Recent developments in online advertising

Author: Eddie Powell

This article summarises some of the more recent developments that will be of interest to those companies and individuals who participate in, or are considering participating in, any online advertising or promotional activity.

The Advertising Standards Authority’s new digital remit

On 1 March 2011 The Advertising Standards Authority (ASA) digital remit will be extended to cover the adverts and marketing communications made by companies on their own websites and any marketing communications made in other "non-paid for space "under that company’s control. The new rules are intended to apply to those marketing communications that are intended to sell something. Advertisements in "non-paid for space" are intended to control those communications on advertising control pages on social networking sites.

Any User Generated Content will fall within the remit if it has been adopted and incorporated within that company’s own marketing communications on its own website or in other non-paid for space on-line. Video games used to promote a product or organisation, "Advergames", will also fall within the new remit.

ASA will assess whether or not the marketing communication falls within the new remit on a case by case basis. The sanctions that ASA can impose have been extended to include an enhanced name and shame policy; it may remove, with the co-operation of the relevant search engine, any paid for search advertisements which link to the page hosting the non-compliant marketing communication (including the company’s own website or any other non-paid for space); and the placing of ASA paid for advertisements on internet search engines highlighting the continued non-compliance of the company.

As from 1 March this will therefore mean that anybody who is concerned about a marketing message within a website will be able to log a complaint with ASA, including complaints from competitors about any marketing claims made on their own website.

OFT to monitor paid tweets and blogs

In December 2010 the Office of Fair Trading (OFT) confirmed that online advertising, marketing and PR practices that do not disclose the fact that they include paid-for promotions are deceptive under fair trading laws. This includes comments on blogs and microblogs (e.g. Twitter) about services and products. The decision arose out of an enforcement action against Handpicked Media under the Consumer Protection from Unfair Trading Regulations 2008.

Following this enforcement action, any bloggers or tweeters that are engaged in any online promotional activity (including those by PR professionals), must display in a clear and prominent manner with the editorial content, that the promotion has been paid for. This must be "unavoidable" to the average consumer. Insofar as any promotional activities are undertaken on twitter, the OFT have directed that hash tags could be used to identify that the tweet is a promotional activity.

This follows a similar ruling by the OFT which held that it was an unfair trading practice for a celebrity to promote a product without disclosing that they had received some sort of financial compensation (including free goods) for the promotion.

The rules will apply to any trader in the UK involved in the promotion, sales, supply of products to or from consumers, and similar laws will apply to traders in other EU countries. For further information please contact Eddie Powell, Partner, Fladgate LLP on +44 (0)20 3036 7362 or// <![CDATA[
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