The Advertising Standards Authority, ASA, announced on the 1st September 2010 an extension of its regulatory remit, from March 2011, which will give the Regulator jurisdiction over all marketing communications on the Internet including those on corporate websites and social media networks such as Twitter and Facebook, as well as over advergames and user generated content.

This controversial move has been introduced without any public consultation, and includes new serious sanctions for advertisers. Exemptions to the new regulation include “heritage advertising”, ‘investor relations’, and marketing communications promoting “causes and ideas”. Nearly all other marketing promotions on-line will need to comply with the CAP Code. Some areas of concern include how the ASA will deal with the fine line between editorial and promotional material; how the extended remit will be adequately funded; how sanctions can be effectively enforced against companies with sites based overseas or indeed against those thousands of smaller on line advertisers who are blissfully unaware and ignorant of the CAP Code and whose advertising can change in seconds in this fast paced media environment.

All this comes into effect on the 1st March 2011, which does not give businesses long to review their on line promotions and marketing plans. The changes to the CAP Code ironically comes literally days after printed versions of the revised CAP and BCAP Codes were sent out to purchasers, and only a few months after a public consultation, which excluded these latest provisions.

Some on-line promotions are more risque than in other media. This is justified since much on-line material on corporate websites and social media networks is “pulled” by the consumer and not “pushed”. These new provisions do not indicate how the ASA will adjudicate marketing material that is aimed at adult markets. Pulled materials ought to be treated differently to those that are pushed at consumers such as pop ups and banners. This is a recognised practice in the off-line environment where advertisements in adult magazines are treated differently to those on a poster or press ad. Otherwise there is a serious danger of a dumbing down of creativity and a less enjoyable experience for consumers.

Many other problems are yet to be determined. For example can a fast food company produce a children’s advergame and comply with the CAP Code given the social responsibility clauses and the restrictions on food advertising?

Many advertisers may be surprised to learn they will pay a levy on sponsored search to fund this new extended remit. Google has provided some initial funding to cover the first year or two of the new system but the 0.1% levy on advertising spend by ASBOF (Advertising Standards Board of Finance) collected by advertising agencies, (albeit that they represent only a fraction of spend in this sector) from their client advertisers, is intended to cover the additional cost of the extended system.

The risk to the ASA is that it may be unable to cope with the number of complaints and the funds available may be inadequate in the long term to deal with this vast medium where reputable advertisers will comply, as they largely do already for reputational reasons alone, and where smaller traders and many rogue traders carry on as they do now.

For further advice on what this means for your business please see our Ad Guide.