Home » Best Practice » 2015 Budgets: Impact of APEC Action Agenda

2015 Budgets: Impact of APEC Action Agenda

Economic

Advertisements

Unexpected costs due to the new obligations under the APEC Action Agenda will impact on budgets in 2015. Not only will advertising Self-Regulatory Organizations (SROs) have additional expenditure but also trade organizations such as advertiser groups, agency groups and media groups. Multi-national companies have particular responsibilities that will be an additional budgetary expenditure item.

Industry has been a strong advocate for reform of advertising regulation in the Asia-Pacific region. APEC has delivered with a comprehensive reform package. 2015 has been designated as the time for industry to implement the reform package – but that will cost money and resources.

Action Agenda

As discussed previously the Action Agenda endorsed by the APEC Leaders’ Declaration is an outstanding document that sets the timetable for introducing best practice self-regulatory standards throughout the region. For those countries where there is little or no self-regulation there is a lot of work to be done. For those that are developing their self-regulatory regimes the same applies. Those countries that already have high standards of advertising regulation will be primarily responsible for resourcing and funding those who need assistance. This will be an unexpected budget item in 2015.

The reason the Leaders gave for endorsing the Action Agenda was “to promote alignment of advertising standards and reduce the cost of doing business across the region”.

Three days before the Leaders’ Declaration the Ministerial Statement of APEC Trade Ministers said their support in part was to “promote advertising”. The relevant paragraph said,

We support efforts to foster more effective advertising regulation and standards to promote advertising, and endorse the APEC Action Agenda on Advertising Standards and encourage economies to undertake efforts to implement its recommendations in 2015.”

Clearly if the objectives of promoting advertising, alignment of advertising standards and reduction of the cost of doing business are achieved then the advertising industry will benefit considerably and the investment handsomely rewarded.

Although the Action Agenda allocates various tasks to different sectors as discussed below, there is no APEC or Government funding. The entire plan is to be self-funded.

SROs

 A key task for developed SRO’s is training for developing and aspiring SROs. This is a continuation of the work so far at the Hanoi Dialogue and the Beijing Forum. A priority is mentoring which is best done on site on a one-to-one basis. If this is followed by a buddy system then developing SRO’s can progress very quickly. To achieve this then the developed SROs would need to fund and resource the initiative.

The Action Agenda states – “Develop and deliver mentoring and capacity building programs in 2015”. Thus developed SROs should budget in 2015 for staff being overseas assisting in the mentoring and capacity building program.

Industry Associations

The Action Agenda spells out what is expected of industry associations –

to actively participate in advertising self-regulatory practice. While raising awareness and capacity of self-regulation, they should play their role in guiding and rectifying their members’ advertising practice.”

 A feature of countries with developed SROs is a supporting network of industry associations. Usually the associations do actively raise awareness of self-regulation and build up capacity and knowledge within their membership of the requirements of responsible advertising. But in countries with developing SROs or no SROs there are usually few or no industry associations. Sometimes there is an advertiser group but agency groups and media groups are less common.

Thus industry associations in countries with developed SROs could become outward looking and assist in the development of sister organizations in countries where there is no association or there is an emergent association. This would be challenging, as it requires an outward looking focus and the willingness to allocate resources and funds in 2015 for the regional good.

Multi-National Advertisers

The Action Agenda specifically mentions advertisers – “As the initiator, investor and drivers of brand advertising campaigns, advertisers should practice corporate social responsibility and actively promote responsible advertising. Brand owners and their representative organisations should, therefore, assume primary responsibility for advertising communications and industry self-regulatory practice.”

 Multi-national advertisers almost without exception do practice responsible advertising and ethical corporate social responsibility. The key words in the statement are “actively promote responsible advertising”. We do not read this to mean actively promote within the company but generally. In other words to become involved in supporting SROs and “assume primary responsibility for advertising communications and industry self-regulatory practice.”

This is a common occurrence in sophisticated markets but being involved in developing markets as found in many APEC countries is more challenging. For instance emerging and new SROs require startup-funding, expertise and general industry support. A group of multinational advertisers have extraordinary influence to get multi-national agency groups and media involved. It is this sort of support that would satisfy the Action Agenda ‘request’.

Once more this requires action with an allocation of funds and resources in 2015.

Discussion

Adam Brandenburger of Harvard University and Barry Nalebuff of Yale developed the concept of co-opetition. Various competitors combine in a common purpose with the goal of increasing the size of the business pie while still competing to carve it up. What the Action Agenda proposes is a co-opetition model.

The diverse industry players combine to ensure that countries in the Asia-Pacific region all have best practice advertising self-regulation. That requires effort, resources and funds. The reward is petty restrictions would be removed, advertising would be encouraged and the cost of business throughout the region would reduce. The advertising pie would subsequently increase with the opportunity for all players to have a larger slice.

The big BUT is that action is required in 2015.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: