Should Advertising Be (More) Regulated?

advertising regulation is necessary

Just like any other industry, advertising needs regulation. If you have doubts, imagine the following:

You travel to Paris to see the Eiffel Tower. You arrive and what you see makes you doubt your own eyes. There are huge banner ads placed on each side of the structure. Atop there are the McBurger’s golden arches. You hear the sound of a helicopter and, all of a sudden, fliers start to rain down. You grab one and realize it’s a voucher for a juice made of real fruits. You fall for the ad’s promise for a healthy beverage, but the drink tastes like pure chemistry.

You are disappointed with the way the Eiffel Tower looks and the way the fruity drink tastes, so you decide to rent a car and explore Paris in a different way. When you start driving, you notice animated ads on both sides of the road. Distracted and annoyed, you crash against the tree. The first thing you see when you open your eyes is a push notification saying: “Had an accident? Get yourself good life insurance.”

Doesn’t it sound like a nightmare?

Without regulations, we would see ads on historic buildings, we would be fooled by false information on food packaging, and we would be victims of dangerous ad placement. The list could go on and on. Without ad regulation, our world would be a marketing haven and a consumer hell.

The Controversy of Advertising Control

The topic of ad regulation is highly controversial.

On one side, we live in free market times, which means that each product or brand, no matter how big or small, has the right to be noticed (read: advertised). Furthermore, many countries practice democratic free speech, and some people think this should extend to businesses.

On the other side, not all products and services are equal. Some are neutral, while others might have a negative effect on our health, safety, and overall well-being. Should neutral and potentially harmful products have equal advertising rights?

Now consider another factor.

Most of us prefer ads that are relevant and personalized. At the same time, we want our personal information to remain personal. The idea of browser tracking or any other form of data collection—which stands behind any personalized ad—makes us feel anxious and possibly even paranoid.

Clearly, there should be a line separating the private from the public, the free from the controlled. But who should be in charge of drawing this line?

Consumers? Not likely. It would take someone brilliant intelligence to organize a procedure where each customer’s opinion is counted and factored into the final result.

Advertisers? What a crazy idea.

Government? This one sounds like the only way out. But there is a problem with government, too. Living in a post-Snowden era means most of us are worried about government surveillance.

Here is the situation in a nutshell:

  1. We realize that advertising should be regulated.
  2. We admit that proper regulation can only be implemented on a state level.
  3. We are as concerned about government data collection as we are with data collection by marketing agencies and brands.

The situation is not hopeless, though. Positive experiences in some countries and among international organizations prove that advertising can be regulated for the benefit of everyone involved.

The Advertising Regulation Algorithm Explained

It would be an understatement to say that advertising regulation is complex. In nearly all the countries, advertising regulation happens on many (many) levels.

In most cases, any ad you can see or hear in your country is a subject to the regulation of state law, corresponding legislative acts, international contracts signed by your country, and, in some cases, self-regulatory organizations of the ad industry.

Let’s take the UK, for example. Any ad you can see in this country is a subject to the following authorities or laws:

The Consumer Protection from Unfair Trading Regulations is a regulation designed to protect consumers against aggressive sales techniques, false or deceptive ad messages, as well as intentionally incomplete information.

The Advertising Standards Authority (ASA) is a non-statutory organization designed to regulate advertising, direct marketing, and sales promotion in the UK. The role of the ASA is to address complaints about the content of ads, marketing, and sales in the United Kingdom. This organization is meant to protect British consumers from inaccuracy, exaggeration, and ambiguity in advertising.

When necessary, the ASA is allowed to enforce the Committee of Advertising Practice (CAP) Code or the Broadcast Committee of Advertising Practice (BCAP) Code. The first covers mainly sales promotion, direct marketing, and non-broadcast advertising, while the second is focused on broadcast advertising.

At the same time, any ad in the UK is subject to the Sale of Goods Act of 1979 under which all advertised goods must match the description advertised on them.

Specific ads such as those targeting children or those promoting gambling, alcohol, or tobacco fall under additional regulations.

On top of it all, ads in the UK have been regulated by the Data Protection Act of 1998, which will soon be replaced by the long-awaited General Data Protection Regulation, a.k.a. GDPR.

As you can see, advertising regulation is anything but simple. What is mind-blowing is that even with so many organizations, laws, and regulations designed to control the quality of advertising, some brands manage to get around ad regulations using legal loopholes.

Advertising Regulation: Best Cases by Country

Switzerland: Although the local ad space is small, it is worth our attention. According to Swiss law, advertising lotteries and games of chance is strictly prohibited. In Switzerland, it is illegal to promote pharmaceutical products under prescription in any publicly available media. Health-related and nutritional claims for foods are only permitted if they deliver exactly what they promise.

China: The Chinese advertising market is the second largest in the world and one of the most interesting in terms of ad control. For instance, brands can be fined up to $157,000 for using statements such as “the best,” “the most,” or similar phrases in their marketing campaigns. Another fascinating fact is that children under 10 are not allowed to endorse or promote within Chinese ads (even if it’s an advertisement for toys!)

Chile: Under Chilean law, it is not allowed to advertise products that are high in calories, sugar, sodium, and saturated fats to children under the age of 14. Brands producing the above-mentioned foods cannot be marketed in schools and are illegal to use in cartoons or toys for promotional purposes.

Ireland: According to advertising regulations in Ireland, any ads that target children under 18 cannot include celebrities. Foods that are high in sodium, sugar, or fats are completely banned from advertising on channels where at least half of the audience is under 18 years old.

Advertising Regulation Reconsidered

In the past, the only concern of ad regulation authorities was which products or services should be allowed for advertising and which should not. These days, when massive data breaches have become the new norm, ad regulations must also specify which forms of data collection and tracking should be considered legal and which should be banned.

As the need for this form of regulation emerged, international regulations such as GDPR came into play. The primary goal of such documents is to limit/control the power of ad tech companies, marketing agencies, and brands trying to make the most out of user data.

The Final Word

These days, everything changes in a heartbeat. With new technologies, advertising can be as personalized as we allow it to be.

Fascinating and exciting for marketers, new tracking and data collection technologies make us all more vulnerable and unprotected than ever before.

Without advertising regulations, it would take brands a few minutes to learn all they need to compose a super-manipulative ad targeted specifically at you.

If there were no advertising regulation put in place, we would fall victims to the whims of marketers, quickly and inevitably, once and for all.

Fortunately for all of us, advertising has become the subject of regulation on national and international levels. There is still a lot to be done in this regard, but our fingers are crossed that this year’s enforcement of GDPR will symbolize the beginning of new era of advertising—the era of ethical ads, responsible brands, and protected personal data.

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