JEREMY MAGGS: Saving the standards
Advertising standards body ASA embarks on a cost-cutting and fund-raising drive to preserve self-regulation and avoid the cost of having to defend complaints through the courts
Under the leadership of new acting CEO Gail Schimmel, the beleaguered Advertising Standards Authority (ASA) has raised R4m in emergency funding, which gives it a lifeline for the next few months.
The organisation is in business rescue after falling into financial difficulty under the leadership of Schimmel’s predecessor, Thembi Msibi.
Under a new cost-cutting regimen, 13 people have been retrenched and the body, which regulates advertising industry output, has given up the top floor of its plush Johannesburg offices and is looking for smaller premises.
Only seven staff members remain, including four lawyers, who adjudicate and process complaints. Schimmel confirms that while the legal affairs side of the business is running smoothly, there have been far fewer complaints over the past few years due to a lack of public communication.
Schimmel, who was head of legal affairs at the ASA 10 years ago, has managed to raise money from, among others, conglomerate Procter & Gamble and the Association for Responsible Alcohol Use. The two organisations donated R1m each.
To generate more capital to keep the ASA afloat and allow continued self-regulation, Schimmel has put a value-add package together for agencies and large corporates.
In essence the ASA is asking agencies, marketers, advertisers and media owners to pre-pay a one-off filing fee of R24,396. In exchange the donor receives full credit to file a complaint at any point in the future; a year’s access to the ASA Rulings Library; the right to carry the ASA logo on marketing material; a responsible marketer Media Advertising & Communication (Mac) charter certificate, which earns BEE points; and access to training and support in how to leverage the ASA process.
Schimmel believes it’s vital for the ASA — acknowledged globally as one of the industry’s better self-regulatory bodies — to survive. "If it fails, issues about advertising content will be heard by the courts and the national consumer tribunal, and the average cost to file a complaint would go from about R30,000, with lawyer’s fees, to hundreds of thousands. Moreover, defending a complaint will no longer be free and, more worrying in the longer term, government is likely to step in. We don’t know what it will do — but it may include strategies such as banning entire sectors of advertising or fining advertisers a percentage of their profits."
Schimmel is also concerned that without the ASA, decisions will be made by people with no industry experience, and that rules could be rigid and set in stone.
She also believes that international investors want a system of self-regulation that they understand and that forms an environment in which they can advertise.
Schimmel is loath to point fingers at where the ASA went wrong and how it found itself in debt of over R5m. Suffice to say that all stakeholders should have woken up earlier, when the current funding model was seen not to be working, and that high operating expenses should have been cut back radically, she says.