I am very grateful to have this opportunity to address the committee and to discuss the marketing elements of the public health (alcohol) Bill. I believe this is important and timely legislation that deserves support.
I am a lecturer in strategic marketing and management in the Dublin Institute of Technology, DIT. My PhD from the University of Stirling is on the impact of alcohol marketing on young people. In my opening statement I wish to address a number of fundamental principles that legislators should bear in mind when considering the marketing components contained in the Bill.
Marketing is more than just advertising. There is a tendency for non-marketers to focus almost exclusively on advertising as if it was entirely synonymous with marketing. In reality advertising is just one part of what is known as the marketing mix. At its most basic level, marketers refer to the 4 Ps of marketing: product, price, place and promotion. Each of these four Ps can be manipulated by marketers to bring about a change in sales and brand positioning. Advertising is one part of the fourth P, promotion, along with sponsorship, sales promotions, direct marketing, personal selling and public relations. In turn, advertising can be further subdivided according to the communications channel used, television, newspapers, outdoor, online, etc. Marketing is considerably broader and more complex than the single issue of advertising. The different elements of the marketing mix are closely integrated. The many different elements of an effective marketing plan are not considered in isolation but are designed in an integrated and mutually reinforcing manner.
Marketing is changing as technology offers new communications channels. The days when television advertising was the dominant communications channel are long over, especially when it comes to alcohol marketing. For example, in 2010 Diageo announced that 21% of its marketing budget would be diverted to online marketing. Other alcohol companies and brands have followed a similar strategy. There are a number of reasons for this. In the first instance, it allows for more effective targeting of consumers, especially via social media. For this reason, some brands have shifted most of their online marketing budget away from traditional websites and towards social media. Second, its interactive nature makes it arguably more effective than traditional passive advertising methods. It is worth noting that digital marketing operates largely below the radar of policy-makers because they do not form part of the target audience. This means that there may be many digital marketing initiatives that regulators and policy-makers are completely unaware of, making it significantly harder to regulate.
Marketing and advertising are not a form of corporate philanthropy. Marketing exists to drive sales. It may have other objectives related to brand positioning, but these sub-objectives are a means to an end, not an end in itself. The ultimate aim is greater market share, revenue and profit. These increases in market share and sales revenue can come about through attracting customers away from competitors, recruiting entirely new consumers or encouraging existing consumers to buy more of the product.
Marketing works. It is not hard to find those who argue that marketing does not work because they think they themselves are not influenced by it. In reality we are all influenced by marketing to a greater or lesser extent. Often it is those who are younger who tend to be most influenced by marketing, perhaps because they have not formed individual consumption habits or because marketing, and the media more broadly, is used as a guide to fitting in. Globally, tens of billions of euro are spent every year on marketing. These data-driven marketing campaigns are carefully researched, designed and executed, and they work.
In particular, alcohol marketing works. There really is no longer any debate on this matter. Some may argue alcohol marketing works merely by stealing market share from competitors. This is partly correct but it is only one way in which marketing works. We now have a range of longitudinal studies from different countries that have followed young people over time, tracking their exposure to marketing and their subsequent alcohol consumption. Longitudinal studies are important because they can establish causal relationships. These studies clearly indicate that the more alcohol marketing young people are exposed to, the more likely they are to start drinking and the more likely they are to drink if they are already drinkers. From a scientific perspective, there is no longer any serious debate about whether alcohol marketing drives consumption.
Young people are especially susceptible to the influence of marketing. More needs to be done to protect children from the influence of marketing in general. This is an important children’s rights issue. Specific steps that can be taken in the alcohol field include lowering the advertising audience profile threshold for under 18s to less than 10%, implementing the proposed ban on outdoor alcohol advertising, and initiating a ban on the sponsorship of sport by alcohol brands. These last two, outdoor advertising and sports sponsorship, are especially important because they are indiscriminate in nature and, in the absence of a ban, it is not easy to protect minors from exposure to marketing.
Commercial sponsorship is not a form of charitable giving. It is a carefully designed and well resourced commercial activity aimed at brand positioning and increasing sales. To give some idea of the commercial significance of sponsorship, in 2013 approximately $60 billion was spent on traditional product advertising in the United States, while $20 billion was spent on sports sponsorship across all product types. Sponsorship is serious business. Sponsorship works by appropriating the image of the sport or team and applying it to the brand in question. It is arguable that sponsorship is even more effective than traditional passive television advertising precisely because of the strong emotional link fans have with their sport or team. The influence of sponsorship may also be compounded by the exposure to branded merchandise that accompanies many sponsorship deals.
On a related note, there is much media comment at the moment about responsible drinking campaigns sponsored by the alcohol industry. These marketing campaigns are part of the political and public relations background against which the debate on this Bill is taking place and as such are worthy of comment. It is, of course, possible to interpret these initiatives as a genuine attempt to tackle Ireland’s problematic drinking culture. It is also, however, possible to come to a different interpretation. It is worth remembering that the tobacco industry adopted a defensive and reactive stance when it first came under public scrutiny some decades ago. It is now tightly regulated. The alcohol industry may have learned from the experience of tobacco regulation. It has adopted a more proactive stance, especially whenever new statutory regulations are on the horizon. The worthwhile central copy clearance system was proposed by the industry in 2003 at a time when alcohol advertising was coming under heavier scrutiny. In 2005, the co-regulatory codes agreed between the then Department of Health and Children and the alcohol and advertising industries were agreed on the eve of legislation being published to control alcohol marketing. As a result of this initiative, the planned legislation was shelved. Now a new high-profile campaign has been launched concurrently with the publication of the public health (alcohol) Bill. Perhaps the timing of all of these initiatives is coincidental but an alternative explanation is also possible, namely, that they are timed and designed to placate policy-makers and to brand the alcohol industry as responsible stakeholders who should not be too tightly regulated.
If alcohol companies wish to promote a safe drinking campaign, they could do so more credibly by opting not to have seats on the board of the social aspect organisations they fund and by not having corporate logos associated with these campaigns. Failing to take these steps naturally invites one to assume that it is a clever exercise in corporate branding.
The alcohol industry might also wish to explain how it can simultaneously maintain that tens of millions of euro spent in promoting alcohol does not lead to increased drinking but that one or two million euro spent in promoting safe drinking will lead to less drinking. It seems hard to reconcile two such contradictory positions.
I thank members for their attention and look forward to answering questions they may have.
