Even before last year's Super Bowl was played, executives at Yellow Tail wine decided they wanted to make a big splash by advertising in the 2017 game. But they quickly uncovered a major hurdle: Anheuser-Busch InBev's exclusive category ad rights with Fox covered not just beer, but all of alcohol, shutting out wine brands.
But Yellow Tail did not give up on its goal of giving the wine category its biggest Super Bowl presence since the 1980s, when Bartles & Jaymes ran a national ad in 1988 and Paul Masson Vineyards ran one in 1980.
So the wine brand and its media agency, Havas Media, got to work, executing individual local ad buys across 70 TV markets, including the top 30. As a result, an estimated 85% of the more than 100 million people expected to tune into the game will have a chance to see Yellow Tail's ad. And viewers across the nation -- including in massive markets like New York, Chicago and Los Angeles -- will have no idea that the brand went the local route.
"As a general rule, a viewer in Chicago has no idea if they are seeing a national spot or a local spot. Unless you are a savant of the industry, you don't know where the local break is versus the national break," said Jason Kanefsky, chief media investment officer at Havas Media.
The 30-second ad is "a big and momentous occasion for our industry. We actually think it's a lot more than just about Yellow Tail," said Renato Reyes, chief marketing officer for
But the journey Havas and Yellow Tail traveled to pull it off provides a lesson on how hard it is for an advertiser to gain a near-national presence in the Super Bowl via local buys, especially in a category where a powerful marketer like AB InBev exerts control.
Why they did it
Yellow Tail's decision to advertise in the game was driven by market dynamics shaping the wine industry. Wine has had a good run of late, despite the fact that its marketers tend to avoid expensive traditional ads in a fragmented category filled with a dizzying array of brands. Wine consumption grew from 14.6% of all alcohol servings in 2006 to 17.5% last year, according to BW166, which provides market analytics and advisory services to the beverage alcohol industry. In that same period, beer fell from 55.7% to 49.8%.
But the Austrailian import segment in which Yellow Tail competes has struggled of late, especially at lower price points, alcohol trade publisher Shanken News Daily recently reported. Yellow Tail, whose suggested retail price for 750ml is $6.99, has managed to grow its share of the Australian import segment to 55%. But because the segment is shrinking, "our volume has actually gone down slightly," Mr. Reyes said.
While some brands facing this category pressure might discount prices and cut back on marketing, Yellow Tail is going the opposite direction.
"Our consumer research is telling us that Yellow Tail is a consumer-loved brand," Mr. Reyes said. So the brand asked, "How do we really turn this to our advantage? And we said instead of investing in price [discounting] we are going to invest in the Super Bowl, the world's largest stage."
He continued: "And we think that if we bring the message that wine can be fun and that wine can be present in all of these occasions where you celebrate, we think we can make a big impact." The ad, created by the New York-based agency Burns Group, "is going to be about how fun wine is," he said, without disclosing creative details.
Yellow Tail made the final decision to make a Super Bowl the ad in January of 2016. But then came the hard part: executing the media buy.
How they did it
Anheuser Busch began striking exclusivity pacts with Super Bowl broadcasters for the 1989 game and the streak has extended into Fox's broadcast of Super Bowl LI on Feb. 5. From a practical standpoint, the exclusivity has only affected beer. That's because NFL rules prohibit liquor brands from advertising in games, and wine brands have not been aggressive on TV. MillerCoors has occasionally snuck in the game via regional buys, like in 2012 when it bought ads covering the Great Lakes and Southeast for its Redd's Apple Ale.
So Havas began the tedious process of negotiating individual local buys. The agency targeted the top 30 U.S. media markets, plus an additional 40. "We spent a tremendous amount of time … trying to put together a replication of a national buy through a local lens. It was an arduous process," Mr. Kanefsky said. But "the team got it done."
There were some nervous moments, however. Not only does AB InBev have national exclusivity, the brewer has the first right of refusal with Fox owned-and-operated local stations, Mr. Kanefsky said. So for instance, if the brewer wanted to buy a local ad during the game in New York for Budweiser, no other alcohol brand could run a local spot in that market. But AB InBev faced a Aug. 1 deadline to execute that option, Mr. Kanefsky said. It didn't, so Yellow Tail pounced.
"As soon as they lost that window of exclusivity, we were all over it," Mr. Kanefsky said. "We weren't going to wait for AB to think about it."
AB InBev declined to comment for this story.
How much it cost
Mr. Kanefsky and Mr. Reyes estimated that the buys will reach 85% of Super Bowl viewers. Yellow Tail could have probably gotten to a higher percentage, but the brand made the decision to bypass some smaller markets that are not a priority.
But it did not come cheap. Mr. Reyes did not disclose the total amount the brand spent, but he said it ended up being more expensive than a national buy. The going rate for a 30-second Super Bowl ad is $5 million, according to estimates.
The reason why the local strategy was more expensive is two-fold. For one, there is limited supply because there are only a handful of local ad pods during the game. Also, prices can fluctuate greatly across markets, and advertisers lose the efficiencies of a national buy.
Some local TV stations actually proposed two rate cards -- a more expensive one for if their local team made the Super Bowl and another less expensive one if they did not. That was because viewership skyrockets in regions where the local team is in the game. "What we are paying for is the corresponding increase in impressions. It's not a penalty or a fine. It's just, 'Hey I am going to deliver you more impressions, you should pay me more money' ," Mr. Kanefsky said.
Mr. Kanefsky, who was interviewed on Friday, added: "There are some markets that we still don't have a final price on because there is a built-on escalator we agreed to." The regions still harboring Super Bowl dreams heading into conference championship weekend were Pittsburgh, Green Bay, Atlanta and the New England.
If Yellow Tail gets its way, fans everywhere will be drinking a little wine as they watch the game, no matter who's playing. Last year, 30 million people served wine during the game, compared with 59 million people who served beer, according to Nielsen figures cited by Yellow Tail. (It is likely that a lot of people served both.) For the past two Super Bowls wine sales spiked an average of 8.9% in the week leading up to the game, while beer sales jumped 9%, according to Nielsen.
Said Mr. Reyes: "It's my hope that that Anheuser Busch sees that both categories continue to grow and we're not a threat, and maybe next year we can buy a national ad."