In its “Preliminary Response” to the “process review” it commissioned in October 2009, the Advertising Standards Authority has said it will consider charging for investigating complaints by brand owners about their competitors’ advertising. It has also already implemented some “process” changes, as Stephen Groom reports.
Topic: Regulatory
Who: Advertising Standards Authority
Where: London
When: June 2010
Law stated as at: 1 July 2010
What happened:
The Advertising Standards Authority ("ASA") published its "Preliminary Response" to the "Process Review" which it instigated in October 2009. The "final response" will apparently be published "in 2011."
This first response to the Review may be preliminary, but privately, as some advertising lawyers may already have experienced, some of the key proposals have already been implemented. It is also clear that serious consideration is being given to taking a leaf out of the USA's book and charging brand owners who complain about their competitors' ads.
The idea of the Process Review was to take an opportunity to "step back and take a good look at how [the ASA did] things with a view to becoming even more effective, efficient, cost effective amd in tune with stakeholders."
The independent consultants contracted to do the review consulted widely among stakeholders and although their report ("Report") has not yet been made public (and perhaps never will as the ASA has always stressed that this is not a public consultation exercise) , it is clear from the ASA's Preliminary Response ("PR") that it was delivered to the ASA a while ago. The Report recommended changes in the following areas:
1. investigations;
2. consistency;
3. stakeholder relations;
4. management approach and systems; and
5. processes and internal ways of working.
The PR summarises concisely the proposals in each area and a link to the PR is supplied at the end of this report, so rather than copy them all out here we will focus on two particular issues, both relating to "Investigations."
The end of a free complaint service for competitors?
In the USA, if a brand owner wants to complain about a competitor's ad to the self regulatory authority (the National Advertising Division of the Council of Better Business Bureaus) it has to stump up a "filing fee" to help cover the NAD's case investigation costs.
These fees can be between $6,000 and $20,000 depending on the gross annual revenue of the complaining party unless that party is a "CBBB Corporate Partner." CBBB Corporate Partners give ongoing financial support to the system by way of regular dues, in which case they pay just $3,500 per compliant. If "economic hardship" can be proved, the filing fee can be waived or modified.
In these challenging economic times, the ASA, dependant as it is on ad spend for its revenue, is not flush with funds. Investigating competitor complaints consumes a disproportionate chunk of its resources, so it was not surprising that the Process Review looked at how this burden might be eased.
Clearly the stakeholders consulted were not necessarily averse to the idea of US-style "filing charges" as the Report has recommended:
• Establishing a "Competitor Charging Working Group" to look at options for charging competitors who complain to the ASA about each others' advertising.
Further on in the PR, under "Implementation," the PR tells us that a "Project Team" has been established to focus on implementation of the Review's recommendations across the board. Ten working groups have also been formed to "conduct research, set out options and determine recommendations to implement, with associated outcomes." Presumably the "Competitor Charging Working Group" is one of these ten. Will they be looking at an "ASA Corporate Partner" model where advertisers who sign up to make annual dues pay a reduced "filing fee"? No more information is supplied.
At least one recommendation already implemented
Also with regard to "Investigations," another recommendation picked up in the PR, designed to "improve the efficiency and effectiveness of the ASA" is to:
• Work towards completing formal investigations quicker, for example, by reducing "lost time," introducing submission limits and "timetabling to conclusion."
.
In a related change, this time designed to "streamline our processes further", Complaints reception staff will be empowered to close no less than 800 more cases a year and undertake necessary preliminary work in a further 6,000 cases.
Recent experience suggests that these recommendations have largely been implemented already. For example, historically ASA complaints investigation staff have mostly been flexible and understanding when asked in the course of a case investigation for more time to deal with requests for further information. This is to be expected, particularly when, as often happens, questions pop up out of the blue after long periods of "radio silence." Now responses recently received suggest that this approach has been replaced by a noticeably more miserly attitude to time extension requests bordering on the unreasonable.
Why this matters:
The "Process review" was instigated not long after new ASA Chief Executive Guy Parker took up his post. It is clearly Guy's opportunity to put his stamp on the self-regulator and to re-shape the organisation so it is better able to face the significant challenges it faces over the next decade.
Whatever the outcome of the exercise, to be revealed who knows when in 2011, there is clear commitment to follow through with most of the Report's recommendations and radical changes are certainly in store on a number of fronts.
The ongoing deliberations of the ASA's numerous Working Groups will not apparently benefit from any interim responses from stakeholders. They have pointedly not been asked for their feedback on the proposals. The Preliminary Response simply offers to answer any questions readers may have about the Process Review. So the ASA is obviously intent on putting its own house in order as it sees fit, and as with some of the changes already made, the rest of us may or may not get advance notice of any further reforms announced in the Final Report next year.
Presumably the ASA's paymasters, the advertising industry, are comfortable with this rather autocratic approach since no disquiet has been expressed. It remains to be seen whether they will be equally accepting of the Final Report and potentially having to pay for the privilege of the ASA investigating a complaint they file about a competitor's advertising!
The Preliminary Response is at this link:
http://www.asa.org.uk/Media-Centre/2010/ASA-Process-Review-interim-report.aspx
