Mobile Advertising Influences 18-24-Year-Olds Most

July 3, 2008 by

Marketing VOX

Use* of picture/video phones is up 17 percent for all adults according to an analysis of BIGresearch’s most recent Simultaneous Media Survey (SIMM 11, Dec. 07) of 15,727 participants (v. Dec. 06), MarketingCharts reports.

That level of use, along with the finding that 90 percent of adults say they regularly or occasionally use a cell phone, makes a case for mobile advertising as a viable option for advertisers, BIGresearch said.

However, cell phones rank low in the list of media that compel consumers to purchase: 6.9 percent of adults say video on cell phone influences them to purchase electronics; 6.4 percent say text messaging does so. (Word of mouth is the top medium, with 42.6 percent).

bigresearch-mobile-advertising-text-influence-to-purchase-by-category.jpgNevertheless, a mobile bright spot is that the elusive 18-24-year-old segment is influenced more than any other: More than double the proportion say they are influenced – for both forms of cell phone media (14.2 percent for video and 15.9 percent for text messaging):

bigresearch-mobile-advertising-video-influence-to-purchase-by-category.jpg“Given the state of our economy, mobile advertisers have a unique environment in which to build strategies that influence consumers to buy via their cell phones, especially the media-elusive 18-24-year-old segment,” said Gary Drenik, president of BIGresearch.

“More robust cell phone technology allows consumers to receive promotional offers and connect to their favorite internet shopping site all within minutes and without having to fuel up on gas.”

Understanding how consumers use cell phones is also critical in developing mobile marketing plans, BIGresearch said: Cell phones are much more likely to trigger an online search for young consumers than all adults (21.8 percent vs. 8.3 percent) as is text messaging (15.3 percent vs. 4.8 percent).

Other findings:

  • The 18-24 year old set is also more likely to download to a cell phone than the general market (31.6 percent vs. 15.9 percent).
  • More than half (50.5 percent) of 18-24-year-olds communicate with others about a service, product or brand via cell phone (compared with 29.6 percent of all adults), second only to face-to-face communication (66.9 percent).
  • 18-24-year-olds are also almost three times as likely to communicate through text messaging than all adults (30.7 percent v. 10.8 percent).

*Regular/occasional use of picture/video phones

Multi-Channel Consumers Not Necessarily Most Loyal or Profitable

July 3, 2008 by

Marketing VOX

Multi-channel shoppers spend nearly twice as much on goods and services as single-channel counterparts. They are also more astute about pricing and more likely to purchase from multiple retailers, according to (pdf) a study from Opinion Research Corporation (ORC) — via MarketingCharts.

Customers who use more than a single channel to interact with an organization — shopping online as well as in a company’s store, for example — are becoming increasingly challenging for retailers, who need to spend more marketing and customer-service dollars to retain them, ORC said.

orc-multi-channel-consumer-competitive-spend.jpg“Multi-channel retailing is growing at a rate of approximately 30 percent a year in transaction value, and the way customers use these channels is rapidly expanding,” said Jill Glathar, PhD, VP and director of the market planning and development practice at ORC. “The assumption that multi-channel consumers are loyal and profitable is not necessarily true.”

orc-multi-channel-consumer-spend-vs-loyalty.jpgConsumers’ multi-channel use varies by industry. The retailers that have had the most success implementing multi-channel strategies include big-box organizations Borders and Home Depot (17 percent); mass merchants such as Wal-Mart and Target (16 percent); department stores (14 percent); and restaurants (11 percent).

orc-multi-channel-consumer-use-by-industry.jpgOther survey findings:

  • Internet shopping will continue to grow, with 65 percent of respondents expecting to make a web-based purchase in the future, vs. 42 percent who use the web channel now.

orc-multi-channel-consumer-channel-use-to-shop-purchase.jpg

  • Telephone shopping will continue to rise, as 39 percent of respondents plan to use the phone to make purchases in the future, compared with only 21 percent who do now.
  • Customers expect to be able to use more channels in the future to buy goods and services. New channels, such as mobile, geo-locator service and peer-to-peer communication will have greater impact on shopping behavior.

