Accusations of mismanagement and a lack of transparency have dogged the Advertising Standards Authority for years. And the industry is too apathetic to change it. Joanna Wright investigates.
The Advertising Standards Authority (ASA) has been the subject of complaints and accusations from the media and advertising industries for several years. The Media and its sister publication, The Media Online (TMO), previously reported on funding crises, alleged financial mismanagement and a lack of transparency at the watchdog.
The industry grumbling and allegations of problems have not abated. When The Media contacted media, advertising and legal sources, many were quick to point fingers at the ASA and each other.
Yet when The Media requested proof to substantiate these complaints, there was little response. Not only were the top levels of the ASA reluctant to comment, but the very sources making the accusations seemed afraid to rock the boat. This appears to justify marketing analyst Chris Moerdyk’s assertion that those in the media are “just sitting on their arses” when it comes to problems at the ASA.
Many say that the organisation does a good job in its role to protect consumers from offensive and misleading advertising. Advertising lawyer and a former head of legal at the ASA, Gail Schimmel, says that the ASA’s staff is “accountable, ethical and conscientious”.
“I believe that the bulk of the staff is doing a very important job,” says Schimmel. “They are still quicker than the courts would be and the bulk of their decisions are good.”
All sources to whom The Media spoke agreed that self regulation by the industry would be preferable to regulation by the courts.
Yet the ASA has been criticised for a ballooning budget; costly appeals processes; failing to communicate with the industry on important matters; and the difficulty of arranging meetings with ASA CEO, Thembelihle Msibi.
The Media made multiple attempts to contact Msibi, but to no avail. On several occasions staff said she was not in the office when The Media called. This mirrors the experience of numerous sources who say that Msibi is difficult to pin down for meetings. The ASA has also rebuffed previous attempts by TMO to obtain an interview, or even comment on earlier stories.
For this article, the ASA forwarded The Media‘s initial questions to the organisation’s current head of legal Freddy Makgato. He responded and we were granted an interview with the manager of dispute resolutions, Leon Grobler, about the organisations operations. However, The Media wanted to give Msibi the opportunity to respond to allegations made against her, so we sent more questions. The ASA replied through its communications consultant, Sibongiseni Dlamini, saying, “We would like you to take cognisance that the ASA is not in the business of responding [to] and feeding into rumours.” Dlamini added that ASA would only consider responding if The Media furnished them “with supporting evidence/documents to these allegations” and “only then, if need be, the ASA will exercise its right to respond in a manner that is appropriate”.
On further attempts to engage with Msibi, Dlamini reiterated that they would not respond to rumours. The body’s response to questions posed to Msibi was to criticise the questions themselves as “nebulous and eclectic”.
On queries about financial issues at the ASA, Dlamini asked The Media to again provide evidence and sources and patronisingly threatened to engage with The Media’s management.
TMO reported in 2011 that the Marketing Association of South Africa had warned of a crisis in the ASA’s funding, and in 2012 that it “was no secret” that the ASA was spending more than it had. TMO quoted, among others, Times Media Group’s Mike Robertson, who complained that the ASA had begun asking for “simply unsustainable” budget increases, well in excess of inflation.
When asked if the funding crisis had been resolved, Makgato denies that there was a crisis: “The article [on TMO] you refer to was baseless and unsubstantiated and the ASA is not in the business of responding to rumours.”
The body does not publish its financial statements and it is not legally required to do so. The statements are available to members and at AGMs. As Makgato says, “The ASA has annual general meetings and its finances are scrutinised there. We are also audited by a reputable firm.”
Yet there seems to be an air of secrecy around the organisation’s finances. Requests for copies of financial statements from the body were denied. ASA members approached for copies would not provide them either, some saying they did not want to cause trouble and others simply refusing.
