1. Internet Marketing Handbook Series
Guide to
Online
Ad vertising

2. Contents
Intro
ducti
on 1
Background 2
Legislation 3
Self-regulation 3
vertis ing 4
Al cohol ad en 5
dr
chil
g to es
Marke
tin
ion s do
anct se to ? 5
Wha t s u Code
ASA rce the
the enfo
6
Changes
Future
6
Useful links
Introduction
Online has come a long way since it surfaced some 10
years ago. What once could easily have been described
as the ‘wild west’ - an expansive, free space unfettered
by moral codes - is now a formidable communications
channel, worth £2.8 billion and challenging TV to become
the biggest marketing medium in the UK.
1

3. guide to online advertising regulations
With the internet placed firmly on the agenda of advertisers worldwide, its
ability to engage consumers and build brands has been proven time and
time again, as we align ourselves with the more traditional media in terms
of quality, reach and efficacy. The ‘young’ medium has now grown up. As
such it requires stringent processes, rules and regulations to ensure that the
practice of online advertising remains transparent, and the integrity of the
medium is reinforced.
As the trade body for internet marketing, it is our role to be actively involved
in the major legal and regulatory issues facing the UK market. In 2008, the
IAB launched its Regulatory Affairs function in response to a growing need
for education, to further promote the internet’s importance within the media,
political and regulatory landscape, as well as to clarify the role of marketers
in ensuring the industry remains robust and responsible.
We appreciate that, for many, this is a new area that requires a formal
introduction and explanation in very simple terms. This document is
designed to do just that. If you have any further queries please contact Nick
Stringer, IAB Head of Regulatory Affairs at nick@iabuk.net.
Background:
Online advertising in the UK is currently regulated by a combination of
legislation as well as a set of self-regulatory rules. These supplement
legislation and fill in gaps where the law does not reach. Self-regulation also
offers an easier way of resolving disputes than via civil litigation or criminal
prosecution.
The self-regulatory rules are reviewed and published by an industry body, the
Committee of Advertising Practice (CAP), of which the IAB is a member,
and administered by the independent Advertising Standards Authority
(ASA). The ASA is funded by a 0.1 per cent levy on ad spend and collected
by the Advertising Standards Board of Finance (ASBOF).
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4. Legislation:
There are over 100 pieces of legislation affecting advertising in England and
Wales. Much of this legislation will apply to Scotland and Northern Ireland
as well but, as devolved bodies of government, they will also have their
own applicable legislation. Some of this legislation is generic, such as the
Data Protection Act 1998 (legal basis for handling information relating to UK
individuals), and some of it is sector-specific, such as the Tobacco Advertising
and Promotion Act 2002 (prohibits tobacco advertising). Businesses have a
primary responsibility to ensure that everything they do is legal.
The latest legislation to affect advertising came into force in May 2008.
The Consumer Protection from Unfair Trading Regulations 2008
replaces existing law relating to unfair, misleading or aggressive marketing
practices. The new law is media neutral but means that if an advert or piece
of marketing is a disguised commercial practice (e.g. a fake blog) then it will
be unlawful. Where the new law applies to non-broadcast advertising, it has
been incorporated into the self-regulatory code (see opposite).
Self-regulation:
The self-regulatory rules – officially known as the British Code of Advertising,
Sales Promotion and Direct Marketing (the CAP Code) - is specific to
non-broadcast media and therefore includes advertising in cinemas and
newspapers, on billboards as well as on the internet (see box I for what
specific online advertising is covered by the Code).
The Code states that all marketing communications should be legal, decent,
honest and truthful. It should not cause serious or
widespread offence, exploit a consumer’s inexperience,
mislead, cause fear or distress, condone or encourage
unsafe practice or violence.
3

