As UK advertisers await the results of the UK ASA’s ” process review,” its US equivalent has increased the fee the National Advertising Division charges for adjudicating on competitor ad challenges. Stephen Groom reports and asks if we could soon see such charges being imposed here.
Topic: Privacy
Who: National Advertising Division of the Council for Better Business Bureaus
When: March 2010
Where: New York
Law stated as at: 25 March 2010
What happened:
The New York-based Council for Better Business Bureaus ("CBBB") announced that it was increasing the fee it charged for handling challenges by advertisers to their competitors' advertising. Such challenges are handled by the CBBB's National Advertising Division.
For CBBB "corporate partners" the filing fee will be raised from $2,500 to $3,500. Non CBBB partners with gross annual revenue under $400m will pay $6,000, those at $400m-$1b will pay $10,000 whilst those over $1b will pay $20,000 per filing.
The idea was stated to be to share more equitably the cost of self regulation across member and non member users.
The system is entirely voluntary but if an advertiser refuses to defend a competitor's challenge to his advertising before the NAD, more likely than not the case will go straight to the FTC.
Why this matters:
The UK equivalent to the NAD is the Advertising Standards Authority or "ASA".
Like the NAD, the ASA adjudicates on complaints by an advertiser that its competitor's advertising breaches the self regulatory Code. However as things currently stand in the UK, the ASA makes no charge to complainants for handling that complaint.
Thus, cases which are by definition likely to be hotly fought by both sides, often require the ASA to incur the cost of taking expert advice and take disproportionately longer to bring to a conclusion, are all handled without charging either of the protagonists a penny.
"Process review" may see changes
This situation may change in the not too distant future. Some months ago, the ASA announced, shortly after the appointment of its new Chief Executive Guy Parker, that it was conducting a thorough review of its processes.
Since then it has become clear that one issue that is very much "in play" is the possibility of charging advertisers to adjudicate on complaints about their competitors' advertising.
The ASA is increasingly strapped for cash as advertising spend softens. This is for the simple reason that the ASA is 100% financed by a levy on advertising spend.
In this climate any revenue-generating scheme that has some logic on its side and also an apparently working precedent in operation in a country like the US is bound to receive serious consideration.
Time will tell whether the "process review" will recommend challenge "filing fees" and if so, whether Guy Parker will pick up the ball and run with it. Whatever the future holds on this, however it is unlikely this recent development in the US will have gone unnoticed at the ASA.
