ReactS : Advertising Lawyers & Attorneys : Reed Smith Law Firm : Marketing Regulations, Product Placement

Ofcom has today designated that, from 1 September 2010, the Advertising Standards Authority (ASA) will be the appropriate regulator for advertising on video on demand (VOD) services notified to the Association for Television on Demand (ATVOD), thus maintaining the ASA as the one stop shop for advertising regulation and enforcement in the UK.

Simultaneously, CAP has issued a new Appendix to the CAP Code (the Code), incorporating new rules into the Code, which will take effect from the same date. This change does not introduce new rules for VOD advertising: it is merely necessary to ensure that the Code reflects specific legislative rules that apply to VOD services, which are not already covered in the Code, thereby enabling the ASA to regulate this area.

In addition to the new Appendix, advertising on VOD services must continue to comply with all the rules and provisions of the Code. In effect, therefore, for advertisers little has changed, except that the regulatory enforcer is now the ASA, with Ofcom merely acting as a backstop power. VOD providers should remember, however, that, under the Communications Act 2003 (the Act), they are primarily responsible for complying with the rules contained in the Act, which are now set out in the Appendix.

In addition to the usual remit of sanctions for non-compliance, the ASA also has the power now to refer any matter to Ofcom with a view to Ofcom considering whether the media service provider has contravened the requirements of the Act.

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Ofcom recently investigated 57 programmes broadcast on STV in 2008 and 2009, all of which were sponsored either by the Scottish Government or its agencies. This followed allegations in the press that the Scottish Government had influenced the content of STV's programming.

39 of the programmes in question (including the 12 Homecoming programmes, about which the press had originally complained) were found not to be in breach of sponsorship rules in the Broadcasting Code. However, 18 other programmes, most of them short, one-minute productions on public information subjects, were deemed to be in breach.

Ofcom reiterated in the adjudication that a sponsor is only allowed to gain promotional benefit from funding through being associated with the programme, not by being referred to during it. There must be no promotional reference to the sponsor in the programme and the relationship between the sponsor and the sponsored programme must be transparent.

Ofcom felt that in this case STV had sought programme funding to create programmes which were effectively vehicles for the promotion of their interests. Although the majority of the series found to be in breach of the Code covered "social action subjects", such as education, health and well being, which are intrinsically unownable, non-proprietorial matters, Ofcom nevertheless felt that the series in fact promoted the service or product provided by the sponsors. For example, the programme, Time for Change, sponsored by Learning Direct Scotland, focused purely on the benefits of attending courses and the funding that was available. Ofcom inevitably surmised that this series served almost solely as a vehicle to encourage viewers to use the service of Learn Direct Scotland, a body which (surprise, surprise) advises consumers on suitable courses and available funding!

Ofcom felt that in these 18 culpable cases, the programmes were in effect advertisements for the sponsor or its activities. STV's sponsors were not simply associated with their respective programmes; they were promoted by them. This time the Scots certainly did not get off scot-free...

Written by Helena Heaton, summer vacation student.

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Failure to comply with regulatory decisions landed DM Digital Television with a £17,500 fine last week. Ofcom

the free-to-air general entertainment channel, which broadcasts mainly in Urdu to the UK Asian community, for its “serious,” “repeated” and “systematic” failure to comply with ASA adjudications.

The ASA referred the broadcaster to Ofcom over three recent adjudications, two of which the ASA considered to be "sufficiently serious and repeated to be considered for a statutory sanction". The most recent ad in question had led one lovelorn viewer to hand over £1,510 in the belief that “spiritual healer” and occasional Cupid, Professor Mohammed Zain, would find her “a prince.” The ASA, fairly obviously, found the ad to be in serious breach of the BCAP code since it was “likely to exploit the hopes and fears of vulnerable viewers.”

The main concern for the regulators was not this one ad, though, but the fact that DM Digital had already been involved in seven other adverse adjudications by the ASA and Ofcom. This included one case where a programme broadcast by DM Digital contained unsubstantiated and potentially harmful claims that the programme sponsor was able to successfully treat medical conditions such as cancer, hepatitis and diabetes. As a result of this previous adjudication in October 2008, DM Digital had already been fined £15,000.

It was this continual disregard, be it misguided or deliberate, for the advertising and broadcasting codes that warranted the fine and a demand from Ofcom that the channel broadcasts a statement of Ofcom’s findings. The relatively modest fine, deemed “extremely excessive” by DM Digital, serves as an important reminder to broadcasters that regulators such as the ASA and Ofcom do have active procedures in place to reprimand compliance violations, and ones that they are very willing to use if the circumstances necessitate them.

Written by Rebecca Jones, summer vacation student.
 

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Ofcom has today, 28 June, opened two consultations on changes to the Ofcom Broadcasting Code (one for television and one for radio) to allow for product placement in UK television programming. The consultations close on 17 September 2010, and we encourage interested parties to respond.

In the television consultation, Ofcom has made a few sensible suggestions and clarifications to the Regulations that came into force in March (see our separate Ad Guide), including allowing single dramas to carry product placement, prohibiting thematic placement and signalling the placement to viewers by way of a universal neutral logo (both visual and audio).

Furthermore, Ofcom has suggested amending the sponsorship rules, to allow programme sponsor's products or services to be referred to in the programme. In essence, this would allow broadcasters to offer full packages to sponsors, prevents conflicts between sponsorship and placement and makes much commercial sense for both broadcasters and advertisers. Ofcom also states that, as a result of the changes to EU law under the Audio Visual Services DIrective which the Product Placement Regulations implement, there is no need for advertising and editorial to be separated, but only that they are distinct from each other: some changes are therefore proposed to this section of the Broadcasting Code.

Notable by its absence, however, is any clarification of what it meant by "undue prominence": under the Regulations, programmes must not give undue prominence to placed products. However, Ofcom has said it intends to issue Guidance as well, so we hope that these address this crucial element.

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