Take a deep breath. Feel the air expand your lungs and diaphragm. Pause for a beat. Now, as you exhale, yell it: “Whassuuuuuuup?!”
That Budweiser commercial first aired in 1999, and for adults over 30, the phrase is still tucked away in a dusty corner in the attic of our brain. Budweiser parent company Anheuser-Busch InBev (ABI) was so sure of the catchphrase’s nostalgic force that it rebooted the “Whassup” commercials with a pandemic-related message in spring 2020—with smartphones instead of landlines, naturally.
Beer TV commercials have for decades ping-ponged with U.S. pop culture, both reflecting current fads, celebrities, and tastes, as well as creating new phrases and icons. Beer commercials were memes before there were memes, and they’re the only reason we can identify Clydesdale horses.
But beer commercials’ influence may be fading. Between 2019 and 2021, beer TV commercial minutes on ESPN, CBS Sports, Fox Sports 1, and ESPN2 declined -18% while airings declined -4%, according to ad measurement company iSpot. Three years ago, those networks broadcast 19,399 minutes of beer commercials. Last year, the total was 15,965 minutes. John Cassillo, an analyst with TVREV, says the “pretty big decrease” is also reflected in impressions—the number of times people saw those commercials. There are fewer beer commercials and fewer people watching them, all while TV advertising becomes more expensive.
“During the pandemic, advertising leaned further into digital and technological solutions. It happened to hit beer products and their advertising more because their commercials were so iconic,” says Hope Schau, a professor of marketing and the James and Pamela Muzzy Chair of Entrepreneurship and Innovation at the University of Arizona. “Beer companies really were the kings, if you will, of 30-second ads. They just got hit hard—like, ‘Now what do we do?’”
The golden days of beer commercials may be in the rearview. The most recent, nationally resonant beer commercial was Bud Light’s 2017 “Dilly Dilly” spot, which became its own series of ads that ran for two years and created a spin-off campaign featuring the “Bud Knight.”
Even if it’s been years since a new beer ad reached pop culture status, they still represent a huge portion of beer companies’ advertising budgets. Last year, both ABI and Constellation Brands, which owns the U.S. rights to Corona and Modelo Especial, spent roughly 10 times more on TV advertising than digital advertising, according to MediaRadar. That’s even as the average live TV viewer gets older, and beer’s target drinker—young, legal-drinking-age consumers—spends more time watching YouTube, TikTok, and streaming services. Almost 60% of 18-34-year-olds in the U.S. have a subscription to Hulu, which runs its ads before, during, or after shows and movies.
Beer commercials are at a crossroads, and their future won’t only be a matter of marketing budgets and ad buys. They’re evidence of the changing pace of the alcohol industry itself, where beer is struggling to keep up.
The audience for traditional TV is getting older, and fast:
U.S. adults ages 65 and older averaged about 6.5 hours of live TV viewing every day in the most recent figures from the third quarter of 2020.
Meanwhile, adults ages 18-34 (beer’s target demographic, once those people are of legal drinking age) averaged just over an hour of live TV daily during that same period, according to Nielsen data.
Those 18-34-year-olds used the internet and phone apps, on average, for 2.5 times as long as they spent watching traditional TV per day.
Despite this, beer companies are still spending hundreds of millions of dollars annually on TV ads. Between January and October 2021, MediaRadar reports the country’s largest companies spent freely for TV airtime:
Constellation Brands: $338 million (e.g. Modelo Especial, Corona Extra)
ABI: $211 million (e.g. Bud Light, Michelob ULTRA, Bud Light Hard Seltzer)
Molson Coors Beverage Company: $96 million (e.g. Miller Lite, Coors Light)
The question isn’t why beer commercials are on the decline, it’s why they’re still as ubiquitous as they are. Alcohol is unique in its reliance on TV commercials, spending twice as much on these ads as the average brand. And given beer’s reputation as the titan of the TV ad, it’s proven a tough legacy to leave behind.
