January 2007 Issue of Wines & Vines
 
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Off the Vine

Boutique Ad-itudes

 
by W.R. Tish
 
 
This much is certain: Advertising--especially where boutique wineries are concerned--is more challenging than making good wine. At least winemaking is grounded in science; you can steer it, monitor it, craft it. Placing ads is notoriously unscientific, difficult to track and may well feel to many small winery owners like an expensive carnival game--the prize is enticing, the objective is clear, but success is about as easy as tossing that ring around the Coke bottle neck.

Boutique wineries, by their very nature, are doubly challenged when it comes to advertising. The rock on one side is represented by limited products, limited market reach and, of course, limited budgets. The hard place on the other is the need to advertise to get noticed and grow the business in an increasingly expansive and competitive arena.

While I'm treading deep in negative metaphors, why not toss in the reality that the most logical form of advertising media for American wineries--namely consumer wine magazines--is flat-out cost-prohibitive, according to John Gillespie, a seasoned wine industry watcher and a founding partner of the consulting firm Wine Colleagues. A full-page color ad in The Wine News, for instance, runs $6,500. You can reach more people via Wine Spectator, but at a steep premium; a full-page ad in WS runs $30,925. Gillespie estimates that only about 200 U.S. wine companies have the scale and market penetration to merit advertising in national wine-interest magazines. That leaves about 3,500 other small wineries looking elsewhere for effective ad opportunities. Specifically, Gillespie, advocates Internet options as the most fertile (more on that below).

Tried and True

For many small producers in established wine regions, a common alternative to national wine magazines is to advertise in wine publications that are regionally focused, often with a tilt toward visitors. Holly Finkelstein, co-proprietor of Judd's Hill in Napa Valley, limits the winery's advertising to Wine Country This Week (WCTW) and an occasional wine-focused supplement in the St. Helena Star. The focus of this advertising is the tasting room, open by appointment only, and Finkelstein finds that it has worked enough to justify advertising on an ongoing basis (most business analysts concur that repetition is vital for advertising to be effective). WCTW, Finkelstein says, "is tangible, and tourists need that." She adds that advertising in this publication also enables the winery to submit editorial pieces.

Tom Wark, who runs his own PR and marketing agency out of Glen Ellen, Calif., agrees that tourism publications can be very useful for boutiques. "If a winery has a tasting room that is open to the public, we almost always recommend that the winery have a presence in at least two or three such publications," Wark says. "We also recommend that they invest in targeted online publications aimed at visitors to wine country."

But Wark also emphasizes that direct mail--via post or e-mail--can bring even higher return on investment. Direct mail enables wineries to put specific sales offers as well as their name and brand message in the hands of specific customers. Wark believes, "Wineries that do--or want to--sell 50% or more of their wines direct should be investing at least 75% of their 'advertising' budget in direct mail of one sort or another."

Casting a Net Creatively

Outside of wine regions that are already in high gear in terms of tourism, the reasons to advertise remain the same--increase brand awareness, establish brand positioning and present unique selling propositions. But a small winery's need to advertise more broadly may be even more compelling.

One common outlet is wine-touring brochures to capture what winery traffic there is. Producers in Ohio also have an opportunity to advertise in The Wine Buzz, a full-color magazine with extensive distribution (33,000 copies printed bimonthly) in supermarkets and wine shops across the state, making it a natural choice for Ohio wineries. Arnie Esterer, proprietor of Markko Vineyards in Conneaut, Ohio, says "I don't really believe in advertising for sales," but he does think it's important for image. He places a variety of ads in The Wine Buzz, the American Wine Society Journal, the trade magazine Wine East, local newspapers (promoting specific festivals) and the Cleveland Symphony program.

