Ad regulators’ 2009 report reveals less cash, but less work

Topic: Regulatory

Who: Advertising Standards Authority ("ASA") and the Committee of Advertising Practice ("CAP")

When: May 2010

Where: High Holborn, London WC1

Law stated as at: 3 June 2010

What happened: 

The ASA and the CAP published their "Annual Report 2009" ("Report") celebrating the ASA's first 5 years as the UK's "one stop shop" for advertising regulation and chronicling their joint fortunes over the last calendar year.

Well presented and illustrated with excellent graphics, the Report will be an entertaining and informative read for all ad regulation sads. Here we will pull out some of the highlights in bullets:

• ASA Chairman Lord Smith of Sainsbury reports that the "Process review" which kicked off in October 2009 is still a work in progress, with the emphasis being now on "working carefully through the results." This doesn’t suggest visible outcomes any time soon, but when these do materialise, the author senses that "seismic" may not be inappropriate for the changes suggested.
• The ASA Chair mentions the Government's decision that the ASA is the right body to regulate video-on-demand ads under the Audiovisual Media Services Directive, but states that some months on, the ASA is still working with Ofcom to put the necessary structures in place. Although the CAP Chair reports later that the advertising industry has agreed to fund this, do we sense here some difference of opinion over how this further extension of the ASA's remit will be resourced?
• Looking ahead, the Report makes no bones about it and says that the ASA's" biggest test in the coming months will be our response to the industry's formal recommendation to extend the ASA's remit to cover marketing communications on companies' own websites." This development, the Report goes on, addresses three key issues- a newly defined online remit, effective enforcement measures and a funding mechanism. The Report states that CAP is deliberating on these matters, but no clear indication follows as to what the answers on these vexed issues might ultimately be or as to what timing will apply. Clearly these debates still have a way to go, but it is interesting how the Report casts the ASA in the role of mere bystander whilst the "industry" makes recommendations and the CAP considers. We suspect this rather underplays the ASA's clearly pivotal part in the whole process.
• The complaint statistics include for the first time data about the number of ads that complaints are received about as well as the number of complaints. The rationale is that this gives a truer reflection of the ASA's workload. True enough, but then frustratingly the Report fails to clearly indicate the grand total of ads complained about across all media over 2009 compared with 2008. The Report does make it clear, however, that across nearly all media, the number of ads complained about was lower compared with 2008. By the writer's calculations, the 2008 total was 16,368 whereas 14,559 were received in 2009, an 11% drop which was perhaps just as well given the financial out-turns reported later.
• TV remained the medium attracting the most complaints about the highest number of ads but the actual number of TV ads complained about did in fact drop by 3% from 2008. Internet was still the second most complained about ad medium, but a stonking 57% of online ads complained about were outside the ASA's remit as things currently stand. There was a 650% increase in the number of mobile ads complained about compared with 2008, but as the 2008 number was a paltry 4, the numbers were still not enormous.
• The non commercial sector (good causes etc) was the most complained about sector of 2009 with 5,479 complaints compared with 2429 for 2008, while the biggest drop in the number of ads complained about occurred in the Industrial and engineering sector.
• The outgoing Independent Reviewer ("IR") reports fewer review requests than in 2008. Once no-hopers had fallen by the wayside, the cases involving non broadcast ads reviewed were down more than a third. In the broadcast ad category the trend was in the opposite direction with twice as many applications received compared with 2008. The IR sent just six cases back to the ASA for reconsideration where non broadcast ads were involved. In the broadcast category, the IR sent five cases back to the ASA, which was amazingly the first time any radio or TV ad case had been sent back by the IR for further consideration since 2006. In all these eleven "sent back" cases, the ASA either revised or reversed its earlier decision.
• CAP proudly reports the recent publication of the extensively updated CAP and BCAP Codes due in force 1 September 2010.  It also includes what appears to be a pack shot of a very rare sight, printed rather than downloaded versions of the new Codes. Some of us are still waiting to clap eyes on these, despite having ordered them for over £40 when they were first supposedly made available many weeks ago.
• The Financial Report makes depressing but unsurprising reading, with revenue from the ASBOF and BASBOF levies down by over 6% from 2008 and standing at £7,395,000. However good husbandry saw expenditure decrease by 3.78% yielding a profit before tax of £132, 316, though this was down from the £361,440 of 2008.
• The ASA's work on non-broadcast ad complaints took up 63% of the overall workload, while broadcast activities took up 37%. Interesting given that elsewhere it is reported that TV remained the medium attracting the most complaints.
• Consultancy and professional fees consumed £533,191, an eye-watering 27% increase over the £419,324 for 2008. Could such overheads be significantly reduced by hiring an in-house lawyer for the first time and charging competitors to process complaints about each others' ads?

Why this matters: 

The ASA is the best ad self-regulatory body we have and possibly the best in the world. It is ably supported by the CAP which writes the Codes and this Report provides an illuminating snapshot of their important work as they approach two more crossroads, the outcome of the process review and the extension of the system's online remit. Clearly of concern are the reduced funds available to the bodies and with no sign of a dramatic upturn in ad spend and levy yield any time soon, it will obviously be essential to configure the arrangements for extended regulation of online advertising in a way that doesn’t place more strains than necessary on the already challenged ASA coffers.