Super Sized Legislation
An increasingly ethical focus on public health and the effects of alcohol and junk food advertising is causing a shift in opinion, reaching both public and Governmental ears. Martin Thomas, head of strategy at MPG, explains the possible effects of new advertising legislation…
Alcohol and so called “junk foods” appear to be vying for the dubious distinction of becoming the next tobacco in the eyes of legislators, with restrictions imposed on the television advertising of these products likely to be a logical first move.
Evidence used by campaigners in favour of a ban on alcohol advertising is mounting. Nevertheless, it is difficult in the short-term to envisage an outright ban on the advertising of alcohol on television in the UK, even though such restrictions already operate in a number of EU markets, including France, Austria, Belgium, Ireland, Spain and Sweden.
That said, there have been increasing calls from politicians, public health bodies and charities for the imposition of an advertising watershed.
The Royal College of Physicians has recently called for such a watershed and contrasted the strength of the movement to legislate food marketing with more liberal attitudes to alcohol advertising and charity Alcohol Concern has urged the drinks industry not to advertise its products or sponsor programmes before the watershed.
The prevailing view of government ministers was underlined by the Home Office and Department of Health’s joint submission to OFCOM prior to the most recent review of alcohol advertising: “It is crucial to make it clear that alcohol advertisements which appeal to young people under 18 are not acceptable. We believe that this can best be achieved by operating a nine o’clock watershed for all alcohol advertising.”
OFCOM chose to ignore these calls for the imposition of a watershed during the last review, but it is not inconceivable that the scheduling of alcohol advertising will be the subject of restrictions during the next couple of years, especially if the calls for a watershed for “junk food” advertising are realised.
Such a move will have significant implications for the drinks industry’s use of advertising media. Currently, 37% of the industry’s advertising media investment is scheduled before 9pm and we estimate that the imposition of a watershed would increase television costs by up to 20%, assuming that the drinks brands aimed to replicate their current level of ratings.
In addition to significantly inflating media costs, the watershed would clearly rule out the scheduling of television advertising during the key early evening day-part and prevent alcohol advertisers from supporting major daytime sports events, such as the World Cup.
The evidence from other European countries where a watershed has been imposed is that alcohol brands have chosen or been forced to divert marketing investment from television into promotional activity, sponsorship and increasingly, new media. This will almost certainly be replicated in the UK in the event of a watershed being imposed. Fortunately, restrictions on the use of television advertising will coincide with the coming of age of new channels such as mobile and digital outdoor and the growing sophistication and accountability of the internet.
The requirement on alcohol brand owners and their agencies to implement multi media programmes has, in turn, forced them to increase their investment in multi-channel planning and research. For example, SAB Miller has recently piloted a global multi-channel communications planning programme in key markets, focused on preparing its brand managers and agencies for communications in a world in which they can no longer rely simply on television advertising to build and sustain brand growth.
The success of brands such as Absolut, built without television advertising investment, would suggest that the lack of television, or severe restrictions on its use, are not necessarily an insurmountable barrier for creative brand owners. Equally, many advertisers unaffected by legislative restrictions are questioning their traditional reliance on television. Late last year, Unilever revealed that it had reduced its global TV advertising budget by 20% over the past three years, with Alan Rutherford, the company’s vice president saying: “Television is rather ill, it is not dead. But it is going through an evolutionary change. Advertisers are rethinking how they use television as part of their mix.”
The challenge facing alcohol brand owners is the need to prepare for an uncertain future, while maximizing the value of existing advertising media investments. Until a watershed is imposed, television advertising will remain the most cost effective means of delivering audience reach, although even today, there is a strong argument in favour of the use of multiple channels to engage audiences and shape their buying behavior, especially close to the point of purchase.
The rising cost and potentially declining effectiveness of television advertising in a post watershed world will make these alternative channels even more important. By embracing channels such as the internet, mobile and digital out-of-home before any legislative changes and making prudent, up-front investments in multi-channel research and testing and adopting new approaches to communications planning, they can face the future with confidence, whatever the legislative climate.