As govt stifles surrogate ads, alcobev brands turn to content insertions & experiential marketing

Experts weigh the impact of stricter surrogate alcohol advertising guidelines on the sector’s marketing strategies.

The Indian government's recent draft rules on surrogate advertising for alcohol brands mark a significant shift in the marketing landscape. According to reports, these draft rules bar even the indirect promotion of alcohol through surrogate products like water, CDs, or glassware.

For the longest time, surrogate ads have been a popular way to advertise such brands. The alcobev sector in India, valued at approximately 3,8700, crores ( $46.6 billion) as of 2023, will need to innovate and rethink its advertising strategies.

Creativity and content

With the traditional avenues of surrogate advertising closing, alcobev brands will have to turn to creative storytelling and focus on content to maintain their brand identity.

Siddhartha Singh, managing partner & COO at Infectious Advertising, highlights the need for lifestyle branding, where narratives about culture, values, and aspirational lifestyles can be used to connect with audiences.

“This shift is a never-before opportunity to embrace more creative and subtle forms of engagement. One of the most promising techniques is the use of lifestyle branding, where the brand narrative is seamlessly woven into stories about lifestyle, culture, and values that resonate well with the target audience. This allows brands to maintain their identity by associating with enviable lifestyles and aspirational values without directly promoting their products,” he says.

Digital spending to increase 

If reports are to be believed, the new regulations also ask advertisers to limit marketing budgets, affecting the scale of advertising campaigns. Experts say that the focus will shift from large-scale promotions to more targeted, niche marketing strategies. Digital platforms will be key in this transition, enabling personalised communication with specific consumer segments.

Sajal Gupta, chief executive of Kiaos Marketing, states that the whole concept of first and second-party data is going to have a major role here.

“Brands are going to want to interact with a limited and refined set of consumers, and they’ll have to do it on a consistent and continuous basis. Digital will obviously be the main driver of this strategy, in ways traditional media can’t. In the absence of surrogate advertising, liquor brands will have to be very personalised in their communication through digital, and identify and target their specific niches,” he adds.

The role of experiential marketing

Experiential marketing is expected to play a significant role in the new advertising paradigm. Pranoy Kanojia, vice president of strategy at Enormous Brands, says he expects experiential marketing to take off further for the category, leading to stronger on-ground branded experiences.

Similarly, Naresh Gupta, co-founder of Bang in the Middle, suggests that on-premises promotions and creating memorable sensory experiences will become crucial for brands.

He points out, "The benefit for alcohol brands and the category itself is that people step out of their homes and go to places that serve alcohol, which can be prime locations for promotions and marketing. Brands will need to enhance their on-premises promotions and be clear and honest with their communication."

Challenges and opportunities

Despite the potential for creative innovation, there are several challenges. For example, ensuring brand consistency across various marketing channels under the new restrictions will be difficult, say experts.

A large portion of the new rules pertain to so-called brand extensions that were previously used to disguise the advertising of new products. The draft rules also prohibit the marketing of these surrogate products if they employ a “similar label, design, pattern, or logo” to that of the brand's alcoholic products.

This poses a real challenge for advertisers, says Kanojia of Enormous. “From the visual perspective, the colours, the elements, the logo, all of it has to change. We have taken this up as a creative challenge. It is like creating two different identities for the brand that remind the consumers of the same brand ac ross touchpoints."

However, he adds that while these guidelines pose an operational overhead for brands, they also encourage brands to develop serious new products or experience lines and also encourages them to create compelling and relevant brand purpose worlds that resonate more with the targeted audience's lifestyle and philosophies they want to own & promote.

Festive spending to be impacted

A media industry expert who wishes to remain anonymous states that the regulations will also impact the alcobev sector’s advertising spend during the upcoming festive season.

He anticipates that spending on sports and OTT entertainment—important avenues for these brands—will decrease. He notes that as the rules also dictate the marketing spend of these brands, their ability to invest at previous levels is being reconsidered.

According to him, the impact is already visible. “I don't think they will be as aggressive this festive season. They were aggressive during the World Cup 2023, a flagship ICC event held every four years in October-November, which is a prime time for investment. However, very few have engaged during major events like the T20 World Cup and the IPL in 2024.”

(With additional inputs from Benita Chacko)