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In 1860, creditor Eberhard Anheuser acquired the small, failing Bavarian Brewery in St. Louis. Four years later his son-in-law, Adolphus Busch, joined the company and, in the next five years, doubled the brewery's capacity, introducing pasteurization to extend shelf life and improving refrigeration systems to establish a national distribution system. With these innovations, he introduced the country's first national beer, Budweiser, in 1876 and the "connoisseur" Michelob brand in 1896.

Mr. Busch also left his mark on the marketing for the company, renamed Anheuser-Busch Brewing Association in 1879. In the late 1800s, he developed a four-point plan to market Budweiser nationally: massive distribution of saloon point-of-sale materials; a large cadre of traveling salesmen; an extensive inventory of giveaway items; and widespread use of print ads and outdoor—including the first electric signs in New York's Times Square. He also pioneered the first multiyear, single-element coordinated campaign with the introduction of "Budweiser Girl" prints and tin signs, an effort that continued for 30 years.

Three of the company's most enduring symbols were born before 1900: the red, gold and brown "A-and-Eagle" symbol, trademarked in 1872; bright-red beer wagons with shiny brass trim that delivered the product and displayed billboards; and the phrase "King of Bottled Beers."

War, Prohibition and Depression

In 1914, a year after Mr. Busch's death, the company hired D'Arcy Advertising, which remained its agency of record until 1994. Faced with the threat of Prohibition, the company launched a yearlong newspaper campaign discussing the struggle for personal liberty in U.S. history. When Prohibition went into effect in October 1918, the company began marketing Bevo, a nonalcoholic beverage that tasted like beer. For several years, the product was immensely popular, selling in 20 countries. The first radio ad ever produced by D'Arcy was for Bevo in 1920.

When Prohibition was repealed in 1933, Anheuser-Busch had survived while more than 50% of the U.S. breweries active before had not. In celebration, August A. Busch Jr. presented his father with a team of Clydesdale horses pulling a turn-of-the-century beer wagon. Thus was born one of the company's best public relations tools; today, three teams crisscross the country.

During World War II, the company focused on institutional and public service advertising to keep its name in front of the public. Production geared up after the war and by December 1950 had reached 5 million barrels per year as the company again sought to regain a leadership position through an aggressive ad campaign.

In 1952, an outdoor board series with the headline, "The beer of your lifetime . . . too," celebrated the company's centennial with characters from the mid-19th century. But it also marked the use of outdoor advertising "spectaculars"—animated electrical displays. The largest of these, 100 feet long and 80 feet high, featured a flying A-and-Eagle and Clydesdales and ran in Times Square. Radio continued to be a popular medium with the company's wholesalers, which bought time on regional stations that broadcast baseball games.

In 1950, the company became the first brewery to sponsor a major network TV show, "The Ken Murray Show," an hourlong variety show on CBS with commercials featuring the show's star and guests often seen drinking Budweiser on camera. The company noted that the sale of Budweiser increased twice as fast in areas that had television, so it renewed its $65,000-a-week sponsorship.

Two additional graphic icons were introduced in the 1950s: the bow tie for the Budweiser brand and the mountains for Busch Bavarian, a popular-priced beer introduced in selected regions to offset low-priced competitive brews.

In 1957, Budweiser took over the No. 1 spot in the beer market. The achievement was due in large part to a breakthrough advertising campaign that marked the brewer's first use of photography. It showed real people in casual situations rather than illustrations of more formal occasions. Its slogan, "Where there's life, there's Bud," used Budweiser's nickname for the first time. Credit also belonged to the "Pick-A-Pair" summer sales promotion that urged consumers to buy not one but two six-packs at a time. It endured for 30 years and is among the most successful promotions in industry history.

The company entered the 1960s still engaged in fierce competition, but its sales hit the 10 million barrel mark in 1964. In 1961, D'Arcy helped introduce the premium Michelob brand to the home market-it earlier had been sold only on draft-and positioned it as "the finest bottled beer in the world."

In 1964, the "That's Bud-that's Beer" campaign was introduced via TV, radio, print and outdoor. Although the images continued to depict sociable drinking situations, the copy explained why Bud was superior. The quality/superiority theme continued for the remainder of the decade. In 1965, the slogan "It's worth it, it's Budweiser" was introduced. In 1967, "Budweiser is the best reason in the world to drink beer" took over, and the Clydesdales were featured in color print spreads also offered as poster reprints.

Among the most popular print ads of the decade were spreads of the Budweiser label, which consumers framed as artwork. The brewer had always produced consumer sales promotion items on a limited basis, but it was inundated with requests for items bearing the product label, including a beach towel, clothing, sporting goods and recreational equipment. This success carried over into early 1970s advertising, in which the label was shown covering the bottom of a swimming pool, a rec room floor and a hot-air balloon, accompanied by the slogan, "When you say Budweiser . . . you've said it all."

