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A Worthwhile Precedent

Best practice advertising self-regulation requires the advertiser, agency and the media to adhere to the self-regulatory codes. An effective way of enforcing this adherence is for the media to include compliance with the codes in their terms of trade. A good example of this and a worthwhile precedent is contained in the Fairfax New Zealand terms of trade for advertising on its Internet sites, newspapers and magazines.

Terms of Trade

The daily morning paper I read is a Fairfax publication. Every day in the classified section it publishes its ‘Advertising Terms and Conditions for Websites and Publications’. There are 25 conditions but right up front is Clause 1 that sets out clearly the expected standards for ads.

Clause 1 has four subclauses

– Subclause (a) deals with compliance with the law

– Subclause (b) deals with compliance with the self-regulatory codes

– Subclause (c) is a disclaimer against liability

– Subclause (d) deals a number of requirements regarding website ads e.g. no undisclosed cookies

We replicate Subclauses (a) and (b)

1. In accepting any material including electronic material or data for publication, and in publishing it we are doing so in consideration of and relying on the your express warranty, the truth of which is essential that:

 a) the material does not contain anything:
- that is misleading or deceptive or likely to mislead or deceive or which otherwise breaches the Fair Trading Act 1986;
- that is defamatory or indecent or which otherwise offends against generally accepted community standards;
- that infringes a copyright or trademark or otherwise infringes any intellectual or industrial property rights; – that breaches any right of privacy or confidentiality; that breaches any provision of any statute, regulation, by-law or other rule or law;

 b) and the material complies in every way with the Advertising Code of Practice issued by the Advertising Standards Authority Inc. (“ASA”) and with every other code or industry standing relating to advertising in New Zealand;

 The clause is very specific. The advertiser must give a warranty that the ad conforms to various laws and the ASA Codes. Note the phrase ‘the truth of which is essential’.

 Subclause (a) deals with misleading material and specifically mentions the Fair Trading Act. Other legislation is mentioned in general terms – there are over 50 different pieces of legislation that cover advertising in New Zealand. There is also the general phrase prohibiting ads ‘which otherwise offends against generally accepted community standards’. Interpretation of this will vary with the media. What is suitable in a Penthouse type magazine may not be acceptable in the daily newspaper.

In Subclause (b) not only are the ASA Codes mentioned but also any other codes. Certain industries and professions, such as dentists and doctors, have their own Codes of Conduct that often include advertising.


In practice the media screen ads before publication. Usually the screeners are highly skilled and have attended seminars conducted by the ASA. With difficult ads the screener will contact the ASA for its opinion. Quite often the ads are acceptable with minor changes.

It is a system that is efficient, works well and is timely. Central to its success is the terms of trade. Most media in New Zealand have similar terms of trade.

The Fairfax terms of trade have many other useful clauses with some specific to website advertisements. The full terms of trade may be found on this link

Best Practice Advertising Regulation Checklist – Draft 2

Draft 2 of the Best Practice Advertising Regulation is completed and we seek your comment. It is available on this link.

Last May we circulated Draft 1 of a Working Paper containing a draft Best Practice Advertising Regulation Checklist. The checklist covered best practice requirements for both advertising self-regulatory organisations and Governments.

The ‘APEC Action Agenda on Advertising Standards and Practice Development’ that was endorsed by the Leaders of APEC economies at their meeting in Beijing in November 2014 lists four challenging tasks for completion in 2015. One of the tasks is:

Develop an advertising regulatory checklist in 2015 that details key elements of a regulatory framework that facilitates trade and investment and protects consumers.’

We asked for comment on Draft 1 and we received a large number of most helpful and constructive contributions. We are very thankful for the generous assistance we received. The suggested amendments were wide and varied and the vast majority has been included in Draft 2.

We now seek comment on Draft 2. If you could let us have your comments by Tuesday 15 September we will be most appreciative. Michael Harker, Research Director of FAR, and I are meeting in Australia and hope to finalise the draft by the end of September. We will then formally forward it to the APEC Advertising Standards Steering Committee. The Steering Committee has already appointed a lead person to oversee the project for which we are very grateful.

You will note that we have used Tracked Changes in Draft 2 to clearly indicate the changes we have made. The document is in pdf form but if you would like a Word version please let us know.

We look forward to your comment.

Glen Wiggs


Foundation for Advertising Research

Best Practice Advertising Regulation Checklist

We would like your assistance and input. The ‘APEC Action Agenda on Advertising Standards and Practice Development’ lists four challenging tasks for completion in 2015. One of the tasks is:

Develop an advertising regulatory checklist in 2015 that details key elements of a regulatory framework that facilitates trade and investment and protects consumers.’

Best practice advertising regulation has been a main objective of the Foundation for Advertising Research (FAR) since its inception 10 years ago. Our work included checklists for the audit of SROs. This was motivated by the interest the founders of FAR had in best practice advertising regulation over the past 25 years.

