What America's No. 1 Beer Can Teach Entrepreneurs About Effective Marketing Modelo upended Bud Light's 20-year reign as America's favorite beer. How they did it is a masterclass in marketing — let me explain.
By Joy Gendusa Edited by Chelsea Brown
Key Takeaways
- The more money you spend on marketing, the more business you generate.
- Defy trendy and popular marketing tactics to truly dominate.
- Fine-tune your strategy by tracking your marketing.
Opinions expressed by Entrepreneur contributors are their own.
When the beer brand Modelo launched its "Mark of a Fighter" marketing campaign in March of 2023, it was not only an intriguing concept that appealed to the underdogs of America, but it was also an indicator that this beer brand had a fierce and competitive spirit — something sorely needed if you're going to take on Anheuser-Busch, the brewer behind Bud Light and "the King of Beers," Budweiser.
In fact, Bud Light reigned as America's No. 1 beer for more than two decades (since 2001). It seemed that Bud Light was as American as the Fourth of July. Meanwhile, Modelo wasn't even on a top-10 beer a decade ago, according to reports.
But Modelo fought its way to the very top and is now the most popular beer in the country.
You might be even more surprised by Modelo's secret weapon: marketing. Here are three lessons we can all learn from Modelo's marketing strategy that will help you reach the number-one spot on your industry's list, too.
Related: 5 Marketing Strategies From Major Brands: What You Can Learn From Their Mistakes and Successes
Lesson 1: Spend crazy amounts on your marketing — far more than your competition.
If Modelo was "brewed with a fighting spirit," it definitely shows. They fought so hard to get to the top that they spent crazy amounts of money on advertising. In fact, they have had the biggest TV advertising bill since the second quarter of 2020, research shows.
Last year, Modelo spent $155 million on TV commercials, and they say they plan to spend even more in 2024. As of July, they have invested $65 million in TV ads — that's about 75% more than Bud Light has spent this year, and 35% more than Michelob Ultra, which just dethroned Bud Light in July as America's second favorite beer.
You might notice a trend here: The more you spend, the more business you generate.
This is actually my most effective — and most hated — piece of marketing advice for business owners: Spend more on your marketing than you think is rational or sane. This is the hardest thing for me to get across to my clients.
Here's a story that sums up what I mean: I have a very successful friend. In his whole career, he's never needed marketing because he's a money manager and that's growth through word of mouth in his circles. He recently decided to try his hand at real estate development and built eight gorgeous townhomes in Hiawassee, GA, right on the water, and he got himself a realtor. Simple real estate investment, right?
Unfortunately, no! None of his townhomes have sold yet, and only one is in contract. He honestly thought, "If I build them, they will come." But it doesn't work that way! He finally realized he has to market these homes, and he's about to do a large integrated campaign with direct mail and online ads.
The point is this: A very smart, very successful man had no clue! He wanted to do a tiny little campaign, and I had to really spend time educating him on this principle — you have to market more than you think is sane or rational!
This applies to all types of businesses, but here are three great examples of companies that grew from increasing their marketing budgets:
American manufacturer Proctor & Gamble's marketing budget of 9.84% revenue led to 5.9% revenue growth in fiscal year 2023
SaaS company Atlassian's marketing budget of 15-16% of revenue led to 26% revenue growth in fiscal year 2023
Another SaaS company Asana's marketing budget of 78.3% of revenue led to 45% year-over-year revenue growth in 2023
Lesson 2: Defy trendy and popular marketing tactics to truly dominate
Fighting off competitors isn't always a frontline battle. Sometimes a smarter approach will help you win. It may feel counterintuitive, but it's the hidden spaces that can help you get ahead, kind of like taking a shortcut to the front that no one else is paying attention to.
For example, between 2019 and 2023, total linear TV ad spend declined 20%, falling more than $183 million. Going with the flow, competitors Budweiser and Bud Light pulled back on their TV budgets. Research shows that, between 2018 and 2023, Budweiser reduced their TV ad spend by 77%, and Bud Light reduced theirs by 38%. Meanwhile, Modelo continued to outspend them — by a lot.
Despite linear TV's waning popularity, Modelo heavily invested, and this helped them take over this area of advertising when other brands like Bud Light were spending more on social media and influencers.
Similarly, my company PostcardMania has taken a lesser-traveled path. Direct mail, once the most common form of advertising, has also declined. Marketing mail decreased by 26% between 2014 to 2023.
But not us — we've increased and now mail 232,000 postcards every single week advertising our own services.
Postcard marketing takes up the largest majority of our budget, and it pays off. As of 2023, mail delivers six times more revenue per lead than digital ads. We figured this out by analyzing 114,373 leads that converted to sales in 2023 and found that we made $229.41 for every postcard lead versus $37.09 for every pay-per-click lead.
Meanwhile, digital and social media remains a trendy space for ad dollars as spending on digital platforms like Meta and TikTok continues to rise steadily. In fact: More than half of U.S. advertising dollars are set to be spent on digital platforms such as Google and Facebook for the first time ever, reports show.
So, would you rather be a big fish in a smaller pond, or fight for space in an overcrowded ocean? I know which one I would pick.
Lesson 3: Fine-tune your strategy by tracking your marketing
Failure is often the best teacher, and it can set us up for success in the future. By tracking all of your marketing, you can see which avenues are lacking and which ones are succeeding. Just like a boxer in a ring, you can use hard blows as a learning experience and come back stronger and harder.
In Modelo's case, they noticed traditional TV advertising was working for them and kept investing in it. Of course, don't throw all of your money into one tactic; diversify your marketing budget as well. But let the data determine the percentage of money going into one particular marketing form or another. We do spend a pretty penny on digital ads as well!
One of my clients, a dentist in Charlotte, NC, at one point, equated spending money on direct mail to a "money pit." But his marketing manager insisted on a direct mail campaign, and once his practice started seeing an 87.5% increase in new patients thanks to those postcards, he had to admit he had been wrong — and his practice was all the better for it!
And of course, never give up the fight. The hard times and the losses I've experienced only fueled my fire even more to succeed. Let it do the same for you!
