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Chicken Licken to appeal ''excessive'' ASA ruling

Chicken Licken has indicated that they will be lodging an appeal against an order by the Advertising Standards Authority that they must advertise on prime time television, at their own expense, that they disregarded the standards code by exploiting the goodwill invested in Kentucky Fried Chicken's Colonel Saunders icon.
Over a long weekend in June Chicken Licken flighted commercials on five television stations that featured a Colonel Saunders look-alike. Kentucky Fried Chicken ("KFC") complained that the ads were disparaging, comparative and exploited the goodwill invested in their icon of the Colonel. KFC concluded that this breached the standards code by constituting imitation and misleading advertising.

On 1 September 2003 the Advertising Industry Tribunal made the following ruling:

"The Tribunal concurred that the crafting of the advertisement was entirely deliberate. The character representing Colonel Saunders was virtually identical to the animated version used as KFC's brand icon and the references to Finger Licken and the secret recipe was deliberately crafted. The iconic nature of the figure is not in doubt.

In the circumstances, the Tribunal felt that it is disingenuous of Chicken Licken to argue that it is coincidental that the advertisement had been flighted before a long-weekend. In light of the very deliberate crafting of the advertisement, the Tribunal held that it is more likely that the advertisement had been deliberately launched before the long-weekend to take advantage of a four-day weekend before any complaint could be considered.

Consequently, the following sanctions are imposed on Chicken Licken by the Tribunal: The advertisement is to be withdrawn in its current format and Chicken Licken is also ordered to publish a summarised version of the ruling as prepared by the ASA in the medium in which the advertising complained of appeared. The costs of such publication will be for the account of Chicken Licken in terms of Clause 14.5 (Sanctions) in the Procedural Guide."

In the past, the ASA had issued the same penalty, and the defaulting party had been required to publish a summarised version of the ruling in the same media, and therefore at the same cost, for example in the Land Rover/The Human Rights and Others matter dated 7 December 2000.

In the KFC/Chicken Licken case it would be the first time in South Africa that the defaulting party would have to air a summary of the ruling on television. A perusal of the flighting schedule for the advertisement over five television stations in the period 13 – 18 June 2003, revealed 41 flightings at a cost in excess of R1 million. Due to the considerable cost that would be incurred in meeting the penalty, the ASA took the unprecedented step of offering both parties the opportunity to address the Tribunal about the appropriateness of the penalty. More particularly, the opportunity was given to the parties to argue the frequency of publicising this summarised version of the ruling.

To assist the Tribunal, the ASA also received opinions from Piet Smit, Technical Director of the South African Advertising Research Foundation ("SAARF") and Brenda Wortley, independent consultant with Brenda Wortley Media CC, on the flighting of the proposed summary.

SAARF expressed the view that the fairest would be to repeat the schedule in the same programmes on the same days. However, although it would work quite well for regular programmes like soap operas, it would not work well for programmes such as the Comrades Marathon, which is not a repetitive item. Smit further stated that the type of sport influences the profile of the audience. He then suggested that the ASA take the achievement of the schedule as a starting point but negotiate alternative programmes to replace once-off sport programmes that would reach similar audiences and be acceptable to the parties involved.

Brenda Wortley said that if the objective is that the correction announcement be flighted at the same level of media weight as the offending commercial, then the best way to do this is by insisting on the same levels of reach, frequency and ARS over the same time period and using a similar mix of programming.

Wortley also suggested that if the ASA is trying to set principles for corrective flighting bursts, one needs to bear in mind the following:
  1. If a substantial proportion of the target has been reached with the offending commercial, then the same should apply for the corrective advertisement.
  2. Media weight should be set in terms of media exposure, namely, reach, frequency and ARS, and not in terms of spend or number of spots.
  3. Media weight should be measured against the same target audience as the campaign was bought against.
  4. A campaign of 250 –300 ARS should reach about 45% of the target market more than twice.

In Wortley's view this should be the minimum level of exposure for corrective flighting as it reaches a significant portion of the target market at least twice. She further stated that this should be the minimum level required for the corrective flighting where the offending commercial had in excess of 300 ARS. Any thing less than 250 ARS should be countered with the same level of exposure as originally flighted.

Another important issue is whether the original campaign was flighted in peak season. Having regard to the fact that the advertisement was flighted over a Comrades Marathon long-weekend, the view was expressed that the ruling summary would have to be flighted at a near appropriate time from the point of view of audience reach.

