UK: The New Advertising Codes Key Changes in the Codes for Non-Broadcast and Broadcast Advertising

The Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP) launched new advertising Codes for non-broadcast and broadcast advertising on 16 March 2010. This followed extensive public consultation which started in March 2009 and generated approximately 30,000 responses. Although the Codes have been updated on a regular basis, it has been more than eight years since they were reviewed in their entirety, so this is a welcome and timely review. The new Codes will come into force on 1 September 2010. Key changes in the new Codes include stronger data protection rules and rules on undue pressure for marketing to children, greater consistency between the CAP and BCAP in areas such as misleading advertising, new guidance on the use of the word 'free' and the introduction of an over-arching social responsibility clause. The new Codes are designed to be simpler, user friendly, proportionate, and effective, with consumer protection and social responsibility playing a key role. These Codes affect any organisation which produces advertising.

Why Have The Rules Changed?

As Code owning bodies, CAP and BCAP are under an obligation to keep the Codes up to date, not only to ensure that the Codes reflect society's requirements, but also to ensure that they are in line with a number of new European Regulations. CAP and BCAP state that the existing Codes work well, but that as part of their commitment to ensure the highest standards in advertising, a thorough review was undertaken to ensure that the requirements are not falling behind the rapid evolution of technology and the times. The new Codes address areas of public concern which were in need of review; for example addressing the environmental claims of advertisers, regulating the use of the word 'free' and tightening regulation of advertisements promoted at young children.

What's New?

Key changes to the format of the Codes include the creation of a single new broad - cast Code for television and radio advertising in place of the existing four Codes. In addition, new Code sections will contain an overarching principle and a set of rules. Existing guidance has been incorporated into the rules or will be provided in separate documents which link to the new Codes. This will make the Codes far simpler to use and provide greater clarity for advertisers. There is also a more consistent approach between the new CAP and BCAP Codes and they now share many of the same rules, including misleading advertising, harm and offence.

There have also been some more substantive changes to the content of the Codes. These are summarised below.

Social Responsibility

Under the current regime, only the CAP Code has a social responsibility clause. The introduction of an over-arching social responsibility clause for both Codes has closed this gap. The clause states that all advertisements must be prepared with a sense of responsibility to the audience and to society. At face value, this does not introduce anything drastically new, however, the essence of the new clause is that it grants the ASA a 'catch all' ability to ban advertisements that, while within the letter of the law, go against its spirit that all advertisements should be legal, decent, honest and truthful. For example, marketers targeting individuals who are in financial difficulty, for the purchase of products they cannot afford or where they are required to take out loans for such purchases, will be classed as socially irresponsible and outside the spirit of the law, despite the fact that they have not broken any rules.

In conjunction with the concept of the principle of social responsibility, provisions on environmental claims by marketers and lottery advertisements have been introduced. The new CAP Code will also contain a specific requirement that advertisements providing debt advice should comply with guidance from the Office of Fair Trading.

Gambling

Although lotteries have their own regulatory regime under the Gambling Act 2005, CAP and BCAP consider that lottery advertising should be subject to the same social responsibility rules as other forms of advertising. The Codes now also reflect the requirements under the Gambling Act 2005, as the previous version of the Codes predated the Gambling Act 2005.

Greenwashing

There has been an increase in the number of companies making exaggerated environ mental claims, a practice known as 'greenwashing'. In addition to the pressure on companies to be 'environmentally friendly', section 172 of the Companies Act 2006 provides a duty on directors to promote the success of companies, having regard to the impact of operations on the community and the environment.

The ASA has investigated and upheld many complaints against advertisers who have made unsubstantiated claims in this domain. To address this, an explicit rule will be introduced in the environmental section of the CAP Code to prevent marketers from exaggerating the environmental benefits of their products and equivalent new environ - mental claims section will be introduced to the BCAP Code.

Protecting Children

A new scheduling rule for TV and radio keeps advertisements for age-restricted video games away from children's programming. This change brings the policy for video games advertising into line with that for films.

Data protection rules for children have also been strengthened to prevent marketers collecting data from under 12s without parental consent. A separate rule regulates the collection of such data from under 16s and other people.

The revised rules also clarify the ways in which advertisers may fall foul of the ban contained in the Consumer Protection from Unfair Trading Regulations 2008, which deals with advertisements encouraging a child to buy a product or persuading adults to buy a product for a child.

New rules will be introduced to comply with new legislation on the promotion of infant and follow-on formula milk.

Health

New rules are being introduced in several areas to incorporate European legislation on:

  • The European Regulation on Health and Nutritional Claims (1924/2006/EC) which prevents misleading claims about food products; and
  • Traditional herbal medicines (Directive 2004/24/EC) about advertising herbal remedies.

Use of the Term 'Free'

The misuse of this term is the source of hundreds of complaints to the ASA. Pricing structures in some sectors have become more sophisticated, making it difficult for consumers and regulators to tell what is included in the price and what is given as a free 'extra'. The new Codes include clarification that advertisements must not describe products as free if that element has already been included in the package price. In addition, the terms 'free trials' and 'buy one get one free' are not permitted to be used where a non-refundable purchase is required.

New rules are also being introduced to oblige marketers of prize promotions to be clear as to prizes available to win and those that are guaranteed to be won, as well as ensuring that recipients of 'instant wins' are able to claim and obtain their prize easily.

Charities

Charities may now use comparative advertising to demonstrate the proportion of their donations that directly help the cause in comparison to rival charities. This brings the charity sector into line with others sectors, which are already permitted to undertake comparative advertising. This change has the ability to improve transparency by enabling donators to compare how donations are spent between charities with similar missions.

What Has Not Been Covered?

Although originally intended to form part of the new Codes, online advertising proved to be a contentious area during the consultation process.

The current CAP Code only regulates paid-for online marketing communications, such as pop-up and banner ads, paid-search, viral ads and sales promotions included on an advertiser's website. However, with more than 2,500 complaints made to the ASA last year alone about online advertising, the ASA and CAP are now consulting on whether it is possible to extend CAP's remit to online advertising. This would allow the Advertising Standards Authority to apply the CAP Code to online marketing communications that currently fall outside CAP's remit, for the benefit of consumers, children and industry.

However during this consultation period, there are a number of issues to be addressed and the ASA and CAP will have to look at the question of how marketing communications will be defined, the distinction between an editorial communications and marketing communications and how to deal with social networking sites, which are in a different category to paid marketing.

What Next?

The existing rules will continue to apply until 1 September 2010, but advertisers and media owners should use the next 6 months to prepare and adjust their materials to ensure compliance with the new rules.

The new Codes provide a timely and welcome review and offer a more consistent approach with current legislation.

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