Keeping it clean: Self-regulation in the advertising industry

Advertising plays a crucial role in shaping consumer behavior, shopping habits and even cultural trends. Evidently, it wields significant influence over public opinion. Because of this power, it has become imperative for the advertising industry to be more responsible in promoting ethical standards; thus the development, promotion and support for self-regulation has become an essential check and balance system in the advertising industry, complementing existing government regulations.

In a nutshell, self-regulation involves the advertising industry setting and adhering to its own standards and guidelines, rather than relying solely on external government regulations. This approach has been widely adopted globally, including in the Philippines, based on the belief that the industry is capable of managing its practices responsibly to safeguard consumers and ensure fair competition.

Typically, self-regulation in advertising involves the establishment of codes of conduct and independent review bodies, and the development and implementation of mechanisms to handle complaints and enforce standards. These systems are crafted to ensure that advertisements developed by industry players are truthful, fair, and respectful of consumer rights addressing concerns such as misleading claims, decency, privacy, and transparency.

THE NEED FOR SELF-REGULATION
Traditional government regulations, while crucial, struggle to keep pace with the dynamic nature of advertising. Self-regulation offers several advantages:

• Agility and Responsiveness: Unlike legislation, self-regulation can quickly adapt to new advertising trends and technologies, ensuring timely enforcement of ethical standards.

• Industry Expertise: Self-regulatory bodies consist of advertising professionals who possess deep industry knowledge, enabling them to develop guidelines that address specific advertising challenges.

• Cost-Effectiveness: Self-regulation is generally more cost-efficient than government-run systems, freeing up resources for both the industry and the government.

• Fostering Responsible Practices: Self-regulation encourages a culture of ethical advertising by promoting proactive adherence to high standards, ultimately building consumer trust.

There have been effective self-regulatory organizations (SROs) around the world that serve as models for the advertising industry.

In the United States, for example, the National Advertising Review Council (NARC) oversees industry self-regulation in tandem with the Better Business Bureau’s National Advertising Division (NAD) in handling and managing complaints about advertising accuracy and truthfulness. The US system allows for efficient review and resolution of disputes to promote and ensure high standards of honesty and transparency in all advertisements.

The United Kingdom has established the Advertising Standards Authority (ASA) which regulates the content of advertisements, sales promotions, and direct marketing. The ASA enforces the Advertising Codes, which apply to all media and require advertisements to be legal, decent, honest, and truthful.

In Sweden, the Advertising Ombudsman (RO) was institutionalized as an independent self-regulatory body that oversees advertising standards, with a strong focus on gender equality and strict regulations on advertising to children.

In Australia, the Code of Ethics is being enforced by the Association of National Advertisers (AANA) while the Advertising Standards Bureau (ASB) adjudicates complaints, ensuring that advertisements adhere to community standards.

Based on their practices, we can identify several features that make self-regulation a success in the enforcement of ethical standards and practices. Among others, these include:

• Clear and Comprehensive Codes: Well-defined codes of conduct that outline ethical principles and provide guidance for advertisers are essential.

• Independent Complaint Handling: A fair and impartial process for handling complaints from consumers and competitors is crucial for maintaining public trust.

• Education and Awareness: Self-regulatory bodies play a role in educating advertisers and the public about the importance of the codes.

• Sanctions and Enforcement: Systems with clear consequences for violations, ranging from warnings to public censure, help deter non-compliance.

Based on global experiences on self-regulation, some limitations have also been observed.

Practitioners have noted that existence of industry bias, with critics arguing that self-regulatory bodies may be seen as lenient towards industry members and therefore more hesitant to impose stricter sanctions. Others argue that self-regulatory bodies lack a stronger enforcement power owing to the absence of legal authority to enforce their decisions as they only rely primarily on persuasion and moral pressure. On top of these, most self-regulatory systems do not seem to adequately represent the concerns of consumers and the broader public interest.

SELF-REGULATION IN THE PHILIPPINE ADVERTISING INDUSTRY
Self-regulation in the Philippine advertising industry is a successful system — a true testament to the collective efforts of stakeholders to promote ethical advertising practices, protect consumer interests, and maintain industry standards. Led by the Advertising Standards Council (ASC), self-regulation in the Philippines has necessarily navigated, managed, and overcome challenges, in uphold the principles of responsible and ethical advertising.

The ASC, established to oversee the self-regulation of advertising content, operates on a foundation of promoting honesty, decency, and fairness in all advertising materials. It is guided by a comprehensive set of guidelines that cover various aspects of advertising, including truthfulness, social responsibility, and the portrayal of persons. The establishment of these guidelines reflects a consensus among industry players on the importance of maintaining consumer trust and upholding ethical standards.

