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'Axing' time for ASA?

Industry bodies are withdrawing levies and the CPA is putting added pressure on the industry... and the Advertising Standards Authority (ASA), the regulatory body that protects consumers from unethical and misleading marketing and referees disputes between advertisers, is facing a funding crisis that could cripple its activities. Acts that are relevant to the ASA include, but are not restricted to: health, gambling, communciations, liquor, roads, and even lotteries.
'Axing' time for ASA?The threat comes as the ASA tries to reposition itself to meet the changing regulatory environment, and amid growing calls for it to revise its code of practice to avoid repetition of what critics say have been some bizarre judgments in recent years.

For years, the ASA was funded through a levy collection system, equal to 1% of media billings. Levies were collected by media owners and paid to the Media & Marketing Collection Agency (Mamca).

This body managed the fund and distributed it to the ASA and to the SA Advertising Research Foundation (Saarf) - which produces regular, independent studies such as the all-media and products survey, radio audience measurement survey and television audience measurement survey. These studies, better known by their acronyms Amps, Rams and Tams, are also at risk.

Gordon Muller, CEO of advertising and media consultancy GSM Quadrant and a 33-year industry veteran and former SAARF board member, says the loss of this data would be crippling. In a recent FM interview, he said: "The industry does not realise how important Saarf is. If it goes, we drift off into nothingness. What distinguishes us from the rest of Africa is market information."

Odette van der Haar, CEO of the Association for Communication & Advertising, notes: "If we don't get the funding models right, the industry will have fundamental obstacles."

Questions over transparency, value for money

Problems began when contributing industry bodies began asking whether they were getting their money's worth. There have also been questions about transparency in allocating funds. After months of argument over how the ASA and Saarf should be funded - and demands by some bodies to pay less - negotiations have reached an apparent impasse.

The Out of Home Media Association, whose activities include billboards and advertising in airports and shopping malls, has withdrawn completely from the levy body. It has halted payments to the ASA but will fund Saarf at a level it deems fit.

The Print Media Association and National Association of Broadcasters have both quit Mamca and will fund Saarf and the ASA at their own discretion.

Mamca officials say the future of their organisation is now in doubt. A recent letter to the various bodies from Mamca chairman Quentin Green says: "The directors are of the view that they are unable to either review the budgets of Saarf or the ASA or approve the funding for these two organisations beyond December 2011. Their doing so would potentially result in an offence under the Companies Act."

He says a Mamca board meeting in the new year will resolve the association's future.

Potential consequences are 'dire'

Marketing Association of SA chair Brenda Koornhof, in a letter to its members last week, says the potential consequences are dire. Discretionary payments will destroy any remaining funding transparency; there will no longer be a body to approve Saarf and ASA budgets; and there is a threat to the existence of the two bodies.

ASA chairman Nkwenkwe Nkomo hopes for the best but isn't holding his breath. "I don't want to hold out too much hope for resolution," he says. "We must prepare to scale down. The funding dispute has taken over two years, so why should I be optimistic? I can only hope that common sense will prevail."

At the very least, the current impasse will increase the time it takes the ASA to reach decisions on advertising complaints. "Instead of three months it could take six months." However, he hopes there is no threat to the continued existence of the ASA.

Nkomo says: "If the communications industry believes in self-regulation, it must make sure we are funded." He says the ASA has previously asked for government funding to help pay the cost of investigating consumer complaints.

One of its challenges is that even if only one person complains about an advertisement, the whole ASA body swings into action. Every complaint is fully investigated. This has led frequently to the situation that a single killjoy can cause the withdrawal of an advertising campaign enjoyed by millions of others.

Dodgy decisions?

The banning of a recent TV commercial suggesting angels would leave heaven to follow a man wearing Axe deodorant opened the ASA to ridicule after it agreed with the single complainant that the idea was offensive to Christians. Critics say the idea that many Christians had watched the ad without offence was apparently not considered.

Nkomo says the number of complainants about a campaign is not the issue. "When someone itches, do you wait until the whole nation itches? Whether it's one complaint or 10, we look at it. If there is merit, we respond. It's the gravitas, not the number."

Van der Haar suggests the ASA needs a thorough overhaul to bring it up to date with changes that have taken place in advertising since its codes and responsibilities were originally defined in 1968. The same applies to Saarf. "We need to go back to basics. Why were they both created and are they still relevant?"

It is a debate that ASA CEO Thembi Msibi understands. In a new discussion document, she suggests the 2011 Consumer Protection Act (CPA) has brought it to a head. "The ASA of late has been frequently faced with questions around ASA's existence and the relevancy of its self-regulatory framework in view of the provisions of the CPA."

A number of Acts are relevant

However, it's not the only piece of government legislation relevant to the ASA:

The health department has three acts that affect advertising - the Medicines & Related Substances Control Act, Tobacco Products Control Amendment Act and Foodstuffs, Cosmetics & Disinfectants Act.

The SA National Roads Agency Ltd and National Roads Act deals with advertising and marketing on or near roads.

The Electronic Communications Act controls advertising on electronic broadcast media.

The National Gambling Act restricts advertising of gambling activities.

Other legislation affecting the ASA includes the Liquor Products Act, National Credit Act, Lotteries Act and even the Fertilizer, Farm Feeds, Agricultural Remedies & Stock Remedies Act.

Msibi says: "Advertising and commercial communication's self-regulatory system existed long before the promulgation of most of the Acts that affect the advertising industry. The ASA is used to keeping up with amendments of these acts and adjusting its code accordingly."

A different challenge

The CPA is a different challenge. Many of the potential offences with which it deals are already covered by the ASA. However, the sanctions are different.

The act recognises the existence of industry self-regulatory bodies but Msibi says that in order to determine its relationship with the CPA and become a registered partner - either as an "industry code" or an "accredited ombud" - "the ASA will seek clarity from the national consumer commission (NCC) on whether its sanctions have to be identical to those of the CPA".

She adds: "Once this process is completed, the ASA will be the recognised body to deal with any advertising consumer complaints."

That's if it gets industry funding. Msibi describes the current debate about the ASA's status as "alarming" and says: "What is of concern is the lack of understanding by the industry of the implications of the demise of the ASA."

Having no ASA will leave the industry open to regulation by the NCC or some other body containing individuals "who by and large have no understanding of the industry".

Source: Financial Mail via I-Net Bridge


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