Guidelines for brand extension of restricted categories strengthened by ASCI
In view of mega-budget celebrity campaigns during high-profile sporting events in India, ASCI felt it necessary to strengthen its brand extension guidelines.
Accordingly, ‘Qualification of Brand Extension: Products and Services’ under the restricted category prohibited from advertising has been updated by the Advertising Standards Council of India (ASCI). The changes are explained in Chapter III Clause 3.6(a) of the ASCI code, focusing on brand extensions linked to restricted categories like liquor and tobacco, according to a press release.
Current ASCI guidelines require brand extensions to meet specific business, investment, or distribution criteria to be considered genuine. Now, ASCI has also set criteria for advertising spends related to the extension’s turnover.
New features of the code for brand extensions:
1. Ad spending must match the extension’s sales turnover: ASCI mandates that the advertising budget for genuine brand extensions should be proportional to the extension’s sales turnover. The ad budgets are capped at 200% of turnover in the first two years, 100% in the third year, 50% in the fourth year, and 30% thereafter.
2. Treatment of variants under brand extension: Variants under the extension won’t be seen as new extensions. The original date of the first extension applies.
3. Certification by reputable CA firms: Evidence supporting the extension’s advertising qualifications must be certified by a reputable and independent CA firm.
If a brand extension of a parent brand in a restricted category doesn’t meet the updated qualifications, ASCI won’t consider it genuine. ASCI’s updates aim to maintain advertising integrity, uphold ethical standards, and protect consumers from misleading practices in India.
