Internet Marketing Handbook Series

Guide to

Online

Advertising

Background 2 Legislation 3

Introduction 1

Future Changes 6

Useful links 6

Contents

Marketing

to childre

n 5

Self-regulation 3

enforce

the Code

? 5

the AS

A use

to What

sanctio

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Alcohol a

dvertising 4

Introduction

1

Online has come a long way since it surfaced some 10

years ago. What once could easily have been described

as the ‘wild west’ - an expansive, free space unfettered

by moral codes - is now a formidable communications

channel, worth £2.8 billion and challenging TV to become

the biggest marketing medium in the UK.

Background:

2

With the internet placed firmly on the agenda of advertisers worldwide, its ability to engage consumers and build brands has been proven time and time again, as we align ourselves with the more traditional media in terms of quality, reach and efficacy. The ‘young’ medium has now grown up. As such it requires stringent processes, rules and regulations to ensure that the practice of online advertising remains transparent, and the integrity of the medium is reinforced.

As the trade body for internet marketing, it is our role to be actively involved in the major legal and regulatory issues facing the UK market. In 2008, the IAB launched its Regulatory Affairs function in response to a growing need for education, to further promote the internet’s importance within the media, political and regulatory landscape, as well as to clarify the role of marketers in ensuring the industry remains robust and responsible.

We appreciate that, for many, this is a new area that requires a formal introduction and explanation in very simple terms. This document is designed to do just that. If you have any further queries please contact Nick Stringer, IAB Head of Regulatory Affairs at nick@iabuk.net.

Online advertising in the UK is currently regulated by a combination of legislation as well as a set of self-regulatory rules. These supplement legislation and fill in gaps where the law does not reach. Self-regulation also offers an easier way of resolving disputes than via civil litigation or criminal prosecution.

The self-regulatory rules are reviewed and published by an industry body, the Committee of Advertising Practice (CAP), of which the IAB is a member, and administered by the independent Advertising Standards Authority (ASA). The ASA is funded by a 0.1 per cent levy on ad spend and collected by the Advertising Standards Board of Finance (ASBOF).

guide to online advertising regulations

Legislation:

There are over 100 pieces of legislation affecting advertising in England and Wales. Much of this legislation will apply to Scotland and Northern Ireland as well but, as devolved bodies of government, they will also have their own applicable legislation. Some of this legislation is generic, such as the Data Protection Act 1998 (legal basis for handling information relating to UK individuals), and some of it is sector-specific, such as the Tobacco Advertising and Promotion Act 2002 (prohibits tobacco advertising). Businesses have a primary responsibility to ensure that everything they do is legal.

The latest legislation to affect advertising came into force in May 2008. The Consumer Protection from Unfair Trading Regulations 2008 replaces existing law relating to unfair, misleading or aggressive marketing practices. The new law is media neutral but means that if an advert or piece of marketing is a disguised commercial practice (e.g. a fake blog) then it will be unlawful. Where the new law applies to non-broadcast advertising, it has been incorporated into the self-regulatory code (see opposite).

The self-regulatory rules – officially known as the British Code of Advertising, Sales Promotion and Direct Marketing (the CAP Code) - is specific to non-broadcast media and therefore includes advertising in cinemas and newspapers, on billboards as well as on the internet (see box I for what specific online advertising is covered by the Code).

The Code states that all marketing communications should be legal, decent, honest and truthful. It should not cause serious or widespread offence, exploit a consumer’s inexperience, mislead, cause fear or distress, condone or encourage unsafe practice or violence.

3

Self-regulation:

guide to online advertising regulations

4

The Code has specific rules for a number of particular areas. These include age-restricted products (e.g. alcohol and betting/gaming), marketing to children (including unhealthy food), motoring, environmental claims, health and beauty products and therapies, weight control, employment and financial products.

