol can go on television other than spirits.
AA: So then you tried to get an Absolut commercial on certain cable TV networks in the fall of '95.
Mr. Shapiro: Yes. They all said the same thing: "Fabulous piece, but I don't want to be the first to do this." So we realized this wasn't going to be as easy as one would think.
Then, last spring, we got a phone call from one of our distributors who put us in touch with the station in Corpus Christi.
AA: Do you think liquor ads will eventually be generally accepted on TV and radio?
Mr. Shapiro: There are two great motivators in life. Right now, we're being kept off the air because of fear. Sooner or later, greed is going to take over and we'll be on the same way everybody else is
Copyright April 1997, Crain Communications Inc.