For small fish in small ponds, it also helps to be creative and to tap into as many cost-cutting and publicity-enhancing opportunities as possible. Nancy Bentley of 1,500-case producer Kinkead Ridge in Ripley, Ohio, notes that members of the Ohio Grape Industries Program qualify for nearly 50% subsidies that dramatically lessen the financial burden of advertising. She runs fractional color ads in The Wine Buzz for under $400 net. Kinkead Ridge's only other media for advertising are local community newspapers, but the winery also tries to actively mine its 500-customer database.

Snowfarm Vineyards in South Hero, Vt., is literally the only wine game in town (and the state, in fact). Having no local wine culture to draw from, proprietor Harrison Lebowitz has been especially active in fostering relationships with other agricultural businesses, as well as in developing attention-grabbing PR stunts, such as having a local TV news station film a chicken crossing the road to get to the winery's nouveau-style red. For traditional advertising, Snowfarm runs ads in locals papers for the winery's summer events and concerts.

Larry Mawby, whose eponymous vineyard produces about 4,000 cases annually on Michigan's Leelanau Peninsula, is typical of many boutique vintners I spoke with, in that he says he doesn't have an advertising budget per se, yet still does a fair bit of advertising. Mawby runs ads in two regional glossy general-interest magazines, the Michigan Department of Agriculture wine magazine and a local wine trail guide. By trading custom-labeled wine for ad space in one of the general glossies, he not only saves considerable expense, but also gains the benefit of having his wine--which the magazine gives as gifts to advertiser s--reach valuable decision-makers in the community.

Internet: the New Frontier

Wine Colleagues' Gillespie is an ardent proponent of search engine advertising for boutiques. Most wineries nowadays both have websites and can ship Internet orders directly to customers. The trick, of course, is driving more customers to your site. With a strategic plan to advertise on search engines, Gillespie says, small wineries not only can reach consumers at a fraction of the cost of traditional media placement (because rates are based on actual clicks rather than overall press run or readership), but also, this form of advertising is the most targeted of any form, and when done correctly it becomes a gateway to direct sales, as the web surfer is literally a mere two or three clicks away from being able to purchase.

Gillespie notes an "extremely high correlation between Internet use and wine consumption," as well as the fact that the use of search engines has become standard operating procedure for most web shoppers (42% of Internet users utilize search engines when shopping, compared to the 23% who go directly to the site of a retail provider).

The importance of search-engine advertising will likely continue to increase as young computer users mature. At the same time, however, the variety of search-engine options is growing too, making it even more important for wineries to understand the intricacies of this uniquely targeted form of advertising in order to maximize investment.

Not unlike print advertising, wineries should approach the prospect of Internet advertising as part of a broader marketing plan. In essence, before tossing darts, get to know the dartboard and develop a plan for hitting it efficiently. According to Craig Camp of the Willamette Valley-based Anne Amie Vineyards, the Oregon winery developed an advertising budget of about $30,000 (as Camp notes, a "brutal" $2 per case). The Anne Amie plan incorporates print ads in the Portland Oregonian newspaper (aimed at tasting room traffic), several tourist guides, but also ads on Google and Yahoo designed to drive people to the winery's website.

Camp adds, "In 2007 we will be redesigning our website and blog. Our goal in advertising is to continually improve the quality of our consumer base and build their loyalty by giving them a meaningful connection to the winery, and I see the Internet as both the most effective and cost-effective tool for accomplishing our goals."

Anne Amie is probably ahead of most wineries in aggressively using the Internet for advertising, marketing and sales. For many small vintners, the comfort level with the Internet in general is not quite there. And some wineries will continue to pursue advertising strategies that they feel work for their particular niche in the wine world. Bedell Cellars, producing between 8,000-10,000 cases per year on Long Island, for instance, advertises not only in Long Island wine publications, but also in nonwine regional interest publications like Hamptons Cottages & Gardens and Edible East End, as well as Wine Spectator.

No matter what course of action boutiques take, it is clear that whether they do it in-house or consult outside experts, customizing a strategy that fits the specific brand is vital. Small budgets will always be a fact of life for small wineries. As will the drive to maximize the efficiency of those advertising dollars.
 
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