Peter Schumacher, Financial Director of Net#work BBDO, argued that it was clear from the wording of the ruling that all was required was to publish a summarised version of the ruling in the same medium that was used in the original commercial. The frequency, however, is determined as a singular and defined flighting.

He further argued that the ruling does not set out a required flighting frequency other than a singular flighting on the medium of television. The ruling also does not say that frequency needs to be decided upon at a later stage.

Schumacher argued, therefore, that it had to be assumed that the Advertising Industry Tribunal (AIT) decision in the September ruling was final and there was no intention to impose any more or any less of a form of frequency than that set out in the ruling. The ruling should be clear and straightforward and unambiguously communicate the intention of the committee. If the intention was to sanction Chicken Licken with multiple adverse publicity statements, this should have been stated and set out clearly in the ruling.

Schumacher further argued that as the complaint came from a competitor and not from consumers there was no question, therefore, of the public being offended and the ruling did not request a public apology.

Schumacher argued that although the ASA is a self-regulatory body, it is still subject to the laws of the country and referred to the Promotion of Administrative Justice Act of 2000 in terms of which the ASA is an administrative body exercising a public power and function in terms of an empowering provision (being the ASA Code of Conduct). Chicken Licken likewise had the right to administrative action that is lawful, reasonable and procedurally fair. The recommendation of spot for spot adverse publicity is outside of the ruling and effectively amounts to a punitive financial sanction in excess of one million rand. This is contrary to the ruling made and is therefore unreasonable, excessive and unprecedented anywhere in the world.

The Tribunal was requested by Schumacher to act in terms of the ruling, namely, that:
  1. The advertisement be withdrawn in its current format. Schumacher stated that this was already done in good faith at considerable opportunity costs prior to the ASA instruction to do so;
  2. A summarised version of the ruling as prepared by the ASA is published in the appropriate medium. He submitted that it should not amount to an adverse publicity statement and should not include anything not mentioned in the ruling. This should be flighted on the medium of television and the respondent is to pay the costs.
Schumacher noted that the current proposed wording of the advertisement includes a number of things not mentioned in the ruling, such as the name of Net#work BBDO and the allegation that Chicken Licken exploited KFC's Colonel character.

A further reason given by Schumacher for the reasonableness of his submission, was that KFC had at no stage provided any proof of damage to their brand or financial loss. He submitted that Chicken Licken had received negative publicity and withdrew the commercial prematurely at considerable cost. Importantly, he said that Chicken Licken still maintained that the withdrawal occurred as a result of an agreed settlement of the issue. KFC had thus achieved its objectives of withdrawing the commercial without having to incur the expense of any form of action in the courts.

It was further submitted that for the first time ever in this country there will be a flighting on prime time television of a summary of an ASA finding. This would not be passed without comment in the media and ranked amongst the most severe if not the most severe sanction ever imposed on an advertiser by the ASA. Contrary to the ruling, no trademark of the complainant's was used in the commercial. Therefore multiple flighting in these circumstances cannot be reasonable to inform the public and thus smacks of deliberate financial retribution which is the prerogative of the courts and not an advertising regulatory body.

In the Tribunal hearing, members of the Tribunal raised very specifically the issue that the advertisement appeared to be very deliberate "hit and run advertising", and that the intensity and spend in such a short time was out of proportion to the Respondent's overall marketing budget.

Net#work BBDO submitted a letter to the ASA dated 10 November 2003 stating that although Chicken Licken strongly believed that the AIT had erred in the conclusions of its original ruling, no appeal had been lodged at the time. The reason was that the commercial had concluded its flighting and it was felt that the costs of the appeal was not commercially warranted in the circumstances. This was also supported by Schumacher's argument that the ruling, as written on 1 September 2003, was final and that nothing was expected to flow from it by Chicken Licken.

The letter further stated, that now that Chicken Licken and Net#work BBDO knew the full effect of the ruling, a decision had been taken to appeal the case, based on their original strongly-felt belief that the ruling was incorrect and that no evidence was produced by KFC showing that Chicken Licken contravened the Code.

At the Tribunal hearing on 12 November 2003 and in the telefax submitted to the ASA on 13 November 2003, Schumacher denied "hit and run" advertising. He presented a document comparing the television launch of Chicken Licken's campaign in June 2002 with the launch in June 2003, stating that the 2002 launch was more intensive and cost more. He denied the validity of the view that the launch was excessive, and submitted that these statements have been made having absolutely no knowledge of the facts pertaining to historic Chicken Licken campaign. Schumacher denied that there was any intention to conduct an "ambush marketing campaign".

