1

UNIVERSITY OF SOUTH FLORIDA

The Features and Relationships

of the Implementation of
Advertising Self-Regulation in
Various Parts of the World
A BHP Honors Thesis

Stephen Ellingson
03/02/2020
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Abstract

Among several developed countries, advertising self-regulation has taken a role as both an

intermediary for governmental efficiency and as a service for consumers to become more

involved in the advertisements they see. Advertising self-regulation is essentially an addition to

government law, a voluntary system set up by advertisers with the intention of bolstering

consumer opinion and voice. Not every country sees the same measure of success with the

implementation of such a system. For example, the United Kingdom’s advertising self-regulation

body, the ASA, stated in its 2018 report that it received approximately 33,000 complaints

submitted over the course of 2018 from both consumers and organizations alike. While the

complaints during this year are considerably higher than organizations with jurisdiction over

other countries, the ASA has been touted as a successful case of a self-regulatory body. But what

qualities in an organization make it successful or effective? Should a self-regulatory body have

standards that are a reflection of the society in which it resides, or is there a universal structure

that proves itself in every scenario? By analyzing a series of case studies from various countries

around the world, this paper attempts to identify characteristics of these regulatory bodies that

contribute towards a properly functioning and efficient system. These findings should suggest

that there is a dynamic element involving culture and self-regulatory practices.

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Table of Contents
Introduction ........................................................................................................................................... 4

What is Advertising Self-Regulation? ............................................................................................... 4

Criticisms of Advertising Self-Regulation......................................................................................... 5

Case Studies ........................................................................................................................................... 5

Overview of the United Kingdom’s Self-Regulatory System............................................................ 5

Overview of Australia’s Regulatory System ..................................................................................... 9

Overview of Brazil’s Self-Regulatory Body .................................................................................... 13

Overview of China’s Self-Regulatory System ................................................................................. 16

Overview of the United State’s Self-Regulatory System................................................................. 20

Overview of Spain’s Self-Regulatory System.................................................................................. 24

Analyzing Beneficial Characteristics of Advertising Self-Regulatory Bodies.................................... 26

Complaints Process.......................................................................................................................... 26

Clear Hierarchy of Jurisdiction ...................................................................................................... 27

Jury Panel ........................................................................................................................................ 27

Discussion and Conclusion .................................................................................................................. 28

References .......................................................................................................................................... 30
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Introduction

Advertising and its inner workings have advanced and evolved over the course of the past

century, changing from a crude, one-way form of communication to an advanced system of

constant contact and input from the consumer. Not only has communicational form advanced but

so have regulatory systems. Advertising self-regulation, in particular, has emerged in several

countries in the past 60 years. In order to discuss the qualities and mechanisms of an advertising

self-regulatory organization, one must first define the question of what an advertising self-

regulatory organization is.

What is Advertising Self-Regulation?

Advertising self-regulation is a form of law in which advertisers, agencies, and media

come together to agree on a set of guidelines to ensure “legal, decent, honest, and truthful”

advertisements (“What is Advertising Self-Regulation?”, n.d.). This form of law is usually

complimentary to the already-existing form of government that applies to the practice of

advertising, which provides that the task of regulating advertisements runs efficiently.

Advertising self-regulatory organizations are responsible for enforcing these agreements set up

by all three parties – advertisers, agencies, and media. These organizations are sometimes split

up into subsidiary programs to manage specific functions depending on the country each resides

in. In the United States, for example, Better Business Bureau National Programs, Inc. oversees

the advertising review process, setting policies for the Children’s Advertising Review Unit, the

National Advertising Division, and the National Advertising Review Board, among others

(“Supporting Self-Regulation,” n.d.). Some of the tasks managed by these organizations include

analyzing advertising content submitted and reviewing complaints made by viewers. Parties that
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violate such policies are subject to whatever repercussions are stated in the agreement made,

which sometimes include fines or advertisement bans.

Criticisms of Advertising Self-Regulation

Not all opinions regarding the inclusion of advertising self-regulatory organizations have

been positive. There have been some instances in which some feel that self-regulation has proved

to be an ineffective force against advertising practices that push legal boundaries. For example, a

study analyzing alcoholic advertising practices took place in the United Kingdom in 2010 which

found that even with the presence of an integrated self-regulatory organization, alcohol

advertisers were still able to find a way to target underaged consumers in their campaigns

(Hastings et al., 2010). More of these criticisms will be discussed in full in the case studies

section.

Case Studies

While many countries have developed systems of advertising self-regulation, the

historical events behind each case are very different. Over the course of this section, self-

regulatory organizations of the countries of Australia, the United States, China, the United

Kingdom, and Spain will be discussed in full, including history of implementation, current legal

structure, and problems faced. This is done in order to identify characteristics of these

organizations that contribute to successful advertising self-regulation.