It’s difficult to overstate how dominant beer TV commercials were 40-50 years ago. Miller Lite launched with endorsements from sports legends like Mickey Mantle and Whitey Ford, and AdAge named its “Tastes Great, Less Filling” effort as one of the top 10 greatest ad campaigns of the 20th century.
“The sales of these main beer brands were on the rise in the ’70s and ’80s when 30-second ads were on the rise,” Schau says. This fused the idea of TV commercials with marketing strategy in the minds of many beer industry executives—and drinkers—who fondly recall that era. “Part of it is also playing to your loyal base, the people who’ve been with [a brand] since the ’70s and ’80s and expect a marquee 30-second ad. They expect it to be on the Super Bowl. And companies don’t want to disappoint.”
The Super Bowl, of course, is beer’s marketing crown jewel. The Bud Bowl, which Deadspin called “probably the most enduring Super Bowl advertising campaign of all time,” fulfilled a direct order from ABI’s then-president August Busch III. Grant Pace, who worked on the Bud Bowl commercial, told Deadspin that Busch wanted nothing less than to “own the Super Bowl.” But whether dominating the Super Bowl actually sells more beer is an open question.
Marketers consider an ad a success when consumers can recall seeing it and when consumers can remember which brand it advertised. Whether or not it gives an actual bump in sales is generally difficult to discern.
“As an econometrician interested in outcomes, I would like to see more companies evaluating advertisements based on their impact on sales,” says Michael Uhrich, founder and chief economist at Seventh Point Analytic.
Some data indicate commercials like Corona Extra’s “O Tannenpalm” holiday ad and Bud Light’s “Dilly Dilly” spot have boosted sales around the time periods that they air. Still, there’s no way to directly prove whether this is a result of correlation or causation. Despite this fuzzy link between commercials and sales, beer companies continue to spend big on TV ads. After sitting out Super Bowl ads last year to instead use the airtime to promote COVID-19 vaccines, ABI is back as the big game’s exclusive national beer sponsor, buying spots for six of its brands—including Bud Light Seltzer Hard Soda and Cutwater Spirits, a canned cocktail line. (ABI declined to make its marketing executive available for an interview for this piece.)
A large part of beer’s continued reliance on TV ads actually has nothing to do with drinkers at all. Beer companies’ audience for TV commercials isn’t only consumers—it’s beer distributors. By splurging on TV promotion, beer makers can tell distributors that a certain product is a priority and that they expect wholesalers to promote it to retailers. But to really get behind it, distributors want to see that the beer company is literally investing money in a brand, and there’s still no bigger way to signal that than with a splashy—and costly—national TV campaign. For this year’s Super Bowl, a 30-second spot costs a reported $5.8-$7 million.
“The consumer is different today in terms of their viewing behavior, but what really isn’t different today is that the distributor tier is still controlled by aging men who have been in the beer industry long enough to remember the glory days of beer advertising and how great it was for the category,” Uhrich says. “I’ve watched CMOs [chief marketing officers] try to convince their distributor partners that their drinkers don’t watch live TV, and I have heard distributors say, ‘You’re wrong, my nephew still watches it.’”
As the TV audience becomes less relevant for beer, commercials are only getting more expensive. That’s because there are companies that will spend more to reach an aging audience—it’s why every other commercial seems to be for prescription drugs.
“When the beer brands go in to bid on ad space on big live sporting events … they’re bidding against categories who know that their demographics actually do watch live TV,” Uhrich says. “So not only do the distributors insist that we tie up ad money in live TV, by extension, they insist that we use our ad money inefficiently.”
There’s a rational reason for this. Distributors’ work keeps them relentlessly focused on shelf space: If a six-pack of a beer they carry isn’t in a prime spot, that space goes to their competitor. TV advertising works similarly. Any airtime that one company buys is airtime its rival can’t have. It’s why ABI has a deal to be the exclusive national beer sponsor of the Super Bowl. Other brands, including Sam Adams, are left with regional slots. Miller Lite is sitting out TV ads altogether and airing its Super Bowl commercial in the metaverse.
