TV toasts NBC drive to drink

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Liquor marketers spent $4 million on TV last year, but that number could quickly skyrocket to $300 million or more in the wake of NBC's decision to break with tradition and accept booze ads. That would provide a big boost to TV but deliver a sharp blow to magazine publishers already hard hit by the recession and other challenges.

Beer marketers poured $891 million into U.S. advertising last year, with 86% of that total-$767 million-spent on TV, according to Impact Database's 2001 distilled spirits study. Hard-liquor marketers spent $365 million in total, with 77%, or $281 million, placed in magazines and just 1% on TV.

Assuming that broadcast and cable networks follow NBC's lead-which seems to be a safe bet-and that hard-liquor companies mimic the beer model, TV would win over the lion's share of the liquor marketers' budgets, some $314 million based on current spending levels.

That number could climb if liquor companies increased their ad outlays to meet the higher cost of TV advertising. Beer marketers spend 1.5% of revenue on advertising; liquor sellers spend about 1%.

"It will fundamentally change the way people market their products," said Arthur Shapiro, now senior VP-trade channels at Seagram Americas. Mr. Shapiro first broke a voluntary ban on TV advertising in 1996 as exec VP-marketing services for House of Seagram; rivals quickly followed suit.


Mr. Shapiro said NBC's move will lead liquor marketers to re-evaluate media strategies. He predicted TV spending could multiply rapidly in coming years if there is no backlash against the appearance of such commercials.

Ultimately, he expects liquor marketers to advertise primarily on TV, shifting money from magazines, billboards and promotion. One publishing executive estimated liquor advertising in magazines could fall 20% next year.

Magazines wouldn't be the only ones unhappy with a shift of hard-liquor dollars to TV. Beer marketers have had the medium mostly to themselves for decades. Brewers also worry about a move to ban all broadcast alcohol advertising.

No networks announced policy changes in the immediate wake of NBC's move. But industry observers expect all leading players to follow suit, especially if NBC meets little resistance from the government and consumers.

"Once that door is open, it's very hard to close it again," said Arlene Manos, senior VP-ad sales for A&E Television Networks, parent of A&E and the History Channel. Those networks are considering a change in policy and already have been approached by spirits marketers Brown-Forman Corp.'s Jack Daniel's Tennessee Whiskey and Allied Domecq Spirits.


NBC agreed to accept hard-liquor ads from 9 p.m. to 11 p.m. and on late-night shows such as "Saturday Night Live"; all shows would have to have at least 85% of their audience age 21 or older. The network also will consider requests to run ads on other programs if 85% of viewers are at least 21. Despite those and other limits put in place by the network-including that all liquor ads will contain messages about responsible drinking-critics voiced their opposition to the move.

"The other networks will look at it and will be just as likely to cash in," said George Hacker, director of the alcohol policies project at the Center for Science in the Public Interest.

Diageo's Guinness-UDV North America is the first liquor marketer to strike a deal with NBC. A spot for Smirnoff vodka urging drinkers to name a designated driver was slated to run during the Dec. 15 broadcast of "Saturday Night Live."

Other liquor marketers likely will follow suit. "Certainly, we have had conversations with networks," said Richard Hamilton, chief executive of Zenith Optimedia Group The Americas, New York, whose clients include Allied Domecq. "We haven't made any decision."

It's not yet known what the Washington reaction will be to NBC's move. On Dec. 14, U.S. Rep. Ed Markey (D-Mass.) "implored" the network to reconsider its decision, saying the airing of hard-liquor ads is "contrary to [broadcasters'] public-interest responsibilities."

Contributing: Cara B. DiPasquale, Jon Fine, Wayne Friedman, David Goetzl, Ira Teinowitz, Laurel Wentz

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