International Guide To Developing A Self-regulatory .
International Guideto developing aself-regulatoryorganisationPractical advice on setting upand consolidating an advertisingself-regulatory systemInternational edition EASA 2009
About EASAEASA—European Advertising Standards Alliance—is a not-for-profit organisationset up in 1992 to promote high ethical standards in advertising through the useof effective self-regulation, while taking into account national differences interms of culture and legal systems. It does so by sharing best practice, supportingthe creation & development of advertising self-regulation and by providing bestpractice guidance, which is agreed upon by all members.EASA started off as a European focused association, which over the years hasembraced advertising self-regulatory organisations from outside of Europe. In2009 EASA unites 31 self-regulatory organisations world-wide and 16 Europeanand global advertising industry associations.The background of this publicationIn 2008, EASA set up the EASA International Council, which aims at providinga forum to facilitate information exchange, best practice discussions andcommunication among advertising self-regulatory organisations around theworld. Within this platform EASA adapted the European version of its guideto setting up an advertising self-regulatory system to the publication you arecurrently holding.This guide is supported by EASA membership, with particular support from thefollowing two major international organisations:World Federation of AdvertisersThe World Federation of Advertisers (WFA) is the voice of advertisers worldwiderepresenting 90% of global marketing communications expenditures, roughlyUS 700 billion per annum, through a unique, global network: 57 nationaladvertiser associations on five continents as well as over 50 of the world’s top 100advertisers. Through the network, WFA represents more than 10,000 businessesoperating in a broad spectrum of sectors at national, regional and global levels.WFA has a dual mission: to champion responsible commercial communicationsand to facilitate a media environment which stimulates maximum effectiveness ofad spend. More information at www.wfanet.orgInternational Advertising AssociationThe International Advertising Association (IAA), headquartered in New York,was founded in 1938 to champion responsible marketing. The IAA, with its 56chapters in 76 countries, is a one-of-a-kind global partnership whose memberscomprise advertisers, media, advertising and public relations agencies, mediacompanies, and academics. The IAA is a platform for industry issues and isdedicated to protecting and advancing freedom of commercial speech, responsibleadvertising, consumer choice, and the education of marketing professionals. Formore information please visit www.iaaglobal.org.
International Guideto developing aself-regulatoryorganisationPractical advice on setting upand consolidating an advertisingself-regulatory systemInternational edition EASA 2009
EASA acknowledges the kind support of ICAP, the International Center forAlcohol Policies, in publishing this guide.Editorial teamGeoffrey Draughn—EASA consultant and self-regulation expertOliver Gray—EASA Director-GeneralLinda Nagel—Chair EASA International Council and President of the Canadianself-regulatory organisation: Advertising Standards CanadaRenée Brautigam—EASA Promotion & Communications Officerii International Guide to developing a self-regulatory organisationn
About this GuideThis booklet offers practical guidance to those who are contemplating settingup a self-regulatory system or improving, or future-proofing, one that alreadyexists. It may also be useful to anyone with a professional interest in marketingcommunications and the regulation thereof as well as the exercise of ethicalresponsibility.At some point, marketing practitioners in every country realise that there isa need to demonstrate that responsibility matters as irresponsible marketingcommunications give little to no sustained return on advertising investments.Creating an effective self-regulatory system therefore does make sense. As wellas creating a level playing field for the advertising industry, advertising standardsdemonstrate social responsibility and encourage consumer confidence inadvertising. Indeed, research also shows that the ethical behaviour of a companyis closely associated with the value of its brand; Brandz estimates a company’sreputation at 30% of the brand’s market value.If you are beginning to think about advertising standards and are wondering howto go about writing a code or setting up a self-regulatory system, this guide willhelp you. The information put forward in this guide builds on more than 16 yearsof EASA’s experience in coordinating advertising self-regulation projects acrossEurope as well as beyond, and combines it with the day-to-day experience of selfregulatory organisations (SROs) globally, some of which have been in operationfor over half a century.To make self-regulation a reality in your market you will need dedication,patience, consensus, resources and above all enthusiasm. Your response will needto be both appropriate and proportionate to the local circumstances. However,once a self-regulatory system is in place that sets and maintains responsibleadvertising standards, it will help increase sustained returns on marketinginvestments through increased consumer trust.With the help of this guide and the support of the European AdvertisingStandards Alliance (EASA) and our growing international network of SROsthrough EASA’s International Council, we hope that you too will be able to build astrong, effective system of self-regulation in your country. Please do keep in mind,however, that this guide is only a starting point and you will not succeed withoutthe active support of the advertising industry to ensure self-regulation happens.Should you need any help or further guidance, do visit our website or contact us:www.easa-alliance.org.My thanks go to Linda Nagel and the members of the EASA InternationalCouncil for helping to adapt this guide to the international market and to RenéeBrautigam for putting it together.Oliver GrayEASA Director GeneralInternational Guide to developing a self-regulatory organisation 1n
Short glossaryAd-spendAdvertising expenditureAdvertising industryAdvertisers, advertising agencies and the media and/ortrade associations representing their interests, whether atnational, European or global level.Awareness campaignAdvertising or promotional campaign, usually run byan SRO, to raise awareness of the self-regulatory systemamong consumers and/or industry.Code (of practice)Set of rules governing the content of advertisements.Code-making bodyPart of an SRO, usually composed of industryrepresentatives, responsible for the formulation andrevision of the code.Copy adviceAdvice on a proposed advertising campaign provided bya self- regulatory body usually on a non-binding basisrequested by an advertiser on a voluntary basis (see alsopre-clearance).Co-regulationSystem of regulation combining statutory and selfregulatory elements and sometimes involving otherstakeholders, e.g. consumer organisations.Digital mediaA generic term used to refer to media other thantraditional media (e.g. television, radio, print, directmail and outdoor advertising). Digital media includes,amongst others, banners on websites, DVDs, sms andonline games.ICC Code(s)Codes of Marketing and Advertising Practice, originallydrawn up by the International Chamber of Commerce(ICC) in 1937 and since regularly updated, which inspiredmany of the self-regulatory codes currently in use.Legal backstopLegal framework that can enforce real sanctions on roguetraders (see definition below).Pre-clearanceExamination of an advertisement by a regulatory orself-regulatory body as a compulsory pre-condition(sometimes also voluntary) of publication or transmission(see also copy advice).Rogue traderAdvertiser deliberately seeking to mislead or deceivebusinesses or consumers.TripartiteBody representing the common interests of the threeparts of the advertising industry—advertisers, advertisingagencies and the media.Frequently used abbreviationsEUEuropean UnionIAAInternational Advertising AssociationICC codeConsolidated Code of the International Chamber ofCommerceICCInternational Chamber of CommerceSRSelf-regulationSROSelf-regulatory organisationWFAWorld Federation of Advertisers2 International Guide to developing a self-regulatory organisationn
Table of contentsAbout this Guide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Short glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Frequently used abbreviations. . . . . . . . . . . . . . . . . . . . . . . . 2Section 1: Advertising self-regulation explained. . . . . . . . . . . . . .1.1 Why advertising needs to be regulated. . . . . . . . . . . . . . . . . . . . .1.2 What is self-regulation? . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.3 Self-regulation and legislation. . . . . . . . . . . . . . . . . . . . . . . . .1.4 The benefits of self-regulation:. . . . . . . . . . . . . . . . . . . . . . . . .44444Section 2: The international environment for self-regulation. . . . . . .2.1 International development and status of self-regulation . . . . . . . . . . .2.2 International rule-making. . . . . . . . . . . . . . . . . . . . . . . . . . .2.3 International discussion on advertising self-regulation. . . . . . . . . . . .2.4 International business perspectives on self-regulation and SR initiatives. . .2.5 Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .555667Section 3: How an advertising self-regulatory system works . . . . . . . 73.1 Basic elements of a self-regulatory system. . . . . . . . . . . . . . . . . . . 73.2 Defining characteristics of a self-regulatory organisation. . . . . . . . . . . 73.3 The self-regulatory code or principles. . . . . . . . . . . . . . . . . . . . . 