Miller Brewing Co. is shifting its sponsorship strategy, moving away from purchasing packages that offer across-the-board access to a wide variety of property assets. Instead, the company is targeting specific benefits it can use to accomplish local, regional and/or national marketing objectives, even if such a switch entails giving up exclusive status.

With a major portion of its portfolio dedicated to pro sports sponsorships, Miller’s new approach is in large part a reaction to the skyrocketing costs of such deals. In the company’s willingness to cede exclusivity to maintain such relationships, the move also is a reflection of the considerable power pro sports hold over corporate partners, especially in the beer/malt beverage category.

“We are strategically reviewing all of our assets,” said Dockery Clark, Miller’s director of sports and event sponsorship programs, who joined the company last month after serving as senior vice president, Olympic, sports and event marketing at Bank of America Corp. Miller’s sponsorship review was begun prior to Clark’s arrival.

As North America’s sixth-largest sponsorship spender, with an estimated budget last year of $160 million, Miller’s shift in strategy will impact the sports, music properties, festivals and others sponsored by the brewer, and ultimately could affect all property types if other sponsors follow its lead.

Although Clark said the strategy is still evolving, she highlighted three areas of focus:

  • More money for activation; less for rights fees
  • Emphasis on experiential marketing programs that the company can “own”
  • More integrated marketing programs that stretch across property types, such as the two-year-old Miller Lite Rock n’ Racing concert series

The cornerstone of the new strategy is negotiating for and purchasing only those benefits that help accomplish specific marketing objectives, with a priority on consumer touch points. “The world of sports marketing is expensive, and you have to make sure that you don’t lose sight of the targeted consumer,” Clark said.

The shift in strategy comes as Miller and its largest rivals–Anheuser-Busch, Inc. and Molson Coors Brewing Co.–face a period of flat growth and increased competition from the wine and spirits categories. Domestic beer sales have grown a meager 0.5 percent in each of the past two years, according to New York City-based Beverage Marketing Corp.

For non-national deals, the new strategy will play out in different ways across the country based on local market needs identified by Miller’s regional marketing managers, Clark added.

Panthers Renewal Example Of Strategy In Action
Miller’s contract extension with the NFL Carolina Panthers shows the results of the company’s new approach.

Miller’s 10-year contract to be the team’s exclusive malt beverage sponsor ended earlier this year, with both parties interested in continuing a relationship.

Clark noted that when Mid-Atlantic regional senior marketing manager Jonathan Gibson broke down the benefits provided by the deal and compared them with his business objectives, he concluded that exclusivity was not necessary, particularly when it came with a mid-seven-figure price tag.

The company determined that program elements like the Miller Extra Yard at Bank Of America Stadium–an area the company uses to host fans during Panthers games and showcase its brands–were essential, but that their ability to deliver on the company’s objectives did not depend on exclusive status, Clark said.

In discussing renewal with Gibson and hearing the company’s position, Kyle Caddell, the team’s director of sponsor sales and services, explored an idea that at one time might have been unthinkable– splitting the category with A-B.

What was important to Miller was keeping specific components of the partnership– and the activations around them–unique to Miller. “If both Miller and Anheuser-Busch feel comfortable with how they can activate, that makes them amenable to a split,” said Caddell. “At the same time, you have to help protect them from stepping on each other. Transparency is vital for something like this to work; you must make each company aware up front of what the other is going to be involved in.”

In addition to the Extra Yard, Miller also hosts the Miller Lite Kick-Off Party and the off-season Miller Lite Weekend Warrior Flag Football program. The platforms let the brewer engage consumers before, during and after games, as well as times when the Panthers aren’t on the field, Clark said.

A-B took advantage of the opportunity when the Panthers approached the company offering a shared category. The brewer’s first-time tie to the franchise includes exclusive rights to produce product packaging featuring team marks and logos, as well as ads during the Panthers’ local TV programming.

“Team sponsorships and our new packaging initiative allow us to precisely target local football fans,” said Tony Ponturo, A-B’s vice president of global media and sports marketing. “The local excitement surrounding our entry into the marketplace and our preferred advertising position within the coach’s show and local pre-game shows creates a significant opportunity for our products to reach core consumers.”

While Miller reduced its commitment to about $2 million per year for six years, the fact that A-B is paying the same amount means a net revenue increase of 33 percent for the Panthers, Caddell noted.

Creating Cross-genre Marketing Platforms
Although the impact on properties from Miller’s focus on controlling rights-fee spending and seeking customer-engagement benefits is clear, the ultimate effect of the company’s interest in combining property types is less so.

“We need to leverage all of our programs together–from sports to music–to drive brand meaning,” Clark said. “Music is a core part of our brand and we know that it also has a great appeal to sports fans, so we have to bring all of those components together and hopefully tell a story that doesn’t just impact immediate purchase, but builds affinity over the long term.”

Miller, title sponsor of a Penske Racing NASCAR Nextel Cup entry for its Miller Lite brand, is looking to create platforms along the lines of its Rock n’ Racing series, which features trackside concerts during race weekends. The program began with concerts at a NASCAR event in ’03 and expanded to five Nextel Cup races and the Indianapolis 500 last year.

This year, the series incorporates “Rusty’s Last Call,” a 12-stop tour in both Nextel Cup and non-race markets honoring Miller Lite driver Rusty Wallace’s farewell season. The concerts include appearances by Wallace and the Miller Lite show car.