Bacardi Limited Chief Marketing Officer Mauricio Vergara can’t remember the last time he saw a TV commercial that felt "breakthrough." Last year’s "We Are the Night" spot—created by BBDO New York and directed by Oscar winner Michel Gondry—was solid work, he says, stylishly reintroducing the Bacardi bat and bringing a little mystery to the brand. "But I wouldn’t say it was a key component of our marketing mix."
Instead, get him talking about Bacardi’s many experiential initiatives, or his company’s ongoing collaboration with Swizz Beatz, or even the Chrome extension for Bombay Sapphire that BBDO built in 2016, and you can feel his pulse start to quicken. Vergara, 45, is helping lead a mission to make his brands relevant again, and to him, that means solidifying their presence in his customers’ lives—even after the New Year’s Eve ball drops.
"We need to get our brands back into culture, so we’re moving away from a traditional marketing model of talking to consumers to really being part of their lifestyle," he says over the hum of diners’ conversation in the Marriott Marquis cafe in December. "It’s not a traditional road—have a TV advertisement or a traditional banner—but it’s more about experiential, PR, cause marketing. So it’s a completely different approach."
Bacardi is certainly not unique among spirits companies for focusing on real-world activations. From Patron’s adventures in virtual reality to Jack Daniels’ Motel No. 7, liquor brands across the board are looking for novel ways to touch consumers in an increasingly crowded market.
But for Bacardi, it’s becoming something of a religion. In 2015, chief executive Mike Dolan abolished the global CMO role and divided marketing responsibilities between Vergara, who oversees North American operations, and Shane Hoyne, who leads the European business. He also whittled down the company’s agency roster to just two: BBDO for creative and OMD for media, and laid off 10 percent of its staff.
Meanwhile, the company has increased its advertising budget, spending close to $30 million on paid ads in the first half of 2016, a 121 percent increase from the same period in 2015, according to Kantar Media. (In Q3 2016, the latest period for which data was available, Bacardi spent $9.9 million, down slightly from $11.3 million in Q3 2015.) But in a bid to better understand the customer journey, Vergara has shifted 20 to 30 percent of the company’s marketing budget year over year away from TV into consumer data and social media.
"We’re still doing investment in traditional media because we have mass brands, but the shift is a big one," he says. "It’s a huge shift." (Vergara oversees the Grey Goose vodka and Bacardi rum brands.)
He has also instituted an always-on approach that doesn’t follow the traditional, holiday-centric calendar for spirits marketing. As you may notice in the coming months, Vergara will have the brands advertising in lighter doses throughout the year. "If we are true to that philosophy of being part of their lifestyle, a brand that they actually relate to their day-to-day life, we cannot just be present in the high-selling moments," Vergara says.
That means efforts like the Bombay Sapphire Artifier extension for Google Chrome. While many beverage brands host art contests that elevate up-and-comers into prominence (Perrier comes to mind), Vergara, BBDO and Bombay took this one step further by creating an extension that transforms banner ads into works of art from the Bombay competition (yes, an advertiser created an ad blocker).
It also means Bacardi’s NO COMMISSION art shows, created by CEO Dolan and Swizz Beatz, who is serving as the company’s Chief Creative for Culture. The events are similar to Art Basel exhibitions with one notable exception: The artists don’t have to pay to play, meaning all sales go to the creators and no portion is siphoned off for gallery owners.
Vergara is also proud of Bacardi virtual turntables on Instagram, which let fans become DJs with the flick of their fingers. While BBDO NY called it a "hack" in its promotional video, Vergara admits that this experience was not one that just any brand could create on the fly. It was a strategic play, "but it’s not an in-your-face thing."
Ideally, Bacardi is making activations that provide brand touchpoints for every moment of a consumer’s night out, says Vergara. First, she checks Facebook to plan where she’s going, and sees an Immersive Canvas ad. When she’s out, she’s snapping pics with her friends, using Bacardi’s hanging bat Snapchat filter. The next day, she’ll use Instagram to post #latergrams of what happened last night and maybe take a moment to play DJ on Bacardi’s turntables.
"It’s more about how do we engage with consumers in the right time with the right platform," Vergara says. "They engage with our brands all year, so the high-selling periods will continue to be very important, and that’s maybe when we go heavier on TV and massive reach media, but then, through the rest of the year, we’re going to focus on social, digital, experiential. We may lose some money because it has nothing to do with sales; it has to do with the positioning of brands in culture."
"I think it’s resulting in what we expected," he says, "which is allowing the brand to get closer to the market. It’s been a learning process; not everything has been perfect. But we’re definitely seeing the payback."
Reversing the slide
Like a lot of converts, Bacardi was drawn to its new religion out of necessity. Although the privately owned company doesn’t share sales numbers, spirits research company IWSR says the company has seen a three-year sales slide, going from 16.7 million cases sold in the U.S. in 2013 to 15.6 million in 2015. (2016 data was not available.)
When Vergara says "it has nothing to do with sales" and "we may lose some money," it’s not lip service. "Mauricio has the same allergy to traditional thinking that we do, in the sense that we don’t want to do something that’s been done before," says Steven Panariello, BBDO NY executive vice president and senior director for the Bacardi global account. "That’s a parameter that we put on everything that we do."
But Bacardi Limited Vice President and Managing Director of North America Ned Duggan, who’s responsible for Bombay Sapphire gin, D'USSÉ cognac and Martini Rossi vermouth, is quick to clarify that his boss isn’t blind to sales: "A lot of CMOS get excited about winning advertising awards—not him. At the end of the day, he knows that this is a business, and he’s most excited when he sees great, creative ideas that create tangible business."
The Mexico City native, whose wife is from Venezuela, started his career at Coca-Cola as the Delaware Punch brand manager because he was inspired by the "magic behind that brand" (not to mention his godmother, who worked there as a corporate communications manager). Over the next four years, he was promoted to a number of positions and eventually became the Fanta VP of marketing for Latin America, which moved him to Costa Rica, where his 9-year-old daughter Sophia was born. Then, in 2008, he transitioned to El Salvador and SAB Miller; his son was born there. Because of his diverse family, Vergara’s Christmas dinner, he jokes, was all over the map—accompanied by Bacardi Cuban cocktails, Bombay Sapphire negronis and Grey Goose martinis (dry with a couple olives).
In 2011, Vergara moved to the U.S., where he positioned Finlandia as a top global vodka brand at Brown-Forman. Nearly two years later, he landed at Bacardi as the VP of marketing and sales for Latin America, where he’s climbed the corporate ladder, finally landing the North American CMO role based between Miami and Bermuda, two oceanfront locales that suit the outdoorsman (he paddleboards, plays tennis and runs the occasional marathon) just fine.
As a boss, he’s "sharp and put together but approachable," says Bacardi director of corporate communications Amy Federman. "When you think of liquor executives, they’re boisterous, they’re out there, they’re always on the go," she says, but Vergara "lets his team shine more than him." Duggan echoes her thought, adding that Vergara has a "unique ability to provide very direct feedback in a motivational way, even if it’s critical feedback."
"He’s just a good guy," explains Federman. "To have an executive that people like and admire and can go to is refreshing in this day and age."
This management style has also played out in Bacardi brands’ advertising. It’s not a hard sell, and yet, the message is clear. Vergara says he wants Bacardi, Grey Goose and the company’s other brands like Cazadores tequila to be "part of what consumers care about."
Even in the Gondry-directed "We Are the Night" spot, the narrator doesn’t once utter the words "Bacardi," "rum" or even "drink." Like Vergara prefers, it represents a partying lifestyle, not a push to consume a particular type of alcohol.
This shift leaves 2017 wide open for interpretation. Panariello hinted that Bacardi will experiment in the ways it operates on various platforms, and Vergara adds that the brand will launch four more NO COMMISSION art exhibitions on four continents. A lot is changing, but one thing’s for certain: Bacardi brands, whether that’s Grey Goose vodka, Aberfeldy single malt scotch or something else, will be pushed without feeling pushy and present without being overplayed—not unlike the man behind their marketing.