Its board of directors has voluntarily placed the Advertising Standards Authority of SA (ASA) in business rescue.
In a statement, director Mike Gendel said the board had taken the decision to “to allow time for the process of restructuring the organisation, while reviewing and rebuilding its funding model”.
The move comes after the National Consumer Commission, which falls under the Department of Trade and Industry, in July published a proposed industry code and ombudsman scheme for public comment in terms of the National Consumer Protection Act (NCPA). Commissioner Ebrahim Mohamed said in the notice that the ASA had, in the code it submitted for comment, incorporated “the recognition of an ombudsman scheme for alternative dispute resolution of complaints”. The commissioner, after receiving submissions from stakeholders, is empowered to revise the industry before making recommendations to Minister of Trade and Industry Rob Davies. That process has taken place over the past three months.
Nkwenkwe Nkomo, chairman of the ASA, says the organisation “performs a fundamental public service by self-regulating advertising in South Africa”. The implementation of a business rescue plan would ensure the public would “continue enjoying protection from untrustworthy advertising material while we work on implementing a new funding model”, he said in a statement.
And he added, “The organisation is supported by government and the marketing, advertising and media industries as a relevant organisation. The ASA has applied for recognition as an Ombudsman under the National Consumer Protection Act. The Business Rescue process is therefore an ideal opportunity to overhaul the operations of the ASA toward its imminent Ombud status. Once accredited, the ASA will be recognised in both law and jurisdiction. This will allow it make findings/rulings on all deceptive and misleading advertising claims thereby protecting consumers and raising standards of good conduct within the industry”.
IAB SA to join as core member
Shortly before the ASA announced it was going into business rescue, South Africa’s Interactive Advertising Bureau (IAB SA) said it would join the ASA as a core member.
Andrew Allison, head of IAB regulatory affairs, told The Media Online the “IAB will work with the ASA and its existing members on financial challenges faced by the ASA to ensure that it is restored to financial health as soon as possible. The marketing and communications industry needs the ASA to survive and flourish, and the IAB is committed to being a part of the solution”.
Veteran media man, Gordon Muller, said he agreed with Nkomo that the industry would like to see the reaffirmation of the ASA as the industry’s independent self-regulatory body. But, he said, one is tempted to pose the question, ‘If the ASA is registered in law as the Ombudsman under the NCPA, will ASA still be independent from an industry perspective’?
“In other words, will the ASA as NCPA Ombudsman be self-regulating the industry on behalf of the industry or policing the industry on behalf of the state?” Muller asked. “If it is the latter, then presumably the state must fund it and that would mean de facto that it is not independent: Catch 22. If it is the former, then who should carry the cost? Advertisers and/or advertising agencies, or media owners?”
Who’s to blame for crisis?
Muller said there was a “prevailing expectation” that media owners should carry the cost of such self-regulation, primarily because that’s just the way it’s always been.
That’s something that riles industry analyst and commentator, Chris Moerdyk. In an opinion piece published by The Media Online, Moerdyk laid into media owners and advertising agencies.
The blame for the ASA’s current predicament, he said, lies firmly in the laps of the advertising, media and marketing industries. “Advertising agencies continue to suffer from chronic apathy and while they complain bitterly about being unfairly treated when their clients’ ads are banned; they have done absolutely nothing for decades to take ownership of what was supposed to be their own self-regulatory body. They have sat back and hoped that someone else would do the work. Nobody has.
“The marketing industry is equally to blame in terms of widespread apathy and pretty much using the ASA to protect their own turf. Using the ASA to pounce upon their competition for often the most frivolous of reasons,” he said. “The media though, is the worst culprit of all. Sitting back and allowing the ASA to force them to cancel millions of rands worth of often perfect legitimate advertising and not lifting a finger.”
The issue of tactical short-term advertising
Muller says given that it is marketers and advertising agencies that create the content (offensive or otherwise), should they not be financing the ASA? “This is an increasingly relevant point given the high value placed on ‘tactical short-term advertising’? What do I mean by TSA? I’m referring to the widespread practice of flighting advertising (preferably over the weekend with the material delivered late) that deliberately flouts the ASA (and other) codes of practice, in the full knowledge that an appeal will be lodged on the Monday and the ad withdrawn,” he explains.
“But if the ad is only ever created with a 48-hour life-cycle, then the objective of flighting the ad has been achieved. Given this scenario, what logic would lead one to conclude that media owners should be paying for this legal process? Print media owners have their content (editorial content) regulated by the Press Council and they pay for that themselves; that is self-regulation,” he says.
“Given the growth of social media and native advertising as primary forms of commercial communication, what plans does the ASA have to regulate such communication? Adex reports 3% spend on digital but the smart money says 15% of media spend goes on digital and climbing. Given the power of mobile devices as the most ubiquitous medium in Africa, we’ll be well on our way to mirroring the world in getting 40%+ investment in digital. I don’t know enough about the NCPA to understand how this legislation would be applied to digital communication. Some of the most misdirected commercial communication of all happens on the internet. Can the ASA regulate SEO modelling for instance and who would pay for such regulation? I could generate 10 examples of misleading search outcomes in fewer than 10 minutes.”
And that’s where the IAB wants to step in. It believes it will “bolster the self-regulatory framework established by the advertising industry 48 years ago and bring much-needed digital best-practice and know-how to the ASA”.
“We’re really excited about the role the IAB SA can now play in gearing the ASA up to deal with increased volumes and complexity of complaints relating to online advertising”, says Allison. “The ASA has served across five decades as an example to the private sector of how responsible industry self-regulation can work. We’re committed to ensuring it continues to do so into the future.”