83.4 The code-making body. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.5 Applying and interpreting the code . . . . . . . . . . . . . . . . . . . . . . 83.6 Sanctions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.7 The appeals body. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.8 The permanent secretariat. . . . . . . . . . . . . . . . . . . . . . . . . . . 93.9 Funding and coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.10 Credibility of a self-regulatory organisation . . . . . . . . . . . . . . . . . 11Section 4: Setting up a self-regulatory system . . . . . . . . . . . . . .4.1 Getting consensus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.2 Whom should you contact? . . . . . . . . . . . . . . . . . . . . . . . . . .4.3 Planning the self-regulatory project. . . . . . . . . . . . . . . . . . . . . .4.4 Drawing up the self-regulatory code. . . . . . . . . . . . . . . . . . . . . .4.5 Sector- and issue-specific codes . . . . . . . . . . . . . . . . . . . . . . . .4.6 Recognition of self-regulation in the law . . . . . . . . . . . . . . . . . . .4.7 Ensuring an operational system. . . . . . . . . . . . . . . . . . . . . . . .4.8 Training and testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.9 How EASA can help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13131414141414151515Section 5: How to further consolidate self-regulatory systems . . . . .5.1 E xtending self-regulation across all marketing communicationsand product sectors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.2 Ensuring up-to-date codes through informal stakeholder consultation . . .5.3 Providing copy advice facilities . . . . . . . . . . . . . . . . . . . . . . . .5.4 Ensuring organised compliance monitoring. . . . . . . . . . . . . . . . . .5.5 Awareness campaigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.6 Handling a surge of complaints as a result of the awareness campaign. . . .5.7 Pre-screening complaints . . . . . . . . . . . . . . . . . . . . . . . . . . .5.8 Undertaking research and consumer awareness surveys . . . . . . . . . . .5.9 Education, training resources and events . . . . . . . . . . . . . . . . . . .15151616161717171717Section 6: Useful information. . . . . . . . . . . . . . . . . . . . . . . . 186.1 Recommended reading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186.2 Useful contacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Annex A: Perspectives on Effective Self-Regulation. . . . . . . . . . . .24Annex B: SRO promotional campaigns 2007 & 2008. . . . . . . . . . .26International Guide to developing a self-regulatory organisation 3n
Section 1: Advertising self-regulationexplained1.1 Why advertising needs to be regulatedAdvertising plays an essential part in all market economies.It stimulates growth and innovation, encouragescompetition and increases consumer choice. It is a swiftand efficient means of making consumers aware of productinnovations and keeping them informed of the range, natureand quality of the products or services available to them.Advertising is an important element in maintaining orincreasing market share and vital to the introduction of anew product or service or the improvement of an existingone. It is also closely associated with the value of brands,therefore making responsible advertising essential (see 1.4).Advertising not only informs people of products, servicesand brands but also provides an indispensable life line forthe creation of television shows, magazine and newspapercontent and online material, to name a few.To fulfil this important task, advertising must enjoy a highlevel of consumer trust and confidence as well as the trustof political stakeholders: it must be legal, decent, honest andtruthful.If consumers are misled by advertising, they will not buyagain; if it offends them, they are unlikely to buy in thefirst place. Such advertising, even though it may accountfor only a small percentage of the whole, will graduallyundermine consumer confidence and all advertising willsuffer. If political stakeholders feel that consumers aremisled, offended or influenced in an irresponsible wayby advertising they will try and push through detailedlegislation restricting certain types of advertising, or possiblybanning them.It is, therefore, in the interest of all those in the advertisingindustry, whether advertisers, advertising agencies or themedia, to ensure that advertising follows a set of rules tomake sure that advertising is legal, decent, honest andtruthful. This is traditionally done through self-regulation(SR), a system that works within the framework of existinglegislation.1.2 What is self-regulation?Self-regulation is a system by which the advertising industryactively regulates itself. The three parts of the industry—theadvertisers who pay for the advertising, the advertisingagencies responsible for its form and content, and the mediathat carry it—agree on standards of practice