KEY ACHIEVEMENTS OF THE ASC
• Effective Pre-Clearance System: One of the cornerstones of ASC’s success is the pre-clearance system. This system requires all advertisements to be reviewed and approved before airing or publication. This proactive approach ensures that all advertising content complies with established guidelines which in turn effectively minimize the airing of misleading or offensive advertisements.

• Industry-Wide Participation: The ASC and its initiatives are widely supported by the advertising industry, including advertisers, agencies, and media companies. This collective commitment and widespread support are deemed crucial in enforcing the guidelines and fostering a culture of responsibility among the players and practitioners.

• Adaptability to Societal Values: The ASC has been successful in reflecting changing societal values and norms in its guidelines. The organization’s responsiveness is widely welcomed in the industry as it ensures that advertising content remains relevant, adaptive and respectful of Filipino sensibilities and cultural idiosyncrasies — which further ensures consumer trust.

• Complaint Handling and Enforcement: In ASC, there is a robust mechanism for handling public complaints about advertising content which is a clear demonstration of its commitment to accountability. It strictly adheres to transparent procedures when it reviews and addresses complaints, taking necessary actions to correct violations and incursions, which may include withdrawing the advertisement or requiring modifications of the advertisements submitted for review and approval.

• Education and Advocacy: Admirably, ASC goes beyond regulation because it engages in educational initiatives aimed at raising awareness among advertisers and the public about responsible and ethical advertising practices. It conducts workshops, seminars, and campaigns to further contribute to a deeper understanding of the ASC guidelines and the importance of ethical advertising in the Philippines.

CHALLENGES
While the ASC has achieved significant success, the self-regulatory body is facing significant challenges, especially in managing new advertising realties in the digital era.

• Digital and Social Media Advertising: One of the major challenges is the rapid evolution of digital platforms that has so far introduced new complexities in advertising. The surge of social media use and advertising and the massive adoption of influencer marketing are necessitating much-felt updates to existing guidelines. To date, the ASC is fully cognizant of these challenges and has started to address them by evolving its rules to cover digital advertising and engaging with digital platforms to ensure compliance.

• Enforcement and Compliance: There is still some room for improvement in enforcing compliance, particularly after violations are identified. The voluntary nature of self-regulation means that the ASC relies heavily on the goodwill and responsiveness of its members to follow through on directives, such as withdrawing or modifying non-compliant advertisements.

• Consumer Awareness and Participation: Admittedly, effective self-regulation requires active participation and support from consumers and the general public, who can file complaints and contribute to the monitoring process. However, there appears to be limited public awareness about the ASC’s role and how to lodge complaints which seem to undermine this aspect of self-regulation, potentially allowing some advertisements to go unchallenged by the consumers which may have a different take on the advertisements.

FUTURE DIRECTIONS
To further strengthen self-regulation in the Philippine advertising industry, several steps may be taken:

• Strengthening Digital Advertising Guidelines: The ASC should continue to evolve its guidelines to specifically address the unique challenges of digital and social media advertising. This includes clear rules on influencer marketing, native advertising, and user-generated content.

• Enhancing Enforcement Mechanisms: To improve compliance, the ASC could explore mechanisms for stronger enforcement, such as introducing penalties for repeated violations or establishing a system for tracking compliance post-adjudication.

• Boosting Consumer Awareness: Increasing public awareness about the ASC, its role, and how consumers can file complaints is crucial. Campaigns, educational programs, and partnerships with consumer protection agencies can enhance consumer engagement in the self-regulation process.

• Adopting Global Best Practices: The ASC can look to successful models of self-regulation around the world for inspiration. For instance:

o The United Kingdom’s ASA uses technology to proactively monitor online content for non-compliance, addressing the challenge of digital advertising oversight.

o The United States’ NAD encourages transparency and accountability through published case decisions, offering valuable insights into the reasoning behind rulings, which could serve as an educational tool for both consumers and advertisers in the Philippines.

o Sweden’s RO emphasizes gender equality in advertising, demonstrating the importance of aligning advertising standards with societal values and expectations, a practice that could be further emphasized in the ASC’s guidelines.

The self-regulation of the advertising industry in the Philippines faces significant challenges, particularly in the digital age. Addressing these challenges requires a multifaceted approach that includes updating guidelines to reflect the realities of digital advertising, enhancing enforcement mechanisms, increasing consumer awareness and participation, and ensuring uniformity across advertising platforms.

By looking to global best practices, the ASC can find innovative solutions to these challenges, strengthening the self-regulation framework in the Philippines and ensuring that it remains effective in protecting consumers and promoting ethical advertising practices.