Overview of the United Kingdom’s Self-Regulatory System

The United Kingdom’s system of advertising self-regulation has been regarded as one of

the most successful, being considered by many as “the preeminent system of advertising self-

regulation in the world” (Miracle et al., 1987). With the ASA/CPA organizations handling most
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forms of advertising from non-broadcast to online, the UK’s regulation system has been

centralized and maximized for efficiency.

History of the UK’s Regulatory System

The United Kingdom did not originally have a self-regulation system. In fact,

advertisements in general were not subject to any form of regulation (self-regulation or

government) until 1955, when commercial TV started broadcasting within the country (“Our

History,” n.d.). In 1961, it was determined that it was in the best interest of not only the public

but advertisers as well to create the Committee of Advertising Practice, or CAP, to provide a

more engaging form of regulation. The Molony Committee published a report rejecting the case

for the CAP to be modelled after the United States Federal Trade Commission:

"We are satisfied that the wider problem of advertising ought to be, and can be, tackled

by effectively applied voluntary controls. We stress, however, that our conclusion

depends on the satisfactory working of the new scheme, and in particular on the

continued quality and independence of the Authority at its pinnacle.”

Along with the establishment of the CAP, the Advertising Standards Authority, or the

ASA, was created as the arm of enforcement to ensure compliance with the British Code of

Advertising Practice. However, its power was called into question in 1974 when concerns were

raised that the system was failing to effectively subdue misleading advertising due to its

relatively unknown (“Our History,” n.d.). To resolve this issue, legislation ensured that a levy on

advertising space costs would properly fund the ASA’s promotion to the public (“Our History,”

n.d.).
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In 2004, the ASA/CAP system was tasked with handling all TV and radio

advertisements, essentially turning it into a complete self-regulatory body with control over all

major forms of media. Now, the United Kingdom’s self-regulatory body handles more than

30,000 complaints per year. According to the ASA, more than 97% of UK advertising complies

with the Advertising Codes (“Our History,” n.d.).

Characteristics and Scope of the ASA/CAP System

The ASA is a regulatory organization “independent of both the government and the

advertising industry” that ensures that advertisements under UK jurisdiction are “legal, decent,

honest, and truthful” (Conway, 2020). It is the investigative arm of the UK’s self-regulatory

system, handling complaints and analyzing ads whose legality has been called into question. The

complaint process is open to anyone who wishes to convey an issue. It begins with an actual

complaint that is reviewed by a member of the ASA staff. If the complaint is thought to refer to

an actual infraction by the advertiser, the ASA will contact the advertiser responsible and attempt

to resolve the matter without a formal investigation. If the advertiser declines to amend their

content, a formal investigation may ensue (“How we handle complaints,” n.d.). In this

investigation, the ASA asks advertisers to provide specific proof of claims made. The

organization will then review this evidence and make a final decision regarding the possible

infraction. Advertisers that are not satisfied with the result may request a ruling review. The

ASA claims on its website that while a specific advertisement may have a significantly high

number of complaints, the organization takes care not to be influenced by this. Rather, the actual

content of advertisements and its possible infraction of law is the main priority. International

cases – that is, complaints referring to advertisements made out-of-country – are referred to the
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regulatory body in the country in which the advertisement originated (“How we handle

complaints,” n.d.).

Criticisms of the ASA/CAP System

Even though the United Kingdom’s regulatory system has constantly evolved and grown

over the course of the past fifty years, there are still many issues that some consumers feel are

not being properly addressed. Hot-button advertisements for alcohol, medicine, and tobacco have

always been a source of many complaints from viewers. For example, when reviewing internal

campaign notes from agencies handling alcoholic brands, it was determined that these documents

were full of references to brands suggesting that “alcohol can enhance the social success of either

and individual or event” (Hastings et al., 2010). Implying that this can be the outcome of using a

specific alcoholic brand is, in fact, against the Committees of Advertising Practice. In Section

18.3 of the CAP’s Non-Broadcast Code, it states that “marketing communications must not

imply that drinking alcohol is a key component of the success of a personal relationship or social

event” (“Non-Broadcast Code,” n.d.). Other issues with these alcoholic brands involved sexual

stereotypes and targeting of underage individuals.

The CAP’s non-broadcast and broadcast codes alike are designed to prevent

advertisements that do not align with proper industry practices. However, in the past cases

discussed, it is apparent that it is sometimes possible for the UK’s system to fail to identify these

unlawful advertisements in a timely manner (if at all). While the 2010 investigation by Hastings

revealed many abhorrent tactics by brand marketers, the consensus of the research was that the

restrictions on demographic targeting and advertising content “simply result in more cryptic and

imaginative campaigns”, using creative loopholes and shady techniques in order to fulfill

marketing objectives. In this regard, the ASA – and other self-regulation organizations – have a
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flaw: no matter how much legal jargon is present in codes of advertising practice, advertisers

must be ethical in the construction and implementation of campaigns.

