5 (more) things we’ve learned from the ASA Annual Report 2022 and some thoughts on its 60th anniversary.

The Advertising Standards Authority Annual Report 2022 was the Diamond Jubilee edition, marking 60 years since the establishment of the ASA in 1962. The Report includes an infographic which charts the evolution of the self-regulatory system and calls out some of the most complained about ads of the last 60 years. Look out for a special webinar coming up soon, when we will be reviewing the 10 most complained about ads of the last 60 years, Top of The Pops style, but without the creepy presenters. Hopefully.

In the meantime, here are 5 interesting things to note from the Report.

1. Published adjudications are the tip of the iceberg. The overwhelming majority of “ads that are amended or withdrawn” (AAW – their acronym, not ours) result from the ASA’s proactive work, much of which is driven by their use of technology to monitor ads. In fact, these account for 94% of all AAW. This is surprisingly high. Those of us who monitor the ASA’s weekly rulings will know that a much larger proportion of these result from complaints by competitors or consumers. We therefore assume that the headline figure of 31,227 AAW includes a huge proportion where advertisers receive a communication from the ASA and simply decide to do as they’re told, and amend or withdraw their ad, rather than defend a formal investigation. The cases that cross our desks suggest, however, that some advertisers come to regret taking the line of least resistance, when they subsequently realise the impact of withdrawing a claim which on further reflection, they no longer think is in breach of the CAP Code. But it is unarguable that the rulings published each Wednesday represent the tip of the iceberg when it comes to the ASA’s enforcement action.
2. The sun is setting on substantiation for green claims using carbon offset schemes. All over the world, regulators and lobby groups are focussing their attention on the use of carbon offset schemes to substantiate sustainability claims. For the ASA, this concern is a function of its research in 2022 into consumer understanding of carbon neutral and net-zero claims. This research indicated that when advertisers make claims for carbon neutrality, consumers understand them to mean that there is an absolute reduction in carbon and feel misled when these claims are based on carbon offsets. The ASA have said that they will be taking further action in relation to carbon neutral and net-zero claims in 2023 and monitoring such claims using the same tech tools that they’ve been using to deal with crypto and NFT ads.
3. All that glistens is not gold. Ads for cryptocurrency and Non-Fungible Tokens will remain a high priority for the ASA for 2023. The ASA deserves credit for plugging the gap in regulation for advertising of crypto and NFTs. Their data science team identified a large number of apparently non-compliant ads, leading to the ASA issuing an Enforcement Notice against 60 cryptocurrency firms. The notice told these firms that their ads must include risk warnings and must not take advantage of consumers’ inexperience or irresponsibly trivialise investing in crypto. In late 2022, the ASA used one of their new favourite tactics for achieving maximum impact, publishing 3 rulings on the same day which dealt with similar concerns about advertising for NFT’s. This triumvirate established that NFT ads must include risk warnings, information on fees and must not exaggerate the value of the NFT. Going forward, enforcement of those principles will be a key focus for the ASA in 2023
4. King Canute wasn’t the only one who that thought he could stop the tide. The ASA has proudly announced that it will be using its tech tools to ‘tighten the net on non-compliant influencers.’ Of course, given that these influencers may not only be breaking the CAP Code but also the criminal law, in the form of the Consumer Protection Regulations 2008, it’s quite right that the ASA is clamping down on them. On the other hand, none of the top 10 most complained about ads of the last 60 years concerned this issue. And no matter how many influencers the ASA sanctions each year, this problem is not going to be solved by self-regulation. The ASA says that it will not only be using machine learning to conduct more monitoring, it will also be working with the social media platforms, the Competition and Markets Authority (CMA) and Ofcom. But unless and until the CMA steps in to impose some serious fines for non-compliance, the tide of complaints will continue to rise. Just as King Canute found ordering the tide to retreat was ineffective, the ASA will find that telling influencers to change their ways without being able to impose a financial sanction is also not going to work.
5. The Intermediary and Platform Principles are cleared for take-off. As we know, the ASA loves an acronym and they are very excited about the IPP, which are not to be confused with the IAPP (those funsters at the International Association of Privacy Professionals) or the IPCC (the Intergovernmental Panel on Climate Change).  The ASA launched a pilot of the IPP in conjunction with several operators in the digital ad supply chain, such as Amazon Ads, Google, Index Exchange, Meta and Yahoo. The aim of the pilot was to encourage these companies to promote an understanding of the principles amongst the advertisers who use their services. In addition, the pilot also aimed to encourage the platforms to help the ASA secure compliance when advertisers refuse to voluntarily withdraw or amend ads that have been found to break the CAP Code.  A report on the pilot is due later in 2023, and it is clear the ASA is intending to build on its work so far. 