About the survey: The telephone survey was conducted April 10-14, 2008 by ORC among 1,090 respondents.

Forget Ringtones, Games — Consumers Want Practical Mobile Internet

July 3, 2008 by

Marketing VOX

Rather than entertainment and ringtones on mobile phones, US and UK consumers want practical mobile web activities — like phone-optimized banking and travel planning, according to a survey from dotMobi and AKQA Mobile that measured mobile internet use and attitudes, MarketingCharts writes.

Nearly two-thirds of participants said they would consider purchasing theater tickets, take-out food and travel tickets via a mobile phone.

Nearly 90 percent of consumer respondents said they would be more likely to choose an airline with mobile check-in facilities over one that did not have them.

This strong consumer interest in mobile banking and commerce suggests an inherent level of trust in the mobile web, according to dotMobi and AKQA.

The study also showed that phones are very important to consumers: 63 percent said they would be more likely to give up their money than their mobile smartphone if they were mugged.

(MarketingCharts offers a handful of other findings.)

Mobile Photos, SMS Used to Customize Nike Footwear

July 3, 2008 by

Marketing VOX

Nike has launched NIKE PHOTOiD, which enables European users to make customized shoes out of mobile photos.

Street Canvas,” an AKQA ad promoting the campaign, depicts a user shooting graffiti, texting the image to Nike, and receiving a link to a customized pair of Air Force Ones, superimposed over the user’s photo.

NIKE PHOTOiD selects two colors from the images in order to craft each pair of shoes. Users can forward the results to friends, or enter a unique code (a “DESIGNiD”) on Nike.com to buy their design.

The effort “gives a glimpse of what can be achieved when technology connects a consumer’s inspirational environment with their natural desire to create,” said Dan Rosen of AKQA Mobile.

PHOTOiD is available to users in the UK, Italy, Germany, Spain, France, Denmark, Finland, Norway and Sweden.

AKQA was the agency behind the Halo 3 “Believe” campaign, which took a number of honors from One Show and the Cannes International Advertising Festival. It also orchestrated a Visa campaign to encourage small businesses to use Facebook’s ad network.

Top 5 things to know about SMS advertising

July 2, 2008 by

iMedia Connection

If you want a marketing platform that offers reach, ease of entry, targeting and interactivity, then text marketing has it all.

When most of us think about SMS, we envision the (sometimes creatively) abbreviated messages, like “R u on yr way home?” But in addition to being a convenient and addictive personal communication tool, SMS is proving to be a great platform to help marketers reach and engage hard-to-find audiences.

Due to the personal nature of communicating with consumers on their mobile phones, marketers need to get smart about the medium and how to tap its potential to not only push information to consumers, but to spark a conversation with them. So, here are the things you need to remember about SMS Advertising.

1. There is big reach in text messaging, and audiences are already opted-in.
Don’t worry about having to deal with fragmentation. If you want to reach tens of millions of consumers through their phones, you can do it today. Moreover, the demographics of this consumer base are not purely teens or twentysomethings; lots of other demographics opt-in for SMS content as well.

Taking a step back, SMS is also the most commonly used mobile technology (besides voice), and because virtually all mobile phones can send and receive text messages, SMS advertising messages reach the widest possible audience.

According to the Nielsen Company, 77 percent of U.S. mobile subscribers used SMS by the end of 2007. In comparison, the same report said that 36 percent of mobile subscribers accessed the mobile web in the same period. More evidence of SMS’ pervasiveness: SMS-based information search was used by nearly 15 million consumers to get sports scores, news or weather during the final quarter of 2007, according to the Nielsen Company.

The things that make SMS a great tool for personal communication — ubiquity, relevance and immediacy — also make it a great channel for marketers.

Publishers like Yahoo, MySpace, Evite, USA TODAY, the NBA, and most television networks are all sending out content that users are asking for. The diversity of the content available leads to an equally diverse audience.

2. Getting started isn’t hard — it requires little legwork.
The biggest complaint I hear from marketers is that they don’t know where to start to find an audience for an SMS campaign. The good news is that this work has already been done for you. With built-in audiences provided by carriers and text message ad networks, marketers simply need to choose who they want to target and go for it. For example, Virgin Mobile recently launched its Sugar Mama program, allowing its customers to earn free mobile minutes in exchange for responding to SMS and mobile web banners on their mobile phones. Marketers have access to Virgin’s subscribers, as well as key demographic information about them.