One of the Tribunal members had expressed the opinion that Chicken Licken was "unrepentant". In his letter of 13 November 2003, Schumacher submitted that the statement was unduly influencing the Tribunal to consider a harsher sanction than that warranted. He further said that Chicken Licken respects the ASA decision and ruling, albeit that it does not agree with the final outcome.

Schumacher stated that it was within BBDO's rights to protest aggressively against the recommendations: "It is within the rights of the marketer to disagree with the ruling while at the same time respecting it and adhering to it, as Chicken Licken has in this case".

Neil Lister, Group Account Director of Ogilvy & Mather submitted that damage was done to KFC, which was picked up in tracking studies. Some viewers perceived the advertisement as a KFC advertisement and others wondered why a competitor was using Colonel Saunders in its advertising.

Lister noted that the ad-spend of R1,2 million amounted to nearly a quarter of Chicken Licken's advertising spend over the year. He suggested a compromise sanction as KFC did not want to revive the issue by having the advertisement raised in the public consciousness again. He submitted that what would be appropriate would be one apology advertisement flighted once and the balance of the advertising spend to be given to a charity of the ASA's or KFC's choice. Chicken Licken correctly pointed out that the latter suggestion is not within the ASA's mandate.

The Advertising Industry Tribunal ruling:

Paragraph 1 of the Preface to the ASA Code states:

"The Advertising Standards Authority of South Africa (also known as the ASA) is an independent body set up and paid for by the marketing communication industry to ensure that its system of self-regulation works in the public interest..."

Clause 12 of the Preface also sets out the Code's two main purposes: firstly, to protect the consumer. Secondly, to ensure professionalism among advertisers.

Clause 13 sets out need for a regulatory Code in addition to complementary legislation. Importantly, Clause 13.2 states as follows:

"The second reason for a self-regulatory Code is that those who are bound by it agree to observe it both in spirit and in the letter, and not to circumvent it by dubious ingenuity. Advertisers accept a straightforward obligation to the public and to one another...".

One of the clauses in terms of which the complaint was considered, was Clause 9 of Section II on Imitation. It is important to point out that after the numbered sub-paragraphs of Clause 9, the Code provides:

"In considering whether or not an infringement has taken place, consideration will, inter alia, be given to the extent of exposure, period of usage and advertising spend, whether the concept is central to the theme, distinctive or crafted as opposed to in common use. Furthermore, the competitive sphere will also be taken into account. This, however, will only apply if the advertiser is committed to start trading in the local market within a reasonable period of time."

It bears referring the parties back to the ruling, as reiterated on page 1 of this document, that the Tribunal was left in no doubt that the crafting of the advertising was deliberate as was the use of the Complainant's brand icon and the references to the Colonel's secret recipe. The crafting was deliberate and in light of the 41 flightings over a 4-day weekend, the Tribunal was in no doubt that the Respondent and Net#work BBDO had launched the advertisement to take advantage of a 4-day weekend before any complaint could be referred to the ASA.

As has been stated already, Mr Schumacher said that the sanction that the advertisement be withdrawn in its current format, had already been done "in good faith and at considerable opportunity cost to Chicken Licken prior to the ASA instruction to do so." In the documentation submitted to the ASA in the original hearing, the Respondent submitted that there had been an agreement between the Complainant and Respondent, that if the Respondent withdrew the advertisement on 16 June 2003, the Complainant would agree to resolve the issue outside the ASA. The Complainant disputed that an agreement had been reached. In the ruling, the Tribunal was satisfied that no agreement had been reached between the parties that would have precluded the Respondent from taking the matter to the ASA to protect its brand. It is important to note, and it is stated in the ruling, that the Respondent conceded in the hearing that the alleged agreement had been more in the nature of a discussion. It was clear that in light of the seriousness with which the Respondent viewed the matter, the Respondent had agreed to withdraw the advertisement. In the ruling the Tribunal expressed its satisfaction that no agreement had been reached between the parties.

However, in its submission to the Tribunal on 12 November 2003, the Respondent persisted in submitting that it had withdrawn the commercial prematurely at considerable cost at the prompting of the Complainant "in what Chicken Licken still maintains as an agreed settlement of the issues." The Respondent is either being dishonest, disingenuous or both.

On the issue of "hit and run" advertising, in its newsletter "ASA Newsline 30 October 2003", the ASA discussed the issue of hit and run advertising and described it as "the practice of placing controversial or potentially offensive advertising over a specific period. The apparent intention is to obtain maximum publicity and exposure before the advertisement is pulled. This practice is frowned upon by the ASA."

