Magazine article Teaching Business & Economics

How New Advertising Regulation Affects Social Networking Sites

Magazine article Teaching Business & Economics

How New Advertising Regulation Affects Social Networking Sites

Article excerpt

The Advertising Standards Authority (ASA) website is a useful source of information providing interesting case studies in relation to marketing and advertising. The cases highlighted by the ASA are often controversial and interesting and useful in stimulating student interest and generating discussion to help build analytical and evaluative skills. The explosion of online advertising presents new challenges for regulation and this article will highlight the main changes which have been made to the ASA's remit with regard to online advertising.

The name Advertising Standards Authority should prompt the words 'legal, decent, honest and truthful' to pour unconsciously from students' pens. Since March 201 1, this phrase can now be applied to marketing claims on companies' own websites and on third party space under their control, such as Facebook or Twitter. While the regulatory framework had already protected internet users from companies running misleading or inappropriate advertisements for their goods or services on other people's websites, such as using pop-up adverts, banners or in emails, it seems extraordinary that, with the World Wide Web coming into its own in the mid-90s, it has taken over fifteen years to extend further the ASA's remit online to companies' own websites in order to provide greater protection to consumers.

'This significant extension of the ASA's remit has the protection of children and consumers at its heart. We have received over 4,500 complaints since 2008 about marketing communications on websites that we couldn't deal withf but from 7 March anyone who has a concern about a marketing communication online will be able to turn to the ASA.'

ASA Chairman Lord Chris Smith - September 2010

This regulation has come close on the heels of the Unfair Trading Regulations. These regulations (full title - Consumer Protection from Unfair Trading Regulations) came into force in 2008 and replaced and strengthened much of the previous consumer protection legislation, including the repeal of almost every part of the once-favourite of business students, the Trade Descriptions Act. Now, with those regulations and this extension to the ASA regulatory framework, the consumer safety net is spread even wider.

Advertising Codes applied by the ASA lay down rules for advertisers and media owners to follow and are designed to ensure that advertising does not mislead, harm or offend. As with everything around legislation, regulatory standards and codes of practice, aspects of this Code can be complex. However, to give students a simple summary, it is sufficient to state that this new regulation covers the following.

* Marketing communications on companies' own websites. So, in the case of, say, a complaint that a children's furniture website was showing images of children in an inappropriate or harmful way, this would now be the subject of investigation by the ASA, in the same way as misinformation in a newspaper or on a billboard would have previously been investigated.

* Marketing communications by companies on other third party space under their control, i.e. web space marketed and provided by another organisation but over which users have control of some of its content. Typical examples of third party space of this nature are social networking sites such as a company's Facebook or Twitter pages. The same children's furniture company therefore would have to be sure that any images or statements it might make extolling the virtues of its goods on social networking sites pass the 'legal, decent, honest and truthful' test.

To grasp fully the implications of this regulation, it is important to understand the ASA definition of a marketing communication and how this could impact on social media sites such as Facebook. A marketing communication is seen as an 'invitation to purchase'. …

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