In an example of quick set-up and launch, a leading sports entertainment company wanted to promote the commercial-free premiere of a documentary film on their network to an audience of young sports fans, and in the process, create a dialog with interested consumers. SMS served as a great medium for reaching on-the-go 18-25-year-olds who may not see traditional advertising. The company retained my company, 4INFO, to launch the SMS campaign.

Advertising was placed in 4INFO’s text message sports channel, with copy that invited users to respond to “TUNEIN.” Those who responded received information about the show and were invited to sign up for an SMS reminder about the air date of the show. No mobile website or rich media was required.

The campaign successfully drove viewers to tune in to the premiere, making it the most-viewed documentary in the company’s history. Twenty-four percent of users who interacted with the mobile advertising went on to sign up for a text message reminder about the show. Overall, 14 percent of users who received the SMS ad reported they had viewed the program.

3. Targeting is the key to advertising success.
The text message campaigns that perform best are those with a direct and simple call to action. Relevance is paramount — relevant ads are effective and memorable, especially when inserted into opt-in content. Here are some other tips:

  • Understand the different ways you can target your audience using SMS, including targeting by carrier and consumer interest. Consider the social, financial and tech savvy profile of the audience you want to reach, and target accordingly. If you consider only one of these dimensions, your advertising will be wasted on consumers who either can’t use your product or can’t hear your message.
  • SMS advertising offers the ability to target consumer segments with specific offers. The more relevant the campaign, the better the ad performance. It’s not rocket science, but writing “one size fits all” ad copy is one of the most common reasons for poor campaign performance.
  • Example: one mobile marketing firm was able to increase conversion rates by 60 to 100 percent by writing specific relevant copy in text message advertisements by targeted audience channel.
  • Example: For “Make Me a Supermodel” on Bravo, messages to Alltel customers promoted the My Circle offer, while messages to other consumers promoted different content.

4. Create a conversation with the consumer.
“Participation media” is the new buzz word in mobile. Campaigns that create a dialog with the consumer are more effective in generating conversions and are more measurable than simple media placement campaigns. A campaign can engage its audience by inviting the user to answer a question, play a game, or look something up. These invitations maximize campaign response rates.

Subtlety is not effective. An unclear, confusing or hard-to-notice call to action will get lost, even on the small screen. One example of this is an SMS campaign for the last Harry Potter novel. After being invited to vote on whether Harry Potter would die (the text message below on the left), audiences were initially sent the text “Harry Potter 40% off Learn more Reply HARRY.” After that copy was tweaked to “Thank you for voting! Harry Potter 7 goes on sale July 21st. Get 40% off at Borders Books, reply BORDERS,” responses improved by nearly 30 percent.

A conversation can go beyond a simple question and answer. Brands can create an ongoing connection with consumers by offering sponsored content that fits with their brand identity. Coors Brewing Company is the National Football League’s “Official Beer Sponsor.” Its agency, DraftFCB, wanted a campaign to support the fanatical interest of passionate NFL fans, so they sponsored NFL Draft text message alerts, offering consumers over the age of 21 the opportunity to opt in to Coors Light NFL Draft alerts, which are real-time text message updates on the first-round NFL draft picks with Coors branding on every message. This SMS alert service saw thousands of sports fans opt-in to these branded messages with no additional promotion outside of SMS.

5. Use SMS as the entry point to a richer experience.
SMS offers a variety of ways that marketers can engage consumers. Just because you start with text doesn’t mean that’s all you get. SMS offers a variety of ways to further engage customers and leverage the initial response to further interaction via additional text message, multi-media messages, email, voice, mobile web, and video. Marketers offering mobile services can drive sales instantly, targeting a built-in audience that is already interested in getting information on their phones. The ability of SMS to deliver cross-media interactivity allows marketers to pick the method that best fits their business goals. These methods include

