December 2010
Buying your legal services from George Green will make you live longer and save the planet – Not really, but please note changes to rules regulating advertising!
If you carry out the promotion of your business in any medium it is essential that you are aware of the laws and regulations relating to advertising so that you can avoid the consequences of non-compliance. Recent changes to these rules and further changes that are due in six months time mean that you should update your awareness.
Various codes regulate advertising, of which the British Code of Advertising Sales Promotion and Direct Marketing (or “CAP Code”) is particularly important. The CAP Code (and the offshoot BCAP Code applicable to the broadcasting industry) is administered by the Committee of Advertising Practice and is enforced by the Advertising Standards Agency, which refers persistent breakers of the CAP Code to the Office of Fair Trading.
As a reminder the continuing principles of the CAP Code are that:
- Advertising has to be legal, decent, honest and truthful. It is particularly important to avoid causing offence on the grounds of race, religion, sex, sexual orientation and disability.
- Advertising copy must be prepared with a sense of responsibility to consumers and society and must respect the principles of fair competition generally accepted in business.
- Advertisements should not mislead by inaccuracy, ambiguity, exaggeration or in any other way.
- Advertisers must hold documentary evidence to prove that they can objectively substantiate any claims they make before submitting an advertisement for publication.
New rules in force from September 2010:
- Prevent the collection for marketing purposes of personal information from children aged under 12 without the consent of parents or guardians and collection from children aged under 16 of information about other people.
- Clarify how to use the word “free” in marketing communications.
- Oblige marketers of prize promotions to make the number and nature of prizes clear and to ensure that recipients of “instant win” type prizes receive their prize quickly and easily.
- Require that marketing communications are obviously identifiable as such.
The CAP Code also includes new rules to reduce “greenwashing”, in other words the exaggeration of the environmental benefit of a product by making claims that cannot be substantiated.
Organisations have increased the use of their own websites and non-paid-for online space, such as social networking sites, to advertise.
From 1 March 2011 the CAP Code will cover advertisement and marketing communications on an organisation’s own website or in other non-paid-for online space under an organisation’s control, such as social networking sites. This will be a significant change as currently the CAP Code only applies in the digital sphere to advertisements in emails and text messages and advertisements in paid-for space, such as banner and pop-up advertisements or keyword advertising on search engines.
The change will be made in March 2011 so that organisations have time to adjust their advertising and marketing arrangements thereby continuing to comply with the CAP Code. The Committee of Advertising Practice has set out how to decide if a particular advert or marketing communication is caught by the new rules.
If an advertising or marketing communication is designed to sell something it will be subject to the CAP Code. However, a communication may be regarded as being designed to sell something even if it does not include a price or immediately seek an immediate financial commitment.
It is still likely to be caught by the CAP Code if it appears in the same or a very similar form as an advertisement in paid-for online space, or includes (or makes easily accessible) an invitation to purchase.
Existing exclusions from the CAP Code will continue to apply, together with additional exclusions for “investor relations materials” (communications by a company about itself with the financial community, including shareholders and investors) and “heritage advertising” (old advertisements) displayed on an organisation’s own website or in other non-paid-for space online under its control.
It is also worth noting that from 1 March 2011 the CAP Code will apply to “advergames” (videogames used to promote a product or organisation) and “user-generated content” (content created by a private individual) if adopted and incorporated into an advertiser’s own marketing communications.
To help enforce the changes, the Advertising Standards Agency will be able to name and shame offenders and remove paid for search advertisements online that link directly to advertising or marketing communications on an organisations own website or non-paid-for online space under its control if they breach the CAP Code.
The implications for your business of the extension of the CAP Code could be significant. You should begin the process now of reviewing your businesses websites to check whether material on them will be subject to the CAP Code. You must also bear in mind that anyone contributing to your businesses’ website, or its Facebook page or Twitter account (which will be regarded as non-paid-for online space now subject to the CAP Code) will need to be aware of and comply with the CAP Code.