An example of this occurred in the United Kingdom when the Industry Group for

Responsible Gambling, or the IGRG, pledged to commit to a voluntary ban on gambling ads

during broadcast sporting events. Taking effect in late 2019, the “whistle-to-whistle” ban was

implemented as a result of the IGRG “stepping up and responding to public concerns” about

impressionable viewers (especially children) acting irresponsibly (Davies & Sweney, 2018).

Because of this voluntary action, the viewing atmosphere for UK sporting events has improved,

and preventative measures have been taken to ensure proper gambling practices.

Summary of UK’s APA/CAP System

The APA/CAP System has played a vital role in the regulation of the United Kingdom’s

advertising content, both on broadcast and non-broadcast platforms. With its inclusive complaint

process and timely investigation process, consumers have a beneficial outlet to ensure that the

content they see is within proper standards. In addition, the APA has lifted a large burden off the

government’s shoulders in handling the responsibilities of regulation. However, the instances

discussed of advertisers sometimes taking advantage of the CAP Code’s language have proved to

be difficult to manage or identify. In the case of the United Kingdom’s self-regulatory

organization, it is plain to see that successful implementation may come about only when the

foundational rules are adhered to by all parties.

Overview of Australia’s Regulatory System

Australia’s self-regulation system didn’t come about until the early 1970’s. In 1974, the

country’s first stand-alone system was created, which gave consumers an outlet for filing ad
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complaints. While this system was originally less centralized than the United Kingdom’s, it grew

over the next decade, taking inspiration from the ASA/CAP system implemented in the UK. For

example, in 1986, the Advertising Code of Ethics was amended to include a provision regarding

taste and decency. Before this point in time, the Council’s approach was adapted from an ADA

test, in which investigators would ask themselves if the advertisement “causes avoidable

offence” (Advertising Standards Bureau, 2015).

In spite of its evolution, Australia’s self-regulatory system was ultimately flawed.

Because of multiple organizations that handled various facets of the ad regulation process,

timeliness was lost, and the complaint submission process was often cumbersome. After self-

regulatory organization dissolved in 1996, it was decided that a new, centralized system was

needed to govern Australia’s advertising industry (Advertising Standards Bureau, 2015). The

Advertising Standards Board, or the ASB, was created, which is the current form of advertising

regulation in Australia (Harker, 2003).

Characteristics and Scope of the ASB System

While the Advertising Standards Board “cannot rule on whether or not a product or

service can be advertised” (a matter for the government), it acts as an investigatory body that

ensures that advertising does not “cross the line of current community values.” In the complaints

process, consumers may submit a written form addressing the advertisement in question.

In the complaints process, consumers may submit a written form addressing the

advertisement in question. After the Ad Standards Community Panel assesses the complaint, it

will determine if the complaint is referring to a completely new issue or one that has already

been considered. The Community Panel will participate in a simple majority vote when it

convenes bimonthly (or as soon as possible if “urgent” instances occur). If the complaint has
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infracted on a Code, the advertiser responsible is then notified of the case. In most cases, the

advertiser will be asked to remove the offending content as soon as possible. If the said

advertiser refuses or fails to take down the content in question, Ad Standards has the right to

notify the respective governmental agency in charge of reprimanding the advertiser.

Criticisms of the ASB System

With the foundational change of Australia’s advertising regulatory body in the mid-

1990’s, the country saw its confusing and inefficient system morph into the one known today.

However, before this time, there were many issues that plagued the old system. As with any form

of regulation, there are issues regarding the extent to which regulation is effective, as well as the

composition of the regulatory council. According to Harker (2003), the Advertising Standards

Community Panel is composed of a mix of public and industry officials; currently, the split is 10

public officials to 6 industry officials. These officials are tasked with reviewing advertisements

when complaints are filed and holding meetings to discuss important issues that affect

Australia’s advertising industry. While these officials may meet the credential requirements for

council membership, they have apparently “struggled with the pressures of council work”

(Harker, 2003). This may be a result of council members being required by Advertising

Standards Council’s criteria of membership to have no professional association at all with the

advertising industry. This is meant to ensure that all decisions made by the Council are impartial

and fair. However, because of this requirement, some officials who were tasked to “deliberate on

perceptions, attitudes, tasks and interpretation of advertisements” (Harker, 2003) could be

considered by some to be overwhelmed.

Another possible weak point with Australia’s system of self-regulation also involves the

Council and its members. In the research study previously mentioned, members and functions of
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the Council were analyzed and found that the leading chairman had an incredible amount of

power and control over the regulatory functions of the body he manages. In fact, this individual

was found to have the ability not only to “select public individuals to serve on the council”

(Harker, 2003) but to also decide on the amount of time that these public individuals would stay

on the Council. In addition to completely controlling who was in Australia’s self-regulatory body

and how long they served, the research study also found that many conclusions come to by the

Council were overruled due to the chairman’s opinion. Because he or she chose the other

members, they tended to agree with most of the decisions made by the chairman.

