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A-B to sports partners: Adapt to a new world

Anheuser-Busch has been the sugar daddy of sports since the early 1980s. That’s when agency executive Tony Ponturo started at the company and helped engineer a strategy that made Bud and Bud Light ubiquitous across sports television, events and venues.

More than 30 years later, A-B’s latest sports media chief, Lucas Herscovici, is shaking things up even as the old model continues to be the dominant one in sports. While his predecessors, like Ponturo and Chuck Fruit, rose through the traditional ad and media agency route, it’s telling that Herscovici, a company executive since 2003, came from the digital world.

He headed A-B’s digital efforts starting in 2012 before moving on last summer to lead a new consumer connections unit at A-B InBev, which combines media, sports, entertainment and experiential marketing for the first time. That unit, and most of the company’s marketing group, are set to open offices this summer in New York City’s Chelsea neighborhood that will include a rooftop hangout and a basement beer bar.

The move to New York City has meant an exodus of many of A-B’s traditional sports marketing team, leaving the sports community to wonder about the brewer’s intentions.

Recently, over a Budweiser, Herscovici opened up about the company’s plans for altering its sports marketing with examples of how things may differ under his leadership.

First off, it’s no longer about signage. He noted that while negotiating the renewal of a founding partnership with the New York Mets and Citi Field, the large center field Budweiser sign is not high on the list of inventory priorities.

That will be true across all sports.

“We need to reinvent ourselves for the 21st century,” Herscovici said. “It’s not about signage, logos and doing defensive [property] deals. It’s about choosing the right partners and the right passion points to drive the convergence of media, content and experiences.”

But Herscovici wanted to send a clear message to the sports industry: A-B is not walking away.

“We’re not going to get out from sports. That’s a firm commitment,” he said. “We reshaped the sports industry in the 1980s. My challenge to the group is to reinvent how we activate sports today. … Sports used to be consumed passively, it was a couch-potato situation. Now, look at 21- to 27-year-old millennials, which are key for us: Interactivity is what drives their sports passion. They are checking stats online while they are watching, talking with friends on social media and competing in fantasy leagues. That means it’s not about ubiquity and signage and only in-game TV ads. It has to be about content, data and experiences.”

In his words are a warning to properties accustomed to relying on A-B’s sponsorship dollars as an annuity, as one of the brewer’s new mantras is “fewer, bigger, bolder.”

There’s a new mandate for proprietary content and consumer experiences, now deemed far more significant than having the largest fixed sign at any particular stadium or arena.

“When we talk with leagues and teams, we’re asking, ‘Is this partner adapting to the new world?’” he said, while offering a blueprint of what he’s looking for. “They need to be open to experimentation and be flexible. They need to be embracing and pushing for content opportunities. They are used to selling signs and used to renewing their deals without analytical assessments and they are used to increasing their [sponsorship price] renewal after renewal, just because of inertia. Those times are over. We’re willing to walk away now.”

While A-B has long been one of the largest sports media buyers in the U.S., Herscovici said that sheer tonnage is no longer enough.

“It has been about paid media and shouting,” he said. “But today, it’s a combination of paid, owned and earned media. You need to pay to be in the game and have others hear you. But you also need to have content that is so relevant that people will seek it out — on whatever platform. The partners that can help us achieve that are the ones we’ll work with.”

Another imperative is combining A-B InBev’s various connections across entertainment and sports. Herscovici said WME-IMG won the recent agency shootout for the company’s experiential business because of the agency’s knowledge across entertainment, fashion and sports.

“Entertainment and sports are converging at the same time as media and content,” he said. “That’s the perfect combination to help us succeed in this new world.”

The vaunted sports sponsor has major renewals coming up with the NBA and NFL, and it’s clear Herscovici will be seeking different assets in negotiations.

“Having a shield as the No. 1 thing we pay for is ridiculous,” he said. “We need to get together with our league partners and create platforms that are ownable, where we can have immediate association and drive sales.”

Herscovici cited some half-dozen “Up for Whatever” videos produced last year by NFL teams in support of their team deals as examples of where the brewer’s marketing is heading. The videos were distributed on social media and some were used as TV ads.

What’s paramount now, he said, is providing the millennial target audience with relevant experiences and content.

“When consumers leave a venue, we want them to feel that our brands have delivered to them the best experience there,” he said, as his beer sat empty. “I want those consumers to feel ‘those brands get me.’ If we show them a sign or a logo, we’re not understanding them. If we can enhance their experience with content and help them get a beer more easily, or help them share content with friends so they can brag, or give me a surprise-and-delight experience — those are things that will make people change their minds and swing [market] share for us.”

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