Turning point

Anheuser-Busch entered the 1970s with Schlitz as its largest rival but ended the decade battling new No. 2 Miller. It began with less than $20 million in annual media expenditures and finished with more than $100 million. Network TV accounted for the largest segment, with emphasis in sports and special-interest programming.

But Anheuser-Busch was rocked by rival Miller's sports marketing techniques and the popularity of its Miller Lite brand (introduced in 1975), decreased purchases by younger drinkers and a strike in 1976. All occurred as August A. Busch III assumed leadership of the brewer.

In 1979, Budweiser introduced one of its most popular campaigns: the "salute to the worker" ads with the "This Bud's for you" slogan. The campaign, which ran for 10 years, starred average working people in various jobs rewarding themselves with a Bud at the end of a hard day. Busch Bavarian's name was shortened to Busch and its brand personality solidified with crisp new packaging and the "Head for the Mountains" campaign from Needham, Harper & Steers. Included was the popular "Buschssssshhhhh" sound of the can popping open. The "Weekends Were Made for Michelob" campaign from D'Arcy-MacManus & Masius, with Vic Damone crooning and actor John Forsythe as spokesman, combined the reward concept with class. The company also created specialized campaigns targeted at such market segments as women, younger adults and African-Americans.

Market dominance

The company entered the 1980s with nearly a 30% market share and quickly hit the 50 million-barrel milestone. The biggest product success story of the decade was the national introduction of Budweiser Light in 1982 with the "Bring Out Your Best" campaign. In 1984, to counteract any confusion with Miller Lite, the name was shortened to Bud Light and a humorous campaign, "Gimme a Light," featuring bizarre light sources, reminded customers to ask for the product by name. Other efforts featured a bull terrier named Spuds McKenzie, the original party animal, who later became a spokesdog for moderation in alcohol consumption.

In addition, the company succeeded in wresting sports sponsorships from Miller. By 1985, Anheuser-Busch had become the largest sports sponsor in the U.S. Each brand had its own sports affiliations based on brand consumer demographics.

The company also made two important corporate strategy moves in the early 1980s. With increased pressure on the industry from anti-alcohol-advertising groups, the company increased its long-standing public service efforts promoting responsible consumption. It launched the "Know When to Say When" media campaign, which evolved into a multipronged effort including "Family Talk" to fight alcohol abuse and underage drinking. The company also moved into the overseas market, beginning in Japan, Great Britain and Israel in 1984. Advertising was tailored to each market using quintessentially American images—the Grand Canyon, New York, cowboys, rock 'n' roll musicians—and themes of success and individual initiative.

In 1991, brand manager August A. Busch IV decided to emphasize humor and a return to tradition. Budweiser maintained its position as the "King of beers," the No.1 brand, with campaigns themed "Nothing beats a Bud," "Proud to be your Bud" and a return to "This Bud's for you." Memorable ads included the "Pool Hall/Classic TV" spot aimed at generation X, the football-playing Clydesdales and the Budweiser frogs, followed by partying ants and frustrated lizards.

In 1994, Bud Light became the best-selling light beer, dethroning Miller Lite. Humorous campaigns—"Everything else is just a light" and "Make it a Bud Light"—helped.

Anheuser-Busch developed a segmented marketing strategy in the 1990s and by the end of the decade was offering 38 brands, including O'Doul's, which became the best-selling nonalcoholic beer in 1997, and Bud Ice, which in 1994 was the first ice beer introduced in the U.S. By 1997, the Budweiser family of brands alone accounted for 30% of the domestic beer market.

In 1992, the company formed its own in-house media group for all planning and buying. The brewer was one of the first to make sizable media buys on U.S. cable TV, as well as global cable sponsorship deals to support its international effort. In 1997, it signed a seven-year agreement to be the exclusive beer sponsor of the Olympic Games. The company also moved into cyberspace with its "Bud Bowl" promotion, other cyber promotions, sports sponsorships tied to space on team Web sites and its first sponsored content area on the CBS SportLine Olympic site, as well as its own brand sites. Program-length infomericals were tested in the 1990s.

In December 1994, the company ended its long relationship with D'Arcy Masius Benton & Bowles and shifted the $100 million Budweiser account to Bud Light's agency, DDB Needham Worldwide. In 1998 the "Lizard" ads were named the most popular campaign ever by USA Today, and in 2000 the "Wassup?" campaign won a Gold Lion at the Cannes International Advertising Festival.

In the early 21st century, as Anheuser-Busch anticipated its 150th anniversary, the company put a new emphasis on making Budweiser not only a national but an international brand as well, expanding beyond the 80 countries in which it was then sold.

In 2002, the company was the first brewer to recognize a market opportunity in the popularity of low-carb diets and rolled out Michelob Ultra that September. It sold 3 million barrels in 2003, placing it among the top dozen beer brands.

For 2003, Anheuser-Busch was No. 43 among U.S. advertisers, according to Advertising Age. The company spent $776.4 million that year, down 2.1% from 2002 spending.

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