Don’t be like Bud Light — unless you have a billion to spare!
What would you do if you woke up to find out that you’ve lost over a billion dollars? You probably would never go back to sleep.
A year after what’s considered the most infamous example of culture in advertising, a $1.4 billion year-over-year sales loss by Anheuser-Busch InBev has been attributed to a boycott over a transgender influencer tie-in, according to CNN. Fox Business adds that NielsenIQ data shows a drop of 30% in sales in one year. Bud Light was also dethroned as the top beer brand in the country to Modelo Especial in a backlash to its April sponsored Instagram post featuring Dylan Mulvaney.
Of course, it’s easy to sit back and say they should have known better. However, as with all second-guessing, the subject of culture in advertising and what’s called Corporate Political Activism (CPA) is more complicated than what appears on the surface.
Trying to do what’s right can add up to one big wrong.
Our industry uses marketing research and surveys to direct certain choices. As it turns out, what Bud Light was intending to do is consistent with what the research shows us in theory (remember those last two words!).
- Marketers actively court Gen Z and Millennials. Makes sense, as they represent the future bulk of consumers. In fact, they already represent a huge portion of the buying public in the U.S. The 2023 census shows that Gen Z represent 20% of the population, while Millennials comprise 21.7% of that total. More importantly is their purchasing power, 40% and 25% of consumption, respectively (per Statista).
- Both groups say they care about social issues and want businesses to as well. A recent APCO Worldwide survey reports that 80% of Gen Z and 70% of Millennials believe a company should speak out, take action, or advocate on current events and issues. Specifically, and relevantly to this case, 74% of Gen Z think it’s OK to support LBGTQ+ issues (the leading issues were mental health [90%] and access to healthcare [88%]), while 45% believe companies should make a public statement or social media post to do so.
- This matters because Generation Z respondents told eMarketer that social media plays an important role along their purchasing journey and that they often engage with influencer content creators.
In theory, therefore, Bud Light’s entreaty to the LBGTQ+ community and engagement with a transgender influencer might seem a logical example of culture in advertising. But remember those two key words: in theory. What looks like a logical chain of thought from points 1 through 3 above doesn’t take into account at least three realities (and reality beats theory when it comes to business, sales, and money).
“Tell your statistics to shut up!”
There was a famous Peanuts comic strip in which Schroeder kept pointing out that statistics say this and say that about their gang’s terrible baseball team. Charlie Brown finally responds with the above quote. Bud execs could have been saved by having Charlie Brown around. Statistics can be fallible if they aren’t viewed critically. Now what about those three realities?
- Yes, statistics say that Gen Z and Millennials SAY companies that take a stand are important to them. They SAY LGBTQ+ is one of the topics of interest. They SAY they watch social media for this sort of thing and engage with influencers. If we tell these statistics to shut up so we can think first, we realize that these stats don’t necessarily reflect actual real-world behavior. For instance, a Gen Z’er could think they’ll make a purchasing decision based on these factors, but not actually do so. Will they pay more to support a like-minded company? Will they do so every time, rewarding activism through their wallets and pocketbooks? Can they know everything that influences behavior and decisions? Not likely. Human behavior and the making of decisions are complex, based around many known and unknown conscious and subconscious factors. And good intentions don’t perfectly align with actual actions in the real world. All this is why it’s dangerous to take it for granted that taking a stance on culture in advertising or exercising CPA will be good for business (or not hurt it).
- Common sense indicates that taking a stance on a political or social issue can make one group happy yet make another angry. According to an October 2023 Gallup survey, 59% of U.S. adults believe “businesses should not take a political stance” and that appealing to one faction alienates the other. That’s a statistic where Bud Light execs might want to take Charlie Brown’s advice.
- Staying true to your brand is essential, while straying into a niche can put it at risk. Since Bud Light had been America’s #1 beer brand from 2001, it inherently stands as a dominant brand with broad appeal and not a product that should concentrate on a limited niche audience. The Atlantic described the Bud Light main target audience as men, especially those who enjoy sports and socializing. That focus started with Spuds Mackenzie, making it the clear “good time brand that brings the party.” Sports Business Journal pointed out that Bud Light has been the perennial largest spender on sports marketing, often using humor to underscore the good time brand personality.
