Cheers to Creativity; No More Hiding Behind Water Bottles!

The Indian government's draft rules on surrogate advertising for alcohol brands signify a major shift in the marketing landscape. The new regulations prohibit even indirect promotion of alcohol through surrogate products like water, CDs, or glassware, marking an end to a long-standing advertising strategy in the alcobev sector, valued at approximately ₹38,700 crores ($46.6 billion) as of 2023. This development forces brands to rethink their advertising strategies, with a focus on creativity, content, and alternative marketing avenues.

As traditional surrogate advertising avenues close, alcobev brands must turn to creative storytelling and content-driven strategies to maintain their brand identity. Siddhartha Singh, Managing Partner & COO at Infectious Advertising, emphasizes the importance of lifestyle branding, where narratives about culture, values, and aspirational lifestyles are used to connect with audiences. Singh views this shift as an opportunity to embrace more subtle forms of engagement, allowing brands to maintain their identity by associating with enviable lifestyles and aspirational values without directly promoting their products.

The new regulations are also expected to shift advertising budgets towards more targeted and niche marketing strategies, particularly on digital platforms. According to Sajal Gupta, Chief Executive of Kiaos Marketing, digital will become the main driver of these strategies, as brands seek to interact with a refined set of consumers on a consistent and continuous basis. The absence of surrogate advertising will necessitate highly personalized communication, with brands identifying and targeting specific niches through digital channels.

Experiential marketing is anticipated to play a significant role in this new advertising paradigm. Pranoy Kanojia, Vice President of Strategy at Enormous Brands, predicts that experiential marketing will further take off in the alcobev sector, leading to stronger on-ground branded experiences. Naresh Gupta, Co-founder of Bang in the Middle, adds that on-premises promotions and creating memorable sensory experiences will become crucial for brands, as these environments offer prime opportunities for engagement.

However, the shift also presents challenges, particularly in maintaining brand consistency across various marketing channels under the new restrictions. The draft rules prohibit the marketing of surrogate products that use a similar label, design, pattern, or logo to the brand's alcoholic products, requiring brands to essentially create two distinct identities. Kanojia notes that while this presents an operational challenge, it also encourages brands to develop new products or experience lines that resonate more deeply with their target audience’s lifestyle and philosophies.

The impact of these regulations is expected to extend to advertising spending during the festive season. A media industry expert, who wished to remain anonymous, predicts that the alcobev sector will be less aggressive in its festive advertising, with reduced spending on sports and OTT entertainment, key avenues for these brands. The expert notes that the impact is already visible, with fewer brands engaging in major events like the T20 World Cup and IPL in 2024 compared to previous years.

The Indian government's draft rules on surrogate advertising are set to reshape the alcobev sector's marketing strategies, pushing brands towards more creative, content-driven, and experiential approaches while posing challenges in maintaining brand consistency and managing advertising spending.