  • SMS reply: A short ad with the option to reply with a keyword for additional information. This platform can also be used to allow the consumer to search for information, play games and receive coupons, reminders or special offers.
  • SMS click to WAP: Advertising containing a URL to a mobile website
  • SMS click to call: Advertising including a phone number
  • SMS branding ad: Branded content without a call to action

SMS can act as a bridge to connect a customer to another medium. Universal Pictures and their agency Ignited recently demonstrated excellence in cross-platform promotions with their campaign surrounding the release of box office hit “Forgetting Sarah Marshall.” In addition to an innovative viral campaign using billboards, bus ads, television and radio spots and online advertising, the studio launched an SMS ad campaign targeted at consumers of digital media. Teaser ads invited consumers to reply SARAH to find out more; those who responded got more information about the film and an opportunity to view the trailer. Thousands of consumers viewed the movie trailer on mobile devices as a result of this campaign.

As you can see, SMS offers a wealth of opportunities for meaningful customer engagement. The key to success with an SMS campaign is to remember that consumers respond best to a targeted, direct call to action. By nature, SMS lets marketers provide consumers with a “digital snack” — a bite sized morsel that intrigues customers because it’s contextually relevant to their search or opted-in content. And like the best snacks, a great SMS campaign will keep them engaged and coming back for more.

11 steps to boost your search visibility

July 2, 2008 by

iMedia Connection

If your company’s organic search results aren’t what you wish they were, check out these key tricks to know and implement.

When it comes to search engine optimization (SEO), there is no magic bullet. Effective SEO boils down to doing a lot of little things well. Imagine building a house — each brick that goes into the foundation plays a vital role in creating a solid structure. A website is similarly comprised of a large number of building blocks, each of which needs to be given a proper level of attention to maximize your site’s visibility. Following are 11 steps marketers can take to get more out of organic search.

1. Optimize your title tags: The title tag is the most important tag on a page. It’s like the title of a book in that it should tell the search engine spiders exactly what the page is about. Also, bear in mind that the title tag forms the link in the search engine results page (SERP), so think about giving it a keyword-rich call to action to help it stand out from the crowd.

2. Add a robots.txt file: This is a simple file that sits in the root of the website. It’s one of the first files a search spider will look for as it begins a site crawl, so make sure you have one — it helps to control where the spider can and cannot go and hence what it can and cannot see.

3. Include sitemaps (HTML and XML): Google doesn’t share much in the way of how to optimize for its algorithms, but the search giant does recommend that you add an HTML sitemap, and when Google talks, you should listen. Make sure you include the entire site, break it into multiple pages (no more than 100 links per page) and update it regularly so it accurately reflects the structure of the site. Add an XML sitemap designed specifically for search engines. This is particularly important for large sites that spiders are having trouble indexing. Verify the sitemap with the Google webmaster console and receive useful data back about your site.

4. Write high-quality, unique content: After all these years, content still rules. Good quality content will help attract links to your site as people refer to it and that same content will work to keep them on your site after they arrive. From a search engine perspective, spiders love content, so the more you can provide them, the better. And don’t limit yourself to text — images and video can help to showcase additional brand messages and attributes. But whatever content you do serve up, just make sure it is in an accessible format.

5. Insert meta-tags for top-level pages: While not nearly as important as they used to be, optimized meta-descriptions are still worth adding to your key landing and top-level pages. Well-wrought meta-tags will help entice users to your site from a SERP.

6. Conduct keyword research: There’s no point in ranking for keywords that your target audience is not using, so make sure you know what your customers are searching for and the terms they’re using to find you. To improve your chances of connecting with interested users, structure your site around keywords and themes that reflect their vernacular, not your internal marketing-speak. Remember that you want to help both visitors and search engines build a complete picture of your site.

7. Don’t neglect your internal link structure: There’s more to SEO and boosting your search rankings than getting links from other sites. Devote some attention to your internal link structure. Embed your target keywords into the internal links and help reinforce the key landing pages to the spiders; don’t just use “click here,” “next” and “more.”

8. Think about pages you want to rank and those you don’t: This is something that’s closely tied to the internal link structure. For brand searches (typically the most significant source of traffic for any site), the home page often ranks first, followed by privacy policies, contact us and terms and conditions pages. The home page is a good destination to steer interested visitors, but the privacy policy and T&C pages generally are not the places you want your users to hit first, so try to sculpt the flow of page rank to the key site landing pages instead.

