Implicit positioning and surrogate advertising
Abstract: The ban on advertising of tobacco and liquor introduced by the Government of India during the early 2000s has spawned a generation of surrogate marketing initiatives as corporations leant to sell without communicating to the consumer. Many in the industry have since started to diversify into areas where they can leverage their brands’ aspirational value; such as aviation, clothing and apparel and sports. However the surrogacy in advertising continues in the absence of a strong code by the ASCI and the government flip flops on the issue. The need of the hour is to come clean on the subject and develop an unambiguous plan of action
Advertising is widely accepted to be the most potent tool in the hand of a marketer. Whether it is to launch a new product, entrench an existing one, educate on the new salient features or create a new market, most consumer products manufacturers orient a considerable amount of time, energy and money to reaching out to existing and potential consumers though various media such as television, radio etc as also new age media like the Internet and Out of Home (OOH) media.
Origins
In this context, one can imagine the predicament of a producer who is mandated to legally produce and stock and then has his hands tied by being denied the right to market the produce. This is ditch that many liquor and cigarette companies have found them in after the Government of India passed a blanket ban on all advertising of ‘intoxicants and harmful substances’ in mid 2002. Most of the large players adapted quickly to introducing what are termed as complimentary products which fell outside the ambit of the Government’s regulation. The significant ones include 8PM Whisky (apple juice), Aristocrat Whisky (apple juice), Bagpiper (club soda), Hayward’s 5000 Beer (kit of darts which was the centerpiece of the advertising campaign) and Gilbey's Green Label Whisky (mineral water); and in this process was born a new trend of surrogacy in advertising which is commonly defined as ‘advertising one product with the view of selling another’
Trends in surrogate advertising
After the ban imposed on the 12 advertisements identified as surrogates by the Government of India, and the show-cause notices issued to Star TV, Zee TV and Aaj Tak in 2002 under the provisions of the Cable Television Regulation Act of 2002, the whirlwind of surrogate ads hitting the telly calmed down to a large extent. Advertisers started diversifying and shifted their focus to other advertising avenues which often stretched the concept of brand extension to previously unheard-of levels. These include the mundane such as sponsoring events (without explicit advertising) and Internet advertising; the unconventional such as ITC’s diversification into clothing and apparel as well as the far-fetched such as the Red and White Bravery Awards and other lifetime achievement awards instituted mainly to perpetuate brand recall among the target audience. One interesting trend which was observed in the mid 2000s was the “socially responsible advertising” taken up by many liquor companies. Several advertisements exhorting viewers to be responsible citizens and refrain from driving after drinking were seen by media analysts as a form of surrogacy.
Media analysts have also often wondered aloud that the ambitious forays made by Dr Vijay Mallya in aviation, Formula 1 and related ‘glamorous’ industries have as much to do with his desire to perpetuate his strong brand portfolio as the prospect of de-risking his business by diversifying.
For the best part of this decade, the tobacco and liquor manufacturing lobby has been trying to persuade the government to relax the restrictions on advertising what are perceived as surrogate products. Finally, as late as March 2009, the Government of India decided to the hand a long rope under the stipulation that the surrogates have no product linkages to intoxicants. However on June 10th this year, the government tabled a bill to amend the Cable Television Network Act of 1994, which is likely to tighten the screws on surrogate advertising even further.
Advertising Ethics
The Advertising Standards Council of India (ASCI) issued clarifications at various points of time that in accordance with the code laid for guiding ethical behaviour in advertising, the mere use of a brand name or company name which may be the same or related to a product put under advertising restriction may not be construed as reason enough to find the advertisement objectionable. An exception may however be made in case the product which is advertised is not freely available or is produced and distributed in minuscule quantities, which may not be sufficient to warrant advertising costs. Also advertisements must not contain direct or indirect cues for the product under advertising restriction.
However many advertisers must still grapple with ethical dilemmas as the existing code leaves a lot of scope for interpretation.
Voluntary abstinence
A notable exception to the clamoring by the tobacco and liquor lobby and circumventing of stipulations to maintain sales is the conduct of ITC Ltd after the ban announced by the government. In 2001, ITC voluntarily opted out of the sponsorship deal that it had signed with the BCCI to sponsor the Indian cricket team and has since been de-emphasizing its cigarette brands in favor of other lines of business which are considerably more sustainable. It has also taken up large scale Corporate Social Initiatives in rural
Two sides of the same coin: Ambiguity of law
Many in the industry question the practice of banning advertisements which effectively erodes the ability to sell while at the same time allowing production to continue.
In an article published by The Hindu in March 2008 Ramesh Narayan, a communication consultant writes, “The advertiser’s perspective is fairly straightforward. If it is legal to manufacture, distribute and sell a product, why should it be illegal to promote the sale of that product? I don’t think anyone can answer that question convincingly. If it has been established conclusively that cigarette smoking kills, why is it that it is available to anyone, irrespective of his or her age, at every street corner?”
"It's difficult to digest that an industry which is allowed to sell its products, is banned from advertising the same products, despite the fact that the commercials carry health warning, advising the customers to use the product in temperance.", says Prof. Atul Tandan, Director, Mudra Institute of Communications in an article released in July 2002.
While such questions make intuitive sense, the practicality of banning production of tobacco and liquor is unpalatable for the simple reason that these are very heavy contributors to
The need of the hour
The following measure will go a long way in easing the deadlock seen here:
- The ASCI should have an unambiguous guideline for differentiating acceptable and unacceptable forms of advertising with respect to surrogate products. Also the ASCI should be empowered to implement the guidelines and issue penalties for non-conformance.
- The government needs to take a stand on the issue. It must look beyond having the cake (the advertising ban) and eating (tax revenues)
- Advertising companies must take pains to understand the nature of the products and market that they are dealing with and must refrain from designing and propagating surrogate brands.
References
Retrieved August 5th from ICMRIndia.org: http://www.icmrindia.org/free%20resources/casestudies/Banning%20Liquor%20Surrogate%20Advertising1.htm
Retrieved August 5th from The Hindu-Businessline website:
http://www.thehindubusinessline.com/catalyst/2008/03/27/stories/2008032750090200.htm
Retrieved August 5th from The Hindu-Businessline website:
http://www.thehindubusinessline.com/catalyst/2002/01/10/stories/2002011000110300.htm
Retrieved August 5th from The Hindu-Businessline website:
http://www.thehindubusinessline.com/catalyst/2008/03/27/stories/2008032750090200.htm
Retrieved August 5th from legal-articles.deysot.com
http://legal-articles.deysot.com/pdf/article-180.pdf
Nikhil Joshi is a 1st year PGDM student at IIM Calcutta. He holds a Bachelor’s degree in Electronics and Telecommunication Engineering from University of Mumbai and has worked as a Software Testing Consultant with L&T Infotech. He can be reached at joshin2011@email.iimcal.ac.in
Published in the Inaugural PAN IIM Marketing magazine (December 2009)