It is difficult to obtain up-to-date information about the ASA. Statistics relating to the cases they have dealt with are clear and accessible in their annual reports. However, The Media found it hard to determine who sits on the board. The ASA did not respond to requests for this information. The ASA’s latest annual report (2012/2013) does not include a list of board members and has a list of members that is three years old. Only one annual report – for 2007/8 – is listed on the website. A certificate issued by the Registrar of Companies and Close Corporations dated 12 March 2014 lists Ivan May, Sarel du Plessis and Karen Willenberg as board members. May died in 2010 and neither Du Plessis nor Willenberg have been board members for years.
Moerdyk says, “An industry regulatory body has to have all that information transparent. The fact that they suddenly don’t betray who their board [members are] is absolutely absurd.”
A source close to the board says many attempts have been made to fix the ASA. They are just stymied by a lack of action at the organisation. “The ASA said they would go in and look at the finances, but this fell flat… While everyone knows there are problems, no one is prepared to stick their neck out. So we just keep building on this flawed system.” The source says the responsibility lies with the Association for Communication and Advertising (ACA), as the ASA is the advertising watchdog.
ACA CEO Odette van der Haar turned down a request for an interview, but sent a comment saying, “The ACA supports self regulation and our self-regulatory body (the ASA). We believe that the ASA is necessary and working well.”
These issues aside, Moerdyk says the very methodology of the ASA is flawed. “The ASA works on precisely the opposite principle on which the SA judicial system is based – you’re guilty till proven innocent!” he says. The onus is on advertisers to prove they have not infringed upon standards, he says, and combined with an easy initial complaints process, you get a situation where lone cranks can end up costing companies thousands and where marketers can get their rivals’ campaigns pulled.
During The Media’s interview with Grobler, he responded to some criticisms. “We’ve turned a little organisation into a world-class self-regulatory organisation. We have had the fortune of working with top people, like our current president [and former Constitutional Court judge] Kate O’Regan… We’ve been commended by top law firms,” he says.
Grobler says that the ASA has a tight screening process for complaints, which effectively filters out illegitimate cases. “And we don’t expect advertisers to pull their ads while we are investigating the complaint,” he adds.
When asked if marketers use the ASA to gain a competitive advantage, as critics have claimed, he says: “Everything one company does to another is to get an edge. But we don’t just investigate willy-nilly… So I don’t think it’s fair to say we are used to settle scores.”
Moerdyk says the “exorbitant” cost of appeals is another issue. A first appeal costs R70 000 and, should a business wish to appeal again, they must pay a further R80 000 in order to get to the final appeals committee.
Marketing consultant and former ASA head of legal Stefan Vos says it is not clear how the ASA arrived at these figures. “No one has ever seen the ASA properly cost them,” he says. In the early 2000s, a final appeal only cost R25 000, he says. And it appears that non-member companies may be entitled to ignore the complaint entirely.
On the cost of appeals, Makgato would only say, “We have a formula that is approved by the board.”
Vos says that whether or not the appeals are overpriced, they have the unintended effect of creating bad precedents because businesses can’t afford to appeal. “That to me is the real issue… I’ve seen a lot of ASA rulings where they used silly things as reasons to ban ads. These rulings form the cornerstones of future judgments.”
Current president O’Regan did not want to comment on this story. Past president Mervyn King, who last year retired from his role after 15 years, tells The Media that the president “is independent, not a board member nor part of management” and therefore not really in a position to comment. The president has to be independent as his or her role is to chair final appeals.
“All countries need a body to ensure that advertising is decent, honest and can be substantiated. The ASA does that job,” says King.
Whether or not one agrees with him, the ASA does not exist in a vacuum. If there are problems with the body, it is in the ambit of the media industry to fix them. The body has AGMs that members can attend, but many have attested to the empty chairs around the boardroom table. ASA budgets are drawn up and approved by their constituencies and, while The Media couldn’t get one, financial statements are available to members.
As Moerdyk says, “The advertising industry gets [the watchdog] it deserves.”
This story was first published in the April 2014 issue of The Media magazine.
