Ofcom says that subject to a parliamentary OK, it will delegate its duty to maintain a broadcast ad code and process ad complaints before the end of 2004. What has it done to assuage the critics? We report on the largely cosmetic tweaks.
Topic: Broadcast advertising regulation
Where: Ofcom House
When: May 2004
Ofcom has confirmed that subject to Parliamentary approval, the UK regime for handling complaints over TV and radio advertising will change radically with effect from November 2004.
As marketinglaw has reported previously, in late 2003, even before it had officially taken on the mantle of the UK's communications super-regulator, Ofcom issued a consultation document proposing the changes which are now to be put before Parliament.
In essence, these proposed to devolve to a new broadcast advertising arm of the Advertising Standards Authority the job of processing complaints over broadcast advertising, with a new "Broadcast Committee of Advertising Practice" having the job of setting, reviewing and if necessary revising the broadcast advertising code.
Up until now, these tasks have been handled by the regulator itself, and its predecessor the ITC, so this represents a significant outsourcing which will transform the ASA and its sister body the CAP into something of an advertising code and complaint one stop shop.
The whole system will be funded by a levy on broadcast advertising spend, in much the same way as a levy on non-broadcast advertising expenditure finances the current ASA/CAP self regulatory system.
During the consultation process, concerns were expressed about the new proposals. Ofcom says that it has addressed these concerns in the final structure to be placed before Parliament.
One area of anxiety for some was the apparent advertising industry monopoly over the code-writing process. Ofcom now feels that it has fixed this by establishing yet another body.
This is called the "Advertising Advisory Committee." It will be independently chaired, have 4-6 independent expert or lay individuals who can represent the interests of citizens and consumers, and "provide lay and expert input to the broadcast advertising code-making body, the Broadcast Committee of Advertising Practice". The BCAP will be "obliged to take into account" the AAC's advice during the code-making process and report back on its response to that advice. Ofcom will also have a permanent observer seat on the AAC. But does this guarantee real, non-industry input into the code-making process? We are not persuaded.
Pontius Pilate impersonation?
Another criticism was that Ofcom seemed to be almost washing its hands altogether of its duties in this area. To deal with this point, Ofcom simply reminds us that as indicated in the legislation from which it takes its powers, Ofcom will always, as a last resort, be able to insist on changes being made to the broadcast advertising codes, as well as having a right of veto on any proposed changes. Hardly any major changes here, then.
Ofcom also believes it has now introduced greater clarity on which advertising regulation functions will be contracted out. It will continue to be responsible for the rules relating to the prevention of political advertising (of which there are none at present) and the amount of advertising that can be shown on TV and sponsorship regulation. There will also of course be no change to Ofcom's role in regulating TV and radio programme content and licensing the commercial broadcasters. Again, no major change to the earlier proposals here.
Another concern expressed was that the ASA system for non-broadcast advertising complaint handling was too slow for the broadcast medium. Ofcom now reports that the ASA acknowledges this and is making appropriate adjustments to its internal processes. For example, the ASA accepts that its Council led approach to adjudications does not favour a swift decision making process. Consequently the Director General of the Advertising Standards Authority (Broadcasting) will be empowered to have an advertisement withdrawn on his authority, prior to any final decision being made by the ASA (B) Council.
There were also concerns expressed as to how swiftly the proposals were being introduced, giving the appearance of a "stitch up" on the part of the industry and Ofcom. In a gesture which seems to be nothing more than that, Ofcom purports to deal with this concern by putting back to November 2004 the introduction of the new system, so as to allow for "more effective planning". Given that there has to be time for Parliament to approve the proposals anyway, it is difficult to imagine that in the light of the far-reaching changes which are proposed, any earlier start date could have been planned in any event.
Another complaint was that the advertising industry had far too great an involvement in the whole process, which would therefore not be properly independent and protect consumer interests. Ofcom responds to this by saying that a self-regulator cannot be expected to be totally independent from the industry it regulates.
Nevertheless, measures will be introduced such as performance targets so as to ensure that the system works effectively and Ofcom will report each year in its annual report on the degree to which the self regulatory system has met its targets.
Ofcom has also introduced complaint turn-around time targets which broadly reflect the best practice turn-around performance achieved by the ITC during its last year of operation. Persistent failure to meet these targets would result in remedial action being taken. As a further indication of the importance which it attaches to its supervision of the new system's operation, Ofcom will also appoint a full time executive whose role will be to oversee and liaise with the new system, which will be on probation for 2 years. Following successful completion of this period, it will operate for a further 8 years, before being subject to renewal by Ofcom.
As for the detailed proposals, these are all on Ofcom's website at www.ofcom.org.uk/media_office/latest_news/nr_200040517.
An appeal/review mechanism will be introduced which mirrors the current "independent review" system for non-broadcast advertising complaint findings. This will be a new departure for broadcast advertising and will serve to reinforce the level of protection for consumers, the Ofcom papers says.
The legal foundation for the co-regulatory scheme that is now proposed is the Deregulation and Contracting-Out Act 1994 ("DCOA"). Any proposal to use the DCOA to contract out the statutory functions of a public authority must first be approved by both Houses of Parliament and Ofcom is currently working with the DCMS to achieve this. Once the necessary order has been passed, Ofcom will officially authorise Advertising Standards Authority Broadcast Limited, Broadcast Committee of Advertising Practice Limited and Broadcast Advertising Standards Board of Finance Limited to carry out the contracted-out functions.
New BCAP's training role
In another new departure, the Broadcast Committee of Advertising Practice will be obliged to give "advice, information, training and support" to broadcast licensees and the advertising industry on matters relating to broadcast advertising self-regulation.
Pre-vetting of broadcast advertising by the Broadcast Advertising Clearance Centre and Radio Advertising Clearance Centre or the British Television & Shopping Association will continue as before, while the ASA (B)/BCAP will take responsibility for teleshopping and other non-spot advertising content, including long form advertising such as teleshopping either within other programme-based output or dedicated teleshopping channels.
Why this matters:
This is a huge change for UK ad regulation. The new system will undoubtedly be a major challenge for the Advertising Standards Authority, and although we are dubious as to whether the concerns that were expressed have been genuinely dealt with, we believe the ASA will be equal to the challenge and silence the doubters.