As America’s #1 Positioning Ad Agency, Innis Maggiore pays attention to a brand’s essence and the need to nurture and protect it. Bud Light’s position as the good time beer for a younger male demographic, exemplified by a strong tie to sports, is as crucial as its connection to middle America (and all it stands for). Middle America is more traditional than progressive, making a tie to a controversial social value stance counter to the Bud Light brand position and the values held by core customers. Significantly, a 2023 Consumer Insights Global survey showed that the “most important life aspects of Bud Light consumers in the U.S.” were a happy relationship, to be successful, and an honest and respectable life. Guess what? The very last mentioned on the list was social justice! Uh-oh! Look at your own consumers and customers first, in favor of general demographic profiles, because relevance is a major determinant of a brand’s position in the marketplace. That was a critical miscalculation in judgment by Bud execs about the impact of culture in advertising.
It didn’t help when the company’s marketing exec and CEO put down its own core demo, thus making everything worse. What do you do when your marketing VP goes on a podcast and proclaims the brand is “in decline” and then puts down its “fratty” consumers as making the brand “out of touch”? You add justifiable anger and greater alienation to the mix. The funny, not-so-funny thing is that the Bud Light core demographic is exactly the group she derided, despite it having kept the brand #1 for over two decades. Then, a clueless CEO sleepwalked through a muddled nonresponse that the company only wanted to bring people together, not divide them. Talk about “out of touch!”
Since most people don’t seem to appreciate being patronized, sales plummeted further, and the boycott widened. A year later, it’s amazing to see how much damage only a few people can do to their company and brand. After all, it was OK to make a crappy beer (judged 6 out of 8 in a recent blind taste test) for over forty years. It was even OK to sell out the great American beer brand to foreign interests. But it wasn’t OK to push “365 days of girlhood” onto manly middle Americans with traditional values who had already proven to be increasingly sensitive to what they perceived as the more extreme sides of progressive politics and social issues. Reaction to Target’s line of Pride clothing and displays was further proof of this.
Can Bud Light come back?
Innis Maggiore believes in positioning, not merely as theory but essential reality. In part, that’s why we’re America’s #1 Positioning Ad Agency. We further believe that positioning can play a major role in rehabilitating what had been America’s #1 beer brand.
Analysts agree that Bud Light can’t get back all the volume it lost. But it can recover. Some believe that the recent crisis isn’t entirely because of the Dylan Mulvaney backlash nor the negative effect of the company’s culture-in-advertising blunder, but that it was more of a trigger related to other troubling factors already in place. A 2022 (pre-crisis) Ad Age article began with the lede, “Bud Light is Ailing,” while The Hill outlined factors they purport made the sales loss and boycott too easy to pass up.
- “A mediocre offering, undifferentiated from competitors.” The taste test findings proved the first part, but the second part got our attention. As positioning leaders, we have to bristle at the notion that a brand can go around without having a clear, competitive differentiation. Yet the light beer category remains largely as bland and generic as the products, with the recent exception of breakout brand Modelo.
- “Below average customer satisfaction.” The Hill made the point that advertising “cannot compensate for mediocre or sub-par quality.” Decades of leadership by Bud Light, accompanied by heavy overall spending and major sports advertising, might indicate otherwise though the general principle bears consideration.
- Based on the aforementioned Gallup survey that discourages CPA, The Hill added that corporate political activism can harm brand equity and employee productivity at the same time as it can alienate some customers.
If there’s anything to the opinion that Bud Light’s transgender influencer efforts were not the sole factor in its fall from grace (and first place), that would correspondingly support the notion that Bud Light can recover. However, it also means more problems need addressing. Quality perception, customer satisfaction, and differentiation from the light beer pack must all improve.
Innis Maggiore also prescribes a renewed focus on the brand’s position and an active, meaningful concentration on its core consumers. Granted, it’s difficult to win back a spurned lover, but sincerity can’t hurt. Another lesson worthy of attention is one of checks and balances. It seems like the former marketing vice president was acting alone or in concert with a small cadre of confederates. For a brand as huge as Bud Light, one has to wonder how this direction of culture in advertising could have happened without cooler heads requiring a second thought before deployment.
A 2024 Ad Age article blames the brand’s marketers, stating that any influencer deal “where the brand abdicates responsibility for creative is courting disaster.” We might add that any influencer deal — and indeed any marketing at all — that’s counter to that brand’s position in the marketplace and to the core beliefs of its core audiences is courting a greater disaster.
But let’s not forget that Anheuser-Busch InBev still sells a tremendous amount of Bud Light. It’s too early to tell if its realignment with sports properties (such as its new UFC partnership, Olympics sponsorship, and Super Bowl visibility) can reverse the downward spiral, but the approach does make sense as a step in the right direction. No matter what, Bud Light may be “Easy to Drink. Easy to Enjoy,” but it won’t be easy to re-carbonate a beer brand that’s gone flat and lost its taste.