New ad control regime to be imposed without consultation
1 December 2010
Not by coincidence, on the very same day as new, updated CAP Codes came into force, the pillars of the UK's world renowned self regulatory system for controlling ads made a long awaited announcement about online advertising.
After three years of debate behind closed doors the Committee of Advertising Practice or "CAP" (which writes the Codes), the Advertising Standards Authority or "ASA" (which administers the system and deals with complaints that the Codes have been breached) and the Advertising Standards Board of Finance (which organises the financing of the whole caboodle) had reached a ground-breaking agreement.
From 1 March 2011, the CAP Code would apply in its entirety (and with only 180 odd extra words) to advertisers' own marketing communications on their own websites.
The new regime would also extend to other non-paid-for space under advertisers' control such as on social networking sites like Facebook and Twitter.
Sanctions for breaching the Code would include "naming and shaming" repeat offenders in ASA paid-for search ads and, with the help of search engines, removing paid-for search ads that linked to the page hosting the offending content.
Funding for the likely exponential increase in complaint handling work by the ASA would come from extending the standard 0.1% levy to paid-for ads appearing on search engines through media and search agencies, supplemented initially with seed capital from Google.
Crucial clarification in CAP paper
More explanation and guidance is in the CAP Paper "Extending the Digital remit of the CAP Code" including probably the most important explanation of all. This is the definition of what the Code will extend to from 1/3/11, which will slot into the list of what the CAP Code covers in the Introduction section viz:
"Advertisements and other marketing communications by or from companies, organisations or sole traders on their own websites, or in other non-paid-for space online under the control, that are directly connected with the supply or transfer of goods, services, opportunities or gifts, or which consist of direct solicitations of donations as part of their fund-raising activities."
Probably the next most important passage in the CAP Paper relates to user generated content. This suggests asking two key questions in order to help establish if the UGC is caught by the Code:
1. did the website owner originally solicit the submission of UGC from private individuals, then adopt and incorporate it within their own marketing communications?
2. did a private individual provide the website owner, on an unsolicited basis, with material which the website owner subsequently adopted and incorporated within their own marketing communication?
So far so reasonably clear, though of course there will be much debate about key issues such as:
- where to draw the boundaries between online marketing communications and editorial;
- at what point brand owners can be said to have "control" over UGC on social media;
- when does a marketing communication cease to be "directly connected with the supply or transfer of goods…"; and
- why was the CAP Paper silent on the key issue of the new regime's geographical reach? For instance will it apply just to websites "operating from the UK" as suggested by further guidance hurriedly put out by CAP 24 hours later, or will it extend for instance to sites ending "co.uk" and clearly aimed at UK consumers but operating from another country? If complaints about such sites are to be passed to local self regulators in the relevant country under the "Alliance" cross border complaint handling system, will their codes have been extended like ours?
Here is the rub, however, because important questions like these are almost bound to arise with such game-changing proposals.
And this is going to be a particular risk when, as here, the package has clearly been hurried out to coincide with the launch of new CAP Codes that we all know were originally intended to extend this far online from day one. The hurry is obvious from the erroneous paragraph cross-references and the fact that within 24 hours, key questions such as jurisdiction were being quickly addressed that were simply not tackled in the original Paper.
Why not consult?
It is for this reason that such seismic changes, impacting all UK businesses and all UK consumers, would ordinarily have been put out in draft for stakeholder consultation before being finalised.
This process would have avoided situations such as that cited above, where a glaring omission from the original paper is "clarified" by further guidance issued just a day later, so that already marketers looking to find out where the goalposts are situated will have to look at two different documents.
So why then was the opportunity to consult and then finalise spurned in this case?
The regulatory bodies concerned might plead the overriding need to get these rules in place after such a long delay. But this argument simply does not wash.
The generous six months lead time could have been changed, for instance, to a two month consultation period followed by two months to assimilate comments and make necessary changes, then publication of the final scheme allowing two months' lead time. If this were felt to be too stretching, then perhaps three months could have been allowed for each stage, putting implementation back by just 3 months to 1 June 2011.
Surely after this length of time, the priority should be to develop a regime that is robust from the start and free from major flaws of the kind consultations will flush out.
Instead it appears from the CAP Paper that we will have a two year "ongoing .review period" during which changes could be made to the system at any time if "significant comments are received." Not a situation likely to engender trust and confidence amongst advertisers looking for guidance they can rely on when formulating a long running digital campaign.
Why this matters:
This extension of the ASA/CAP Code remit is long overdue and undoubtedly a major and probably world-leading achievement by all concerned. The new sanctions are imaginative and a smart approach to the challenge of policing in the online world.
It is also to be hoped that the new levy and Google's initial help will meet the funding challenge. It remains to be seen, however, whether the failure to consult will have serious financial implications further down the line by leading to more time consuming disputes between advertisers and the ASA over the correct application of the Code in individual cases.
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