Let’s start with a simple question for readers who don’t have prior knowledge of how things are done in the UK. What is the basic structure of the system? What assumptions lie behind it? Because it is quite different from the American system, for instance.
We have a mix of self and co-regulation. The UK advertising industry decided 50 years ago that it would be in its best interests to set up the Advertising Standards Authority (ASA) and to write an advertising code containing rules by which it would police itself. Initially, it covered just non-broadcast advertising. In 2004/5, our remit was extended to cover broadcast advertising. This is where the co-regulatory bit comes in because we do so under contract with Ofcom, the communications regulator in the UK. They still have legal responsibility to ensure that broadcast advertising complies with the law, but they contract out to us, on a day-to-day basis, the job of making sure that happens.
Anyway, it’s a tripartite system. The advertisers pay for the system through a 0.1 percent levy on display advertising. There are one or two other elements to the funding, but the majority comes from this levy on display advertising, collected by the Advertising Standards Board of Finance (ASBoF). And the same is done by its broadcast equivalent, the Broadcasting Advertising Standards Board of Finance (BASBoF). These are both industry boards responsible for collecting the money that funds the ASA. They operate at arm’s length from us. We don’t know which advertisers contribute and which don’t. But we know that 70 to 80 percent of display advertising is levied, so that obviously tells us that the vast majority of big advertisers are paying the levy.
How would one escape being levied?
You just choose not to.
Oh, so it’s voluntary?
It’s voluntary. But this is the only voluntary aspect of the system. People frequently make the mistake of saying “Oh, the ASA system, it’s voluntary.” But it’s not voluntary in the sense that you cannot choose not to comply with the advertising codes. But the funding of the system is voluntary.
The second part of the system, the second leg of the three-legged stool, is the Committee of Advertising Practice (CAP) and its broadcast equivalent, the Broadcast Committee of Advertising Practice. These are the industry bodies that write the advertising codes and make sure they stay up to date, to make sure that they respond to changes in technology, changes in society, and so on. When markets are deregulated or new markets emerge, they make sure that the advertising rules are right. So the first two of these three legs are self-regulatory; the industry’s paying and the industry’s writing the rules. When it writes the rules, the industry then puts the rules out to public consultation. That can be a major undertaking. The last full advertising code review that we did in 2009/2010 generated thousands of responses from people who were interested in the rules.
How do you put it out for consultation?
We published consultation documents on the CAP website. Our code review team here set out the rationale for all of the advertising rules, which rules they were proposing should stay the same and why, which rules they were proposing should change and why, and they invited responses. When the responses came in, they went through all of them, and there were many hundreds of substantive responses. They then provided a further public document called the “Response to the Code Review Consultation” in which they explained whether they agreed with the response and if not why not. And what they were going to end up doing, keeping the code the same or going with the change that they’d previously consulted on, or changing it further in reaction to someone’s response. I mean this documentation runs to 900 pages; it’s a really, really thorough job.
So, it is the industry writing the...