Most of the problems and issues discussed pertain to Australia’s self-regulatory system

before its complete reboot right before the new millennium. In place of the Council, Ad

Standards now has what it calls a Community Panel overseeing complaints and maintaining

regulation. This panel is made up of a diverse group of individuals from many different sectors,

including medicine, marketing, military and law (Ad Standards Community Panel, n.d.). These

individuals are all independent of the advertising industry and make their varying opinions heard

through meetings and discussion. Instead of the past Council’s rules for appointing officials by

ruling of a leading chairman, membership applications are advertised, and interviews take place,

further solidifying the effort that Australia’s self-regulatory body is making to have regular

people take part and have a voice in the process. Terms are staggered and on a fixed term basis,

now no longer determined by a single individual or a few people. (Community Panel, 2019).

With the system that Australia’s government has currently in place, it is now able to more

efficiently and ethically handle the regulation of the country’s advertisements.

Summary of Australia’s Ad Standards Board System

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Within the past half-century, Australia has seen its self-regulatory body undergo major

changes that completely rethought both internal structure and interaction with other

governmental agencies. What has transpired in the region is an insightful look on self-regulation

adapting and evolving to the needs of its government, its people, and its industry. Now,

Australia’s body is now looked upon as being on the same level as the United Kingdom’s or the

United States in terms of effectiveness, timeliness, and efficiency.

Overview of Brazil’s Self-Regulatory Body

Brazil has been one of the first pioneers of advertising self-regulation with South

America. With the creation of the “Conselho Nacional de Autorregulação Publicitária”

(CONAR, for short), advertising officials were able to stop Brazil’s government from

implementing a set of regulatory laws unduly restricting practices at the time. While not at the

same level as regulatory bodies previously discussed, it is essential that this particular caliber of

regulatory body is discussed in order to properly deduce elements of successful regulation.

A Brief History of CONAR

CONAR was created out of a public need and a disagreement with government practices.

In the 1970’s, the industry was at a crossroads. As explained by Gossett (2011), Maruo Salles

and Caio Domingues, who were pioneers of the system, Brazil could decide between two

options:

"…total absence of regulation, which permits disordered practice to the detriment of

healthy competition among advertisers and affects legal rights of consumers, and the

other extreme that is the total delegation of the regulatory function to the government, the

executive and legal structure of which not always seem to understand the function, value
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and subtleties of the commercial advertising (…). What today we call self-regulation is

the midway path that has more and more followers and that shows increasing advantages

in theory and in practice over the visionary systems of total freedom or total

governmental control."

In the face of total government regulation (which would restrict the freedom and

efficiency of the advertising industry), advertisers and other officials made their case for a self-

regulatory system. They succeeded in convincing the government, and in 1978, the Brazilian

Advertising Self-Regulation Code was unanimously approved (Gossett, 2011). Taking

inspiration from the English system, CONAR was created two years later as the active branch of

Brazil’s advertising self-regulation system. In doing this, Brazil’s government gave its

advertisers more freedom, more responsibility, and openness with their consumers.

Characteristics and Scope of the CONAR System

As stated before, CONAR’s system of operation was inspired by the English regulatory

body in mind. While advertising is still regulated by Brazil’s federal government, CONAR is

involved with most television, magazine, radio, and newspaper advertising. It holds jurisdiction

over many product types, including alcoholic beverages, medicine, and tobacco products. Even

though the organization is not part of the government itself, it still receives respect from

members of the advertising community, and its decisions regarding complaint resolution are

hardly ever challenged (Gossett, 2011). CONAR fulfills four goals set in place when scholars

originally constructed their idea for Brazil’s advertising self-regulatory body: it must “establish

the ethical rules for the advertising industry, permit an effective action to anticipate the

controversy, establish a system for solution of disputes and claims out of the scope of the Public
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Power, and guarantee a fast, prompt and objective solution of claims, complaints and disputes.”

(Gossett, 2011).

CONAR follows the laws that were agreed upon in 1978 by the III Brazilian Advertising

Self-Regulation Congress. The laws, named the Brazilian Advertising Self-Regulation Code,

provide the basis for CONAR procedures and sets precedence for cases considered. In addition

to the first few articles, which deal with general advertising practices, the Code also delves into

subjects that might be more prone to complaints, including advertising towards children and

medicinal advertising.

The complaints process within Brazil’s CONAR system is much alike to the systems

implemented by Australia and the United Kingdom’s governments. A complaint may be filed

with the organization at any given time. After receiving the complaint, officials in the Board of

Ethics will review it and make a decision on whether or not the case being made is valid. If the

complaint is accepted, the Board will review the claim and come to a decision on the legality of

the ad. The Board will also inform the advertiser and on occasion, the media. If the

advertisement in question is found to be guilty of violating the laws set in place by the Code,

CONAR may penalize the punished party in a variety of ways; the Board may decide to

recommend to the media that the ad be banned or to warn the advertiser to edit or pull the ad. If

the advertiser in question decides that it would like to appeal the decision made by the Board of

Ethics, it may appeal to CONAR’s Superior Committee. (Gossett, 2011).

