Meta okays alcohol and gambling ads; brands may now allocate more spends to digital

On Tuesday, August 20, 2024, social media giant Meta announced that starting August 27, 2024, it will allow ads for alcohol and real-money gambling in India, Asia Pacific (APAC), and Latin America (LATAM).

This change in Meta's advertising policy might raise concerns about how it could affect public health, the industry, and consumer behaviour in India, which is set to announce sweeping rules that will even bar surrogate ads and event sponsorships.

According to Manisha Kapoor, secretary general, Advertising Standards Council of India (ASCI), “These appear to be internal policies applicable to multiple geographies and are always subject to local laws that organisations will need to be compliant with.”

Anuraag Saxena, CEO, E-Gaming Federation, says, "Gambling is largely illegal in India, and advisories issued by the Department of Consumer Affairs (DoCA) and the Ministry of Information and Broadcasting (MIB) restrict the usage of digital platforms for certain categories of advertisements. I am sure platform operators in India will consider this decision in light of Indian laws and social realities and engage in dialogue with regulators, policymakers, and social organisations before implementing such a significant change."

While the government's stance on alcohol and gambling advertising remains uncertain, industry stakeholders are cautious about what the next move might be. They also raise critical questions about compliance and the ethical implications of promoting such products in a heavily regulated environment.

Abhishek Upadhya, SVP - digital innovation and strategy, HiveMinds, a digital marketing agency, thinks it is quite a drastic shift from Meta’s usual policy stance regarding highly regulated product sectors.

“Usually, such policy changes take time to percolate with channel partners. What is surprising to me is that since Whatsapp's power and potential are still quite untapped by advertisers in FMCG, Retail, Luxury, Auto, etc, the urgency of including these incremental and relatively complex regulatory sectors seems oddly timed,” he says.

Impact on relationship between Meta and Indian government

The Indian government has maintained strict regulations on alcohol and gambling ads, and Meta's approach may prompt scrutiny from regulatory bodies.

Chandramouli Nilakantan, CEO, TRA Research, a market research firm, shares that it might provoke a strong response from regulators and could lead to a more profound debate regarding the alignment of digital advertising practices with the broader regulatory framework.

He adds that Meta is at risk of losing trust with the Government of India, which may view this move as circumventing existing regulations and potentially prioritising profit over public welfare.

Kushal Sanghvi, mentor, NITI Aayog, expresses confidence about the anticipated open debate between the government and Meta. He believes that, ultimately, they will find a way to collaborate. For a long time, not just Meta but all digital companies have been seeking new platforms for the liquor category, which has been a significant global category in the digital space.

“I think it is about time we acknowledge that, while understanding the mechanics of government regulation in India, we also need to recognise that alcohol consumption is on the rise,” he adds.

Sajal Gupta, CEO, Kiaos Marketing, a digital marketing agency, adds that since there is ambiguity in the government regulation on how it is treating digital media, Meta is taking advantage of this ambiguity.

Protecting vulnerable demographics

The introduction of alcohol and gambling ads also raises concerns regarding the protection of vulnerable demographics and minors. Experts argue that allowing such ads could increase exposure to potentially harmful content among users who are addicted, financially vulnerable, have health issues, and who might be going through mental stress due to bad experiences with gambling and/or alcohol.

Although Meta has policies in place to restrict ad targeting based on sensitive information, the broad categories of age and location still permit advertisers to reach specific demographics.

Upadhya believes that the algorithm might end up chasing specific audiences like these in the short term since they might respond to these ads due to their existing addictions. It might also automatically identify more such audiences similar to the prior responding set and hence open up a new cohort of users to addictive communication.

“Strong self-regulation on ad content creation and automatic vetting of any addictive/ personalised communication centred around solicitation or addressing the consumer's insecurities have to be auto-blocked with strict penalties on the advertiser,” he comments.

A shift towards digital for advertising?

The discussion on alcohol and gambling advertising on Meta has raised questions about whether there will be a significant shift towards digital advertising for these brands. Industry experts believe that advertising on digital platforms will increase. However, it remains to be seen whether brands will make digital their primary medium, depending on future developments and feedback.

“Meta’s decision could accelerate this shift, particularly for industries like alcohol and gambling, which face significant advertising restrictions on traditional media. Digital platforms, with their ability to segment audiences and tailor messaging, provide a more direct and potentially more effective means of reaching target demographics,” says Nilakantan.

While platforms like Google and YouTube also have the technological capability to offer similar advertising opportunities, the decision to do so reflects the broader vision and philosophy of each organisation.

Experts also add that not all companies will follow Meta’s lead; some may choose to prioritise ethical considerations and long-term trust over short-term revenue gains.

Yash Chandiramani, founder and chief strategist, Admatazz, a digital marketing agency, shares that the brands will allocate a part of their attention on digital for advertising.

"Majority brands will still focus on below-the-line (BTL) marketing and point-of-sale activities as it always has been relevant in the alcohol category." 

Upadhya states that this is not a healthy sign and poses an extremely high responsibility on the shoulders of the platform, advertisers, and agencies to always think about the consumer.

Gupta says, “All digital platforms, including Meta, may capitalise on the uncertainty surrounding a potential government ban on surrogate ads. Currently, only real money gambling ads are permitted on Google.”