The hullabaloo around surrogate advertising in India is not new. However, the recent developments around banning direct advertisements of liquor have caused a stir in the system yet again, signalling unbending rules that will proscribe surrogate ads and sponsoring of events, essentially impacting giants like Pernod, United Breweries and Diageo dominating the $60 billion market in India.
It is reported that the public draft for the new rules by the Department of Consumer Affairs (DoCA) is in its evaluation phase and is expected to be released post-October. It is being designed with an all-inclusive mindset after consulting with the key stakeholders. The proposed rules are believed to have taken inspiration from international best practices while aligning with the already established guidelines of the Central Board of Film Certification (CBFC), the Advertising Standards Council of India (ASCI), and the Central Consumer Protection Authority (CCPA).
Additionally, digital will be added to its purview for the first time, along with pinning a clear distinction between celebrities endorsing 'brand extension' and the celebrities associated with 'restricted' brands.
“We expect the government to rule out a clear set of guidelines and instructions regarding alco-bev advertising and promotion on social media channels. Our major promotional strategies for small batch spirits and brew businesses rely heavily on online activities to reach their respective target audiences,” appeals Vicky Chand, Director and CEO, Radiant Manufacturers.
The Innovative Spin
The tighter implementation and heavy penalties (up to Rs. 5 million) will railroad alco-bev brands to revisit their marketing initiatives. They will have to think more creatively, while consciously shifting towards more genuine and transparent brand communication. “Instead of relying on indirect promotions, companies will likely focus on storytelling that truly resonates with consumers. This could lead to innovative campaigns that build upon brand values, ethics, and community engagement, further creating stronger trust and improving consumer protection,” shares Ambika Sharma, Founder and MD, Pulp Strategy.
With these challenges, newer avenues for innovation and deeper connections with audiences will emerge, agrees Anurag, Co-founder, Lone Wolf Beer. The brand aims to pivot its strategies to prioritise content marketing and storytelling through engaging blogs, videos, and social media content.
Further, experiential marketing is also expected to become a cornerstone, with immersive branded events, pop-up bars, and virtual tastings offering unique, memorable interactions with brands. “Leveraging influencer partnerships and user-generated content will help us foster lifestyle associations that resonate with our consumers. Collaborations with non-alcoholic brands will emphasise our brand's lifestyle aspects, and our network of brand ambassadors will continue to organically promote Lone Wolf through their personal and social channels,” adds Anurag.
Along with the above, brands will explore technology to improve digital engagement through partnerships and sponsorships that align with lifestyle and cultural trends, offering a holistic brand presence without direct product promotion. It's a chance for brands to win over their consumers, even if it means investing more in compliance and creative strategies.
Digital & POS Budgets To Prosper
With these new guidelines, alco-bev brands will be compelled to take a hard look at their marketing budgets as well. As much as a 30 per cent decline in ad budgets is expected, significantly impacting surrogate advertising and brand extensions.
“As the traditional routes get more restricted, brands might reallocate funds to enhance their digital presence, leveraging social media, data analytics, and personalised content to engage their audience,” emphasises Sharma.
Vedant Kedia, CEO, Mount Everest Breweries also supports, “Budgets will likely shift from traditional forms of media to digital and influencer-led marketing. Adopting a community building approach where consumers resonate with the brand’s identity and communication will pay long-term dividends.”
As advertising avenues narrow, the competition for consumer attention will likely intensify at the point of sale (POS), where brands can educate consumers about their products’ unique qualities. “This regulatory change underscores the importance of honesty in advertising and may encourage a more transparent and trustworthy spirits industry,” expresses John Royerr, Founder, Ochre Spirits.
For Chand as well, their advertising budgets are mainly allocated to the point of sales activation and promotions through displays, and other allied strategies, apart from a major chunk of budgets utilised to push presence and promotions online.
While we discuss the big impact on brands concerning the upcoming surrogate ad guidelines, another school of thought argues that brands do not rely solely on it for their income. Instead, they diversify into other businesses, which not only helps balance out their risks but also boosts their brand visibility. These are genuine brand extensions with solid revenue models. Kingfisher serves as a perfect example here. It diversified into aviation when its beer was battling stiff market competition. Its idea to pivot to aviation translated into a strong revenue stream while keeping the core product in the spotlight.
As brands urge the government to moderately regulate the mainstream media and advertising rules, the expected changes prophesy to lead to more responsible and sustainable marketing practices in the long run. Whatever the new rule may be, all brands can do is adapt and thrive!
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