Criticisms of the CONAR system

As the UK’s self-regulatory system still deals with some issues that have plagued it since

its early years, so does Brazil’s system. In many of the same ways, CONAR has received
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criticism in many facets of its operations. It is quite possible, for example, that CONAR would

lack the power to restrict industry members in the case of said members grouping together in

numbers to achieve self-serving regulatory legislation (Gossett, 2011). CONAR also faces a

challenge regarding its jurisdiction. As conforming to the rulings of CONAR is purely voluntary,

the organization may find it easy to face potential pushback from individuals within the industry

(Gossett, 2011).

Summary of the CONAR System

While not quite as advanced as self-regulatory systems like ones in Australia or the UK,

Brazil has made monumental steps in the direction of a perfect compromise between the

government and the industry. Instead of a potential future in which Brazil’s government would

enforce strict restrictions on the creativity and freedom of advertisers within the country,

members of the industry were able to come together and convince the government to allow a

form of self-regulation. This has proven to be extremely beneficial for both industry and public

members alike.

Overview of China’s Self-Regulatory System

Even with the country’s status as one of the world’s most dominant economic powers,

China has yet to implement a singular working advertising self-regulation system. This is mostly

due to the fact that China is in a torn situation: with more international business than ever, the

country is having to slowly evolve with the rest of the world’s primarily capitalist practices while

at the same time maintaining complete control over the advertising industry. In fact, China has

only just begun processes to create a self-regulatory body in the last ten years, with most of that

time being spent on simply creating a standard code rather than a body to enforce the laws.

While going at what seems like an incredibly slow pace, many international ad and marketing
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regulatory committees such as the International Chamber of Commerce (2015) have praised

China’s efforts to allow advocation for the creation of a self-regulatory system.

Characteristics of China’s Regulatory System

In the past, China’s government has imposed severe restrictions on the content being

created by advertisers. As discussed above, this is due to the government’s “authoritarian and

conservative” politics that are prevalent in all facets of its society. According to Gao (2007), the

organization that has been put in charge of advertising administration is the State Administration

of Industry and Commerce. Some of its primary duties include research on ad administration and

regulation, supervising business activities, punishing false ads, and guiding the work of ad

examination institutions and trade organizations. (China pdf) This regulatory organization helps

to ensure that regulations are adhered to, regulations of which are not just applying to ethical

advertising standards and practices but also to the congruency of ideology with the Chinese

government’s laws.

While the SAIC may oversee the broad regulatory functions of the Chinese government,

there are many overlapping jurisdictions with local agencies and other branches of the

government, some of which supervise the media (like the Ministry of Culture), and some that

supervise advertised products and services (like the State Drug Administration (Gao, 2007). In

addition, there are many local agencies tasked with managing the regulation of ads within their

jurisdiction, such as outdoor advertising (Gao, 2007). With this system of many overlapping

channels that has been implemented by China’s government, it is clear that said government is

still in total control of the advertising industry. As stated by Gao (2007):

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“The Chinese system, with its built-in complexity and power overlapping, makes

advertising regulation in the country extremely susceptible to confusion, inefficiency,

bureaucracy, and corruption. Since the various government agencies regularly issue rules

and circulars to deal with recurring or new issues, Chinese advertising regulation is in a

state of flux and thus proves very difficult for advertising businesses to navigate.”

With businesses that operate in China, there is a strict set of laws and regulations that

must be followed in order to be able to advertise. A certificate of legitimate business must be

acquired from the government, and advertisements must be sent to censorship bureaus to ensure

compliance with China’s advertising laws. It is quite interesting to note that according to the

Advertising Law of the People’s Republic of China (China’s regulatory lawbook), it states that

the content of an advertisement “shall be true, lawful and conforming to the requirements in the

building of a socialist spiritual civilization” (“Advertising Law of the People’s Republic of

China,” 1994). This statement reflects well the state of the harsh restrictions set by the

government in order to maintain its authoritarian policies and culture.

Although there has not been a case of self-regulation in China, the market has taken its

own initiative to create a handful of organizations made up of a collection of businesses. These

organizations, which include the China Association of National Advertisers, the China

Advertising Association, and the China Advertising Association of Commerce, all have the

primary function of regulating advertising in tandem with China’s government. In 2011, these

three organizations came together to adopt the “first set of ethical standards for the entire

marketing industry in China” (“China Embraces Self-Regulation,” 2015). This standard set of

rules, the China Responsible Marketing Code, was built off of the International Chamber of

Commerce’s own code regarding marketing practices and was also agreed upon by many
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members of China’s marketing and advertising community (“China Embraces Self-Regulation,”

2015). While these organizations are voluntary and do not hold any power, advertisers join them

as a way to bolster public confidence with the assurance that China’s advertising agencies are

doing all they can to not only abide by the ethical standards set in place but also to show

initiative in listening to consumers’ needs.