9. Get more from analytics: Make sure you set up your analytics package correctly so it separates the sources of your traffic. There’s no point spending a lot of time and effort on search engine marketing only to find that your analytics software was not configured to separate the paid search traffic from the organic traffic.

10. Submit to the main directories: Make sure your site is listed in all of the main directories, such as Yahoo!, DMOZ, Business.com, JoeAnt, etc.

11. Emphasize internal education: Everyone within your company can make a difference, particularly when it comes to a natural search campaign. Make sure all departments, from marketing to IT to PR to product development, know why the company is undertaking an SEO program and how they can contribute. Run regular sessions to update staff and inform them about how the campaign is progressing.

Last, but certainly not least, remember that SEO is not a set-and-forget process, but rather, one of ongoing improvement. Anytime you make changes to the structure of or content on your site, review the relevant steps in the optimization process to make sure you get the maximum benefit from these changes. Search can help you connect with your customers, but you have to make sure you’re supplying the search engines with the right connective tissue.

“A New Anheuser-Busch”?

July 2, 2008 by

Brew Blog

Will it be enough to stave off InBev?

Anheuser-Busch CEO August Busch IV told investors on Friday that A-B has a new expertise beyond brand building: Cost cutting.

Making A-B’s case that InBev’s unsolicited, $65-per-share bid for the company is too low, A-B execs laid out a plan to cut $1 billion of costs from the company between 2008 and 2010. That’s up from $500 million in savings A-B described in February.

The savings would be generated by A-B’s “Blue Ocean” program, which is driven by a recognition that “we needed to break from a conservative culture,” Busch said. The plans A-B laid out reveal “a new Anheuser-Busch.”

The question is: Will A-B’s plan be enough to persuade investors to pass up InBev’s offer?

Press reports prior to the call suggested that, despite the posturing of the two companies, InBev and A-B might reach a friendly deal – particularly if InBev sweetens the offer.

From Reuters:

KBC Securities analyst Wim Hoste said InBev had two options: either to raise its offer towards $70 per share or go hostile at the existing $65, with a preference for the former.

“I can imagine they might try through informal contact to see if there is scope to talk about an offer. If not then they would take the hostile route,” he said. “But the friendly approach is clearly better for public opinion and the workforce. The company is a U.S. icon.”

Bloomberg:

Colin Symons, whose Pittsburgh-based Symons Capital Management Inc. manages $325 million in assets, said Anheuser- Busch might still accept as little as $67 a share, or $47.8 billion, should it become clear that InBev can successfully lobby shareholders to tender their stock.

A price of $67 “would probably assuage the feelings of everybody,” Symons said. His Symons Alpha Value Institutional Fund is down less than 1 percent this year, outperforming 96 percent of its peers, according to data compiled by Bloomberg.

It remains to be seen how investors and InBev will react. A-B laid out plans on how it would generate savings. From Beer Business Daily:

A-B cfo Randy Baker said that their cost reduction initiatives will center around “more disciplined” cap ex spending, process benchmarking, energy and environmental projects, supply chain savings, improved material usage, and business process redesign. A-B will also offer up a new early retirement program to be offered to their salaried workforce in Q3, seeking to reduce it by 10 to 15%. There will be one-time charges to be associated with this program, estimated at around $300 to $400 million charge in Q4. August said there are about 8,500 total salaried employees, of which about 1,500 are over age 50.

These cost savings – coupled with topline growth – would generate earnings well ahead of analyst expectations, A-B said. From the Associated Press:

As part of the plan, Anheuser-Busch said it expects low-double digit earnings per share growth in fiscal 2008, with a target of $3.13 per share.

Analysts polled by Thomson Financial, on average, predict a profit of $3.01 per share.

For fiscal 2009, the company expects earnings of $3.90 per share, while analysts predict $3.29 per share.

Execs said they would not reduce marketing spending or sell off A-B’s packaging division or theme parks. Busch concluded the call by saying A-B would challenge InBev’s court claim that A-B shareholders could dump all of A-B’s directors without cause.

