Is brand extensions ban impacting TV revenues

Televisionpoint.com Correspondent
The April 12, 2005 ban order served on all television channels not to air surrogate advertisements or brand extensions of liquor and tobacco products may have seen a serious impact on revenues of TV channels. As a remedy of the situation, the apex body of broadcasters, Indian Broadcasting Federation (IBF), has decided to introduce stringent self-regulatory measures. While it is difficult to quantify the loss of ad revenue on account of the new fiat, big advertisers like the UB Group and ITC have put much of their brand extension advertising with brands like Kingfisher and Wills Lifestyle on hold.

Surrogate and brand extension advertising is said to account for at least 5% of TV channels' ad revenue. As a self-regulatory measure to meet the April 12 ban, the Indian Broadcasting Foundation (IBF) has decided to set up a joint team with the Advertising Standards Council of India (ASCI) to screen and weed out advertisements that violate the advertising code. The IBF had earlier developed a procedure to identify any advertising that may vitiate the programme and advertising code set out under the Cable Networks Act. However, at its board meeting held on Monday, the IBF decided to form an independent body with advertisers to work as a 'filter' so as to reduce violations to the minimum.

Broadcasters are obviously not taking any chances this time, as the April 12 notification from the Union Information & Broadcasting (I&B) ministry has an ominous ring about it. Drawing attention to Cable Network Rules 7(2)(viii), 1995 that prohibit the advertisement of liquor and tobacco products, the circular directs TV channels.

"To strictly adhere not to telecast any advertisement for a product that has a brand name which is also used for cigarettes, tobacco products, wine, alcohol, liquor and other products... You are hereby directed/cautioned that violation of the above directives will attract severe action from the central government," the circular says.

Most television networks said they were taking the circular seriously and had asked their advertising departments to pull out all those ads that could be seen as offending the government's surrogate advertising code. A Zee spokesperson said the company was following the circular, but had sought clarification from the Union I&B ministry on certain kinds of ads like that of Kingfisher Airlines.