CAP RELEASES NEW CODE FOR ADVERTISING, SALES PROMOTION AND DIRECT MARKETING

On 4 March 2003, the Committee of Advertising Practice (CAP) released a revised edition of the British Codes of Advertising and Sales Promotion - the rules applying to non-broadcast advertising, direct marketing and sales promotions in the UK. Aside from being re-named the "British Code of Advertising, Sales Promotion and Direct Marketing", what else has changed?

5 key points of interest

1. Sanctions - Under the heading 'Pre-publication vetting', a new clause, 61.8, states that persistent offenders may be required to have some or all of their marketing communications vetted by the CAP Copy Advice Team until it is satisfied that future communications will comply with the Code. This reflects the language often used in ASA adjudications. But does the ASA have the right to impose this 'requirement', and is it enforceable? The next clause describes, the mandatory pre-vetting that can be imposed following adjudications against posters that cause serious or widespread offence, or are socially irresponsible. So is compliance with the 'requirement' still just voluntary in other circumstances? If not, its compatibility with advertisers' freedom of expression under Human Rights Law is questionable.

2. Testimonials - The requirement in clause 14.5 of the old Code that references to tests and surveys by journals could only be used with permission has been deleted. One of the most frequent complainants under this clause was the Consumers' Association, objecting to the use in advertising of favourable conclusions from 'Which?' magazine. Make of that what you will!

3. Parodies - The prohibition on the unfair use of the goodwill in the advertising campaign of any other organisation has also been deleted from the new Code, suggesting that parodies of other companies' advertising may now be permissible, subject to all the other remaining constraints.

4. Viral Marketing - Most viral marketers honour the law more in the breach than in the observance. And now they have some new Code provisions to ignore, although these really just reflect changes in the law brought in by the Electronic Commerce (EC Directive) Regulations 2002. Clause 1.1(a) of the new Code specifically clarifies that it applies to e-mails and text transmissions. It also states in clause 22.1 that unsolicited e-mails must be identifiable as marketing communications without being opened, ie from the subject line and that explicit consent is needed before marketing by e-mail or SMS text messages.

5. Children and Sponsorship - Welcome clarification has been added concerning the definition of a child in the context of advertising, not just sales promotions. This is now harmonised as someone under 16 for all purposes under the Code, and in line with the rules for broadcast advertising. The Code also now clarifies that it does not apply to sponsorship. But life is never simple: the new Portman Code has recently introduced restrictions on sponsorship by brewers of events that have a significant number of children among the audience, spectators or participants.

What else is different about the new Code?
Instead of three Codes, there is now one unified Code, combining general rules for advertising as well as sales promotion, direct marketing and other specific rules. The terminology has also been changed to reflect the importance of forms of marketing other than advertising. For example, the term "marketer" is now preferred over "advertiser".

On closer inspection, many of the changes to the new Code reflect either changes in UK and European law, or the existing body of decisions of the Advertising Standards Authority (ASA). Clause 32.3 has been added stating that marketers should not describe an individual element of a package as "free" if the cost of the element is included in the package price. This reflects the numerous ASA rulings that it is misleading to advertise telecommunications packages as including "free air time", because the cost of the calls is "inclusive" rather than "free". The various amendments to clause 1.2, which confirms the application of the Code to advertisements in paid-for space on websites and e-mails, also reflect previous decisions of the ASA. In short, marketing that fell on the right side of the previous edition of the Code will largely continue to comply with the revised rules.

Other new requirements
Apart from those mentioned above, there are some other key changes that reflect current community concerns. Clauses 46.3 and 46.7, for example, have been amended to prevent irresponsible marketing of alcoholic drinks by prohibiting the implication that drinking is therapeutic, or can overcome boredom, loneliness or other problems.

Clause 47.1 has been amended to state that marketing communications that are acceptable to teenagers will not necessarily be acceptable to younger children. Certain on-line "pop-ups" could, therefore, be acceptable under the revised Code if they appeared on a website targeted at 14 year-olds, but unacceptable if they appeared on a website targeted at 8 year-olds.

The rules concerning comparative advertising have been rationalised, and the Code now recognises that comparisons may not necessarily be with competitors' products. According to clause 19.1, this type of comparison must also be clear and fair, and the elements of the comparison should not be selected in such a way that gives marketers an artificial advantage. The Code prohibitions on comparative claims that unfairly denigrate other competitors remain (clause 20.1).

Some of the most significant changes are to the rules for sales promotions. There is a new rule, for example, which makes promoters responsible for all aspects promotions (clause 27.3). Promoters cannot disclaim responsibility for the acts or omissions of their clearing houses or any other subcontractor involved in the promotion. Among the numerous other changes, there are also new rules prohibiting the encouragement of excessive consumption by participants (clauses 28.2 and 30.3).

Relaxing the rules
Although there are many changes to the Code, marketers will be heartened by the news that the CAP has relaxed some of its rules. As stated above, the old clause 14.5 required that references to tests, trials, endorsements, research and professional journals could only be used with the permission of those concerned. Now, professional journals may be used without the permission of those concerned, if they are genuine statements taken from a published source. This is likely to please marketers - but researchers and publishers will probably be unimpressed by their loss of control over the products or services that are associated with their work, not to mention the loss of potential revenue from marketers who previously had to seek permission to quote from them.

Clause 34.1(c) has also been relaxed. Instead of imposing an absolute rule on promoters to tell consumers the date upon which their promotion will come to an end, this clause now recognises that a closing date may not always be necessary. This change will be welcomed by many retailers, who found that it was not always possible to comply with this rule - particularly when they were advertising "buy one get one free" promotions that were intended to last as long as the relevant stock did.

Summary
Marketers do not need to fear any drastic changes to the rules because the amendments to the Code are largely based on previous ASA decisions and changes to UK legislation. Having said that, there are some important changes that marketers need to familiarise themselves with and they should study the revised Code carefully.

For further information
To obtain a copy of the new Code, as well as other useful information about CAP and the ASA, and to try your hand at the tutorial about the changes from the previous edition, visit the CAP website at www.cap.org.uk.

If you require further details or have any questions, please contact Brinsley Dresden on 020 7074 8069 (brinsley.dresden@lewissilkin.com) or Rachelle Andrews on 020 7074 8146 (rachelle.andrews@lewissilkin.com).

Professional advice should be obtained before applying the information in this Newsflash to any particular circumstances.

Lewis Silkin - March 2003