New Research Finds that Some Regulations Can Be Circumvented Through Creative Branding


Ashley Smith
PR Specialist

New Research Finds that Some Regulations Can Be Circumvented Through Creative Branding

Key Takeaways: 

  • Umbrella brands are able to circumvent marketing regulations in a particular product category.
  • Mutual funds of asset management firms may have used umbrella brand advertising to aid the firm’s hedge funds that were banned from marketing.


CATONSVILLE, MD, February 3, 2020 – In the public interest, governments often regulate the marketing activities of certain industries like tobacco, financial services, alcohol, and gaming. 

Is it possible for certain multi-business line firms in regulated industries to circumvent such regulations? Could one business unit with the ability to advertise more freely implicitly aid another, advertising-constrained, business unit within a firm? 

New research finds the answers to be “yes” and the vehicle of circumvention to be ‘umbrella’ brands. The research shows that umbrella branding, a marketing strategy of a group of products sharing one common brand, renders advertising regulations in a given product category to be less effective through marketing activities conducted in another product category. 

The study, recently published in the INFORMS journal Marketing Science, is titled “Can Brands Circumvent Marketing Regulations? Exploiting Umbrella Branding in Financial Markets.”  It is authored by Yan Lu of the University of Central Florida; Debanjan Mitra of the University of Connecticut; David Musto of the Wharton School at the University of Pennsylvania; and Sugata Ray of the University of Alabama.

The study uses the context of alternative investment products like hedge funds, where a comprehensive marketing ban existed till recently. The ban originated from the Securities Act from 1933 enacted in response to the 1929 stock market crash, and was removed in 2012 as a part of the JOBS Act enacted by President Obama to counter recession.

“We examined whether umbrella branding can be used to circumvent marketing regulations on a given product,” said Debanjan Mitra.  “More to the point, we looked at the asset management industry and examined if hedge funds, faced with a comprehensive marketing ban, have benefited from advertising from their umbrella brand mutual fund affiliates.  Further, we explored whether the hedge funds exploited this effect.”

The study’s authors found that increased advertising by mutual fund affiliates leads to a significant increase in the sales of umbrella brand hedge funds, confirming the effectiveness of umbrella branding as a marketing strategy.  Further, while the ban on hedge fund advertising was in effect, they found that hedge funds’ circumstances in a given period impacted the likelihood of advertising by their umbrella brand mutual fund affiliates in the period that follows, suggesting strategic use of umbrella branding to circumvent the advertising ban. More important “Using the 2012 JOBS Act that removed hedge funds’ marketing restrictions as a natural experiment, we found that hedge funds’ circumstances had significantly less impact on umbrella branded mutual fund advertising after the passage of the JOBS Act,” said Debanjan Mitra.  “These findings are consistent with hedge funds using umbrella branding to circumvent the marketing ban.”


Link to full study.

About INFORMS and Marketing Science 

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at or @informs.