and set up asystem to ensure that advertisements that fail to meet thosestandards are quickly removed or corrected.This is achieved by means of rules or principles of bestpractice, by which the advertising industry voluntarilyagrees to be bound. These rules are enforced by a selfregulatory organisation (SRO) set up for the purpose andfunded by the industry itself.4 International Guide to developing a self-regulatory organisationnSelf-regulation exists in most regions around the world. Insome jurisdictions self-regulation has been in place for manyyears; it takes widely varying forms in different countries,but its underlying ethos is always the same: that advertisingshould be legal, decent, honest and truthful, prepared with adue sense of responsibility to the consumer and society andwith proper respect for the principles of fair competition.Although in some countries advertising is subject toso much detailed legislation that the scope left for selfregulation is quite narrow, elsewhere legislation is limitedto providing a broad framework and advertising content isefficiently regulated by SROs.1.3 Self-regulation and legislationSelf-regulation is an alternative to detailed legislation, butnot to all legislation. Many believe that self-regulationworks best within a legislative framework, and it is usefulwhen the concept of self-regulation is formally recognisedin framework legislation. The two complement each other,like the frame and strings of a tennis racquet, to produce aresult which neither could achieve on its own. The law laysdown broad principles, e.g. that advertising should not bemisleading, while self-regulatory codes, because of theirgreater flexibility and the fact that they are interpreted inspirit as well as to the letter, can deal quickly and efficientlywith the detail of individual advertisements. The legislativeframework, therefore, creates a legal backstop that selfregulation will need to invoke when dealing with fraudulentand/or illegal practices as well as rogue traders—thoseoperators who repeatedly refuse to abide by any laws.1.4 The benefits of self-regulation:Around one third*, and in some cases up to 70%**,of a company’s market capitalisation is represented byits brand reputation, which is why consumer trust inthe brand is crucial to corporate success. Advertisingself-regulation, through the promotion of responsibleadvertising, helps build consumer trust in brands,which in turn builds brand loyalty, increases sales,and strengthens market share. Maximised returns onlong term investments on advertising benefit not onlyadvertisers but also agencies and media, who will seea higher demand for creative yet responsible advertising.Advertising self-regulation in a nutshell: Provides a level playing field—the SRO ensuresthat competitors will not use advertising in a waythat could be detrimental to professional practice orconsumer trust in your sector.Is quick—complaints are handled quickly whichallows for rapid withdrawals of damaging campaignby competitors.Is inexpensive & accessible—the system avoidscostly legal costs and provides efficient and quickredress.
Is flexible—the system is flexible enough to adaptto changing societal views and advertising media/techniques.Is appropriate & proportionate—the advertisingstandards are appropriate and proportionate to themedia and culture concerned.Provides effective sanctions—decisions can requestmodification or withdrawal of the ads found inbreach of the codes. The media acts as a gatekeeper incase the advertiser refuses to comply, which ensuresrapid enforcement of the decision. The impact on thebrand image and reputation of the advertiser and thecost of losing the campaign are deterrent sanctionsfor advertisers. Repeat offenders can be submitted tomandatory copy advice to avoid future problems.Is impartial—the cases are assessed in an impartialprocedure by a jury composed of lay experts only oraccompanied by professionals. Conflicts of interestare therefore avoided. Through these decisions thetrust of consumers in advertising is preserved.Demonstrates responsibility—through theirinvolvement in the self-regulatory system, industrystakeholders show their active commitment toresponsible marketing communication. By providingan additional level of consumer protection, it helpsdecrease the pressure to further regulate a sector andhelps increase the level of consumer trust.Provides advice—many self-regulatory bodiesprovide advice upon request to the advertisingindustry on campaigns before they are run to makesure they comply with the code. This helps avoidproblems.When looking at advertising, legislators may not fullygrasp the complete impact of certain laws they passon the industry. A
EASA 2009 International Guide to developing a self-regulatory organisation Practical advice on setting up and consolidating an advertising self-regulatory system . About EASA EASA—European Advert
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