Will self-regulation unleash advertisers or hold them back?

SELF-REGULATION - At long last, the industry will be able to set and adjudicate its own rules for broadcast advertising. But, as Caitlin Fitzsimmons asks, is this really the great escape?

Nearly half a century after commercial television arrived in the UK, broadcast advertisers have finally been deemed old and wise enough to take a stab at selfregulation.

The non-broadcast media has been self-regulating for more than 40 years with an independent industry body, the Advertising Standards Authority, to force errant advertisers back into line.

But the Government has kept television and radio on a short leash with broadcast advertising falling under the control of a series of statutory regulators, from the Independent Television Authority of 1955 to Ofcom.

Now, just seven months after it came into being, Ofcom is to devolve some of its powers to the ASA and the Broadcast Committee of Advertising Practice – established just last week and simply called BCap – with a formal handover this November.

So what will self-regulation mean for the industry?

Ofcom power share welcomed

The news that Ofcom was to share its powers and the plan had passed both houses of Parliament was widely welcomed by media owners and agencies, which see it as a vote of confidence.

As Hugh Johnson, head of commercial marketing at Channel 4, says: “It’s always better to run your own house properly than have someone else run it for you.”

The advertising industry has come under pressure in recent times, with a clamour from politicians and consumer lobby groups for stricter controls on alcohol and food advertising.

Indeed, media owners and agencies should be grateful they didn’t wind up with stricter regulation and a more powerful bureaucracy.

Mark Palmer, executive director of strategy at OMD UK, described the decision as a “vote for common sense” and expressed hope it would avoid the “hell” of bureaucracy.

But ASA director-general Christopher Graham is at pains to point out that self-regulation does not mean deregulation.

“I don’t think people should be too starry-eyed about this – this isn’t about avoiding the rule book,” Graham says.

“The ASA is not a soft option,” he adds. “Self-regulation in nonbroadcast advertising has been no pushover – just ask those who’ve been on the receiving end of upheld adjudications. You get it wrong and it really damages the brand.”

The statutory regulator, Ofcom, will retain specific control over certain areas and as the “backstop” authority can overrule the self-regulatory bodies as a last resort.

And, of course, there’s always the strong arm of Parliament, which can still pass laws restricting or liberalising advertising laws as it sees fit.

Yet the pending self-regulatory regime offers plenty of potential benefits to justify the optimism of media owners and agencies.

Graham says the one-stop shop will make life easier for consumers but also ensure a more consistent approach for advertisers.

“I think it will make a huge difference because [advertisers] will have the efficiency of dealing with one organisation rather than several – I hope it will avoid wasteful cock-ups,” Graham says.

Virgin Radio sales director Lee Roberts endorses this from a media-owner viewpoint.

Currently Ofcom asks radio stations to respond whenever consumers complain about an on-air advertisement, despite the fact that stations clear ads through the Radio Advertising Clearance Centre – an industry body based in the offices of the Commercial Radio Companies Association – to ensure they comply with the code.

Roberts believes the ASA will be much more inclined to talk to advertisers directly about their own content, relieving media owners of the burden of justifying items that have already been cleared by a third party.

But Chris Hayward, head of television at ZenithOptimedia, says it would make little difference to media agencies.

“We don’t have a lot to do with them directly all the time, except where there’s a problem,” Hayward says. “We have contact when things go wrong.”

The one-stop shop will be better placed to deal with issues of digital convergence. Presently Ofcom regulates television, while the ASA regulates online media – leaving interactive television advertising in an inter-regulatory abyss.

Online media and television fears

Hayward cautions that online and television are different media, despite convergence of technology, and need to be regulated differently.

Graham says this and similar issues will be dealt with by BCap, but it is too early to speculate on how such problems will be dealt with.

“I think everybody expects the regulatory regime to come to terms with the way media and advertising are going,” Graham says.

“They expect us to be able to cope with converging media.

