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The ASA goes online: Its remit is to extend to digital marketing from March 2011

The Committee of Advertising Practice has today announced that the Advertising Standards Authority’s remit will be extended to regulate advertisers’ marketing on their own websites and in other non-paid-for online space under their control. This significant development is likely to have an immediate and significant impact on advertisers. The ASA certainly thinks it will, as they say that “nearly two thirds of the complaints that we receive about online marketing activity are not presently covered by the Code.”

There are some key points which all online advertisers should be aware of in planning their campaigns and communication strategies, as well as the CAP Code as it currently applies. The impact on UGC and activation through social media will be areas advertisers need to pay particular attention to. Start-ups who may use online and social media channels almost exclusively during the early days of their business will have to consider the Code for the first time.

The extension

From 1 March 2011, the new CAP Code which came into force today,

1 September 2010, will also apply to:

Advertisements and other marketing communications on companies’ own websites, or in other non-paid-for online space under their control.

What are “advertisements and other marketing communications”?

This is the key test, which will determine how much of a company’s online communications fall within the ASA’s remit. We will have to wait for guidance from the first adjudications applying the Code. For now, the test is boiled down to the simple question: “is the primary intention of the communication to sell something?” The ASA will also ask itself whether the communication has appeared in that form in paid-for third party space or if it contains information on the characteristics of the product and the price. This leaves open the question of whether tools commonly used to create brand engagement, such as games, which often bear very little relation to the characteristics of the underlying product and typically do not contain any “call to action” would be caught.

What are “websites and other non-paid-for online space under their control”?

These should be obvious tests to apply: corporate web presences and official Facebook pages or Twitter feeds are clearly caught. The exercise of the advertiser’s control will be crucial. Open questions remain however:

How does the Code apply to user-generated content?

Advertisers who encourage their target public to engage with their campaigns and create content will have to review whether and when that content will fall within the remit of the Code. The focus of the ASA will be on whether the website owner “adopts and incorporates” the UGC. The passive receipt of UGC (e.g. a post on a Facebook page) should, therefore, fall outside the Code’s remit. It is an open question, however, whether UGC which remains on a website for a period of time will be implicitly “adopted and incorporated”. Those advertisers who invite users to submit content which is reviewed before being posted online (e.g. in response to a competition) are more obviously “adopting and incorporating” the UGC.

For further commentary on the risks of liability for UGC, click here.

What sanctions will be imposed for breach of the Code?

The usual sanctions will continue to apply.  New sanctions have also been introduced to strengthen CAP’s ability to enforce the Code online but it is not clear whether the sanctions should be seen as a sliding scale or what type of breach would result in any particular sanction:

These sanctions appear to attempt to deal with the “obvious jurisdictional and enforcement challenges ahead”, without fully addressing how to assess when advertisers are targeting UK consumers or how to ensure that foreign website owners actually remove offending content, if this is possible.

Consultation

CAP has opened what it calls “an ongoing and lengthy review” and has invited comments from all stakeholders. If you would like assistance formulating a response to CAP which deals with the points we have raised or your own concerns, we would be happy to discuss them with you.

To read the ASA’s press release and guidance note, click here. For our commentary on the other changes to the UK advertising regime which have been recently announced, click here.

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