Criticisms of China’s Regulatory System

As stated in the previous section, China has no self-regulatory system. This is because

China’s societal norms and system of government are much stricter than in other countries like

the United States or Australia. Because of its authoritarian system, China has complete legal

control over the advertising regulation process. Any self-regulatory practices are voluntarily

executed by members of the CAA, the CAAC, or the CNA and are done as a show of good faith

between advertisers and consumers. However, these organizations are closely monitored by the

SAIC. For example, the CAA says that its fundamental function is “to guide coordinate, serve,

and regulate the advertising industry under the leadership of the SAIC) (Gao, 2007). This

statement is key to the understanding that even though these self-regulatory organizations may at

first seem like independent bodies, they are overshadowed by the power of the government’s

SAIC. Because this process is completely voluntary, members of self-regulatory organizations

are given no responsibility by the Chinese government to enforce or have a say in the laws set by

the Advertising Law of the People’s Republic of China. As a result, the government is the only

body in charge of regulating advertisements, which has proven to be a clumsy obstacle that

opens the door to corruption and inefficiency. This is due to the fact that there are many overlaps

in jurisdiction from local to national, as well as the fact that there is not a truly centralized

government agency to oversee the complete process of advertising regulation.

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Summary of Chinese Advertising Regulation

While China is one of the leading economic powers in the world today, its advertising

regulatory system may be considered archaic when examined next to systems of other nations.

While in Brazil’s case, advertising self-regulation was implemented in order to stave off strict

government intervention, China has not seen nor allowed such an action to take place. Its

government is solely responsible for maintaining, editing, and implementing the laws regarding

regulation, and although the country’s few self-regulatory organization are making progress in

advocating for a change to the system, they ultimately fall under the absolute authority of the

SAIC and its affiliates, leaving effective self-regulation as virtually non-existent.

Overview of the United States’ Self-Regulatory System

While on a more segmented basis than some of the previous case studies, the United

States has an advanced regulatory system that works side-by-side with the government to ensure

ethical practices and compliance with the law. With organizations like the NAD, the CARU, the

BBB, and the ASRC, various sectors of advertising are monitored in order to provide a system of

efficiency, low cost, and high consumer trust.

A History of the U.S.’s Self-Regulatory System

Because the creation of self-regulatory organizations within the United States did not

occur due to a drastic need, such as the case study of Brazil, self-regulation has gradually been

implemented and has become an essential part of the U.S.’s advertising industry. During the

1960s and early 1970s, the rise of consumerism and consumer protection began to take place,

which led to industry leaders fearing the worst in the form of negative opinions, harsher

regulation, and a lack of trust from consumers. To combat this, the National Advertising Review
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Council (undergoing a name change to the Advertising Self-Regulatory Council in 2012) was

created in 1971 by the American Advertising Federation, the American Association of

Advertising Agencies, the Association of National Advertisers, and the Council of Better

Business Bureaus. This organization was responsible for creating policies for the NAD and the

NARB. As time went on, the relationship between consumers and advertisers began to show

more trust, and in 2012, the organization changed its named to provide a clearer message on its

fundamental purpose (Morrison, 2012). As of mid-2019, the Better Business Bureau has merged

ASRC and its subsidiary programs into “BBB National Programs, Inc.”

Characteristics and Scope of the BBB National Programs System

The BBB National Programs system is made up of six programs, all with their own

jurisdiction. Most of these programs have their own independent processes, including complaints

and penalization procedures. This enables each agency to perform its function in an orderly and

clean matter.

National Advertising Division (NAD). The NAD handles advertisements on a national

level, responding to complaints from consumers and competitors alike. The complaints process is

“almost always faster than a court proceeding” and offers businesses a more efficient and less

costly alternative to government intervention. Complaints can refer to advertisements in all

forms of media, and results set a precedence for future cases relating to the issues discussed

(“National Advertising Division,” n.d.).

National Advertising Review Board (NARB). The National Advertising Review Board

is the appellate body for the nation’s self-regulatory program. Its primary function is to review

the NAD’s decisions on complaints. When an NAD decision is appealed, the NARB will
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construct a review board of five of its 86 members, who come from backgrounds in national

advertising, advertising agencies, and the public sector. These individuals are nominated by

members of the BBB National Programs, ANA, AAAA, and AAF (“National Advertising

Review Board,” n.d.).

Children’s Advertising Regulation Unit (CARU). CARU was formed in the 1970s as

the children’s branch of the nation’s self-regulatory organization. Its members will proactively

review advertising content directed at children using its own guidelines. The organization

contacts advertisers if there is a matter of interest and will request a change through voluntary

cooperation (“About CARU,” n.d.).

