At the time of the merger that created brewing giant Anheuser-Busch InBev SA/NV, the conventional wisdom was that executives from InBev—known for keeping a close eye on spending—would soon curb A-B’s equally well-recognized appetite for gobbling up sponsorships.

But upon the signing of a blockbuster NFL deal this May, it appeared that predictions of cost cutting and belt tightening had been wrong.

Well, maybe not.

In a presentation at last Thursday’s ANA/IEG Sponsorship & Event Marketing Day presented by Univision at Carnegie Hall in New York City, AB InBev revealed that it is midway through a global audit of about 300 of its major corporate sponsorships.

When that assessment is completed—which should be by the end of the year—decisions will have been made about the future of each of those relationships, said Mike McGough, the company’s global procurement manager, media and sponsorship.

“Budgets are not increasing; there will be some tough decisions,” McGough told the audience. “In some cases, we will decide not to renew, in others we may choose to give up exclusivity and share the category if necessary.”

Part of the impetus for the audit is that as a “new company,” AB InBev needs to “harmonize what we are doing now that we have brought a number of brewers under one roof,” McGough said.

The process includes gathering all key data relevant to each sponsored property in a central database; instituting a “buy what you need and use what you buy” philosophy worldwide; and aligning sponsorships with the company’s three global brands—Budweiser, Beck’s and Stella Artois—and key focus brands in each country.

“Matching up brand and sponsorship strategies sounds obvious, but it is not done currently in many markets,” McGough said.

The audit also is an expansion of a process begun in the U.S. by Anheuser-Busch prior to the ’08 merger with Leuven, Belgium-based InBev.

“We started this about three or four years ago as the sponsorship landscape had become more complex,” McGough said, outlining three major challenges that the company—and other sponsors—continue to face: rising costs of rights fees, clutter, and measurement of return on investment.

To meet those challenges, the brewer had to evolve its sponsorship platform, said McGough, an 18-year A-B veteran who began with the company as senior manager of local sports and stadium signage. Specifically, AB InBev is shifting its approach to sponsorship in the following ways.

From: Non-activated properties
To: Activated properties

From: Horizontal ownership
To: Vertical ownership

“Horizontal” refers to deals such as the company’s partnership with the MLB St. Louis Cardinals, where it has stadium naming rights, signage, broadcast ad packages, etc. This type of sponsorship is becoming “the exception not the rule,” at AB InBev, McGough said, replaced by vertical deals that concentrate on only the inventory and benefits that are most effective. “We don’t need to have everything,” he noted.

From: Long-term commitment
To: Shorter-term agreements

Although the company’s goal is still to have longstanding relationships, they will be conducted through shorter-term contracts. “The days of five-year or more agreements are over,” McGough said, noting that although brand managers prefer one-year terms for maximum flexibility, it is more likely the company will be able to negotiate two- and three-year commitments.

From: Sum of local = global
To: Global reach, local relevance

“We have had too many local deals,” McGough said. “It’s more efficient and effective to have global platforms that can be leveraged in locally relevant ways.”

From: Multi-brand properties
To: Single (focus) brand properties

The brewer “has been guilty of wedging too many brands” into some sponsorships, McGough pointed out. “We don’t need to have five brands in one deal. Among other reasons, if you have a single brand you require less inventory.”

AB InBev has already shifted sponsorships of the four major U.S. sports leagues according to this philosophy—including plans for its NFL partnership, which begins in ’11. Budweiser is now aligned with MLB and the NBA, while Bud Light has the NHL and NFL.

From: Logo, hospitality, presence
To: Branded engagement

From: Borrow property equity
To: Create property equity

From: Be everywhere, anytime
To: Make choices

From: Exclusivity
To: Shared

Where Things Stand
AB InBev began the audit last October with an online questionnaire sent to designated staff involved in focus brand sponsorships in top markets to collect information on deals that met minimum thresholds.

“In some markets it was sponsorships of at least $50,000,” McGough said. “In other markets the threshold was higher.”

The questionnaire focused on key financials for each property, such as annual spend on rights fees and activation, media commitment and contract length. It also asked sponsorship managers to rate each property on a 10-point renewal scale, with 10 indicating that a deal “must be renewed” in the manager’s opinion.

AB InBev has created a proprietary audit tool to assess the deals and determine whether they should be retained, divested or considered for divestiture pending further analysis. Many in the third group are properties where activation is low but which managers indicated should be renewed.

The company is “right in the middle” of its audit process, said McGough, who moved into his current position last September, relocating from St. Louis to AB InBev’s new “functional management office” in Manhattan.

With collection and analysis of sponsorship data occurring between October ’09 and March ’10, the company has entered phase two of the process, in which it will create its global sponsorship strategy during the second and third quarters of this year.

Phase three—implementation and alignment with key markets and focus brands—is scheduled to begin rolling out during the third quarter and continue through the fourth quarter with phase four—ongoing evaluation and measurement—beginning in ’11.

While the audit process takes into account approximately 300 property relationships controlled by the company, McGough estimated that twice that number of deals are done on behalf of AB InBev brands by distributors throughout the world. Although distributor deals are not included in the audit, the company intends for local managers to share the new sponsorship strategy with distributors, he said.

Sponsorship Evaluation
McGough said AB InBev’s measurement plans are a “work in progress,” noting that the company does not have a “set formula” for evaluating return.

“We are in the process of developing a consistent set of metrics that can be used to measure the success of our sponsorship investments,” he said, adding that those metrics would include: increases in sales, increases in market share, media value, digital activation, and tailored surveys of hospitality guests.