COMMENT: NBC decision dampens the spirits
Spirits manufacturers have a right to be dismayed by NBC's decision to pull back from national TV spirits advertising, but they should not perhaps be too surprised. The prospect of Congressional hearings, mounting pressure from groups such as the American Medical Association (AMA) and Mothers against Drunk Driving (MADD) and the clear reluctance on the part of other networks to follow suit were already suggesting that NBC might regret its bold decision.
It has also been speculated that the network's beer advertisers were putting pressure on NBC to ditch its plans. The simple truth of the matter is that NBC thought it had more to lose than gain by continuing.
Ironically, NBC had not yet aired a single conventional branded spirits ad. In accordance with the agreement it had with Diageo, in the first four months all the spots were to be branded social responsibility messages. This means that NBC had only actually aired around 50 ads. After the four months, conventional brand ads - subject to a comprehensive 19-point code on content and style - would have been aired with one in every five slots still a branded social responsibility message.
That the pressure should become too intense for NBC even before the second stage only serves to underline the extreme sensitivity of this subject in the US. The national networks had an agreement not to broadcast advertising for spirits stretching back some 54 years.
A further irony is that spirits advertising is already widely broadcast on American TV anyway. Spirits manufacturers revised their 1948 decision not to broadcast ads on TV in 1996 and spirits ads are now seen on as many as 400 local broadcast stations and 30 national cable networks. More bizarrely, liquor advertising is carried by many NBC affiliates. But the idea of spirits advertising appearing on a national network appears to have been far more potent in stirring up anxiety and opposition.
The introduction of liquor advertising would have netted NBC as much as $100m in new advertising according to advertising industry estimates. However, the tone of the political pressure seemed to be suggesting that Congressional hearings might look into all forms of TV liquor advertising including beer. That would put in jeopardy the estimated $1 billion beer and wine companies spend on all TV advertising annually. With that in mind, one can not only understand why NBC got cold feet but also why the beer companies might be concerned enough to let their feelings be known.
And that to a degree is why spirits companies are so irritated by this turn of events. Of course it is vexing that a channel of communication has been closed off but what rankles the most is that this same channel is freely available to beer and wine. Beer in particular is a huge network advertiser. According to industry estimates, last year beer companies spent some $480m on network TV advertising. Indeed the NBC decision virtually coincided with the announcement of Coors' $300m sponsorship of the NFL, a package which will include a massive amount of TV advertising.
Legislators, public health officials and broadcast commissions in many countries view beer differently from spirits but nowhere in the world is the distinction as sharply drawn as it is in the US. One spirits supplier suggested that NBC's decision left spirits out in the cold while beer could continue its position in the nation's consciousness as "adult Coca-Cola".
This distinction has long been a bugbear of spirits companies. They have generally been in favour of a more united stance by the entire alcohol industry which would enhance its lobbying potential and make its arguments more credible. Yet the NBC case provides further proof that beer and wine brands have more to lose by allying themselves more closely than they have to with spirits producers.
However, there is a compelling public health argument against treating spirits differently from other forms of alcohol, for the corollary of saying that one type of alcohol - hard liquor in American parlance - is more dangerous than another is that one type is less dangerous. Any public health expert worth their salt would say that you have to make clear that all alcohol is capable of producing negative effects.
It is yet again ironic that on this subject the most extreme anti-alcohol lobbyists and the spirits companies are preaching the same message. As a spokesperson for the US Distilled Spirits Council put it: "Alcohol is alcohol is alcohol."
The TV advertising debate in the US thickens yet further when the fast-growing RTD sector is brought into the equation. The inconsistency of the current situation is brought home by the fact that spirits-branded "malternative" products, such as Smirnoff Ice, are not subject to the same taboo as mainstream spirits brands. Even though products such as Smirnoff Ice are de facto line extensions of spirits, because they are malt-based, they come under the same guidelines as beer.
For that matter, several of the Diageo brands are in fact low strength spirits brands. If alcoholic strength is the prime determinant of how the products should be treated - as the distinction between beer and spirits implies - then perhaps the likes of Baileys and Archers should be seen differently from high strength spirits.
In truth, the NBC decision is not a momentous event. Arguably its original announcement in December that it was to screen spirits advertising, breaking a 54-year moratorium, was more sensational. Its decision now to wimp out leaves the situation much as it was. Spirits ads are still being aired widely on a variety of US local and cable TV stations and beer companies continue to advertise nationally on the networks. Some of the lobby groups against alcohol can certainly claim a small victory but NBC's decision has averted the political furore which might possibly have precipitated greater victories for the anti-alcohol lobby.
On the other hand, some observers have suggested that the anti-alcohol lobby will be emboldened by this decision to pursue all the more vehemently TV advertising of all kinds of alcohol. So while network executives will be sleeping a little more soundly, they may be doing so with one eye open.
What the decision has undoubtedly done though is to highlight once again the contradictions and double standards which pervade the entire debate. In a way, one might have welcomed greater political scrutiny if only to show up and possibly eliminate some of the blatant hypocrisy.
Diageo says it is still in discussions with NBC but any reversal in the foreseeable future seems highly unlikely. But more controversy and fierce debate over alcohol advertising is a virtual certainty. And with the growth of the "malternative" market and the arrival of more spirits-branded malt-based products, there are no prizes for guessing where it will be focused.
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