“If you look at the beer aisle, there’s a lot of packages of Bud Light. And if you look at the TV ad space, the more Anheuser-Busch takes up, the less their competitors can take it,” Uhrich says. “It’s a calculation they’re doing between what they get from the viewers they’re actually hitting versus what they get from keeping their competitors out of that space. Those two numbers are not the same.”
Super Bowl dominance may still be worth the tens of millions ABI spends there. But Schau notes that Super Bowl commercials are almost their own breed of TV ads, in that they generate mainstream media coverage outside of the live broadcast itself and can therefore reach a wider audience through YouTube and news websites. But in terms of standard live TV advertising, she doesn’t see that as beer’s most efficient route forward.
“Beer is resting on their laurels,” Schau says, noting that on the whole, beer marketing has been slower than other industries to embrace so-called “ambient advertising”—the types of integrated ads or product placements that you can’t look away from—while continuing to spend millions on live TV commercials. “They don’t want to change, because that was their heyday. They’re the bros that are still talking about their high school football careers.”
Beer is not unique among alcohol categories in its skew towards TV commercials, but its long history there has hindered a willingness to embrace newer, digital platforms. Globally, alcohol advertising on TV is expected to drop next year, with Zenith forecasting a -2.4% decline between 2019 and 2023. That will be accompanied by an estimated +9.2% annual growth in digital ad spend during the same period.
“I believe that the legacy of that golden age of beer advertising is still seen in our industry’s nostalgia, and in some ways our reluctance to evolve,” Uhrich says. “That relates to what I was saying about distributors insisting on getting national TV support for a campaign that might be geared towards 21-27-year-olds. Guys, maybe we should be advertising on YouTube.”
Not only has entertainment moved online and to streaming services, but alcohol sales have moved online, too. The rise of e-commerce platforms as a major sales channel for beer predated the pandemic, but COVID only hastened the need for brands to be in those digital spaces. It literally sped up the clock: Management consulting firm McKinsey & Company reports the pandemic compressed 10 years of e-commerce growth for alcohol into just three months. This is laptop or smartphone territory, not the TV screen territory where beer has long been comfortable.
“The game is going to be won in the space of product placement. It’s going to be on whether you can attract memes,” Schau says. “Product placement in games and narratives is where beer ads want to be. That’s where viewers can’t turn away.”
Digital spaces also tend to track consumers in a way that TV can’t. TV advertising can reach segmented audiences, but digital spaces can align products with consumers’ browsing habits and can tell brands whether someone watched an ad or skipped it. That’s extremely valuable to marketers. On the other hand, companies don’t know whether you sat glued to the screen during commercials or got up for a snack break.
“I get surveys on YouTube pretty regularly saying, ‘Hey, have you seen an advertisement for this brand?’ The point not everyone realizes is: YouTube knows if you’ve seen that ad,” Uhrich says. “They want to be able to tell the person who bought the ad: We can say this person saw the ad and recalls that they’ve seen this ad.”
The next dream for advertisers? Having you (meta)physically interacting with their products. Miller Lite is testing those waters this year with a Super Bowl strategy centered on a virtual bar in the metaverse platform Decentraland—complete with metaverse bathrooms. The futuristic plan received its share of skewering, including from Stephen Colbert on “The Late Show,” but even skeptics have to hand it to the brand: This isn’t your grandpa’s beer commercial.
“I don’t understand why people would be interested in that, but it’s a nod toward the right direction: Be digital, be customizable, be social,” Schau says. “I don’t think it’s going to get the traction this time, but they’re going to get their feet wet and learn to communicate in that space, which is a good thing.”
Whether an evening “drinking” Miller Lite in the metaverse will be as memorable for 22-year-olds today as the “Great Taste, Less Filling” commercials were for their parents remains to be seen. But given that digital already is the reality in entertainment, sports, and shopping, beer can’t afford not to take a big chance on the small screen.
Words by Kate Bernot