Categories like paan masala spent upwards of `350 crore across TV and digital last Indian Premier League (IPL) season (around 50% of their annual budgets) with surrogate advertisements for ‘mouth fresheners’. Vishnu Packaging (Vimal Elaichi Pan Masala) and K P Pan Foods (Kamla Pasand Silver Coated Elaichi) were among the top five advertisers during the 2024 season. Alcohol brands too, on an average, spend around 30-35% of their annual budgets during the IPL since it is peak summer season.
There’s a question mark over all that advertising money this IPL season.
Less than two weeks ahead of the IPL, the Union Health Ministry urged the tournament to ban all forms of tobacco and alcohol advertising, including surrogate promotions within the stadium premises during the games as well as during the broadcast. Citing the ministry’s moral obligation to promote public health, the letter sent to IPL chairman Arun Singh Dhumal stressed the need for sportspersons to put a stop to endorsements of products linked to alcohol or tobacco.
Sandeep Goyal, chairman at Rediffusion, welcomes the move, asserting that the removal of any advertising for alcohol and tobacco is a matter of ethics. Having waged a lone battle against surrogate advertising for the past eight years, especially on big platforms like the IPL, Goyal says the latest directive is a step in the right direction for the advertising business. “The diktat on surrogate ads from the DGHS (Directorate General of Health Services) is clear.
Flouting it will be difficult for the IPL, for the broadcaster and for brands. Most surrogate brands will give the IPL a miss this year since there will be much more scrutiny,” says Goyal. He estimates that tobacco and liquor companies account for 20-25% of IPL advertising in volumes and value. Naturally, IPL broadcaster JioStar will face the brunt.
The directives against surrogate advertising will present new challenges to JioStar, which is reportedly eyeing `5,000 crore in ad revenues this year from the cricketing extravaganza.
To be sure, this is not the first time that alcohol and tobacco advertising has come under the government scanner. Two seasons ago in 2023, after the Central Consumer Protection Authority issued guidelines for surrogate advertising, the only liquor brand to advertise during the IPL was Pernod Ricard, as surrogate advertising saw a steep 70% drop.
Regardless of the impact on advertising revenues for the IPL, Neelesh Pednekar, co-founder & head of digital media at Social Pill, says that the move could ensure a more ethical advertising landscape. “The government’s IPL directive signals a shift towards stricter regulation of surrogate advertising. While this may disrupt revenue for IPL and media platforms, it also opens up opportunities for more ethical advertising and diversified sponsorships. Brands that adapt by focusing on storytelling, engagement, and responsible marketing will continue to thrive within the evolving regulatory landscape,” observes Pednekar.
He notes that despite government initiatives in the past, enforcement has been weak. “Possible solutions include stronger penalties for violations, mandatory undertakings from advertisers and tighter monitoring of advertising,” suggests Pednekar.
Setting boundaries
According to Karan Taurani, senior VP, Elara Securities, while alcohol and tobacco brands contribute in low single digits towards the advertising industry annually, the IPL is a big draw for these categories. The companies in these segments, especially the likes of beer brands that are more active during the summer, are likely to feel the heat. “However, brands from segments like BFSI, e-commerce, quick commerce and auto will mitigate the impact of the absence of tobacco and liquor brands,” notes Taurani.
Last week, JioStar announced a roster of 20 sponsors for IPL 2025 such as My11Circle, Campa Energy, PhonePe, Joy Cosmetics, Asian Paints, Amul and more. The broadcaster said that it has also set its eyes on categories more local in nature by offering targeted ad solutions – this includes sectors like real estate and SMBs. Experts agree that the absence of surrogate advertising may also pave the way for new categories to advertise on the IPL this year.
Last week, JioStar announced a roster of 20 sponsors for IPL 2025 such as My11Circle, Campa Energy, PhonePe, Joy Cosmetics, Asian Paints, Amul and more.
While the directives may pose new challenges for the tobacco and alcohol segments, they also push the industry to define what really constitutes surrogate advertising. As Siddharth Devnani, co-founder & director at SoCheers asks, “Remember Kingfisher Airlines? Was that a surrogate or a legitimate business extension?”
Devnani contends that to regulate surrogate advertising, all stakeholders need to be on the same page. “Brands, publishers and broadcasters need to establish guidelines that everyone follows both in letter and spirit to practice self-regulation in the industry. We’ve seen this happen in the influencer marketing space,” points out Devnani.
However, he adds that this will be a delicate balancing act since these categories are also important contributors to the state’s tax revenue. Cracking down on one IPL season will not move the needle, but a long-term policy will drive change and even push the impacted categories to innovate with experiential marketing and other avenues, he sums up.