October 4th, 2001

TV Executives Warm Up to Spirits Ads

By Shelly Branch

After Years of mostly being excluded from the airwaves, spirits marketers are finding that television executives are increasingly receptive to commercials touting whiskey, vodka and other hard liquor.

As broadcasters nationwide have sought in recent weeks to stem steep declines in ad revenue, many local and cable stations are reviewing their strict rules about spirits advertising. “With the increased slowdown, there seems to be a new open-mindedness” toward spirits ads, says Chris Rohrs, president of the Television Bureau of Advertising, a trade group of local TV executives.

Television ads for hard liquor have long stirred controversy. Back in 1948, alcohol producers imposed a voluntary ban on television spots. But by the late 1990s, some companies—notably Seagram, Bacardi, and Brown-Forman—began running commercials on the handful of local and cable stations that took them.

But such efforts represent a fraction of their marketing budgets. In the first half of 2001, according to ad tracker CMR, a unit of Taylor Nelson Sofres, the five biggest liquor marketers combined spent slightly less than $3 million to advertise booze on cable and local television stations.

That figure is now likely to soar. The Distilled Spirits Council of the U.S., a liquor trade group, estimates that about 400 local and cable channels are permitting, or considering spirits ads, up from a few dozen just a year ago. While the major networks still decline booze ads, the contest for spirits spots among other stations has “turned into a sprint,” says Spirits Council spokesman Frank Coleman.

One national sales representative, the Katz Television Group, says more than a third of its roughly 400 local TV clients now accept liquor ads. A year ago, the figure was closer to 10%.

“More of our clients are finding places on their schedules for liquor ads, but there are restrictions,” says Mike Hugger, president of Katz Television’s Millennium Sales & Marketing division. Most commercials, he says, must air after 9 p.m., as broadcasters “want to be sensitive to the audience.”

A number of television executives acknowledged in interviews their new taste for spirits ads, but they were unwilling, or not permitted to comment. A few stations, including Los Angeles-based KCAL-TV, an independent local station, indicated to media buyers just this week that they will begin to accept spirits ads.

In April, the Spirits Council prepared a commercial to woo the broadcast community. Starring Jim Rogers, owner of Sunbelt Communications in Las Vegas, the spots told television executives that liquor ads could mean “a great source of revenue.”

The audience had good reason to listen. Well before the terrorist attacks of Sept. 11, the local television industry had forecast that advertising revenue would slide by about 11% in 2001 to $23 billion. Now the projections are bleaker.

Brown-Forman, for one, plans to take advantage of the new demand for spirits ads. In the first half of 2001, the maker of Jack Daniel’s Tennessee whiskey spent about $15 million to advertise its liquor brands, according to CMR. Most was spent on print advertising for the flagship brand, with less than $150,000 allocated to television.

Now, the company is revamping its media plans. This week, Brown-Forman is set to launch a new Jack Daniel’s advertising campaign—its most expensive to date. Though most of the undisclosed budget is being spent on folksy print ads that show more color images than in the past, several new TV spots are likely to get more air time. “Broadcasters that were not even talking to spirits advertisers are now calling us,” says Julia Hall, director of Brown-Forman’s media services.

The new attention from TV stations, adds Ms. Hall, has “broadened our media plans quite a bit.”

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