Legal Environment and Advertising Ethics

Dolly Mehta

TYBMM

Roll no:29

Advertising Standards Council of India (ASCI)

The Role and Functioning of the ASCI & its Consumer Complaints Council (CCC) in dealing with Complaints received from Consumers and Industry, against Ads which are considered as False, Misleading, Indecent, Illegal, leading to Unsafe practices, or Unfair to competition, and consequently in contravention of the ASCI Code for Self-Regulation in Advertising. The ASCI is not a Government body,but it is a voluntary self-regulatory council, registered as a not-for-profit Company under section 25 of the Indian Companies Act. The sponsors of the ASCI, who are its principal members, are firms of considerable repute within Industry in India, and comprise Advertisers, Media, and Ad Agencies and other Professional /Ancillary services connected with advertising practice. The ASCI was set up;

To ensure the truthfulness and honesty of representations and claims made by advertisements and to safeguard against misleading advertisements.

To ensure that advertisements are not offensive to generally accepted standards of public decency.

To safeguard against the indiscriminate use of advertising for the promotion of products which are regarded as hazardous to society or to individuals to a degree or of a type which is unacceptable to society at large.

To ensure that advertisements observe fairness in competition so that the consumer’s need to be informed on choices in the market-place and the canons of generally accepted competitive behaviour in business are both served.

Mission of ASCIASCI has one overarching goal: “To maintain and enhance the public’s confidence in advertising”.

ASCI seeks to ensure that advertisements conform to its Code for Self-Regulation which requires advertisements to be Truthful and fair to consumers and competitors.

Within the bounds of generally accepted standards of public decency and propriety.

Not used indiscriminately for the promotion of products, hazardous or harmful to society or to individuals. .particularly minors, to a degree unacceptable to society at large.

Objectives of ASCI To monitor ,administer and promote standards of advertising

practices in India To codify, adopt and modify the code of advertising practices in

India and implement, administer and promote and publicize such a code.

To give wide publicity to the Code and seek adherence to it of as many as possible of those engaged in advertising.

To print and publish pamphlets, leaflets, circulars or other literature or material, that may be considered desirable for the promotion of or carrying out of the objects of the Company.

Self-Regulation of Advertising in India

When you submit an advertisement , you need to ensure that the advertisement complies with the standards and Code for Self-Regulation of Advertising in India (“Code”) established by the Advertising Standards Council of India (“ASCI”).

Ensure the truthfulness and honesty of representations and claims made by advertisements and safeguard against misleading advertising. Specifically, please ensure the following:

o Advertisements shall not, without permission from the person, firm or institution under reference, contain any reference to such person, firm or institution which confers an unjustified advantage on the product advertised or tends to bring the person, firm or institution into ridicule or disrepute. If and when required to do so by the ASCI, the advertiser and the advertising agency shall produce explicit permission from the person, firm or institution to which reference is made in the advertisement.

o Advertisements must be truthful. All descriptions, claims and comparisons which relate to matters of objectively ascertainable fact should be capable of substantiation. Advertisers and advertising agencies are required to produce such substantiation as and when called upon to do so by the ASCI.

o Where advertising claims are expressly stated to be based on or supported by independent research or assessment, the source and date of this should be indicated in the advertisement.

o Advertisements shall neither distort facts nor mislead the consumer by means of implications or omissions. Advertisements shall not contain statements or visual presentation which directly or by implication or by omission or by ambiguity or by exaggeration are likely to mislead the consumer about the product advertised or the advertiser or about any other product or advertiser.

o Advertisements shall not be so framed as to abuse the trust of consumers or exploit their lack of experience or knowledge. No

advertisement shall be permitted to contain any claim so exaggerated as to lead to grave or widespread disappointment in the minds of consumers.

o Obvious untruths or exaggerations intended to amuse or to catch the eye of the consumer are permissible provided that they are clearly to be seen as humorous or hyperbolic and not likely to be understood as making literal or misleading claims for the advertised product.

o In mass manufacturing and distribution of goods and services it is possible that there may be an occasional, unintentional lapse in the fulfillment of an advertised promise or claim. Such occasional, unintentional lapses may not invalidate the advertisement in terms of the Code.

