Bigmouthmedia, CAP and ASA in 2011

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CAP Expansion into Digital

Andrew Girdwood Media Innovations Director bigmouthmedia David Hardy Media Development Director bigmouthmedia

AP code expansion into digital In March, the Advertising Standards Authority will expand the Committee of Advertising Practice to cover the digital sector. The precise details of how this will affect online advertisers are yet to emerge, but what is certain is that digital marketers will need to ensure that in future; every strategy they launch is able to withstand more intense scrutiny than ever before. The CAP code addresses socially responsible and truthful advertising, maintaining that digital teams should be responsible with regard to their consumer campaigns and ensure they uphold taste, decency and fairness at all times. A subject the UK government is very much behind at the moment, it is expected to become an important running theme over the years ahead.

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While discussion over its practical implications will dominate much of the year, the move is almost certain to result in a tougher regulatory regime for all online activity. Digital marketers will need to be careful of the competitive claims they make, ensure that quoted prices are inclusive of VAT and other added charges, provide limited stock warnings and cope with increased regulation around the health, medical, gambling and charity sectors.

ASA

Make no mistake: every aspect of digital marketing is likely to be affected by the ASA’s expansion into the channel and, given that many of the specifics are to be sorted out using a blend of precedent and on the fly judgements by a committee of experts, nobody can be exactly sure how. Fortunately the regulatory body has demonstrated real willingness to work alongside the industry as the details are threshed out over the coming months, but in the meantime there are a number of areas where brands can benefit from ensuring their online activities will not fall foul of the new rules.

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The CAP code: to infinity and beyond The organisation’s existing remit enables the ASA to regulate industry and consumer facing advertising campaigns according to both the CAP and BCAP codes of practice, two committees established to maintain advertising standards with the aim of protecting consumers and promoting fair competition. Both the CAP and BCAP exist to uphold the key principles of fair advertising: that every campaign is legal, decent, honest and truthful. However, with a remit going beyond simple content, the CAP code also addresses the administration of prize promotions and database use. The decision to extend the CAP’s areas of operation was taken both to ensure that the code remains media neutral while responding to calls for action from advertisers seeking fair competition. Pressure has also been brought to bear from consumer groups wishing to build public trust in online marketing and political bodies seeking reassurance that he regulatory body is taking the protection of children and the sensitivity of childhood into consideration. Clearly, online retailing will be the sector most obviously affected by the change, with campaigns that speak directly to the consumer about a product or service coming under the most intense scrutiny. Slogans such as “fastest broadband in the land” will be subjected to investigation, for example, as the telecoms sector finds itself under increasingly close examination. Marketers are recommended to sign up to the ASA’s weekly adjudications email (see the ASA website).

Whilst this reflects bigmouthmedia’s current opinion on this issue, the contents of this white paper are of a general nature only and do not constitute specific advice from bigmouthmedia or the CAP or ASA. This white paper does not take into account your circumstances or needs and must not be relied upon in place of appropriate professional advice. BMM/LBi, the CAP and ASA disclaim any and all responsibility and/ or liability for your actions as a consequence of relying on this white paper.

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Content is key: the new regulatory battleground Whereas until now digital marketers have largely been forced only to consider the legality of copy contained within advertising, under the new regulations all promotional content contained in non paid-for space will now come under the CAP remit. An extension that takes into consideration all social media platforms, from now on branded spaces aimed directly at the consumer - such as a company's Facebook page - will be scrutinised. While user generated content has hitherto been widely regarded as ‘free’ promotion, from now on any marketing communications that start a conversation with consumers will be open to scrutiny. The ASA will consider all UGC adopted by the website owner and incorporated within its own marketing communications to fall under its expanded remit. For example fake reviews, particularly those which are then incorporated into the website in a testimonial style section, will be considered advertising under the new code of practice. There are a range of potential situations where user generated content currently being adopted by marketers could fall foul of the extended rules. If a vodka manufacturer invites consumers to send in photos of their drinks parties, for example, then that distiller is taking editorial ownership of the photos by posting on the website and must be certain that everyone featured in the photos is (and looks) over 25. Can they be sure? If not, potential problems lie ahead. Similarly, if a brewer maintains a page featuring photos uploaded by fans the images remain beyond the remit of the CAP code if the brand has not interfered with, organised or compiled albums made up of the pictures. Once the beer maker recognises these pictures however, or once fans have tagged themselves in in the company-created albums, then the photos become subject to the rules covering alcohol advertising. Even repeating user commentary can be problematic. If a major retailer using Twitter retweets a consumer's message regarding a product or offer, for example, it is considered to have taken the decision to adopt the content and use it in its marketing communications. From that point the company must be certain of the availability of the item, that it can substantiate the claims made by the consumer, and will be held responsible for any discrepancies which subsequently spark complaints from other users.

