• by Ken Liebeskind , March 25, 2002

Late last year, after NBC started airing ads for Diageo's Smirnoff vodka, the first network ads for hard liquor in more than 50 years, there was talk of an entire new ad category that might generate $100 million in revenue.

That figure is at $0 now, after NBC pulled the plug on liquor ads last week. The ads generated so much criticism that NBC was forced to back out. First it was the American Medical Association, Mothers Against Drunk Driving and many other public interest groups. Then members of Congress, including Sen. Diane Feinstein (D-CA), Rep. Frank Wolf (R-VA) and Rep. Lucille Roybal-Allard (D-CA) intervened, threatening to hold hearings on the propriety of hard liquor ads on TV.

"It's difficult to see how we got to this point, since ads have run since 1996," says Phil Lynch, a spokesman for Brown-Forman, maker of Jack Daniels. "We've been in 40 markets with no negative feedback from consumers or interest groups." In 1996, the industry ban on TV ads ended, with local and cable stations starting to play them. More than 400 stations representing 67 percent of U.S. households now play liquor ads.

Lynch says NBC's current problem was caused by "political and market pressure from politicians and beer companies." Direct pressure from beer companies is hard to confirm, but they may have played a role since liquor advertising would have been unwanted competition. Lynch also says the Congressional hearings would have gone beyond liquor to possibly address beer and wine advertising, which generates over $1 billion a year. "It would have made no sense for them to hold them without also addressing advertising for beer and wine," he says.

That is exactly what some of the public interest groups want. Last week, after NBC announced it was pulling the ads, MADD said NBC's decision "missed the big picture and the need for stricter responsibility standards for all alcohol advertising, including beer, wine and malt-based beverages." The group called for more stringent rules governing all forms of alcoholic beverage advertising.

It's possible that NBC's foray into liquor advertising could prove detrimental to the entire alcoholic beverage category, which would be devastating to all the networks, which rely strongly on beer advertising.

As for the future of liquor advertising on network TV, it is now uncertain at best. "It may be many years before the major broadcast networks try to accept liquor ads again," says Ken Sacharin, executive vice president/media director at Media Edge. "NBC decided to take a risk and backed off rightly. Given the flack they're getting, it will be some time before anyone tries it again."

The Distilled Spirits Council hasn't given up, calling NBC's move "a temporary setback." DSC spokeswoman Lisa Hawkins says, "In time, networks will air distilled spirits ads. We can't say how long."

Lynch says Brown-Forman had met with NBC prior to the Olympics and gave them a reel of the commercials they'd played over the past two years. "They said they'd get back to us after the Olympics but we never got together again," he says.

He says NBC's decision won't change the company's advertising plans. "It won't have a direct effect, but we hoped to have the opportunity to run on network."