The pending TV ban has created a short-term ad boom as marketers
flood the airwaves in one last push to build brand awareness,
according to industry insiders.
At the same time, brewers and their agencies are plotting
longer- term moves to digital advertising, which will still be
allowed. (Print ads will also be permitted, although current law
bans alcohol ads on the first and last pages of newspapers and
magazines.)
"Advertising agencies understand that a new era has come and
that this is our future," Olga Tsoukanova, managing director for
Lowe Adventa,
Moscow, said in an email interview. The agency oversees several
brands owned by Sun InBev, the Russian unit of Anheuser-Busch
InBev.
Alcohol abuse is a longtime problem in Russia, where more than
half of all deaths of people aged 15 to 54 are caused by alcohol,
according to international medical journal The Lancet.
The latest crackdown is a priority for President Dmitry
Medvedev, who signed the law last July as part of an initiative to
cut annual per-capita alcohol consumption from 18 liters to five to
eight liters by 2020.
Mr. Medvedev is so closely identified with his anti-booze
policies that his supporters have made it a rallying cry.
For instance, in an event staged in a square in central Moscow
last August, two leggy women calling themselves the "Medvedev
Girls" urged men to dump their beers in a bucket, according to
published reports. The two stripped down to bikinis, drawing hordes
of photographers and priceless press coverage. (Mr. Medvedev, who
hopes to switch roles with ally Prime Minister Vladimir Putin in
the March election, has bigger fish to fry as protesters claim that
the recent parliamentary elections were fraudulent.)
In the meantime, marketers -- more accustomed to using sexy
women to sell beer rather than discard it -- say the law is
misguided.
As binge drinking becomes a bigger problem worldwide, "the
discussion around alcohol ... abuse is a perfectly legitimate one
to have," said Stephan Loerke, managing director of the World
Federation of Advertisers, whose members include AB InBev,
SABMiller and Heineken. But "we all know through past experience
that alcohol-advertising bans just don't deliver."
Mr. Loerke pointed to France, which banned alcohol ads on TV in
1991. The law remains in place, despite a government report in 1999
that found it ineffective in reducing high-risk drinking patterns,
according to a WFA translation of the report.
A French anti-alcoholism group, APNAA, said in a 2004 report
that "the effectiveness of advertising on sales and consumption [is
] weak." But the group supports the ban as part of overall
prevention efforts, noting the law "has been efficient in
correcting excesses in the form and content of advertising
messages."
In Russia, beer will lose its classification as a "foodstuff."
That had allowed brewers more marketing freedom than spirits
producers, who have for years been banned from advertising on TV,
except on pay channels. (The new law forbids any alcohol
advertising on pay channels.)
Beer's privileged status made it widely available, fostering
what Euromonitor Russian analyst Vladislav Savinov has described as
an "on-the-go beer-consumption culture." That attitude undoubtedly
helped to spur growth and attract international brewers to the
country, which in the Soviet era was dominated by a
state-controlled beer brand.
Russian beer sales grew fourfold between 1997 and 2007,
according to Euromonitor. Volume declined in 2010, a result of the
excise tax's tripling in 2009, Mr. Savinov said.
Opinions are mixed on how the law will affect the market.
Denmark-based Carlsberg would seem to have the most to lose as the
top player in Russia, with 36 .6% of the market; its Baltika is the
country's No. 1 beer brand, with a nearly 16% share, according to
Euromonitor. AB InBev is the No. 2 brewer, with almost 15% of the
market across its brands.
AB InBev has bet big on Russia, launching Budweiser there in
2010 and recently signing on as official beer sponsor for the 2018
FIFA World Cup, which the country will host. While existing law
bans beer advertising and sales in Russian stadiums, the brewer and
FIFA hope to get an exemption.
If the stadium ad ban is not lifted, AB InBev is prepared to use
"alternative channels of communication, i.e. digital and PR
channels," Sun InBev spokeswoman Natalya Leonova said in an
email.
According to some observers, the TV-ad ban will give major
players an advantage over new ones, letting established brands
essentially lock in market share, as the ads are required to build
brand awareness.
The restrictions "will not have a negative impact on the beer
market size, because [advertising] does not increase beer
consumption in Russia" but rather "forms consumers' loyalty to the
brands," Mr. Savinov said.
TV's power is already diminished as a result of restrictions on
using people or animals in ads, which forces marketers to rely more
on symbolism and music. Beer ads are also not allowed before 10
p.m., which has created a second prime time, "beer prime time,"
with "hundreds of strange, people-less beer ads," said Alexander
Yendovin, digital director for Optimum Media's OMD Group, Moscow.
Point-of -sale marketing will become critical when TV ads
disappear in July, Russian marketing experts agree. "There will be
wars for place on the shelves, especially in the value segment,"
said Ms. Tsoukanova at Lowe Adventa.
Most digital ads will be aimed at awareness, including those on
brewer-run sites, Vladimir Tkachev, chairman-CEO of Leo Burnett Eastern Europe,
Moscow—Baltika's agency—said in an email. "We also
believe that social media will start to play a significant role in
beer advertising."
But marketers face obstacles online as well, because Russia's
most popular social site, Vkontakte, does not accept beer ads.
Facebook, which has far less penetration, will be used but "can
only work as an image driver for the opinion leaders for premium
brands," Mr. Tkachev said.
