Advertising’s new self-regulatory body
A new self-regulatory body with a new membership and staff structure has replaced the Advertising Standards Authority, which went into liquidation just over a month ago. Agencies and brands are being urged to support it to ensure self-regulation survives
The brand and marketing industry is being asked to rally around a new organisation which has replaced the defunct Advertising Standards Authority. The ASA went into liquidation at the end of September after years of mismanagement and alleged financial impropriety.
In its place comes the Advertising Regulatory Board (ARB), headed by former ASA legal counsel Gail Schimmel.
"The marketing and advertising industries were not prepared to sit back and allow advertising content to become unregulated," says Greg Garden, head of the Marketing Association of SA. "We saw the need to step in and protect both the good standing of the industry and the rights of the consumer."
Two other industry bodies, The Association for Communication & Advertising (ACA) and the Interactive Advertising Bureau (IAB), have also lent their support to the new ARB.
In an interview with the FM, Schimmel stresses that the new body "is not the ASA with a new name" but a completely new entity. "From a company law perspective we needed a different name — but we also wanted a new start in every way. The demise of the ASA is a tragedy but we are excited about the opportunity that a new start for self-regulation presents." Schimmel says the new body has a less complicated structure than the ASA.
"The membership has gone from a rather complicated structure with core and noncore members, to a straightforward membership model with one class of member. These members will be industry bodies. The staff structure has also changed completely — with a small internal staff and then a network of external adjudicators. The industry has entrusted the Code of Advertising Practice to the ARB — and, as such, the remit and process is much the same."
Funding, Schimmel concedes, will remain a major challenge. "R2m that was raised to pay off the ASA debt will be distributed on liquidation — meaning that most likely only super-preferant and preferant creditors will be paid anything at all. The new entity — because it is an entirely separate entity — has no debt. The ASA, at the time of closure, was running smoothly except for the debt. If marketers and agencies commit funding to the new entity, there is no reason that it should not quickly become a healthy and well-financed self-regulatory body."
The FM understands many of the marketers who were making donations to the ASA have committed to similar monthly donations to the ARB. Says Schimmel: "We are also applying increased pressure to the entire industry to come to the funding party. If every marketer, agency and media carrier paid R1,000 a month, we would be fully funded. I don’t think R12,000 a year is a big ask for self-regulation."
Schimmel is confident that ad agencies and brands will come to support the new ARB. "The industry has been supportive of ensuring that self-regulation in SA survives. In a funny way, the liquidation of the ASA is a wake-up call. We had warned that it could happen, and maybe industry didn’t quite understand that it was real. Now that it has happened — and they have experienced a month with no self-regulator — I think that they are even more committed. The reality is that if the ARB fails, there is no further back-up plan; self-regulation of advertising will die and we will have to see how the government steps in. I hope that never happens."
Sadly, a month of unregulated advertising has been a reality and Schimmel says this can’t happen again.
"The ASA was ordered to close its doors and stop trading. While we knew that this would happen eventually on liquidation, this was in fact done by the business rescue practitioners with no notice, two months before the liquidation was set down for hearing, and staff were ordered to hand over keys by the end of the day on which the instruction was given. Salaries were frozen immediately. The work stopped that day."
She says the ARB is now up and running and on day one received its first complaint.
Key industry organisations are happy that work has started again. "For us, the continued self-regulation of advertising is critical," says Paula Hulley, CEO of the IAB.
Mathe Okaba, the CEO of the ACA, says: "The agencies that are members of the ACA are all strongly in favour of self-regulation, and we are delighted to see the quick establishment of a new entity. We will be calling on all our members, as well as marketers, to fund the ARB willingly, so that this can be a success story."