1. What aspects of online advertising does the self-regulatory Code cover?• Emails, text messages and other electronic material.• Paid-for display adverts (e.g. banner ads).• Sales and advertisement promotions.• The Code is not specific on, but includes, paid-for search listings, viral advertising, in-game advertising, advergames (as part of a paid for ad), pre-roll and video display advertising, engagement marketing, tenancies, search listings on pay-per-click price comparison websites and advertising within mobile multi-media services (MMS).

• The Code does not cover editorial content, website content (except sales & advertisements in paid for space), marketing communications in foreign media, classified private advertisements and premium rate services.

Alcohol Advertising

The CAP Code contains specific rules for advertising alcohol products (those that exceed 1.2 per cent in alcohol volume). They must not be directed at people under the age of 18 years and, if a medium (e.g. website) has an audience share of children under the age of 18 years greater than 25 per cent, then it must not carry any alcohol product marketing or advertising. In addition to this, marketing communications of alcoholic products must not be portrayed as having therapeutic qualities, mood changing abilities, enhancing confidence or performance, or be linked with seduction/sexual prowess.

5

II. What sanctions does the ASA

use to enforce the Code?

Marketing to Children

The vast majority of advertisers abide by the Code. However, in some cases, where a complaint is upheld and the advert is not taken down voluntarily, the ASA may impose sanctions to enforce compliance (see box II on sanctions and enforcement).

The CAP Code has stringent rules for marketing communications addressed or targeted to a child under the age of 16 years. For example, it must not contain anything that is likely to result in their physical, mental or moral harm or exploit their credulity, loyalty, vulnerability or lack of experience. The Code prevents marketing communications from condoning or encouraging poor nutritional habits or an unhealthy lifestyle in children. It goes even further by implementing strict rules for advertising directed at pre-school or primary school children. Except for fresh fruit or fresh vegetables, food or drink advertisements for this age group should not include promotional offers and should not include licensed characters or celebrities popular with children.

• Weekly publication of the ASA’s rulings bringing adverse publicity for the

advertiser.

• CAP ad alerts advising its members to withhold services - such as

advertising space - to those who do not comply.

• Revoking CAP member trading privileges and recognition,

e.g. direct mail discounts.

• Pre-publication vetting for persistent offenders.

• Referring the advertiser to the Office of Fair Trading (OFT) to legally force

the advert to be withdrawn.

guide to online advertising regulations

Future Changes:

About the IAB

acknowledgementswww.iabuk.net

www.asa.org.uk

www.asbof.co.uk

www.cap.org.uk

www.ec.europa.eu/avpolicy/reg/avms/index_en.htm

Nick Stringer, Head of Regulatory Affairs, IAB

Amy Kean, Senior PR and Marketing Manager, IAB

6

The Code is currently undergoing a fundamental review and a new version is expected to be published in 2009. This is likely to incorporate new advertising techniques, such as those in paid-for space.

Separate to this review, the Government is due to implement the EU Audio Visual Media Service Directive into UK law by December 2009. This updates broadcasting regulation across the EU but also extends it into online video-on-demand services, such as BT Vision, 4OD and Sky Player. It will also implement a new regulatory system for advertising on these video-on-demand services. However, it is expected that the ASA will remain the ‘one stop shop’ for all advertising.

The Internet Advertising Bureau (IAB) is the trade association for online advertising. With over 450 members, it’s run for the leading media owners and agencies in the UK internet industry. Online is an exciting and fast-growing medium and our job at the IAB is to work with members to ensure marketers can identify the best role for online, helping them engage their customers and build their brands. Through the dissemination of research and the organisation of regular events, we aim to put online on the agenda of every marketer in the UK, acting as an authoritative and objective source for all internet advertising issues whilst promoting industry-wide best practice.

Useful Links:

Internet Marketing Handbook Series

Online

Advertising

Guide to

Int

ernet

Advert

ising

Bureau

14 Mac

klin S

treet,

London

, WC2B

5NF

Tel: +

44 (0)

20 705

0 6969

email:

info@

iabuk.

net

www.ia

buk.ne

t

Engage

!