Lost in the maze of advertising regulations?

HAVE YOU CONSIDERED THE ASA CODE?

When working on new marketing campaigns and strategies the legal rules and regulations that restrict creative brain-storming are usually last on the agenda. Marketing should be fun! And thinking about the law and possible restrictions will hamper the fun…. These restrictions do however deserve careful consideration at the beginning of each campaign. Do not be that company that receives a complaint from the Advertising Standards Authority.

Advertising law is, generally speaking, a very broad area of law. Specific rules apply depending on the type of product or service you are advertising. However, the overarching piece of legislation for companies to consider when advertising to the public is the Consumer Protection Act 68 of 2008 (“the CPA”), which promotes the advertising of products in a fair and reasonable manner. It also forces advertisers to ensure that no misrepresentation is made about their products. Some of the requirements in terms of the CPA to consider are:

• Section 29 – requires the marketing of goods or services to be done in a manner that is not reasonably likely to imply a false or misleading representation concerning those goods or services and not misleading, fraudulent or deceptive in any way.
• Section 30 – an advertisement may not advertise goods or services as being available at a specified price in a manner that may result in consumers being misled or deceived in any respect relating to the actual availability of those goods or services at that advertised price – this is also known as “bait marketing”.
• Section 32 – if the goods or services are marketed directly to the consumer, further requirements in terms of the CPA must be met, for example: the consumer must be informed in the prescribed manner and form of the right to rescind that agreement (also known as the right to “opt-out”). With direct marketing activities, the Protection of Personal Information Act 4 of 2013 should also be considered.
• Section 33 – when marketing goods where the consumer will not have the opportunity to inspect the goods that are the subject of the transaction before concluding the agreement (so-called “catalogue marketing”), certain information must be disclosed to the consumer, including: the supplier’s name and address, the supplier’s cancellation and refund policy, the manner in which complaints must be lodged, etc.

In addition to the general CPA provisions, the actual content of an advertisement is regulated through a self-regulatory system with the Advertising Standards Authority of South Africa (“the ASA”) at its head. The Code of Advertising Practice (“the Code”) is the guiding document of the ASA. To read more on the ASA, see: https://www.asasa.org.za/.

As a starting point, advertisers must ensure that the content of their advertisements comply with the Code. Depending on the specific product or service being promoted, specific legislation may also need to be considered. For example, in addition to the Code, if you are an advertiser who promotes:

1. food products – you must consider the Foodstuffs, Cosmetics and Disinfectants Act 54 of 1972;
2. medicines – you must consider the Medicines and Related Substances Act 101 of 1965 and its related Code of Marketing Practice;
3. credit products or services – you must consider the National Credit Act 34 of 2005 as it relates to advertising practices by credit providers;
4. insurance products – you must consider the Short -Term Insurance Act 53 of 1998, the Long -Term Insurance Act 52 of 1998, and/or the Financial Advisory and Intermediary Services Act 37 of 2002, where applicable.

And so the list goes on.

What is considered an “advertisement” in terms of the ASA Code?

Firstly, you will have to determine whether the content of your product or service promotion falls within the definition of an “advertisement” in terms of the Code. The definition reads:

“advertisement means, any visual or aural communication, representation, reference or notification of any kind –

1. which is intended to promote the sale, leasing or use of any goods or services; or
2. which appeals for or promotes the support of any cause.

Promotional content of display material, menus, labels, and packaging also fall within the definition. Editorial material is not an advertisement, unless it is editorial for which consideration has been given or received.

The word ‘advertisement’ applies to published advertising wherever it may appear. It does not apply to editorial or programming publicity.”

It is common knowledge that each specific social media platform, such as Twitter or Facebook, has its own advertising rules to follow. In South Africa there is currently no legislation aimed at dealing specifically with advertising on social media. It can however be argued that the definition of “advertisement” is so wide and flexible that it could allow for the inclusion of new types of advertising such as websites, SMS’s, emails, and social media posts. Laws and regulations applicable to traditional advertising should therefore also apply to social media advertising. It is expected that the Code will also apply to social media advertising and that complaints about social media advertisements will be considered by the ASA in the same manner as those in more traditional formats.

What are the main aspects of the Code?

