What Sparked the Divorce Between McGarryBowen and AB InBev

Brewer Was Dissatisfied With Agency Staffing, Say People Familiar With the Matter

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Bud Light
Bud Light

"They had strength in planning, account service, creative development," said AB-InBev's top U.S. marketer Paul Chibe less than a year ago, explaining to Ad Age the reason why he hired McGarryBowen to replace longtime agency DDB, Chicago. "To have a long-term relationship, you need all three. ... If you're not [strong] in all three and your creative is not linked to a long-term strategy, it's not going to work."

Therein lies a hint of what went wrong between Anheuser-Busch InBev and the Dentsu-owned agency, which was unceremoniously shooed out by the beermaker after only eight months. Without a review, McGarryBowen was supplanted by Translation Advertising, a roster agency brought aboard in tandem with McGarryBowen that was originally intended to handle work for line extensions such as Bud Light Lime and Bud Light Platinum.

According to people familiar with the matter, the brewer, led by U.S. Marketing VP Mr. Chibe, had pushed McGarryBowen for months to hire a head of planning for the account, but as of this week the agency still had not made the hire. That became one point of contention, as did work that , under AB InBev's stringent testing rules, didn't consistently perform well.

While the account was won and largely handled out of the shop's Chicago office, the agency's co-founder, Chairman and Chief Creative Gordon Bowen, had recently stepped in and was working to smooth things over with Mr. Chibe.

The agency declined to comment to Ad Age on the reasons for the split and demurred when asked to comment on an internal note obtained by Ad Age that Mr. Bowen sent wide to staff at McGarryBowen today. The note, explaining the account loss, was surprisingly cordial.

"As all of you know, given our track record, it is unusual for me to write you a note with disappointing news. Unfortunately, today we have learned that Bud Light has decided to consolidate their business with another roster agency. I am very proud of the work we've done for this American icon, including our much beloved Super Bowl 'Rescue Dog' effort. Many of you have given days, nights and weekends to creating great Bud Light work over the past eight months, and I am deeply grateful for your commitment and continued passion. A special thanks to Chris, Frank and Mike in Chicago and their assembled and dedicated teams for working what seemed to be 24/7, 365 to reignite this brand. I ask that you join me in thanking Bud Light and their parent company Anheuser-Busch InBev for giving us the incredible opportunity to work on one of the greatest beer icons of all time."

Cyclicality is a part of the game in adland, but parting ways with a client after just a matter of months is rare. So what could have gone wrong so fast?

McGarryBowen's first TV ad as an official roster agency ran in February during the Super Bowl and it was generally well received. The aforementioned "Rescue Dog" spot, as it's called, featured a scrawny pooch named "Weego," which played off of Bud Light's "Here we go" tagline. The spot got extensive airplay. Yet that turned out to be the only TV ad the agency produced for the brewer, as other work apparently did not satisfy its strict ad-testing process. And as the summer wore on, AB InBev was forced to resurrect older work that had been produced prior to McGarryBowen coming on board.

Bud Light Port Paradise
Bud Light Port Paradise

One sign of trouble came recently when Translation -- not McGarryBowen -- was picked for a promotional spot (now running) that promotes the Bud Light Port Paradise Music Festival. That meant that McGarryBowen, which had been expected to debut new work during the summer, was essentially shut out of the season. Meanwhile, Translation had cemented itself as a favored agency of Mr. Chibe, who used the shop at his previous job at candy marketer Wm. Wrigley Jr. (He had most recently served as VP-general manager for gum and mints at Wrigley before he left for AB InBev about a year ago.)

Mr. Chibe declined to comment on the brewer's specific rationale for cutting McGarryBowen. But in an interview following the agency change, he praised Translation. The agency has "been doing a phenomenal job on our business with groundbreaking work on Bud Light Platinum, Bud Light Lime and Budweiser Made in America," he said, referring to marketing related to a Budweiser-sponsored music festival in Philadelphia slated for Labor Day.

Even as Translation gained favor, McGarryBowen fought hard to keep the account, struggling to get work through the brewer's rigorous testing requirements, and hiring new talent.

Steve Stoute
Steve Stoute

Late last month, the shop announced it would hire Jamie Shuttleworth as the Chicago office's head of strategy. He came from DraftFCB's Chicago office, where he headed planning and analytics, among other duties. His specialty is experience leading strategy and planning at an agency that had a long-term beer account (MillerCoors, which cut ties with DraftFCB earlier this year), but it seems from AB-InBev's perspective it was a move that came too late.

McGarryBowen had brought in other senior executives since winning the Bud Light account -- executives that to some extent had connections to Mr. Chibe -- including Mike Roe and Frank Dattalo, creative veterans of EnergyBBDO, which handled (and continues to handle) gum work for the Wrigley account while Mr. Chibe was there. The agency also recruited Chris Tussing to run the Bud Light business. Mr. Tussing, an account veteran, previously was the managing director of Palm & Havas; he was also an account director on Wrigley at EnergyBBDO.

One former beer-marketing executive with deep knowledge of the brewer suggested that McGarryBowen was not entirely at fault, as the move to slim down to one agency for the brand was driven by AB InBev's intense focus on cost-cutting. "They treat agencies as a vendor, like the guys that make neon signs, and that 's no way to treat their partners," the person said.

Paul Chibe

Asked to respond, Mr. Chibe said the brewer's "commitment to our AOR partners remains strong and we have several AORs on the roster that are performing extremely well." The brewer's other agencies include Anomaly for Budweiser and Palm Havas for Michelob.

While the win is a boost for Translation, it also comes with intense pressure. The agency, which at 130 employees is a fraction of the size of McGarryBowen and doesn't have the backing of a holding company, must scale up to serve the marketing needs of the biggest U.S. beer account.

Said Steve Stoute, founder of Translation: "This account says to the advertising world that we're very, very serious. To get the category leader in beer to give you their business, it means we're on the main stage now. I'm looking to hire the best creative talent in the world and give them an opportunity." He added: "The category has been stuck in some of the same messaging for a long time and with Bud Light being the leader in the category, it's our responsibility to move the conversation forward. I'm looking forward to that challenge."

Under Mr. Chibe's direction, the brewer has pursued music-themed advertising, a shift that has seemingly played to the advantage of Translation, whose investors include Jay -Z.

Bud Light is by far AB InBev's biggest brand and the overall biggest beer in the U.S., commanding a 19% market share, according to Beer Marketer's Insights. But brand shipments fell three straight years from 2009 to 2011, when it dropped 1.7%, according to Beer Marketer's Insights. Lately the brand has been lifted by new brand extensions such as Bud Light Platinum, a higher alcohol version of Bud Light, and Bud Light "Lime-A-Rita," a margarita-flavored malt beverage.

"The Bud Light megabrand is gaining in 2012 with the big Platinum intro and the surprise success of Lime-a-Rita," Benj Steinman, president of Beer Marketer's Insights, said in an email. "But Bud Light itself is likely down for the fourth year in a row." He added: "Distributors definitely like the success of the higher-priced line extensions in 2012, but are still concerned about the health of the mothership."

For McGarryBowen, the loss seems a signal that its new-business engine is finally showing some signs of slowing down. Although it recently joined P&G's roster, there have been setbacks on other accounts. It lost a piece of Chase business to Saatchi & Saatchi, and after winning Burger King in 2011, the chain in early 2011 moved to a general-market roster that included Mother and Ogilvy offshoot David, as well as Pitch. Each quarter the agencies compete to see whose work will run inthe following quarter, and McGarry hasn't had a TV ad for fast feeder since the first quarter.

Contributing: Rupal Parekh

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