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As a general rule of thumb, brands considering retweeting user comments should remember that while subjective claims such as “Brand X is great” or “Brand Y has the best dresses on the High Street” are simply expressions of the customer’s opinions and so okay, objective claims must be substantiated. Repeating comments such as “Brand A is the fastest car on the market” or “Brand B is best for buying laptops”, therefore, could result in difficulties further down the line if the marketer cannot produce evidence to show that the claims are true. Brands must also tread carefully around the issue of commercial tweets. Commercial tweets will fall under the ASA’s remit if the content is controlled by the marketer. If it is not (for example, if the marketer has paid or supplied products to a consumer, on condition that the consumer tweets about the marketer’s products, but leaves the actual content of tweet up to the user), the message will be outside the ASA’s remit but the marketer might be required by the OFT to disclose their involvement. In the US, adding a disclosure '#spon' or '#ad' to the end of the tweet seems to be sufficient to remove any issues.

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A question of balance: getting content right There are several contexts where the ASA’s new regulations do not apply. Press releases and PR material are excluded, for example, while editorial content, political advertisements and heritage advertising will not be subject to scrutiny. While the detail of these issues will evolve over the coming months, there are a few rules of thumb marketers can apply to keep themselves out of trouble.

Offers, pricing, availability Any compulsory charges must be included in the upfront price. Optional prices must be disclosed but need not be included in the headline price, while companies must be clear if prices are dynamic and likely to change. When promoting any deals or offers, as a general rule users must be one click away from the complete terms and conditions. Such deals can be extended occasionally, but extending sales should not be a regular part of the brand’s marcoms strategy. Comparative savings claims must be spelled out in clear English, while cost comparisons must be substantiated. Where a site displays deals such as ‘save from 60%’ or ‘prices start from £2.95’, at least 10% of the items that fall under the offer must be offered at the maximum saving / minimum price. Similarly, closing dates placed on offers will be subject to scrutiny if they mislead the consumer into feelings of urgency to purchase. ‘Better than RRP’ claims will also be checked under the new regulations, so marketers claiming that a product is better value that the recommended retail price must firmly establish the price that the product is generally sold at.

Customer testimonials Testimonials which are selected and uploaded onto a brand's website will be under remit as they have been adopted by the company. Companies must retain the contact details of the client/person who provided the comment or review.

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Objective claims Brands making objective claims will need to be able to prove the claims and substantiate them with evidence if required.

Moderated UGC Moderating offensive comments on brand owned digital spaces does not automatically bring all the content in that space within the ASA’s remit. As before, the content that falls within the ASA’s remit is content that is adopted or endorsed by the marketer. For example, if a user posts a comment which claims a product made them run faster, made their wrinkles disappear or extended their life by 20 years, and the brand then responds with a comment which endorses the claim, then they are open to scrutiny under the CAP code. However, removing offensive comments will not be taken as evidence that all the remaining comments have been endorsed by the advertiser.

Editorial Comment Editorial content falls outside the ASA’s remit. However, the line between editorial and marketing content is sometimes difficult to determine. Consider this situation: An energy company produces a social responsibility report on environmental issues. This report increases the amount of customers buying their energy service or package. Has this report been deliberately used to sway potential customers into choosing their product over another company's? Issues will arise when it is unclear whether content is editorial or marketing material, and a decision will be made according to where the content appears. The regulatory body will consider the context of the content, the arena within which it appears and whether it is seen as promoting or as supporting marketing communications.

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Heritage Advertising What is considered fair advertising is if companies are celebrating their brand’s heritage by featuring old brand messages such as, for example: “Guinness is Good for you”. What will induce scrutiny where there is room for complaint is if the actual message is strategically used to promote new claims, with the context and space where the message is placed determining the CAP’s action.