Ensure that advertisements are not offensive to generally accepted standards of public decency.

Ensure to safeguard against the indiscriminate use of advertising for the promotion of products which are regarded as hazardous to society or to individuals to a degree or of a type which is unacceptable to society at large.

o No advertisement shall be permitted which: Tends to incite people to crime or to promote disorder and violence

or intolerance. Derides any race, caste, colour, creed or nationality. Presents criminality as desirable or directly or indirectly encourages

people – particularly minors – to emulate it or conveys the modus operandi of any crime.

Adversely affects friendly relations with a foreign State.o Advertisements addressed to minors shall not contain anything,

whether in illustration or otherwise, which might result in their physical, mental or moral harm or which exploits their vulnerability.

o Advertisements shall not, without justifiable reason, show or refer to dangerous practices or manifest a disregard for safety or encourage negligence.

o Advertisements should contain nothing which is in breach of the law nor omit anything which the law requires.

o Advertisements shall not propagate products, the use of which is banned under the law.

o Advertisements for products whose advertising is prohibited or restricted by law or by this code must not circumvent such restrictions by purporting to be advertisements for other products the advertising of which is not prohibited or restricted by law or by this code. In judging whether or not any particular advertisement is an indirect advertisement for product whose advertising is restricted or prohibited, due attention shall be paid to the following:

Visual content of the advertisement must depict only the product being advertised and not the prohibited or restricted product in any form or manner.

The advertisement must not make any direct or indirect reference to the prohibited or restricted products.

he advertisement must not create any nuances or phrases promoting prohibited products.

The advertisement must not use particular colours and layout or presentations associated with prohibited or restricted products.

The advertisement must not use situations typical for promotion of prohibited or restricted products when advertising the other products.

Ensure that advertisements observe fairness in competition so that the target consumer’s need to be informed on choices in the market-place and the canons of generally accepted competitive behavior in business are both served.

o Advertisements containing comparisons with other manufacturers or suppliers or with other products including those where a competitor is named, are permissible in the interests of vigorous competition and public enlightenment provided.

It is clear what aspects of the advertiser’s product are being compared with what aspects of the competitor’s product.

The subject matter of comparison is not chosen in such a way as to confer an artificial advantage upon the advertiser or so as to suggest that a better bargain is offered than is truly the case.

The comparisons are factual, accurate and capable of substantiation.

There is no likelihood of the consumer being misled as a result of the comparison, whether about the product advertised or that with which it is compared.

The advertisement does not unfairly denigrate attack or discredit other products, advertisers or advertisements directly or by implication.

o Advertisements shall not make unjustifiable use of the name or initials of any other firm, company or institution, nor take unfair advantage of the goodwill attached to the trade mark or symbol of another firm or its product or the goodwill acquired by its advertising campaign*.

o Advertisements shall not be similar to any other advertiser’s earlier run advertisements in general layout, copy, slogans, presentations, music or sound effects, so as to suggest plagiarism*.

* Complaints of plagiarism of advertisements released earlier abroad will lie outside the scope of this Code except in the under-mentioned circumstances:

o The complaint is lodged within 12 months of the first general circulation of the advertisements/campaign complained against.

o The complainant provides substantiation regarding the claim of prior invention/usage abroad.

All advertisers must ensure that all advertisements submitted to Yahoo! Search Marketing India are also in complete compliance with all relevant and applicable laws related to the subject matter of the advertisement.

The Advertising Agencies Association of India

On September 21, 1945, 60 years ago, Advertising Agencies Association of India (AAAI) was registered as a society in Calcutta. 4 agencies from Calcutta – D J Keymer, General Advertising Agency, J Walter Thomson Co. and Press Syndicate – and 3 agencies from Bombay – Adarts, Lintas and National Advertising Service – were the signatories in the registrar’s office doing the honours. Initially the registered office of the Association was located at 37, Chowringhee, Calcutta. Calcutta, under the British Raj, was a vibrant commercial city. In 1961, the AAAI office was shifted to Bombay.

What was the size of the ad industry then? The Government’s own Press Commission in 1953 noted that the value of print advertising was Rs. 35 million. Other media spends were estimated at another Rs. 15 million.

In such an era, these were some real bold men, who felt the need to create a platform to promote advertising, as a professional activity!

We must also understand the background under which AAAI grew in stature. After India became a Republic in 1950, our successive Governments promoted the policy of self-reliance and import substitution. For three decades – from 1951 to 1980 – advertising in India had limited purpose to play.

Till the 80’s, while the Government did not encourage competition, the Government did grudgingly acknowledge the importance of communication in social aspects like in family planning programmes, nutrition, education, the modernization of agriculture and ushering in the green revolution. AAAI Members were called upon to provide support in the Government efforts in some of these critical areas.

The Government also had a healthy respect for AAAI and always consulted it in matters of consequence. For example, it was at AAAI

instance that the Government permitted foreign equity holding in ad agencies in the late 80’s.

Whenever required, AAAI has stepped in to protect its business interests to regulate orderliness in the industry. It has been intrumental in restoring the 15% commission/trade discount for Government business in Government owned media, or in lobbying for removal of tax on advertising way back in 1965 and subsequently in 1978 and 1983, or during the most recent Fringe Benefit Tax where advertising and promotion was included as Fringe Benefit!

AAAI’s contribution in regulating the industry is no less significant. In 1987 when TV sponsored programmes became a reality, it determined how the income should be shared between the placing agency and the creative agency. In 1988 and again in 1990, AAAI was actively involved in determining the procedures and policies of the electronic media i.e Doordarshan.

In 1983, AAAI was involved in a serious dialogue with Indian Newspaper Society (INS) when the credit period was proposed to be reduced from 75 to 45 days. Finally we agreed on 60 days, with the rider that "no changes would be made in the Accreditation Rules without mutual consultation and consent" of INS and AAAI. In 1991, when the proposal came to reduce this 60 days to 45 days, it was persuasively defended. Since then INS and AAAI meet regularly with respect to matters that concern both bodies.

AAAI has been behind the National Readership Survey as a joint industry initiative in collaboration with INS and ABC. Having felt the need for a self-regulating body in Advertising, AAAI was highly supportive to the formation of Advertising Standards Council of India (ASCI).

Similarly, AAAI encouraged the formation of Indian Broadcasting Foundation so that it could address the needs of TV channels. About

4 years back, AAAI signed a unique Agreement with IBF, which codified the working relationship between the members of IBF and AAAI in the matter of placing and paying for the ads. This initiative has been a resounding success for both sides.

AAAI enjoys a healthy relationship with Indian Society of Advertisers (ISA). Time and again, AAAI has been called upon by its members to resolve disputes with advertisers for which formal Arbitration proceedings have been conducted. AAAI also assists our members to collect payment from defaulting advertisers.

In summary, AAAI, over the last six decades, has stood by its members and have protected their business interests, be it in dialogue with Government, media bodies or advertisers; AAAI has regulated its members in the orderly conduct of their business affairs, whenever the need arose; And last, but not the least, AAAI provided a platform for training of advertising professionals, recognition of creative work through its coveted Triple-A Awards and honouring outstanding advertising men through its AAAI-Premnarayen Award.

AAAI has thus come a long way from its humble beginnings 60 years ago. But as they say, the future is always more exciting than the past.AAAI is alive to the changes that the future holds out and the next decade would be a stimulating period, ushering the advertising industry in newer challenges and opportunities. Objective of The Advertising Agencies Association of IndiaThe Advertising Agencies Association of India (AAAI) is the official, national organisation of advertising agencies, formed to promote their interests so that they continue to make an essential and ever-increasing contribution to the nation, by working towards the following objectives:

To benefit Indian consumers and to protect their interests by helping ensure that advertising is honest and in good taste.

To benefit Indian advertisers by promoting their sales, increasing their sales and increasing productivity & profitability, to stimulate business and industrial activity.

To benefit media by establishing sound business practices between advertisers and advertising agencies and each of the various media owners.

To benefit the nation by harnessing advertising for the good of the country, its institutions, its citizens; to co-operate with the Government in promoting its social objectives and in the task of nation-building.

To question advertising that is wasteful and extravagant; to make it possible for the small entrepreneur to grow through advertising and to compete with the biggest; to encourage market and media research; to serve society by meeting its social responsibilities.

To encourage the interest of young individuals in the business of communication, to assist in education and training programmes and to provide information of benefit to members. Non-members are also provided this service for a fee.

To establish a common platform in building and sustaining the prestige of the advertising profession and to serve as a spokesman against unwarranted attacks or restrictions on advertising.

To establish a forum where representatives of advertisers, advertising agencies, media owners and Government can meet on mutual ground and examine problems of mutual concern.

To offer effective co-operation and liaison with Government officials and bodies for the purpose of broadening their understanding of the role of advertisers, advertising and advertising agencies.

To co-operate with Government bodies in discussion of matters such as taxes, radio and TV advertising, legislation, political

campaign advertising, controls on pharmaceuticals, tobacco or liquor advertising and other subjects of similar complexity and sensitivity.

The AAAI today is truly representative, with a very large number of small, medium and large-sized agencies as its members, who together account for almost 80% of the advertising business placed in the country. It is thus recognised at all forums -- advertisers, media owners and associations, and even Government -- as the spokesperson for the advertising industry.

Tasks of The Advertising Agencies Association of IndiaThe AAAI's activities cover all areas of vital importance to the advertising industry. Some of these include:

Government & Public Relations: Improving the image of the advertising industry and focusing on its role in economic development and employment through campaigns, seminars, press relations and direct contact with Government ministries.

IBF/Doordarshan & AIR/Other FM Channels: Protection of members' interests on issues related to Guidelines and Rules of Commercial Broadcast, Sponsorship, Rates, Commission and Accreditation; working towards full service operations at all TV Channels/Doordarshan Kendras and Radio Channels; setting up an independent monitoring body for commercials.

INS: Protection of members' interest in matters relating to INS policies, credit periods, Rules for Accreditation and streamlined operations; promotion of better production values and effective advertising purchases.

Professional Practices: Improving the quality of professional relationships between Agencies and Clients through seminars, the AAAI Handbook and the evolution of uniform guidelines, codes and norms.

Client Disputes: Helping settle disputes through evolution of guidelines, procedures and uniform practices; mediating

between agency-client, agency-agency and agency-media to ensure quick resolution of disputes.

Statutes and Laws: Constantly examining all relevant laws and statutes affecting the advertising industry including ESIS, Sales Tax, other taxes, Arbitration, MRTP guidelines; seeking professional advice and presenting a common viewpoint at relevant forums to protect members' interests; pursuing new avenues like Credit Insurance cover, etc.

Training & Development: Organising seminars and workshops on effective advertising skills in creative, copy-writing, print and production, client servicing, television production, media operations, media planning, advertising as a career, etc; maintaining a fully-stocked reference library with a reprint service for members.

Member Communications: Constantly communicating with members through circulars and correspondence; periodic publication of an updated membership directory, regular regional meetings for members and their employees.

Public Service: Offering the services of the Association and members in significant projects, e.g. for Family Planning, the National Wastelands Development Board, Gujarat Earthquake relief, etc; encouraging the creation of such advertising by members. There are innumerable instances of successful AAAI activities, with benefits to the entire advertising industry and all others associated with it.

Structure of The Advertising Agencies Association of IndiaThe AAAI functions through the active, voluntary services of a President, a Vice-President, an Honorary Secretary, an Honorary Treasurer and an Executive Committee assisted by a full-time Secretary-General and his staff. The Association maintains a permanent office, which is located at: 35 Maker Tower 'F', 3rd Floor, Cuffe Parade, Mumbai 400 005.

Conventionally, a very senior agency person represents each member agency in the AAAI.

The President and other office-bearers are elected every year by the General Body, which comprises all representatives of member agencies. In addition, some Executive Committee Members are co-opted to the Executive Committee and an effort is made to ensure that all zones and groups of agencies (by size) are represented on this Committee.

Assisting the above groups are various Sub-committees, each looking after specific activity areas of the Association, and Regional Convenors who co-ordinate members' activities in different regions of the Country.

The Executive Committee, the Regional Convenors and various Sub-Committees meet very regularly and information is constantly shared with all members.

The AAAI is thus a true association, in the sense that nearly half of all members are directly involved with one or more of the active committee groups and the remaining members are in touch through direct communication.

THANK YOU