the value of advertising and industry standards...

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2016/SOM3/CTI/SEM/007

The Value of Advertising and Industry Standards: Facilitating Trade, Economic Growth, and Innovation

Submitted by: ICC

Seminar on Sharing Good Practices and Experiences on Advertising Self-Regulation

Among APEC Economies Lima, Peru

22-23 August 2016

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APEC SEMINAR

Raelene Martin22 August 2016 | Lima, Peru

“Sharing Good Practices and Experiences on advertising self-regulation among APEC economies”

The Value of Advertising and Industry Standards: Facilitating Trade, Economic Growth, and Innovation

WE ARE THE WORLD BUSINESS ORGANIZATION.

ICC: THE WORLD BUSINESS ORGANIZATION

Companiesof all sizes and all sectors

Business Associationssectoral and national

Chambers of Commercelocal, regionaland national

Worldwide NetworkOver 6,5 million companies andMore than130 countries

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ICC’S MISSION

To promote international trade, responsible business conduct and a global approach to regulation through a unique mix of advocacy and standard setting activities—together with market-leading dispute resolution services.


ICC’S ROLE IN FACILITATING TRADE: AREAS OF INVOLVEMENT

Areas of workICC has three main activities: rule setting, arbitration and policy. Because its member companies and associations are themselves engaged in international business, ICC has unrivalled authority in making rules that govern the conduct of business across borders. Although these rules are voluntary, they are observed in countless thousands of transactions every day and have become part of the fabric of international trade.

Rules-setting Arbitration Policy

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IMPORTANCE OF GLOBAL TRADE

Fosters global economic growth Sustainable international

development Economic value creation Drives investmentGlobal inclusion (inclusive and

interconnected development) Promotes innovation Poverty reduction



An open, free and fair global trading system in key sectors creates opportunities for innovation, sustainable growth and value-added employment

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CO-OPERATION ACROSS SECTORS & GEOGRAPHIES


IMPROVED FLOW OF GOODS/SERVICES

Align best practices

Reduce non-tariff barriersImprove flow of goods/services

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NETWORKED ECONOMIESCOMPLEX VALUE CHAINS

Working together to achieve these objectives is ever more important in today’s…

&


ICC POLICY & ADVOCACY

Facilitating cross-border trade &

investment

Banking

Commercial Law &

Practice

CSR & Corruption

Taxation

Digital Economy

Marketing & Advertising Intellectual

Property

Competition

Environment& Energy

Customs & Trade

Facilitation

Trade & investment

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ICC COMMISSION ON MARKETING AND ADVERTISING

Mandate:

To promote high ethical standards in marketing by business self-regulation through the Consolidated ICC Code of Advertising and Marketing Communications Practice and formulate world business positions and initiatives to address government actions that affect marketing and consumer protection.


In existence since 1937 - 2017 will mark the 80th anniversary of the Code

The ICC Code has served as the foundation and building block for self-regulatory structures around the world

ICC Code harmonizes global best practices across sectors and markets; extends and strengthens SRO remits internationally

APEC PSU report identifies the ICC Code as the global reference for international best practice/advertising self-regulation

Helps industry build consumer trust by using high ethical standards and marketing products responsibly

CONSOLIDATED ICC CODE: THE GOLD STANDARD

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WHY MARKETING SELF-REGULATION MATTERS Advertising – key to competition & choice Consumer trust and confidence Protection of brands and reputation Need effective alternative to government regulation Cost-effective mechanisms to redress problems quickly and efficiently

• Global ad spend is on course to grow 4.6% to $579 billion this year, up from 3.9% growth last year

Value of the industry

• Global internet ad spend expected to grow 3x global avgrate this year –15.7%

Digital Media growth (many new players)

• Public attention on bad examples damages reputationfor all

• Consumer trust essential to marketing effectivenessNew markets:

new potential, but unprepared

• Restrictions: alcohol, now food & beverage to kids

• Privacy concerns in online media

• Protection of children• Green washing Regulatory pressure on high profile issues


VALUE OF ADVERTISING

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Global ad spend to grow 4.6% to $579 billion this year, up from 3.9% growth last year

Global internet ad spend expected to grow 3x global avg rate this year – 15.7%. Up to $260bn by 2020

Mobile advertising expenditure expected to increase by $64 billion between 2015 and 2018, accounting for 92% of new advertising dollars added to the global market over these years

Internet advertising is the main driver of global ad spend growth, driven by social media (31.9%), online video (22.4%) and paid search (15.7%).

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MOBILE AD SPEND GROWTH TO 2018

MOBILE = 87% ADSPEND GROWTH TO

2018


AVERAGE ANNUAL AD SPEND GROWTH 2015-2018

+8.5%

+6.3% +3.5%

+3.1%

+2.7% +2.2%

+1.8% -5.8%

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THE ECONOMIC IMPACT OF ADVERTISING

Advertising-related Activities Audience-related Activities

Publishers Advertising Services

Suppliers

Suppliers

Suppliers

Suppliers

Brands

Suppliers

Suppliers

Extra jobs support increased consumer demand for goods/services across economy

Skills, industry development, R&D, infrastructure, etc

Consum

ers

Ad Sales Ad SpendDirecteffects

Indirect effects

Inducedeffects

Spill-overeffects


VALUE OF INDUSTRY STANDARDS

• The advertising industry is an integral part of the global economy, however diversity in advertising regulations can create challenges in encouraging demand for products across borders

• The broader adoption of advertising standards will help reduce unnecessary divergences in both advertising regulatory and self-regulatory regimes

• ICC Code is globally relevant and is flexible enough to adapt to different legal backstops and local needs

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VALUE OF INDUSTRY STANDARDS: APEC ECONOMIES

• Advertising is an important driver of economic growth within APEC.

• Promoting alignment of regulatory frameworks to recognize a role for self-regulatory organizations (SROs) built upon international best practices will promote growth in, and trade amongst, APEC economies by reducing non-tariff barriers to trade

• Aligning advertising standards across the Asia-Pacific region will easier facilitate the delivery of advertising services, and enable business growth, greater regional trade and investment, non-tariff barrier reduction and drive economic growth among APEC economies


VALUE OF INDUSTRY STANDARDS: ICC CODE IN PRACTICE

Truthfulness…not misleading

Decency…likely to cause offence… sexual portrayal of women

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VALUE OF INDUSTRY STANDARDS: ICC CODE IN PRACTICE

Social responsibility…gender discrimination

Safety and health/children

Social responsibility… likely to cause offence


APPLICATION OF THE ICC CODE IN APEC ECONOMIES

In Singapore:National code based on ICC general principles

In Chile:National code based on ICC Code

In Philippines:Adopted ICC provisions for their national code

In Australia:National code based on ICC Code

In Canada:National code based on ICC Code

In Mexico:National code based on ICC Code

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REFLECTION ON OBJECTIVES AND LOOKING AHEAD

• To share information, policies and best practice principles regarding advertising standards to reduce barriers to trade and investment across APEC member economies

• To foster partnerships between governments and business, advertisers and the media in the advertising sector

With the co-operation of all those present much has already been accomplished& we are on the right track to continue to build on these achievements!

the value of advertising and industry standards...

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