Over the past few weeks we have developed a Working Paper of a Draft Checklist that we believe will be suitable for the APEC region. We seek your feedback. The Working Paper is on this link

If you could let us have your comments by 29 May we would be most appreciative. Once the Draft is finalised we intend to submit it to the APEC Advertising Standards Steering Committee for its consideration.

Glen Wiggs


Foundation for Advertising Research

South Africa ASA on Verge of Collapse

Trade media in South Africa report that the self-regulatory Advertising Standards Authority (ASA) is in a ‘perilous’ financial position and will cease to operate within 45 days unless the funding is found. The collapse of the ASA would set a dangerous precedent internationally and fuel argument for Government regulation.


The ASA has a proud 47-year history being founded in 1968. It was an early international member of the European Advertising Standards Alliance (EASA) having joined in 1982. Its codes are based on the ICC Code of Advertising Practice and it has a complaints system where consumers can complain about breaches of the codes and have their complaints dealt with by an independent adjudication body.

On the face of it the ASA complied with the EASA 10 Principles of Best Practice Advertising Standards. However it appears that it has failed to comply with the Second Principle – Sustained and Effective Funding.

There has been discussion in the South African trade media about the ASA over the past few years. In 2012 there was considerable discussion with discord between the ASA and various industry members. Allegations included:

– Lack of transparency by the ASA regarding its budget and financial position

– In 2011 there was criticism of the funding model and a warning of a ‘pending crisis’

– The withdrawal of some key funders

– A ballooning ASA budget

– Slow turnaround of complaints

– The refusal of the ASA to process complaints about Government advertisements

– The ASA was becoming the ‘Mugabe of Marketing, with idiotic rules, iron fists and no money’

– ‘Lobbyists brazenly manipulating the ASA ‘by lodging multiple complaints to further their campaigns’.

– The codes were outdated

These issues will be familiar to self-regulatory organisations (SROs) especially when they are under stress. Successful SROs deal with the issues swiftly and remedy any perceived problems.

Urgent negotiations are now underway to resolve the funding crisis and no doubt the other issues will need to be resolved at the same time.

BBB Amends Code

The US Better Business Bureau (BBB) has announced changes to its Code of Advertising. The main changes relate to price promotions, testimonials, endorsements and environmental claims. Further information including a link to the new Code is available on this link

Why Self-Regulation Works

Almost all developed countries have a sophisticated network of advertising Self-Regulatory structures. Many query how Self-Regulation can be effective when there is no punishment such as a fine. This is based on the assumption that a fine is required to ensure compliance and is a common factor in a Command and Control regulatory regime.

Creatives make ads and the role of a successful creative is to push boundaries. Creatives have done this since the beginning of time. The right to advertise is not an absolute right but is subject to fetters such as advertising codes which are much stricter that the law. This contrasts with other types of creatives such as visual artists and writers who are not subject to codes and therefore enjoy a greater freedom of expression. Even when they breach a law the Government regulator is often reluctant to act because of potential public backlash – so entrenched is the artists right of freedom of expression.

Advertising Self-Regulation works because it is in the self-interest of the advertising industry for it to do so.

– There is an economic imperative to operate a successful Self-Regulatory regime. The media rely on income from advertising to sustain their businesses. If consumers are misled or offended by a particular medium or consider it is publishing or broadcasting advertisements which are socially irresponsible then they will no longer support that medium. Circulation, viewership or listenership will fall as consumers lose trust in the medium. The inevitable consequence is a loss of advertising revenue as advertisers place their advertisements elsewhere. In order to sustain revenue in the longer term the media rely on a high level of trust by consumers.

It is therefore in their self-interest to have codes and a complaints system that genuinely protects consumers and reflects prevailing community standards. It is also why media, on a daily basis, will not accept advertisements that do not meet the standards set out in the self-regulatory codes.

– The same arguments apply to advertisers and advertising agencies for they also will lose revenue in the longer term if they mislead or offend consumers or act in a socially irresponsible manner.

– Advertising Self-Regulatory organizations and the wider Self-Regulatory systems make extensive use of persuasion. It is a key reason why they have very high compliance to its requests to withdraw advertisements found in breach of the Codes.

– Instead of a culture of resistance and regulatory cat-and-mouse the Self-Regulatory organizations and the wider Self-Regulatory regimes have established a culture of respect for not only the provisions of the Codes but also the spirit and intent of the Codes.

– If there were a Government Command and Control regulatory regime with a punishment system such as fines then it is likely to lose the goodwill of the industry players, foster a sub-culture of resistance and encourage regulatory cat and mouse. Exploitation of loopholes and vastly increased expenditure would develop. It would be self-defeating.

APEC Beijing Advertising Standards Forum Report

The report on the Beijing Advertising Standards Forum last August is now available. The report gives a full count of the discussions at the Forum including how the Action Agenda on Advertising Standards and Practice Development evolved.

The report may be accessed on the following link


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