In March 2010, the arrival of new ASA Chief Exec Guy Parker was swiftly followed by a thorough review of the ad regulator’s processes. Just over 18 months later the review has concluded. Anna Williams reports on the ASA’s final response and a key change to competitor complaint handling effective 1 December 2011.
Who: Advertising Standards Authority ("ASA")
When: 5 October 2011
Law stated as at: 4 November 2011
The ASA has released its "Final Response to the Process Review". This sets out the changes the ASA has made, and is still making, to its working practices to address the recommendations made as a result of Berkshire Consultancy Ltd’s independent Process Review Final Report of 31 March 2010 which was commissioned by the ASA.
For the purposes of this article, we take a look at just some of the key points arising out of the Final Response, including how the ASA has indicated it will deal with competitor complaints going forward.
1. The impact of ASA's online remit extension
On 1 March 2011, the ASA’s online remit was extended to apply the CAP Code to companies’ and organisations’ own advertising on their own websites and in social network spaces under their control. The ASA has experienced a large increase in the number of complaints it receives as a result of this extension in its remit. The Final Response states that between 1 March and 23 September 2011, the ASA received 5,531 complaints about 5,165 ads/campaigns meaning that the total number of complaints it had to handle during that period was 18,369. This means online remit extension complaints are now 30% of the ASA's workload and apparently "almost all" the complaints received regarding online ads were from members of the public regarding advertising by small and medium sized enterprises.
Over the course of 2011, the ASA has increased its headcount by a total of 10% to deal with its extended online remit. The ASA has confirmed that it has not needed to recruit additional managers to supervise those staff or additional staff in its Corporate Services department. However, the increase in workload due to the ASA's extended remit has exceeded its expectations, which has impacted on the measures it was going to take as a result of its process review. The ASA has therefore actively sought to resolve as many cases as possible informally, has prioritised complaints about complementary and alternative healthcare (the most complained about sector where online advertising is concerned) and has introduced Informal Contacts to help it manage the increased workload.
While ASA says it's now "on top of the workload in all departments", but admits the increase in its workload has had an impact on its ability to meet some of its Process Review targets. For example, the ASA admits it has found it hard to make significant inroads into resolving Formal Investigations more speedily, and progress has been hampered where issues such as Stakeholder Relations and consistency with Trading Standards is concerned.
2. Informal resolution of complaints
The ASA has confirmed that Informal Investigations will usually concern "minor and clear cut" issues raised by one or more complainant and the ASA will usually request an assurance from the advertiser that relevant future ads will be amended or withdrawn, upon receipt of which they close the case down quickly (which the ASA has confirmed means on average in under 25 working days). If a case is resolved informally, only minimal details will be provided to the ASA Council and appear on the ASA's website. The ASA has sought to increase the number of cases it resolves informally, particularly broadcast cases, but if an ASA decision has "significant ramifications" in determining where the ASA draws the line on a certain issue, it will ensure its decision is published. In the year leading up to 1 June 2011, 72% of cases were decided informally, an 8% increase from the previous year. On average such cases were resolved within 26 working days. The ASA reveals this freed up 10,487.24 ‘case days’, which would otherwise have been spent formally investigating complaints and this also notionally saved the ASA £178,283.083.
3. Resolving formal investigations faster
The ASA's Formal Investigations follow the most comprehensive process at the ASA, typically allowing at least two opportunities for the advertiser to defend its ad and at least one for the complainant to comment on our proposed recommendation that the ASA submits to the ASA Council. Such cases currently take an average of 58 working days for "Standard Investigations" and 99 working days for "Complex Investigations". The ASA has confirmed it is going to focus on reducing the "waiting time" and delays association with the management and processing of such cases by:
- applying limits on submissions and rounds of correspondence and refusing to accept only references to studies;
- setting internal standards for completing key stages of investigations;
- setting and enforcing more challenging deadlines for external parties;
- continuing its use of ‘timetabling to conclusion’ which involves ensuring that all interested parties are clear early on in appropriate investigations of the deadlines and the ASA’s intention to stick to them; and
- adopting stricter criteria for Complex Investigations with a view to increasing the proportion of investigated cases that attract the much more demanding Standard Investigations’ turnaround target of 85, rather than 140, working days.
