Advertising levys to fund regulators are a small price to pay to preserve consumer trust, says Chris Powell, chairman of Asbof and Basbof
I always greet the end of February with a small sigh of relief – we’ve endured the worst of winter (hopefully) and spring is now just around the corner.
Warmer weather is usually in sight and deals for ski holidays are starting to switch for summer holiday packages.
With the prospect of a sunny getaway on the horizon, I’ve begun thinking about the travel sector and just how much the industry has changed.
Those of certain age may still remember – possibly fondly and with a twinge of frustration – waiting for page 27 of 32 on teletext to load up a special offer on a holiday to Tenerife.
Now, I can’t even imagine such a cumbersome task with our modern-day search engines, dynamic pricing, and on-the-go purchases on our smartphones. How quickly things have changed.
The travel sector has been an early adopter of new technology, and that’s something to celebrate.
But as with all industries, change inevitably comes with teething problems. For example, the rise of online advertising has created an opportunity for advertisers to update ads and information promptly and dynamically.
With such a wide array of options now at the fingertips of customers, it is now more important than ever to ensure the accuracy of advertised deals.
If customers click on an ad only to find out the shown price is no longer available, they are going to be disappointed, and that disappointment erodes the trust between companies and customers.
That’s why the Advertising Standards Authority (ASA) is here. The ASA and its sister body, the Committees of Advertising Practice (CAP), help preserve trust between the advertiser and the consumer.
CAP writes and reviews all advertising rules in the UK and the ASA enforces them.
These two bodies are an important part of the advertising ecosystem because by keeping ads ‘legal, decent, honest and truthful’, they promote responsible advertising and by extension confidence in the ads we see and hear.
The ASA and CAP play crucial roles in keeping the industry competitive; maintaining a level playing field amongst businesses by ensuring everybody plays by the same rules helps promote healthy competition, leading to greater consumer choice and lower prices – all bolstering consumer trust.
Without the checks and balances of CAP’s rules or ASA’s rulings the ad industry runs the risk of becoming undisciplined and embarking on an advertising free-for-all.
Advertising in the UK has the fortune of being a self-regulated industry – a benefit we shouldn’t be quick to forget.
Self-regulation allows the industry to be quick and responsive to changing consumer behaviour, media, and technology.
The self-regulatory system is also more cost-effective for advertisers as it saves them racking up the hefty legal costs that would occur if issues were resolved through the courts.
The ASA and CAP are keen to support the travel industry. After all, it’s you – the travel firms, agents, booking sites, airlines, hotels, ferries, train operators, and more – that carry the hopes of millions of tourists, from the solo backpacker to the family unit.
People may spend months researching, planning and dreaming about their next adventure and it is you that brings those plans to fruition.
A holiday may also be one of the biggest annual financial outlays for many people and we have an obligation to treat these customers with extra care. That is why trust is so important.
And if that trust is to be maintained, not only does the sector have to continue to understand and stick to the rules but it also needs to keep supporting its regulator.
The two bodies are currently supported by a small voluntary levy – a mere 0.1% on the cost of buying advertising space and 0.2% on some direct mail.
That means, for example, if you placed an ad on a billboard for £1000, £1 would be collected to go towards the funding.
This levy allows the ASA the necessary resources to handle around 30,000 complaints each year and CAP to support advertisers through training, guidance and pre-publication advice, most of which is free; in 2017, CAP gave over 330,000 pieces of advice to advertisers and publishers on how to best navigate the Advertising Codes.
The funding also allows the ASA and CAP to attend industry events to engage directly with stakeholders on key issues.
This past November, they presented at the Abta Consumer Law Seminar so that they could connect directly with advertisers on travel industry-specific topics such as how our rules apply to reviews and testimonials or availability claims for various travel packages.
It’s important to note the levy is collected via two other bodies – the Advertising Standards Board of Finance (Asbof) and the Broadcasting Advertising Standards Board of Finance (Basbof), both of which I am the Chairman of – to ensure the ASA and CAP don’t know who is paying in.
This ‘arms-length levy’ is a vital mechanism that keeps the regulators independent and unaffected by funding considerations.
But changing advertising practices are impacting the system – increasingly, advertising dollars are going towards search advertising and there hadn’t been a mechanism to collect the levy there. So we’ve partnered with Google to set up a new website to plug this gap in funding.
Asbof.withgoogle.com is a tool that simply facilitates the levy collection for companies who choose to use Search advertising.
As the advertiser, all you have to do is register with the website and it will automatically notify you whenever the levy needs to be collected – it does all the work for you.
So I encourage you to visit the website and sign up. Let’s do our part to fund the ASA and CAP, keeping the industry responsible, fair, and self-regulated.