They expect us to recognise that campaigns run on all sorts of platforms at once and they want consistency of decision making.”

Graham says “contradictory decisions” are inevitable when regulation is divided among separate organisations, and he cites a Tetley Tea campaign as an example.

“They got into all sorts of trouble over a £14m relaunch, I believe, where they were being told: ‘Yes it’s OK on television, not it’s not OK on posters – oh, perhaps it isn’t OK on television after all’.”

From 1 November, the ASA will be juggling three codes: the radio code and television code – which it inherits from Ofcom – and the Committee of Advertising Practice-developed code for non-broadcast advertising.

For example, while the television code bans political advertising, this is not the case for posters or print. Examples of Cap regulation includes the fact that models for alcohol advertisements should not be, nor look, younger than 25.

Ofcom is busily updating the codes ahead of the handover and has released draft proposals for changes to the rules on advertising food and alcohol in the past two weeks.

BCap will be able to change the rules in the future, but only with approval from Ofcom. There has been some suggestion that the codes may be harmonised, although Johnson insists he has no intention of dragging nonbroadcast advertising under the thumb of Ofcom.

One possibility is that BCap – which will include representatives from the Advertising Association, commercial television, radio stations and other players – may develop a single broadcast advertising code to replace the separate television and radio codes.

Changes limited by Ofcom’s control

This raises the prospect of a loosening of the television code or a tightening of the radio code, but any change would be limited by the fact that Ofcom retains control over sponsorship, adfunded programming, volume of advertising and frequency of commercial breaks.

Johnson, who represents Channel 4 on BCap, says he does not see any need for a single broadcast code.

“Television’s a more powerful medium, so you’ve probably got to be a bit more careful about it,” Johnson says. “I think they’re different media and they certainly, for the foreseeable future, have to be treated differently.”

Virgin’s Roberts says the radio industry deserves to retain a “light touch” regulatory regime.

“The degree of sponsorship and promotions over the past 10 years has helped us to create good radio and remain competitive and it certainly hasn’t harmed consumers,” Roberts says.

He adds: “Should TV have as light a touch as radio? I don’t see that there has to be complete harmonisation between the two codes.”

For now, the ASA and BCap will be focused on the practicalities of how the organisations will operate.

The ASA’s Graham says he has 69 working days – plus weekends and evenings – to bed down the arrangements and find new premises with room for 31 new staff.

Meanwhile, both broadcast media owners and agencies can relax – notwithstanding any anxiety over the changes that Ofcom may make to the codes over the next few months.

Self-regulation is not deregulation, but it does herald an era of greater responsibility and input by the industry into how things should be run.

And, while a one-stop shop is not a panacea, a beefed-up ASA would be well placed to ensure greater consistency and tackle the challenge of digital convergence.

Broadcast alphabet soup

1955 – Commercial television arrives in the UK, regulated by the Independent Television Authority

1961 – The Committee of Advertising Practice set up to develop code for nonbroadcast advertising

1962 – The Advertising Standards Authority set up to administer Cap code

1973 – First commercial radio station in the UK. The Independent Broadcast Authority to regulate radio advertising and replace ITA

1974 – Advertising Standards Board of Finance set up to provide funding for selfregulation via a levy on media spending

1990 – IBA splits into the Independent Television Commission and the Radio Authority

1997 – Broadcasting Standards Commission established as an independent watchdog on violence, sex, taste, decency unfair treatment and invasions of privacy

2003 – Ofcom set up to regulate broadcast media and telecommunications, replacing the BSC, ITC, Oftel, the Radio Authority and the Radiocommunications Agency

2004 – Industry wins selfregulation of broadcast advertising. After November, radio and television advertising codes to be maintained by a broadcast Cap and administered by ASA. Ofcom to retain ultimate authority and specific control over adfunded programming, sponsorship, the amount of advertising permitted and the rules on insertion of commercial breaks

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