Axes out for advertising standards autocracy
It comes as no surprise that the embattled Advertising Standards Authority management and board have gone to ground and are steadfastly refusing to answer some pretty searching questions. Either they are in state of denial or the answers are just far too embarrassing.
Major funders of the ASA are in revolt with the most vociferous coming from the print media industry.
The acting CEO of Avusa and prominent member of the Print Media SA Board, Mike Robertson, pulls no punches: "I believe the ASA has lost the plot. The budgets it has submitted to the PMSA in the past couple of years have asked for increases that are way in excess of inflation and are simply unsustainable. It has also not adapted to the consumer protection laws. What the industry needs is a body that can resolve disputes fairly, speedily and cheaply. The ASA is not that body."
The industry task team that is developing funding models for both the ASA and the SA Advertising Research Foundation is believed to be close to a solution for SAARF but I have been told that it is not even past first base on trying to solve the ASA funding issue.
But, funding is not the only problem the ASA faces.
It is rumoured that its president, Judge Mervyn King has resigned but no announcement has been forthcoming. If indeed he has resigned it would be a damning indictment on the ASA in spite of what the inevitable PR spin might suggest.
King has been very much a figurehead and has never really been involved in the operations of the ASA. If he has resigned it would not come as a surprise given that the ASA has been accused by some stakeholders of flouting King 3 corporate governance guidelines.
Just to add to the ASA's woes, a large pharmaceutical company has sued it with litigation documentation running into a couple of thousand pages.
As an indication of the desperation that reigns within the ASA today, when it was served with these papers, the ASA wrote to all of its members claiming that it was being sued by a company that had a history of "numerous consumer complaints."
However, the ASA's own records show that in fact there has been only one complaint in the past 15 years from an actual consumer, with all of the rest coming a small group of four health industry activists who by their own admission have never bought or used any of the company's products.
Very similar to the situation that occurred a few years ago when 75% of all the complaints to the ASA regarding the cellular telephone industry came from one individual.
A litany of accusations and charges
It is believed that the ASA is no longer the advertising industry's own self-regulatory body simply from the point of view that only a handful of advertising practitioners remain involved in what appears to be a non-executive capacity.
It would be safe to say that the ASA has to all intents and purposes, been hijacked.
The litany of accusations and charges against the ASA goes on.
For many years, for example, the ASA claimed that appendices to its Code were drafted by and administered on behalf of credible industry regulatory bodies such as the Medicines Control Council ("MCC").
As early as 2008, the ASA was informed by an industry expert that the MCC could not possibly have delegated authority to the ASA to administer a code on its behalf with regard to the regulation of advertising of medicines and products used to treat certain conditions.
In spite of this, the ASA was found to have continued to administer the appendices to their Code "on behalf of the MCC"
In early 2011, the industry sought clarity directly from the MCC in reference to their relationship with the ASA, and their supposed delegation of authority.
The MCC responded in a letter signed by the Registrar of Medicines, stating in no uncertain terms that it had no relationship with the ASA whatsoever and had delegated no functions to it in any shape or form.
The big question that still remains concerns the validity of all relevant ASA rulings during the period it claimed to be acting with the blessing of the MCC. The irony is that any company wishing now to contest these rulings will, according to ASA rules, have to pay roughly R70 000 upfront.
Right now there is growing sentiment within the ASA funding community that the organisation needs a radical overhaul, in terms of control at board level, professional skills for adjudication and most importantly the ASA's code needs urgent reassessment to not only bring it in line with the Consumer Protection Act, King 3 and the constitution of the country. In addition, it needs to put a stop to what seem to be bizarre interpretations of regulations. These interpretations are costing companies millions of rands in lost opportunities and legal fees, which inevitably end up being paid for by the very consumer the ASA is supposed to be protecting.
The ASA, in my opinion, has become dysfunctional and with growing pressure from its stakeholders and disenchantment from companies that feel they are being victimised by lobbyists brazenly manipulating the ASA, it is time for a complete re-think of just who should be doing the self-regulating of the advertising industry.
Of course the ASA will trot out its usual warning that if it is not allowed to be seen to be carrying on business as usual "government will take over. "
Which is an extremely fatuous argument because government did in fact take over as far back as 1949 with provisions in the Trade Practices Act that allowed for action to be taken on advertising matters.
However, the current government rescinded that legislation years ago, which is pretty much proof that the last thing that government wants to get involved in is judging advertising.
About Chris Moerdyk: @chrismoerdyk
Apart from being a corporate marketing analyst, advisor and media commentator, Chris Moerdyk
is a former chairman of Bizcommunity. He was head of strategic planning and public affairs for BMW South Africa and spent 16 years in the creative and client service departments of ad agencies, ending up as resident director of Lindsay Smithers-FCB in KwaZulu-Natal. Email Chris on moc.liamg@ckydreom
and follow him on Twitter at @chrismoerdyk