Electronic Retailing Self-Regulation Program (ERSP). The ESRP is in charge of

handling the online direct response sector, which mainly consists of telemarketing services. It’s

primary mission is “to enhance consumer confidence in electronic retailing” (“Electronic

Retailing Self-Regulation Program,” n.d.). Like other subsidiary programs that fall under the

BBB National Programs’ jurisdiction, consumers and competitors alike may contact the ERSP

with issues that they want to be discussed.

Direct Selling Self-Regulatory Council (DSSRC). Like the ERSP, the DSSRC’s reach

is more limited than other programs and only applies to direct-selling companies throughout the

industry. It monitors claims made and has a primary focus on social media (“Direct Selling Self-

Regulatory Council,” n.d.).

Digital Advertising Accountability Program. The Accountability Program deals with

internet advertising regulation. With internet-based advertising, advertisers cater content by

 23

collecting data from users. The Accountability Program means to ensure that all data collection

processes are conducted in an ethical manner and with proper notice to consumers.

Advertising in the United States is ultimately regulated by the government, specifically

the Federal Trade Commission. The FTC also monitors many forms of advertising in order to

enforce its policies of fair and decent advertising (“Digital Advertising Accountability Program,”

n.d.).

Criticisms of the BBB National Programs System

Advertising self-regulation in the United States has been successful overall in staving off

the government while bolstering consumer trust. However, it should be stated that there are

certain instances in which advertising self-regulation has failed. The system regulators in general

has been described as “reactive” (“Self-regulation Is a Success,” 2011) in their ability to properly

regulate advertisers. In recent years, the privacy of consumers and data has been a sore spot that

has proven hard to enforce. Many advertisers and marketing companies have not complied with

the regulatory laws that are supposed to be enforced by self-regulatory organizations, giving

some the notion that these organizations are not effective.

Summary of the BBB National Programs System

With its new merging into BBB National Programs, advertising self-regulation in the

United States has become more centralized and clearer to understand for consumers. Its

subsidiary programs all provide consumers with an outlet to voice their opinions and concerns.

While in recent years, data collection laws have come to the forefront of the issue with

advertising self-regulation, overall regulation has proven to be extremely effective, providing a

balance between government intervention and industry participation.

 24

Overview of Spain’s Self-Regulatory System

Spain’s modern system of advertising self-regulation has only come about within the last

25 years. The creation of this organization, named Autocontrol, now consists of around 4,500

members, both direct and indirect (“About Us,” n.d.).

Characteristics and Scope of Spain’s Autocontrol System

Spain introduced the Association for the Self-Regulation of Commercial Communication,

or Autocontrol, in 1995. This organization falls within the European Advertising Standards

Alliance, which is a Europan institution that promotes advertising self-regulation through the

European Union (Feenstra & Esteban, 2019). Like the China Responsible Marketing Code,

Autocontrol’s Code of Advertising Practice is based on the ICC Code. Autocontrol states its goal

as “to work for responsible advertising: truthful, legal, honest, and loyal” (Feenstra & Esteban,

2019). To accomplish this, the organization monitors advertising content using its Code, accepts

complaints made by both consumers and competitors, and has a jury of individuals to oversee the

complaints process. This advertising jury is consisted of a blend of industry members and

individuals from the public sector. About 25% of the jury members come from sources external

to the advertising industry; this has been stated as giving the jury “independence and impartiality

in the deliberative processes of evaluating complaints.” (Feenstra & Esteban, 2019). Autocontrol

monitors all forms of advertising produced by its members, and in the event of noncompliance,

the organization refers the advertising violation to the proper government authority.

Criticisms of Spain’s Autocontrol System

While Autocontrol has proven to be effective method for the advertising industry to have

a larger involvement in the monitoring and enforcement of Spain’s advertising laws, there are a
 25

few concerns with not only the structure of the organization but its consumer involvement, as

well.

As opposed to the structure of regulatory bodies from other countries discussed,

individuals residing from the public sector only make up a quarter of Autocontrol’s complaint

jury. This may lead some to be skeptical about the jury’s level of independence from the

advertising industry, as the majority of the jury consists of industry officials.

Another concern with Autocontrol refers to the level of consumer participation with the

organization. When compared to other self-regulatory organizations, such as the UK’s

Advertising Standards Association, complaint numbers are drastically different from each other.

For example, in 2015, Autocontrol received only 305 complaints during the course of the year,

while the ASA organization received more than 37,000. This number is also low when compared

to other countries’ organizations, like Germany’s WBZ, which had 13,157 complaints, and

Sweden’s Reklamombudsmannen, which received 4,985 complaints (Feenstra & Esteban, 2019).

While these numbers may be considered as incredibly low when compared to its European

counterparts, its number of consumer participation has steadily increased since the year 2001.

Summary of Spain’s Autocontrol System

Spain has made significant progress to implement an advertising self-regulatory body in a

relatively short amount of time. It has proven to be relatively effective while maintaining its

simplicity, and although its levels of complaints reflect its lack of establishment or notoriety, it

has made significant process in doing so.

 26

Analyzing Beneficial Characteristics of Advertising Self-Regulatory Bodies

With the knowledge gained of viewing various advertising self-regulatory systems from

around the world, it is now possible to analyze the elements that have been proven to lead to

successful self-regulation. Some notable elements that have been identified include a consumer

complaint model that is well-known and easy to use, a clear hierarchy of program functions and

jurisdiction, and a jury panel that is impartial from the world of advertising.

Complaints Process

The complaints process in an advertising self-regulatory organization is a foundational

element. As analyzed in most nations’ programs, the inclusion of timeliness with the complaints

process is one of the factors in successful self-regulation implementation. As consumers make up

one of the main parties involved in the advertising industry, it is absolutely essential that that

party has a large voice regarding what is acceptable practice for the advertising sector.

In addition, an advertising self-regulation organization and its complaints process must be

well-known to the public to ensure mass participation rates. The lack of participation can be seen

as previously discussed in Spain’s Autocontrol system, which when compared to the United

Kingdom’s ASA or other European countries, it was apparent that participation rates (as

complaint numbers) were far fewer (Feenstra & Esteban, 2019). While this is due to the fact that

Autocontrol was implemented at a later date than compared programs, the fact does not change

that the more complaints submitted, the more awareness is present, and the more issues can be

brought to light.

Finally, the timeliness of complaints process is beneficial as it quickly leads to

resolutions to the issues at hand. The advertising self-regulatory organizations that have been

touted as success stories, such as the ASA, go through a large amount of complaints at blistering
 27

paces (as previously stated, the ASA had over 30,000 complaints as of 2018). This aspect of the

complaints process leads to a more efficient and effective system that leaves consumers feeling

valued and having a well-regulated advertising industry.

Clear Hierarchy of Jurisdiction

Of course, an essential part of any successful organization is a clear order of duties

between the various branches of said organization. As has been the case in many self-regulatory

programs analyzed, original hierarchy systems were often clunky, inefficient, and had

overlapping jurisdiction, which not only contributed to the lack of a seamless process and

confusion among consumers. This is why organizations like the ASA have seen tremendous

change within their systems, leading to a simple yet extremely beneficial system that still

manages to properly function. Given that most, if not all, of the leading advertising self-

regulatory organizations have gone through some form of these changes, it can be deduced that

this sort of system is ideal for most national structures.

Jury Panel

The jury panel is one of the most important elements in an advertising self-regulatory

organization. It is absolutely imperative that this jury contains at least some impactive non-

industry element. Many leading organizations have used public officials, individuals with

backgrounds in law and medicine, and scholars to help with the process of handling complaints.

This practice gives the organization a just and neutral take when analyzing advertisements.

As discussed before in various case studies, the importance of the appointment process

for jury individuals must also be impartial. Many organizations have gone through an

evolutionary process involving the selection of the jury. Instead of the majority of power residing

in one single panel member, processes are decided by the committee as a whole. In addition to
 28

various systematic changes, the makeup of the committee members for many organizations has

also changed, with ratio enforcements requiring a certain number of members to have

backgrounds uninvolved with the advertising sector. This is a perfect example of how a jury

system should operate in order to gain the best opinion from a diverse group of individuals who

hold the consumer’s values and experiences above all else.

Discussion and Conclusion

After analyzing the selected advertising self-regulatory organizations, not only were the

components of a successful program identified but also the type of environment in which such a

program may thrive. Firstly, the voice of the consumer is an essential piece of the self-regulatory

puzzle, as it provides regulatory organizations with a status quo in terms of what is acceptable in

the eyes of the public. Without an interactive experience, consumers may not feel as though their

opinions are valued, and the lack of a complaints process means that it is entirely up to the

organization or their cooperating governments to address issues.

In addition, it should be stated that a form of independence must be maintained between

the advertising self-regulatory organization and its respective government body. Without the

“self”, there is no “self-regulation”, and in the cases of many countries – with China being a

prime example – the voice of advertising agencies and companies may be stifled due to

overreaching laws and regulation. Many self-regulatory organizations, such as Brazil’s CONAR

system (source), were implemented because of a fear of strict government intervention.

While many countries around the world may have some form of advertising self-

regulation, it is clear with the case studies analyzed that not all are created equal. Among the

leading organizations, however, we have seen many similar factors that have been identified as
 29

leading to successful implementation. It has also been noted that self-regulation may only work

with the inclusion of the voice of both consumers and advertisers, impartial justice, and

symbiotic governmental intervention. An advertising self-regulation organization may only

thrive with communication of the highest order, which must be reflected in all facets of its

environment.
 30

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