Section II contains the “flesh” of the Code which has been interpreted and qualified by numerous ASA rulings. The most obvious content to stay clear of include:

• Advertisements that contain “offensive advertising” – usually based on sex, religion, race and politics (clause 1). The main question is whether the hypothetical reasonable person would be offended by the commercial.
• Advertisements that (i) play on fear without a justifiable reason (clause 3.1); (ii) contain any content which might lead to acts of violence (clause 3.2) or illegal activities (clause 3.3); (iii) is discriminatory (clause 3.4); or (iv) contains gender stereotyping or negative gender portrayal (clause 3.5). With some of these prohibitions exceptions to the general rule may apply.
• Advertisements that contain any statement or visual presentation which, directly or by implication, omission, ambiguity, exaggerated claim or otherwise, is likely to mislead the consumer (clause 4.2.1). Advertising in this context will again need to be considered as a whole, in context and objectively from the viewpoint of the hypothetical reasonable person who is neither overcritical nor hypersensitive.
• Advertisements that take advantage of the advertising goodwill relating to the trade name or symbol of the product or service of another – also known as exploitation of advertising goodwill (clause 8).
• Advertisements that consciously copy or imitate the original intellectual thought of another (clause 9).
• Advertisements that encourage children to do dangerous things, exploit their innocence; encourage them to nag; and sexually exploit them (clause 14).
• Advertisements that attack, discredit or disparage other products, services, advertisers or advertisements directly or indirectly (clause 6.1). The guiding principle in all comparisons shall be that products or services should be promoted on their own merits and not on the demerits of competitive products (clause 7.4). Comparative advertising is not illegal in South Africa, but certain requirements must be met. For example: “Works faster than our nearest competitor”. The claim makes a factual comparison with the competitor, does not use another’s trademark, and does not belittle the competitor – therefore it will be acceptable as long as it is true.

Mine is better than yours, or is it?

The intention behind clever marketing campaigns is, in essence, to make the product or service “stand-out”. To achieve this, advertisements often contain short and memorable phrases such as “Fastest in Cape Town” or “Best Boerewors in the World”. Such slogans have led to a number of complaints to the ASA. Probably the most often cited clause in such complaints is that of “substantiation” – clause 4. In short, the requirement of substantiation requires an advertiser to hold in its possession, before an advertisement is published, documentary evidence to support claims that are capable of objective substantiation. For example: if an advertiser claims that his transportation service is the “Fastest in Cape Town”, the advertiser must hold proper independent substantiation for the claim he is making if the claim can be objectively substantiated(meaning, if consumers think that there is some evidence behind the claim the advertiser must hold such evidence).

Things that are not capable of objective substantiation include “puffery”, which is not illegal in South Africa.Puffery refers to matters of opinion or subjective assessments where it is clear that what is being expressed is an opinion which is not likely to mislead consumers about any aspect of a product or service (clause 4.2.2). The ASA has previously held that the phrase “Best Boerie in South Africa and probably the world” is clearly an exaggerated claim and would be understood by consumers to be an expression of opinion rather than fact, therefore it constitutes acceptable puffery. However, if the claim changes to “the most sought after boerewors brand in South Africa”, the claim becomes capable of being objectively substantiated and the advertiser must hold evidence to that effect.

It is therefore important for advertisers to distinguish between claims that are capable of objective substantiation and those that will merely be regarded as puffery. Previous rulings of the ASA provide particularly useful guidance in this regard. For example, in Complete maintenance dog food / montego feeds / 18193 / 2011 the advertisement claimed that the particular product was “excellent value for money”. The ASA was not convinced that the hypothetical reasonable person will regard the claim to be an objectively substantiable comparative claim. The claim was rather seen as a matter of opinion, therefore there was no contravention of clause 4.

Conclusion

As the industry moves away from traditional media to digital media, advertising law faces new challenges. The vast amount of rules to consider, depending on the product or service being promoted, may further complicate matters. The Code should be every advertiser’s starting point. The Appendices to the Code contains industry specific rules that should further be considered. For example: alcohol advertising (Appendix A), advertising of collective investments (Appendix H), food and beverage advertising (Appendix J), etc. In addition to the Code and its Appendices, further laws regulate the advertising practices of particular products such as foodstuffs, medicine, etc. Consumer legislation adds to the advertising law maze and requires all advertisers to comply with the CPA. The Code and related laws should indeed be recognised as an important part of any company’s compliance assessment when deciding to advertise products or services to the public.