Surrogate ad ban: Liquor ad vol continues to bubble on digital & allied platforms

According to TAM data, digital has seen maximum growth in ad insertions for Jan to Sept '22 compared to 2020

e4m by Shantanu David
Published: Oct 13, 2022 8:54 AM  | 6 min read
Beer

Contrary to popular belief, it is difficult to find truth at the bottom of the bottle; but then it’s not much easier from the top. The known truth here is that the AlcoBev industry has often relied on ‘brand extensions’ for promotions – be it through a related product extension like malt-based beverage, mineral water and club soda, or through related categories like music CDs, music festivals and events (commonly referred to as surrogate advertising).

Now, the lesser-known truth. Even as the Consumer Affairs Ministry issued notices to close to 10 liquor brands last week for reminding them about the prohibition on surrogate advertising, there was advertising aplenty online.

According to statistics from TAM data (that exchange4media has access to), Allied Blenders & Distillers (Sterling Reserve) was among the top five advertisers on TV, Radio and Digital mediums. It is notable, however, that radio had ads from only three advertisers during Jan-Sept '22.

Data shows that the indexed ad volume for the liquor category on TV has seen 64% rise in Jan-Sept '22 over Jan-Sept '20. Digital saw maximum ad volume growth in the category for this period. If the ad insertion percentage in Jan-Sept in 2020 is 100, and taken as a base line, that number shot up to close to touching 335 per cent in the same period in 2022.

(Stats made available by TAM Data)

While the advertising of liquor has been banned in the country since 1995, it has been going on unabated in the world of the Internet. The question of what exactly constitutes surrogate advertising could use a decanter.

Not Crystal Clear

Nakul Dutt, Strategy Director at FoxyMoron (Zoo Media) points out that the industry is awaiting clarity on what can qualify as a valid brand extension. “The key reason for this is the fact some of these products have their own existence and are sold in the market because of what they are, and not just because it comes from a house of a brand that sells AlcoBev. Hence there is a need for clarity on what defines acceptable brands extension and what can be quantified as ‘surrogate advertising,” he says, adding that the industry is working with regulatory bodies to get this clarity and is hopeful that this will be ironed out soon.

“Till then, AdEx is expected to take an immediate hit, while this will be compensated through increased spending in controlled environments (pubs, age-restricted events, digital community, etc). However, at overall levels the spending curve will go down,” posits Dutt.

Dhiraj Gupta, Co- Founder & CTO, mFilterIt, says that because platforms like Facebook and Google reject ads that violate these rules on the basis of keywords, brands have to focus beyond the keyword analysis.

“We at mFilterIt have an advanced tool to validate the creatives and ensure that they don't violate the advertising guidelines by ASCI, GOI, and platform-specific. Apart from that we also do a check on the relevancy and sentiment of the content (not just the keywords) to ensure that the creatives are compliant and don't violate the guidelines,” he says, adding, “This also helps to improve the campaign's performance. When brand creatives are compliant with the platform, the creatives perform better and as a result, the campaign performance also improves.”

It should be noted that legacy brands, which make up the majority share of advertisers, declined to comment on these developments. Meanwhile, there are plenty of ways to campaign other than the surrogate route, especially for emerging brands, boasting a ‘Made in India’ pedigree.

Alternate Brews

Abhinav Jindal, CEO and founder, Kimaya Himalayan Beverages, which owns brands like Bee Young and Yavira, says the company has been working towards expanding its customer outreach without choosing the route of surrogate advertising. Kimaya currently has over 1700 retail tie-ups across North India, apart from its forays into foreign markets like Singapore and Hong Kong.

“Our marketing spends are majorly split between social media promotions and product seeding in sampling opportunities. The cost of a product dispensed for a particular event is also taken into consideration and calculated in marketing spends as figures, after all - the product is money. We never indulge in taking paid media as a brand policy and always believe that our product will stand out and speak for itself,” Jain says, adding, “We also believe in selling the experience along with the product to make an impression in consumers' minds which is possible through hosted events, curated festivals, intimate dinner settings, and conceptual content marketing.”

Similarly, Harsha Malik- Marketing Head, Bored Beverages, says the brand with its first product, No Label Mead, is focused on creating their own "tribe" and looks to achieve that through social and community collaboration that align with the brand and product. “We will try to be the empowering force for people to openly communicate and come together either via our digital or physical interactions. Digital will be a main point of focus with community creation and interaction which align with our overall strategy of "consumers first, advertise after". We believe if we focus on these two ways people will organically be part of the No label family,” she says.

Jindal notes that HORECA events also help with brand sampling and business opportunities, as well as a good way for gauging the market for new opportunities and even categories. “Given that the liquor industry is highly regulated, traditional communication mediums like newspapers, radio, TV etc. are not very budget heavy. However, we do spend our 50% budgets on events to reach a higher audience and through surrogate marketing. For instance, BeeYoung Experiences we are able to communicate through traditional mediums. Also we spend 30-35% of our budget on digital mediums, mostly being Social Media,” he says.

“We are trying to build a new category and product, which has made us focus directly on the new age consumer who is looking for an all-together new drink. Our primary focus is to try to innovate and build strategies around the discovery of an alternative alcohol category and the buying to consumption experience,” says Malik, concluding, “This we will drive digitally by focusing and creating our own tribe, reaching out to likeminded groups and our on-ground interactive experiences.” 

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