5. guide to online advertising regulations
1. What aspects of on
does the self-regulat line advertising
ory Code cover?
• Emails, text messages and
other electronic material.
• Paid-for display adverts (e.g
. banner ads).
• Sales and advertisement pro
motions.
• T
he Code is not specific on,
but includes, paid-for search
advertising, in-game adverti listings, viral
sing, advergames (as part
pre-roll and video display adv of a paid for ad),
ertising, engagement marke
search listings on pay-per-cl ting, tenancies,
ick price comparison website
within mobile multi-media ser s and advertising
vices (MMS).
• he Code does not cover
T editorial content, website con
advertisements in paid for tent (except sales
space), marketing communica
media, classified private adv tions in foreign
ertisements and premium rate
services.
The Code has specific rules for a number of particular areas. These include
age-restricted products (e.g. alcohol and betting/gaming), marketing to children
(including unhealthy food), motoring, environmental claims, health and beauty
products and therapies, weight control, employment and financial products.
Alcohol Advertising
The CAP Code contains specific rules for advertising alcohol products
(those that exceed 1.2 per cent in alcohol volume). They must not be
directed at people under the age of 18 years and, if a medium (e.g. website)
has an audience share of children under the age of 18 years greater than 25
per cent, then it must not carry any alcohol product marketing or advertising.
In addition to this, marketing communications of alcoholic products must
not be portrayed as having therapeutic qualities, mood changing abilities,
enhancing confidence or performance, or be linked with seduction/sexual
prowess.
4

6. Marketing to Children
The CAP Code has stringent rules for marketing communications addressed
or targeted to a child under the age of 16 years. For example, it must not
contain anything that is likely to result in their physical, mental or moral harm
or exploit their credulity, loyalty, vulnerability or lack of experience. The Code
prevents marketing communications from condoning or encouraging poor
nutritional habits or an unhealthy lifestyle in children. It goes even further by
implementing strict rules for advertising directed at pre-school or primary
school children. Except for fresh fruit or fresh vegetables, food or drink
advertisements for this age group should not include promotional offers and
should not include licensed characters or celebrities popular with children.
The vast majority of advertisers abide by the Code. However, in some cases,
where a complaint is upheld and the advert is not taken down voluntarily, the
ASA may impose sanctions to enforce compliance (see box II on sanctions
and enforcement).
the ASA
sanctions does ?
II. What nforce the Code
use to e erse publicity for the adv
the ASA’s rulings bringing
• eekly publication of
W
advertiser. vices - such as
members to withhold ser
• CAP ad alerts advising its
se who do not comply.
advertising space - to tho ognition,
trading privileges and rec
• Revoking CAP member
.
e.g. direct mail discounts
for persistent offenders.
• Pre-publication vetting T) to legally force
Office of Fair Trading (OF
• efe
R rring the advertiser to the
n.
the advert to be withdraw
5

7. guide to online advertising regulations
Future Changes:
The Code is currently undergoing a fundamental review and a new version
is expected to be published in 2009. This is likely to incorporate new
advertising techniques, such as those in paid-for space.
Separate to this review, the Government is due to implement the EU Audio
Visual Media Service Directive into UK law by December 2009. This
updates broadcasting regulation across the EU but also extends it into online
video-on-demand services, such as BT Vision, 4OD and Sky Player. It will
also implement a new regulatory system for advertising on these video-on-
demand services. However, it is expected that the ASA will remain the ‘one
stop shop’ for all advertising.
Useful Links:
acknowledgements www.iabuk.net
Nick Stringer, www.asa.org.uk
Head of Regulatory Affairs, IAB www.asbof.co.uk
www.cap.org.uk
Amy Kean,
www.ec.europa.eu/avpolicy/
Senior PR and Marketing Manager, IAB reg/avms/index_en.htm
About the IAB
The Internet Advertising Bureau (IAB) is the trade association for online advertising. With
over 450 members, it’s run for the leading media owners and agencies in the UK internet
industry. Online is an exciting and fast-growing medium and our job at the IAB is to work
with members to ensure marketers can identify the best role for online, helping them engage
their customers and build their brands. Through the dissemination of research and the
organisation of regular events, we aim to put online on the agenda of every marketer in the
UK, acting as an authoritative and objective source for all internet advertising issues whilst
promoting industry-wide best practice.
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8. Internet Marketing Handbook Series
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