Still struggling with the key aspects of the recent, game-changing extension of the CAP Code to brand owners’ websites and much more? No worries, Judith Gordon comes to the rescue with a bite size summary including a look at the new penalties devised for advertisers who get it wrong.
Topic: On-line advertising
Who: The ASA
When: March 2011
Law stated as at: 1 April 2011
On 1 March 2011, the online remit of the Advertising Standards Authority (ASA) was extended, in what the Financial Times described as "one of the world's most ambitious attempts to police online marketing".
Following an announcement at the start of September 2010 and a subsequent 6-month grace period within which to comply, the extended online remit of the ASA came into force on 1 March 2011. This remit now includes regulation of marketing communications on advertiser's own websites, as well as in other non-paid-for space online under their control.
Why the change?
Since 2008, the ASA has received more than 4,500 complaints relating to marketing communications on websites that they were previously unable to deal with. The extended online remit is therefore intended to reflect public demand for increased regulation of online advertising.
There has been widespread support for change from UK advertisers via the Advertising Association, with Andrew Brown, Chairman of the Committee of Advertising Practice (CAP), stating that the extension had been a "top priority for the UK industry" over the last few years. Indeed funding for the extended remit is coming directly from advertisers via an extension of the 0.1% levy already placed on other forms of advertisements, and which will now be placed on paid-for advertisements appearing on internet search engines.
The increased use of social networking sites as marketing tools for advertisers was also a factor central to the expanded remit, with particular focus on the way such sites target children. ASA Chairman, Lord Chris Smith, cited the protection of consumers and children as being "at the heart" of the extension, with concerns relating to children's use of the internet having attracted much media attention in recent years, particularly following reports such as the 2008 Byron Review and 2009 Buckingham Report, which both referred to the risks inherent in exposing children to online advertising.
The old remit
Prior to 1 March, the extent of the ASA's online remit was limited to advertisements in paid-for space (such as banner and pop-up ads), paid-for search listings, marketing emails, and sales promotions in both paid-for and non-paid-for online space.
The new remit
As of 1 March, the CAP Code now also applies to advertisements and other marketing communications on advertiser's own websites and in other non-paid for space online under their control.
The full wording of the addition to the CAP Code remit is as follows:
Advertisements and other marketing communications by or from companies, organisations or sole traders on their own websites, or in other non-paid-for space online under their control, that are directly connected with the supply or transfer of goods, services, opportunities and gifts, or which consist of direct solicitations of donations as part of their own fund-raising activities.
What material is caught?
The ASA has provided guidance and clarification on the forms of advertising or marketing likely to be caught.
What is a 'marketing communication'?
According to the ASA, a marketing communication is "a type of communication for a good, service, opportunity or gift that primarily sets out to sell something". Advertisers should note however that the content of this communication does not necessarily need to include reference to a price or to overtly seek an immediate or short-term transaction. Careful consideration should therefore be given to such communications.
What is meant by "other non-paid-for space online under their control"
This aspect of the remit extension is predominantly aimed at the way advertisers make use of free social networking sites, such as Facebook and Twitter, where companies often have their own pages which they use to publicise their products or services and to run promotions. Owing to what the ASA has described as their "significant consumer reach", such content is now covered by the CAP Code.
User generated content ("UGC")
The ASA has further clarified that UGC (i.e. content created or provided by private individuals) can be caught by the Code's extended remit where an advertiser adopts and incorporates the material into marketing communications on their website or in other non-paid for space online which is under the advertiser's control. For example, where an advertiser incorporates a particularly favourable quote that a customer has posted online into its subsequent marketing communications, this would be within the Code's remit. It is irrelevant whether the advertiser solicited the content from the private individual or whether the individual provided it of their own accord.
Additional assessment criteria:
For further clarification of whether material falls within the new remit (i.e. as an "advertisement" or "other marketing communication") the ASA has suggested that advertisers should consider the following additional criteria:
- Has the material appeared in the same or very similar form as an advertisement in paid-for third party space?
- Does the communication include or make easily accessible, an 'invitation to purchase' (being a communication which indicates characteristics of the product and its price, and enables the consumer to make a purchase)?
Should the answer to either of these questions be yes, it is likely that the content will fall within the remit.
What material is excluded?
Material already excluded prior to 1 March 2011 which does not fall within the extended remit will continue to be exempt. This includes communications such as press releases, editorial content and political advertisements (among others).
Two new exclusions have however been created in addition to those already available. These are:
- 'Investor relations' – i.e. communications relating to an advertiser's company, intended for those with an interest in the company's stock or financial stability; and
- 'Heritage advertising' – i.e. materials relating to old advertising campaigns which are not being used for a current promotional strategy and are placed in an appropriate context.
Note also that marketing communications promoting causes or ideas (e.g. charitable or political communications) are not covered by the Code.
Extent of remit
It should further be noted that whilst the remit is intended to apply to '.uk' websites, marketing communications on non-UK websites for companies that are registered in the UK will also need to comply with the Code.
Given the ambitious expansion of the remit, CAP has unsurprisingly brought in three new sanctions to strengthen its ability to secure compliance. These new sanctions are:
- Providing details of the advertiser and its non-compliant marketing material on a special ASA microsite, with a view to 'naming and shaming' those who have failed to comply with the Code;
- Placing paid-for advertisements on search engines, highlighting an advertiser's non-compliance; and
- With the cooperation of search engines, removing paid-for advertisements which link directly to non-compliant material.
What should your business be doing?
The implications for businesses are far-reaching, and any kind of online presence should be checked for compliance with the CAP Code carefully. Some pointers for how to ensure this are as follows:
- Where your employees are encouraged to use social networking sites to promote or market your business, ensure that they are aware of the need to comply with the Code and if necessary, consider providing additional training to raise awareness.
- A thorough check of all website content should already have been undertaken prior to 1 March, however this is an ongoing process and all content uploaded going forwards should also be checked for compliance.
- Note the potential for UGC to fall within the remit should it be incorporated into your own marketing communications and make sure that compliance checks are not overlooked with respect to this.
Remember however that although these are additional obligations brought in under the extended remit, they only reflect what is already commonplace in UK advertising and marketing standards – that is, that advertisements should be decent, legal, honest and truthful. Responsible advertisers should not therefore find the new requirements particularly onerous.