Some People Really do Want to ‘Join the Conversation’

July 2, 2008 by

AdRants

In a recent study conducted by product review online TV site, ExpoTV, it was found that, yes, some people do actually want to “have a conversation” with a brand. The study found:

– Consumers not only want to talk to brands, they want to establish a conversation: 55% of consumers want an ongoing dialogue with brands

– Learning about new products in the pipeline is a top priority: Respondents were most anxious to talk to the product design (49%) department, followed by customer support (14%), marketing (14%) and pricing (13%)

– Positive brand experiences can generate word-of-mouth buzz: More than 60% of those polled said they tell 10 or more people about the products they like while a third tell 20 or more people

– Listening leads to loyalty: 89% of respondents would feel more loyal to brands which invited them to participate in a feedback group, and 92 percent of those who have a positive experience communicating with a brand will recommend purchasing a product from that brand to someone they know

– Consumers are open to engaging with the competition: 93 percent of consumers surveyed would be interested or very interested in communicating with competitive brands that expressed interest in their feedback if their first choice is not interested in hearing what they have to say

A-B Rejects InBev Bid

July 2, 2008 by

Brew Blog

Deems it financially inadequate, not best for shareholders.

As expected, Anheuser-Busch has formally rejected InBev’s unsolicited, $46 billion bid for the company.

Given that InBev earlier in the day made moves suggesting it may target A-B directors, InBev now is widely expected to go hostile.

From an A-B release:

“InBev’s proposal significantly undervalues the unique assets and prospects of Anheuser-Busch,” said Patrick Stokes, chairman of the board for the company. “The proposed price does not reflect the strength of
Anheuser-Busch’s global, iconic brands Bud Light and Budweiser, the top two selling beer brands in the world, with Budweiser selling in more than 80 countries today. The proposal also undervalues the earnings growth actions that the company had already planned, which have significant potential for shareholder value creation; the company’s market position in the United States, the most-profitable beer market in the world; and the high value of its existing strategic investments.”

Here’s the text of a letter A-B sent to InBev CEO Carlos Brito:

June 26, 2008

Mr. Carlos Brito
Chief Executive Officer
InBev nv/sa
Brouwerijplein 1
3000 Leuven
Belgium

Dear Carlos,
This is to provide you with a response from the Anheuser-Busch board of
directors to your unsolicited and non-binding proposal submitted June 11th.

First, let me express our appreciation for your public comments about
your high regard for Anheuser-Busch, its employees, leadership and
wholesalers, remarking on the success of our company in building iconic
brands and the independence of its board of directors.

We have noted that your letter is expressly not an offer, but only a
non-binding proposal. Notwithstanding the non-binding nature of your
proposal, the Anheuser-Busch board carefully and thoroughly examined all
aspects of your proposal with the assistance of independent advisers.

The board unanimously concluded your proposal is inadequate and not in
the best interests of Anheuser-Busch shareholders. In reaching this
conclusion, the board considered the advice of its independent financial
advisers.

The Anheuser-Busch board believes that your proposed price
substantially undervalues Anheuser-Busch, its key assets and its prospects,
among them:
— Premier, iconic brands – Anheuser-Busch has built coveted, highly
valued brands over the past 150 years. Budweiser and Bud Light are
among the top 10 global consumer brands and are supported by valuable
marketing properties. Bud Light is the largest-selling beer brand in
the world and Budweiser is the second-largest. These brands have
strong consumer loyalty. Recent change of control acquisitions of other
major consumer product companies with iconic brands have been valued at
much higher multiples than what you have proposed for Anheuser-Busch
shareholders.

— Market leader position – The strength of these brands and the close
relationship the company has with its wholesalers have made
Anheuser-Busch the U.S. market leader with almost 50 percent share in
the world’s most-profitable beer market. In sheer size, the United
States is the world’s second-largest beer market and continues to grow.

— Growing international partners – Anheuser-Busch has large, strategic
investments in two international brewers in important growth markets.
We hold a 50 percent direct and indirect interest in Grupo Modelo, the
leading brewer in Mexico, another very profitable beer market. Modelo
also has a strong, growing business in the United States. We hold a
27 percent interest in Tsingtao, the leading premium beer and one of
the largest brewers in China, which is the largest and fastest-growing
beer market in the world.

