Probably the bravest advertising campaign – will it boost Carlsberg’s value?

Haven’t seen the latest negatively, self-referencing Carlsberg advertising campaign yet? Well, it is brave, but not Carlsberg as we have traditionally known it.

Carlsberg; a Danish beer brand that rose to fame in the UK on the back of the slogan “probably the best lager in the world”, whose ads were voiced with suitable gravitas by the once very famous Orson Wells.

With incredible honesty, the recent campaign readily and brazenly admits that, on the contrary, it is probably not the best lager anymore.

Applying guerrilla marketing tactics Carlsberg has waged a subversive campaign on Twitter re-tweeting any negative comments that they could dig out that had been logged or posted over the last five years.

And there was no holding back, these contain some very derogatory remarks about the product. One comment for example, compared the beer to the rancid p*ss of Satan

Was this a case of a marketing director going rogue or a cunning plan?

Telling everyone that your product is rubbish to get media attention is, not surprisingly, a very high-risk approach. As Gerald Ratner, of the now defunct Ratners jewelry chain, found out when during a television interview he described a decanter set sold by the group as “total crap”. To make matters worse the interview went out just before the peak Christmas period leading to a 15% decline in sales and ultimately the closing of some 330 stores in the UK and US.

However, some think it a work of genius – Mark Ritson of Marketing Week clearly thinks so, and he’s often right.

The proof of the pudding etc…so has it worked?

Well, the Carlsberg share price which was bumping along at 850 DKK at the beginning of April is now trading at around the 870 mark, which is close to the 52-week high of 881. So clearly some positive market sentiment has been generated. However, if you pull back to the 6-month view it has been steadily appreciating from a low of 685 back on 27 December 2018. Therefore, the campaign can’t really take all the credit for that – and Carlsberg are clearly not all about the UK market so the shareprice tick up could well reflect performance in other markets.

According to the Drum, ‘Carlsberg sources confirmed that it does indeed have marketing shenanigans in the works and that the promoted tweets will soon pay off. It comes at a time when the brewer is looking to build the profile of its “unfiltered” brand, a Danish-style Pilsner beer brewed using naturally-occurring yeast.

The challenge that Carlsberg and other similar brewers face is that the mass-market, mass-produced beer that we’ve all grown up with is, on the whole, not what we want anymore.

We’re now in the world of ‘Craft beer’ (read our article Crafty move?) with over 400 new brewers entering the UK market over the last 3 years and with 1.6 million fewer people drinking beer than 5 years ago, the mainstream market is under siege.

It is therefore easy to see why Carlsberg might adopt this high-risk strategy to start to distance itself from the mainstream and prepare the market for the full launch of a new, wholesome, Pilsener crafted brew.

Well-established companies, regardless of sector or size, will always face the challenge of new market entries and changing tastes and styles. The conventional defensive response is either New Product Development – developing and launching a competitive offer or buying up these pesky new entrants. Or alternatively, shareholders take the opportunity to offer their company up for sale to one of the bigger brands, in which case we recommend you check out our piece on preparing your company for sale.

Will Carlsberg succeed?  Only time will tell. We will keep an eye on marketing developments and share price and report back on whether this new ‘honesty-marketing’  strategy enhances value.

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