Employees acting as users Agency employees giving their own opinions is permissible under the new CAP code, but if there is belief that the brand is supplying the message or opinion, then the comment will be regarded as marketing material. Responsibility for a comment or claim lies with the brand and the question should be asked: is the brand advancing the image of the brand by endorsing the comment or by not disclosing the identity of the individual making it?

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The impact of the new rules on digital marketing For all the following types of content see the general rules on pricing and offers in the previous section.

Search While SEO copywriters have long been afforded license to make bold claims and statements in content tailored for organic search purposes, employing a range of literary tricks enabling them to insert targeted keywords and phrases into text, these will need to be watched in future. Under the new rules a page alluding to local services in Manchester, Birmingham and Liverpool, for example, would be open to having official complaints lodged against it if the company profiting from these results did not offer services in those cities. Given that such activities are normal practice for national companies trading across the UK, there could well be a lot of confusion around the legality of such tactics when the new ASA rules come into force. A host of frequently made claims once considered pure marketing spin may also generate complaints and prompt ASA investigations. Broadband providers will not be able to lay claim to offering the fastest internet connections available if they cannot prove it, for example, while companies claiming to be the Number One provider of X or the leading supplier of Y could be forced to justify such claims or face official censure.

Paid Search Although strictly speaking already covered by advertising legislation, complaints about PPC advertisements are almost certain to increase when the ASA’s bid to regulate the digital channel kicks off in March. With campaigns on services such as Google’s Adwords system coming under greater scrutiny than ever before, advertisers need to take steps to ensure campaigns remain up to code. From now on, extra efforts will need to be put into ensuring that the information contained within PPC adverts is accurate, up to date and avoids misleading consumers. VAT will need to be included in published prices, for example, (unless the product is available only to business customers) while vendors will need to ensure that the products advertised are available. Page 9 of 15

Display While display advertising departments will already be largely familiar with the regulatory requirements governing the channel, the extension of the ASA’s powers to cover the digital sector will have some impact. Under the rules brands cannot have inappropriate imagery on adverts appearing online, while offers displayed on banners must be accurate and clearly defined. The era of online ‘bait and switch’ is now over. There will be more to come as the year rolls on. A cookies and e-privacy debate is already scheduled to take place in May that will have an impact on the behavioural targeting of display marketing, so brands will have to remain alert to potential changes as they move forward in 2011.

Mobile One rather ambiguous area brands need to monitor is the field of mobile display banner campaigns. Blind served banners will be difficult to regulate, but an example which could incur regulatory action would be if a banner displayed during racing games promoted a fast car. Any advert which promotes speed or risky driving which could be emulated by consumers in such a context would be under the remit of the CAP code, meaning that the regulation remains dependent on both the nature of the game and the tone of the display banner campaign. This will be a difficult area of regulation for agencies, and they should use every available system to analyse the data of display banner placement to prevent this hazard.

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Social Media Social media is one of the areas where brands will have to step most carefully as the details of the new regulations become clear. With consumers able to actively promote goods and services, exactly who will be charged with responsibility for their actions remains an issue, opening up a range of potential conflicts and problems for marketers wishing to use the channel. The ASA’s extension into the digital arena will have implications for user generated content that makes claims about goods or services if it is adopted or endorsed by the brand. For example retweets will be considered to fall under the remit of CAP and if a complaint is made after a brand repeats a consumer’s tweet, they will be held responsible for any false or misleading statements. For example: if a consumer broadcasts a message on twitter suggesting that “Brand X is great because they cured my cold,” the brand must not retweet that statement if it cannot be verified. While highlighting such unsolicited testimonials is a mainstay of current twitter marketing technique, under the terms of the new rules it could leave you vulnerable to censure.

Micro Location There are almost certain to be issues surrounding advertising and age limits for sites such as FourSquare which may not yet be sufficiently sensitive to users' ages. FourSquare offers prizes for 'unlocking' venues, or for treasure hunts, for example, while giving no consideration to the fact that in the absence of an age limit, such competitions and offers are potentially being offered to children.