— Global brand business – Budweiser is a leading global brand, sold in 80
countries around the world, and is the largest-selling beer in Canada.
Budweiser is the leading international brand in China, the world’s
largest and fastest-growing beer market. We own our Budweiser brewery
in India and recently entered Vietnam. We see strong growth for
Budweiser in Mexico, Argentina, Paraguay and other Latin American
markets.

— Accelerated Earnings Growth – Our company already has developed a
detailed, accelerated earnings growth plan that 1.) expands our cost
initiative through an enhanced productivity plan that we refer to as
the Blue Ocean effort to deliver more than $750 million in savings
through 2009 and $1 billion in savings through 2010, while furthering
environmental sustainability; 2.) extends the strong revenue growth
from our brands that we’ve seen over the past five years; and
3.) drives additional volume growth for core brands through new
consumer opportunities and for our successful, higher-margin new
products.

Anheuser-Busch’s beer brand building expertise is an asset without
comparison. Our brands sell in countries around the world and are sought by
consumers everywhere. Our award-winning advertising, U.S. and global
sponsorships and superior-quality image are second to none.

As you state in your letter, there is limited overlap in our respective
businesses. Many of the suggested synergies seem not to be synergies at
all, but are instead profit enhancements. We believe that we can deliver
similar enhancements to our shareholders independent of a transaction, and
have included these enhancements in our accelerated earnings growth plan.

From your standpoint, we see that now could be opportunistic timing for
you to make this acquisition, given the weak U.S. dollar and sluggish U.S.
stock market. From the standpoint of the Anheuser-Busch shareholder,
however, a transaction with InBev at this time would mean foregoing the
greater value obtainable from Anheuser-Busch’s strategic growth plan. We
are convinced that pursuing our program will enable Anheuser-Busch
shareholders, rather than InBev shareholders, to realize the inherent value
of Anheuser-Busch.

While Anheuser-Busch pursues its plan, its board will continue to
consider any strategic alternative that would be in the best interests of
Anheuser-Busch shareholders. The board is open to consider any proposal
that would provide full and certain value to Anheuser-Busch shareholders.

Our two companies know each other well and have a close dialogue and
relationship. This has developed over the years through our joint
agreements in the United States, Canada and South Korea and through our
exploration of other joint business deals. As you say yourself, you dream
big. We respect your desires to grow your company. But your growth should
not come at the expense of our stockholders.
Very truly yours,

August A. Busch IV

cc: Board of Directors of InBev nv/sa

InBev Flexes

July 2, 2008 by

Brew blog

Directors under fire?

Apparently InBev is prepared to go hostile.

Following reports that Anheuser-Busch is poised to reject InBev’s unsolicited, $46 billion bid, InBev has filed suit in the Delaware Chancery Court “seeking a judgment to confirm that shareholders acting by written consent may under Delaware law remove without cause all thirteen of the present Anheuser-Busch directors, including the five elected in 2006.”

From an InBev release:

InBev (Euronext: INB) said today that it remains committed to its proposed combination with Anheuser-Busch, Inc. (NYSE: BUD) and its offer of $65 per-share in cash for all of the outstanding common shares of the company, representing an immediate premium of 35% over the unaffected price of the shares.

InBev’s strong preference is to enter into a constructive dialogue with Anheuser-Busch to achieve a friendly combination that comprehensively addresses the interests of all constituents. At the same time, the Company is also seeking a declaratory ruling in Delaware regarding alternative routes to progress the combination to ensure that Anheuser-Busch shareholders preserve their voice in the process.

InBev stated further that it filed suit in Delaware Chancery Court seeking a judgment to confirm that shareholders acting by written consent may under Delaware law remove without cause all thirteen of the present Anheuser-Busch directors, including the five elected in 2006. Under the Charter of Anheuser-Busch and as a matter of Delaware law, it is clear that the eight directors elected after 2006 are subject to removal without cause through the written consent procedure; the filing seeks to confirm that, as InBev strongly believes, the directors elected in 2006 are also now subject to removal through that same mechanism.


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