Wednesday, February 08, 2006

Surrogate Advertising: Enforced Innovation

A recent series of hoardings led me to delve into a very unique trend specific to Indian advertising – Surrogate advertising… a trend which is fast catching up and has suddenly attracted a lot of innovative and creative brains around the country.

Reason? On one hand, the govt cannot allow public advertising of liquor companies. But ironically, liquor and cigarette sales are the biggest revenue generators in terms of taxes and duties on these items. That’s why an overt acceptance of the marketing in these sectors is not legally acceptable. This has led to one of the biggest ironies of the country – Sales of these items are not banned, yet advertising on the same has strictly been prohibited!

Talking about the market size and the different segments would not be pertinent to the discussion (for the records, it is more than 100 million cases in India!). But what is the significance of this trend vis-à-vis the entry points for new players and sustainability of existing ones?
Multinationals which would like to explore the Indian markets find the double-faced attitude of the government as an impediment to their ventures. Since no policy has been formalized in this regard, foreign companies continue to be skeptical about their entry.

Domestically, it has led to innovative ways and methods of spending on different media for Advertising from the companies, where companies do more of a brand building exercise than direct advertising. Be it promotions for brand building, or sponsoring events that can be mapped with the “showbiz” and “glamour” of the brand, advertisers don’t leave many avenues to enhance their visibility.

The rule says “Advertisements which lead to sale, consumption and promotion of liquor should not be allowed.” So, in Surrogate Marketing, a product which is different from the main product is advertised, and has the same brand name as the main product. The product is called as “surrogate” and advertising through this channel is called “Surrogate Advertising”!
It may include CDs, water, clothing, Apple juice, fashion accessories, sports goods or even events sponsoring!

These gimmicks, in turn, help the consumers build a strong equity of the parent brand, and with the enhanced visibility, the equity of the brand would definitely become higher!

Liquor companies were forced to look at innovative ways of building their brands. With an objective of enhancing brand recall, companies either engage into “surrogate advertising” or displaying “socially responsible messages”.

Again, out of the two viable options for Advertising, Surrogate Advertising has been surrounded by controversies and legalities for a long time. There is no clear policy from the government for obvious reasons and companies do not want to risk their investments on Ads, which might not be screened after a while.
So, a safer choice available where companies can exercise their grey cells is advertising “socially responsible” messages.

Take a look at these billboards which I noticed on a private flyover a few days back. There is also another print ad in continuation with the Johnnie Walker billboard.

Must say, this is one of the best elements of innovation that I have seen so far. Though it would be too premature to attribute this to the industry per se, it has become imperative for the companies to change their line of thought completely, to work around the system.

What are the other practices companies are looking at?
(a) Companies are getting involved in Sponsorships of events and have launched their own awards for bravery or lifetime achievements!
(b) Internet advertising has become a lucrative area which has so far not been delved into. The medium holds a lot of potential to enhance visibility, and companies have lately realized that.
(c) Catchy jingles have become the norm of the day to ensure that their brands have a high brand recall
(d) With restrictions in other marketing elements – in terms of pricing and distribution, companies have ventured into another important element – Packaging. Innovative packaging makes their brands stand out of the clutter, and most of the Multinationals are revisiting this element in their brand portfolio.

Though the industry is not healthy for the young consumers, some processes and laws need to be formalized and established in the system. Else, innovative workarounds and arm-twisting of laws would be the norm of the day for the entire liquor industry!

[Reference: Marketing Management Case Studies, ICFAI University, Banning Liquor Surrogate Advertising]
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