4. Competitor complaints
The ASA acknowledges in its report that submitting a complaint to the ASA is almost always preferable to instigating legal action where a corporate entity dissatisfied with a competitor's advertising is concerned. It also acknowledges however that repeated and/or "tit-for-tat" complaints are costly for companies and also for the reputation of self-regulation. The ASA's current approach to competitor complaints is as follows:
- before submitting a complaint, companies are encouraged – but not required – to attempt to resolve their differences with their competitors;
- complaints that are groundless and without good supporting information are rejected;
- companies must confirm that their complaints are not the subject of legal action, that they will not instigate legal proceedings in connection with their complaint and that they are content to be named in any adjudication that results and
- complaints that merit formal investigation are automatically assigned as "Complex Investigations" to be completed within 140 days.
Going forwards, the ASA has confirmed it will put into place the following recommendations which are intended to help the ASA deal with competitor complaints "effectively, efficiently and cost-effectively":
4.1 Inter-party resolution
Companies must normally demonstrate that they have attempted to resolve their differences with the advertiser responsible for the marketing communications they are complaining against before getting the ASA involved. The ASA has acknowledged that this is not always possible in all cases, for instance where there are topics or sensitive information that companies cannot readily discuss for legal or other reasons.
Going forward, as from 1 December 2011, a corporate complainant will need to raise their concerns with the advertiser in question by registered post. This correspondence must provide an appropriate level of detail about the advertising claim that is objected to and the media in which the ad appeared, together with the factual basis for their complaint (and, preferably reference to the relevant Code rules). This complaint should be signed or authorised by a suitably senior officer of the complainant (and the ASA indicates this means someone such as the Chief Executive or the Legal, Marketing or Regulatory Director) and addressed to a similarly senior officer of the competitor.
The ASA further stipulates that prior notice should preferably be given by telephone to ensure the intended recipient is appropriate, available and aware that the complaint is about to be made and then the competitor should be provided with at least five working days to provide their response before further steps are taken.
If following five working days from the competitor's receipt of the letter of complaint, either the competitor advertiser has not provided a response, the complainant has other reasonable cause to believe that the advertiser will not act within a reasonable timeframe or in good faith in response to the complaint, or the parties cannot reach an agreement regarding the advertising in question, the ASA states that the complainant can then notify the ASA of the issue in question and the ASA will accept and, if appropriate, progress the complaint concerned.
It has been made clear that complaining companies must demonstrate that they have attempted to resolve their differences by providing the ASA with all relevant correspondence including the registered letter that has gone unanswered for five working days or has not been answered to the complainant’s satisfaction so this is not a requirement companies can easily get around.
The ASA has stated that 12 months after launching this new "Inter-party Resolution" process on 1 December 2011, it will:
- survey a selection of large advertisers (some of which are known to submit competitive complaints or have been the subject of a competitive complaint) to ascertain if such Inter-party Resolution has been successful;
- compare the number of competitor complaints and the average time to resolve them against the relevant previous period; and
- report on the difference, if any, between the number of competitor complaints originally submitted and the number of competitor complaints leading to ASA involvement.
4.2 CAP Compliance intervention
From 1 January 2012, the Compliance teams will review all competitor complaint cases on a quarterly basis, to consider if and how CAP or ASA Executive intervention should be offered to relevant advertisers. Such a quarterly review will involve both quantitative and qualitative analysis and may result in CAP ASA Executive intervention. It has been suggested that such intervention could possibly take the form of mediation; signed undertakings; compliance advice; communication from an ASA director or the ASA Chief Executive or the referral of the matter to another appropriate representative body.
Why this matters:
The ASA's report makes it clear it believes all new recommendations to be put in place by the ASA following its long process review shall lead to it operating in a way which is more "effective, efficient, cost-effective and in tune with [its] stakeholders".
The ASA has also indicated that it believes the new processes and policies it is implementing shall benefit consumers (by making the ASA's operations more efficient, focused on priorities and effective at resolving investigations quickly) and be of benefit to all who use the self-regulatory system. Whether corporate complainants agree with this statement due to the additional hoops they must jump through before they can file a compliant with the ASA regarding a competitor, remains to be seen!