These are the Principles that participating intermediaries and platforms have agreed to uphold:

• Raise awareness of the CAP Code on their services.
• Use T&Cs to help secure advertisers’ compliance with the Code.
• Assist with promoting awareness of the ASA regulatory system.
• Support advertisers to meet obligations with regard to paid age-restricted ads.
• Act swiftly against an advertiser that persistently refuses to remove a non-compliant paid ad.
• Provide relevant information to the ASA to help carry out its investigatory regulatory duties.

How has the ASA evolved over the last 60 years?

The ASA has evolved very considerably over the last 60 years. In some ways, it is a more powerful regulator than ever before. A key milestone in its development occurred in 2011, when the remit of the CAP Code was extended to cover claims on companies’ own websites and social media channels. Given the importance of digital media in the media mix of most advertisers, the ability of the ASA to use machine learning to find potentially offending ads, and its collaboration with platforms to enforce rulings, although the ASA nominally remains a self-regulatory organisation, in practice it has at least as much power and impact on advertising as the statutory regulators such as the CMA. What it lacks in the power to impose fines it more than makes up for in the power to blocks ads that it has ruled against. This power can also be felt across media. When the ASA rules against a claim in non-broadcast media, Clearcast will not approve the claim for television either.

This makes the continuing lack of an opportunity for oral submissions and a meaningful appeal mechanism particularly troubling. Some equivalent self-regulatory bodies in other countries, such as The Netherlands, do allow for oral hearings, which gives advertisers the opportunity to correct misconceptions and misunderstandings that may develop in the minds of investigators.

The lack of an appeal mechanism is also problematic. As part of the Annual Report, the Independent Reviewer of ASA decisions has contributed his review of 2022. The timeline of the development of the ASA does note state when his role was created, but it was designed to minimise the threat of Judicial Review proceedings by having a role for someone to weed out those cases where there has been a substantial flaw in Council’s decision or the process by which it has been reached or where new evidence has become available and the advertiser has a plausible explanation as to why it has not been submitted previously. These are very high bars, as reflected by the fact that the Independent Reviewer only received 27 requests review in 2022, and only 4 of these resulted in a re-opened investigation. Is this because the ASA hardly made any mistakes in 2022 or because the bar is set so high?  To make matters worse, the bar for Judicial Review is even higher and the costs are prohibitive for most advertisers. Some legitimate advertisers are left with a genuine feeling that the ASA lacks accountability.

There is no way to appeal decision simply because Council has made a poor decision, often in reliance on the Draft Recommendation submitted to it by the Executive in a Council meeting that is held behind closed doors. The ASA is understandably wary of advertisers clogging up the works with unmeritorious appeals, not doubt encouraged by their rapacious legal advisors (perish the thought). But other ways could be found to prevent abuse, such as a requirement for a substantial fee for filing an appeal, or a requirement that comes from an advertisers Chairperson or Chief Executive, like the current system for Independent Review.

The ASA has been incredibly successful over the last 60 years, and could reasonably claim to be the world’s leading advertising self-regulatory organisation. But with the growth in its remit and the efficacy of its enforcement comes a growing need for transparency in its decision-making and an appeal system that allows advertisers to challenge its rulings when they appear to be flawed. As the ASA prepares its next 5 year strategy to come into force next year, we hope that it will consider whether these changes would help to ensure the strength of the system through to its centenary and keep the ‘self’ in self-regulation.