It also stated that in recent years the sanctions imposed on Code transgressors have become tight and reference was made to recent contraventions, including the Status/ Axe and the Opel Corsa / VW campaigns.

The Tribunal noted the Respondent's submission that the flighting schedule and ad spend was in line with the previous years' campaign. However, the Tribunal noted that unlike the previous campaign, the campaign in question started flighting on the Friday of a long weekend and not on a Monday, as did the previous campaign.

Given the nature of the advertisement and the 41 spots concentrated over a 4-day long weekend, the Tribunal is in no doubt that the Respondent intended the advert to be "hit and run". The dishonesty regarding the alleged agreement to withdraw the advertisement does not help the Respondent's cause either. In any event, the flighting schedule speaks for itself. It was for the period 13 – 18 June 2003, starting on the evening of Friday 13 June 2003 and to end on the afternoon of Thursday 19 June 2003.

Mr Schumacher submitted that the original ruling had to be the final word on the matter, and stated there was to be a single flighting in terms of the interpretation. The intention of the Tribunal was that a summarised version of the ruling is to be published, as opposed to a full-length advertisement setting out the ruling in every word.

Quite simply, the decision on the frequency could not be made when the ruling on the merits was made, because the Tribunal did not have before it the Respondent's flighting schedule.

In the Tribunal's view, the irresponsible use of an established icon and an international advertising property, warranted more than the mere withdrawal of the advertisement. The fact that the complaint arose from a competitor and not a consumer does not make it any less serious. It is apparent from the original ruling that the Tribunal, on the facts presented to it, considered the crafting of the advertisement to be entirely deliberate and that it was disingenuous of the Respondent to argue that its flighting was co-incidental.

The timing and intensity of the burst, in a period in which the ASA could not act, indicates clear intent.

This was a deliberate breach and disregard of a voluntary Code. It raises the concern that if the ASA does not act decisively, it could harm its credibility and the whole issue of self-regulation will come under increasing scrutiny.

In the past, the ASA had applied the sanction of one to one adverse publicity and in the view of the Tribunal, the Respondent failed to put forward an acceptable, reasonable alternative proposal by insisting on one flighting only. To date the merits of the matter have not been appealed and the Tribunal is not convinced that the Respondent withdrew the commercial significantly prematurely.

The Tribunal notes that while in the 702 and Landrover matters referred to by Mr. Schumacher, adverse publicity was imposed in terms of Clause 14.4 of the Procedural Guide; this was done as Clause 14.5 was only introduced subsequent to these rulings. It is however, the principles encapsulated in these rulings which gave rise to the introduction of Clause 14.5.

Regarding Mr Schumacher's submission that the current proposed wording of the summary of the ruling includes a number of things not mentioned in the ruling, the Tribunal wishes to point out that the name of Net#work BBDO and the fact that the respondent exploited KFC's colonel character, do appear in the ruling. Furthermore, the inclusion of the name of the responsible agency is consistent with previous practice.

Through the entire process, from the original documentation submitted by the Respondent opposing the initial complaint, in the content and nature of the presentation made by the respondent (both in the original hearing and the sanctions hearing), and in the correspondence presented before and after the second hearing, the Respondent's representations were both arrogant and dismissive.

This is further borne out by the fact that at both hearings and in all the correspondence, the person entrusted to present the respondent's case, was the Financial Director of Net#work BBDO. Nowhere in the entire process did the CEO, or more importantly, the Creative Director, make their presence felt in any way whatsoever. Given that the Respondent allegedly saw the seriousness of the issue to the Complainant, the Tribunal does believe the Respondent's, and more particularly Net#work BBDO's, attitude was dismissive and unrepentant.

Finally, it is important to record that the Code does not require damages to be proven by a Complainant as would be required in a court of law, in order to justify the Complaint or warrant a sanction being imposed.

Accordingly, the Tribunal rules that the summarised version of the ruling be flighted at the same exposure levels, i.e. the same reach and average frequency levels, as the offending advertisement. From the original schedule, three separate markets were targeted. Thus the reach and average frequency levels should equal those originally achieved, namely:
LSM 4-8 black - 63% reach - 4.1 average frequency
LSM 8-10 Black - 58% reach - 3.7 average frequency
LSM 8-10 White - 60% reach - 2.7 average frequency

To ensure that this is achieved, the Respondent must supply not a schedule but a post campaign evaluation to this effect.

The spots must be flighted in the same timebands proportioned to the original schedule.

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