07:53 PM

Anheuser Busch teams with MingleNow: Can online social networks sell beer?

It is a sunny, crisp mid-afternoon, and Gurbaksh Chahal, the CEO of BlueLithium advertising network,  is wearing a stunning blue striped suit by a French designer as we walk along a dowdy part of Divisadero Street, in San Francisco. I am meeting with him and top brand management executives from Anheuser Busch, who are dressed more conservatively,  to discuss plans to use online social networks to sell beer.

The research group of BlueLithium, the second largest US online advertising network, last year came up with an idea for MingleNow. It is an online social network organized around the offline world.  

Since friends gather around the same bars, restuarants and clubs, there is a potential opportunity to create social networks built around these common points of community. (SVW: MingleNow - social networking that mingles online and offline.)

Following a private beta last year, BlueLithium is making a big push with MingleNow this year. Its goal is to have 2m active users by the end of 2007. And Mr Chahal has landed Anheuser Busch as a key launch partner for the venture.

Tom Shipley, director of Global Industry Development at Anheuser Busch explains the reasons for the alliance. He shows me charts of beer consumption over the last 35 years.

He points to the problem: beer's high point was in 1995 when it reached a  61 per cent share,  compared with hard liquor and wine. By the end of 2005 it had declined to 57 per cent.

"For the last 18 months we have been running a campaign called "Here's to beer" which we have funded and which promotes the entire beer industry not just our brands. It highlights the positive, social aspects of beer drinking, and we hope it will reverse the trend," he says.

With the rise of social networks such as MySpace, Friendster, etc, there is an opportunity to see if there might be a mutually beneficial relationship between the two "social" products/services.

For the next stage of the "Here's to beer" campaign, Mr Shipley says Anheuser Busch wanted to team up with known experts in online social networks, people that know what they are doing, people that know how to build communities.

I pointed out that BlueLithium is not yet an expert in this area, and it doesn't have a proven track record in building social networks.

"We were attracted to MingleNow's goal to have 2m users and its vision.  It is also focused on the 21 to 25 year old demographic that is also our target. And we know that that demographic doesn't like direct marketing so we are trying a different approach with MingleNow."

There is a promotion called "Clink" that encourages people to upload photos of themselves clinking beer glasses with others. Those with the most photos win prizes and trips.

Mr Chahal says that the Clink promotion plays well with MingleNow's viral expansion strategy.

"We are not spending much money to market MingleNow, we believe it should grow virally so that it becomes a key part of people's communities. We have been to venues and have taken pictures of people and uploaded their photos to MingleNow. That's a great way to get people to come to the site, to register, and to start using it."

The contrast between Mr Chahal's designer blue suit, and his more conventionally dressed clients, perfectly illustrates the sharp contrast between the older worlds of marketing and promotion, and the new emerging forms of online promotion. And that is precisely why BlueLithium is building MingleNow, to discover those new forms advertising.

"MingleNow is not about traditional online advertising, using banner ads, etc. It is about mining the data to feed back into our advertising network," says Mr Chahal. "We believe that when we get to at least 2m active users, that will create a data stream that will be very useful in improving our business."

It's an ambitious goal for this very young (2004) privately held company, that has already reached $100m in revenues.

What is the metric for success I ask  Mr Shipley? He points to his charts and the year 2005, "When this number goes up," he says.

It could potentially be a perfect partnership. After all, beer has helped build social relationships for centuries--maybe online social networks can now help build sales of beer. 

. . .

Additional Info:

MingleNow - social networking that mingles online and offline

I just got an early briefing on an interesting idea for social networking coming out of BlueLithium, the online advertising agency headquartered in San Jose, CA. It's an idea developed in Blue Lithium Labs, the R&D component of the...

Posted by Tom Foremski on June 12, 2006 3:30 PM



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