In today's Finshots, we talk about the government's new guidelines surrounding surrogate advertising.

The Story

Remember when Pierce Brosnan (of the James Bond fame) made headlines for endorsing ‘Pan Bahar’? (Link here)

Yeah, that dodgy episode.

Besides the mass trolling that followed soon after, Brosnan also received a notice from the Delhi government seeking an explanation as to why he appeared in an Indian pan masala commercial glorifying tobacco products.

In fact, the actor had to personally clarify that his contract with Pan Bahar made no reference to the harmful tobacco content present in its products and pleaded ignorance suggesting that he was unaware of the fact that he was endorsing tobacco under the garb of premium grade mouth fresheners. And he was right. Pan Bahar wasn’t selling actual Pan Masala. Instead, they were selling mouth fresheners hoping people would also buy their more infamous tobacco products if they were to spot them in their neighbourhood kirana stores.

This act of advertising products with the real purpose of promoting some other product is called surrogate advertising. It’s very popular with brands who can’t legally advertise their stuff on mass media. Think — Tobacco. Advertising tobacco and other carcinogenic products on cable tv or print media is strictly prohibited according to Indian laws. The ban was first introduced in 1995 when the Cable Television Network Rules, 1995 (“CTNR”) were amended to prohibit direct or indirect advertisements of cigarettes, tobacco products, liquor or other intoxicants.

And this created a predicament for big businesses. On the one hand, the regulations created an entry barrier that was too hard to beat. For instance, if you were a new entrant and you wanted to sell alcohol, doing so without advertisement is always a tall order. On the other hand, even if you were an incumbent, trying to grow your market share in a mature industry — that was ridiculously challenging too. In fact, this excerpt from Vijay Mallya’s story on Bad Boy Billionaires captures the emotion rather succinctly —

“I am in the beverage- alcohol business; advertisement is banned. So we created an aspirational lifestyle branding image around Kingfisher. Now how do I communicate that? I don’t have advertising, I don’t have radio, no TV, no nothing. So you’ve got to think out of the box.”

And Mallya did think out of the box. During the 1996 World Cup, Kingfisher launched its ad campaign by sponsoring the West Indies Cricket Team and introducing the ultra-catchy jingle — ‘ooh-la-la-la-la-ooh-la-oh ooh-la-la-la-le-ohh’. The “King of Good Times” kept the brand in focus by advertising other products such as soda and calendars. And although the government has its own regulations regarding surrogate advertising, the enforcement of these provisions is indirectly delegated to the Advertising Standards Council of India (ASCI) — a non-government body involving industry members and ad agencies who try and self-regulate themselves based on their own little code.

According to ASCI, brands that sell tobacco and alcohol can legally advertise other products so long as they qualify as genuine brand extensions. For instance, if the in-store availability of the product sold under the brand extension is 10% of the leading brand in the product category OR sales turn-over of the product exceed 5 crores annually OR 1 crore in the state where the product is distributed, then, you can legally advertise the product. Also, the ads must be reviewed and certified by the Central Board of Film Certification (CBFC) before they can be aired on cable.

And while Kingfisher sodas and calendars might actually make the cut, what about Imperial Blue music CDs? I mean, who carries Music CDs in physical stores anymore? And how do you even evaluate if these products qualify as genuine brand extensions? Is that why they’re so popular with liquor brands? What about playing cards? That’s pretty shady stuff as well.

Needless to say, enforcing ASCI guidelines has always been difficult. And then there is the whole debate surrounding OTT platforms since the code doesn’t explicitly regulate these entities. Recently, Diageo used SonyLiv to publicize Hipster —a 180 ml pocket-size flask, and thereby also promoting its scotch whiskey brands Black Dog, Black & White and Vat 69. This happened during a cricket match between England and Pakistan. So it’s safe to say someone had to intervene.

And last month, the government released draft guidelines in a bid to get advertisers to fall in line. If notified, these new rules will require brands and ad agencies to be a lot more watchful. Because while earlier, abiding by the ASCI’s Code was voluntary, these new guidelines will be legally enforceable in a court of law. Also, its scope extends to ads over the internet as well, including the electronic media.

Granted, you could still advertise brand extensions, but the ad will only be permitted if the product sought to be promoted through the advertisement, is produced and distributed in reasonable quantities, having regard to the scale of the advertising in question. So if you’re spending 10 Crores in producing and distributing ads for those Music CDs you better be selling more than 50 units. Or you’ll be in trouble.

If the law is passed, that is.

Until then…

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