Affiliates The affiliate industry has been somewhat self regulatory for some time, particularly with the increasing prominence of the IAB Affiliate Marketing Council (AMC). The perceived problems from the community around the ASA/CAP extension to cover the sector have been around the fact it will now be coming from an external source, so many practicioners are worried that they will have little control over its implementation. Thankfully the ASA have been supportive of the AMC and parties such as bigmouthmedia in the past, and along with the IAB have been instrumental in

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putting them in front of the community and in developing their understanding of a very complex industry. As a result of the diverse range of parties involved, including Affiliates, Networks, Agencies and Merchants the rule changes have caused some concern about exactly who is responsible for any breaches of the code. The ASA have been able to shed some light on this, and it is very dependent on how the promotional communication is being relayed to consumers, and where the information has come from. Any breaches are not automatically going to be the merchant’s sole responsibility, which a lot of brands have feared, but will also place a level of responsibility on the affiliate. It has been made clear by the ASA that they aren’t going to go hunting for inaccuracies in hobby blogs, and that the changes are only really going to impact affiliates who are promoting misleading information. What is key to take away from this is that nothing has been set in stone. It is likely to take a high profile case to set a precedent as to how the affiliates industry will be impacted by this change, but the sector has been becoming more responsible, more answerable and more regulated in recent years in any case, meaning that it is more prepared for change than it would have been a few years ago. It will absolutely take strong affiliate management to ensure communications, promotions and affiliate resources are kept accurate and within the code restrictions to ensure affiliates have the best possible information to promote brands. It also puts a level of responsibility on the affiliate to make sure what they are communicating to their own users – but this channel has always entailed affiliates taking on some risk, and bigmouthmedia is confident that this dynamic industry will continue to roll with the punches and work together to help manage the ASA’s new remit. There are most definitely grey areas to be contended with however. If a claim is made to the ASA and the claim is determined as being valid, for example, is it the fault of the affiliate or the merchant company? According to the ASA it all depends on the context of the claim. When the claim originates and legitimately rests with the affiliate marketer, then it is the affiliate that will be held responsible. There is no definitive code as yet, but it would be considered best practice for companies to evaluate and be aware of their affiliates’ actions.

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Similarly, if the affiliate maintains a feed and has chosen a pay per click action on a particular deal, and this deal subsequently goes out of date but the affiliate continues with the deal, then they are, at that point, responsible for any consequential complaints. However, if the company continues to feed the offer to the affiliate after it is out of date, then the company will be held responsible for any complaints.

Online behavioural advertising At present, the extension of the ASA’s remit does not cover online behavioural marketing techniques. A new framework covering this is expected later in 2011.

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Sanctions Companies who are adjudged to be infringing the ASA’s CAP code already face the consequences of adverse publicity if the ASA chooses to name and shame the guilty party in any infringement. These sanctions are set to be beefed up however, with an enhanced naming and shaming programme set to be introduced. In extreme cases the CAP Compliance Team will contact Google and other search engines to arrange for the company’s paid ads to be removed. It’s expected that only the particular PPC links found to be in breach of the CAP code and judged as being detrimental to the consumer will be taken down. Companies will be allowed to complain about their competitors, but they must be open about their status and must show that they have attempted to resolve the issue prior to the complaint being registered. Where possible, the majority of issues will be resolved informally rather than through a formal investigation. Digital marketers are amongst the likeliest to want to complain about regulationbreaching campaigns run by competitors. Agencies can lodge complaints but industry complainants are asked to resolve their concerns directly before resorting to the ASA. Separating the genuine from the mischievous complaints is the job of the ASA, as it is currently with complaints about offline media. In terms of geographic scope, if a company is registered in the UK or uses the top-level domain “.uk”, then it is subject to the CAP code. If a company is registered abroad but has prices in £ sterling, or a +44 customer helpline number for example, and so are obviously targeting UK customers, it may be considered to fall under the CAP code remit.

Whilst this reflects bigmouthmedia’s current opinion on this issue, the contents of this white paper are of a general nature only and do not constitute specific advice from bigmouthmedia or the CAP or ASA. This white paper does not take into account your circumstances or needs and must not be relied upon in place of appropriate professional advice. Bigmouthmedia/LBi, the CAP and ASA disclaim any and all responsibility and/ or liability for your actions as a consequence of relying on this white paper.

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