Monster: We Don’t Need No Stinking TV!

Quick – can you name a beverage company that avoids mainstream marketing and employs no ad agency, yet still generates over a billion dollars a year in sales? As few as there may be in any industry, in the beverage world, there’s only one that we know of: Monster.

Monster, whose energy drinks produced $1.3 billion in sales in 2011, has long shunned traditional advertising channels like television, radio, and print. Instead, the company focuses its marketing resources on reaching a target demographic of energy seeking 18-30 year olds through a mix of “extreme sports” and alternative music sponsorships, a hefty dose of product sampling, and a strong social media presence. A recent article in Investor’s Business Daily examined Monster’s methodology and why it’s been successful, as well as how the implementation of alternative marketing can be an effective way for a business to grow.

The article posits that Monster has been largely successful by focusing on its core consumer base of teens and individuals in their early 20s who want a quick energy boost. These consumers are often suspicious of traditional advertising and that Monster TV or radio ads would likely alienate them.

In the place of mainstream media channels, Monster promotes its energy drinks at events and competitions in so-called “extreme sports” including skateboarding, motorcycle racing, and surfing. Monster also connects with its youthful consumers through social media.  The company has nearly 15 million “fans” on Facebook, and over 170,000 followers on Twitter.

Scott Van Winkle, a Boston-based industry analyst at Canaccord Genuity, told Investor’s that Monster’s approach is particular effective from a cost-based point of view. Van Winkle noted that while Monster could purchase an expensive Super Bowl ad with 110 million impressions, a fraction of that number would reach Monster’s target audience. Monster sports sponsorships, on the other hand, target its consumer base almost exclusively and cost significantly less.

In addition to its targeted approach to advertising, Van Winkle credits Monster’s rise in market share to a focus of its core brand, its investment in new products like Rehab and Java Monster, and avoiding acquisitions and big gambles in trendy beverage categories.

It appears that Monster’s alternative marketing strategy has been largely successful, and a big part of the company’s rise within the energy drink category. Monster is now the bestselling energy drink brand in the convenience store channel in front of Red Bull, Rockstar, and Amp’d, and well ahead of Coke’s Full Throttle and PepsiCo-owned SoBE No Fear.

Despite Coke and Pepsi pumping millions of sales and marketing dollars into its energy drink brands, Van Winkle pointed out that Monster has achieved far greater success in the category by embracing the alternative vibe of consumers within the segment. And while Coke may the most recognized brand name on the planet, Van Winkle believes that, when it comes to energy drinks, the Coke name may actually be a liability. He claimed that when Coke put its name on Full Throttle, it undermined the brand. The “anti-establishment” consumers that drink Monster don’t want to buy a Coke energy drink, he said.