UK Policy and Regulation of Branded Content
Briefing Notes for Branded Content Research Network seminar
25 April 2017
Contents
Introduction
CURRENT RULES
1.TELEVISION
1.1 Product Placement
1.2 Sponsored programmes (including advertiser-funded programmes)
1.3 European Union audiovisual legislation
1.4 Commercial Communications in Radio Programming
1.5 Video-on-demand/On Demand Programme Services (ODPS)
2.NON-BROADCASTING COMMUNICATIONS AND PUBLISHING
2.1 Editorial/Advertising
2.2 European Union laws
2.3 Publishing self-regulation and codes (UK)
2.4 Journalists’ Codes
2.5 Other professional governance
3.REGULATORY CHALLENGES OF MEDIA-MARKETING COMMUNICATIONS CONVERGENCE
3.1 Existing differences/anomalies across UK regulations
3.2 Regulation in other countries
4. SELECTED ISSUES AND QUESTIONS
4.1 Identification and Labelling
4.2 Rule monitoring and enforcement
4.3 Consumer attitudes and research
4.4 Regulating for the integrity of channels of communication
4.5 PR sources and editorial
4.RESEARCH NEEDS AND ACADEMIC NETWORKING
Table 1: Regulation of Branded Content
Introduction
Branded content, native advertising and other fast-evolving forms have intensified the challenges to the separation of editorial and advertising that were already being felt across the legacy media of print and television. UK media governance has historically benefitted from clear demarcation between marketers’ sponsored content and the media’s own editorial content.
- How is the blurring of media and marketing communications addressed across UK regulation and governance?
- Are the existing regulatory arrangements appropriate and effective?
- What are the challenges for UK regulatory arrangements?
Across digital media new forms of integrated advertising are developing rapidly. Boundaries
between media and advertising are being tested, crossed, redefined, and erased. Pressures on marketers to find effective ways to reach prospective purchasers and pressures on media to attract advertising finance and accommodate marketers are occurring in contexts of disruption and change in markets, in policy and in creative communications practices and use. Within the overall convergence of media and communications industries and cultures, the convergence of media and marketing is gathering pace across the various dimensions of ownership, work practices and values, cultural forms and user engagements. The emergence of new forms and practices of integrated advertising raise a host of issues ranging from consumer awareness to editorial independence and creative autonomy
The integration of media and advertising is not new but it is intensifying. Branded content is
occurring in different forms across news media, entertainment and social media. Emergent forms include ‘native advertising’ which describes various forms integration of advertising and content especially on social media. This is an online variant of advertorials, where advertisements follow the form and user experience associated with the context in which they are placed. In digital journalism the range of practices and norms is highly diverse but forms of branded content, native advertising, sponsored features have rapidly become established. In entertainment media, marketing integration includes advertiser-financed television, product placement, virtual advertising, advergames, and beyond.
The Branded Content Research Network is an academic network project funded by the UK Arts and Humanities Research Council. The network seeks to bring together academic researchers, industry and civil society interests to explore the practices and implications of branded content, native advertising and the convergence of media and marketing communications.
This is a working document that seek to summarise existing regulations and set out issues for debate. There may be inaccuracies or omissions and so this document will be revised after the 25 April 2017 event.
Prepared by Prof. Jonathan Hardy, Principal Investigator, Branded Content Research Network
CURRENT RULES
- TELEVISION
Commercial communications are subject to Ofcom’s rules on the amount and scheduling of advertising, a cross-promotion code and rules on sponsorship and commercial references in programmes. Advertising on television and radio is regulated by the Advertising Standards Authority in accordance with the UK Code of Broadcast Advertising (BCAP) drawn up by the Committee of Advertising Practice. Ofcom’s rules implement European Union regulations set out in the Audiovisual Media Services Directive. The relevant rules are set out in two main documents, Ofcom Code on the Scheduling of Television Advertising (April 2016), Ofcom Broadcasting Code (May 2016). Section Nine of the Broadcasting Code concerns commercial references in television programmes and includes rules on product placement, sponsorship and advertiser-funded programmes and related matters.
Principles
‘To ensure that broadcasters maintain editorial independence and control over programming (editorial independence).
To ensure that there is distinction between editorial content and advertising (distinction).
To protect audiences from surreptitious advertising (transparency).
To ensure that audiences are protected from the risk of financial harm (consumer protection).
To ensure that unsuitable sponsorship is prevented (unsuitable sponsorship)’.
Identification of advertising
‘Broadcasters must ensure that television advertising and teleshopping is readily
recognisable and distinguishable from editorial content and kept distinct from
other parts of the programme service. This shall be done by optical (including
spatial) means; acoustic signals may also be used’.
‘Integrity’ of programmes
‘Rule 8. Where television advertising or teleshopping is inserted during programmes,
television broadcasters must ensure that the integrity of the programme is not
prejudiced, having regard to the nature and duration of the programme, and
where natural breaks occur’
Editorial control
‘There may be circumstances in which it is acceptable for a person or organisation other
than the broadcaster or programme-maker to provide input into the editorial of a
programme. For example, in the case of an advertiser-funded programme. However, in
all cases broadcasters are responsible for the programmes they transmit. Therefore,
while other parties may contribute to programme content, broadcasters must retain ultimate editorial control over the programmes they transmit’ (Ofcom Guidance Note on Commercial Communications 1.11, emphasis added).
1.1 Product Placement
Ofcom defines product placement as ‘[t]he inclusion in a programme of, or of a reference to, a product, service or trade mark where the inclusion is for a commercial purpose, and is in return for the making of any payment, or the giving of other valuable consideration, to any relevant provider or any person connected with a relevant provider, and is not prop placement’ (Ofcom Broadcasting Code 2016).
In accordance with European Union legislation (AVMSD) product placement is permitted (subject to restrictions on programme type and products) but there must be no undue prominence, no promotional references (i.e. encouragement to purchase) and the ‘ultimate editorial responsibility’ of the broadcaster must be upheld so that any placement is editorially justified.
Rules (Ofcom Broadcasting Code)
9.6 Product placement is prohibited except in the following programme genres:
a) films;
b) series made for television (or other audiovisual media services);
c) sports programmes; and
d) light entertainment programmes.
Product placement is not permitted in the following programme genres: news, current affairs, consumer advice, children’s, religious programmes
Editorial control must remain with the broadcaster
Rule 9.8 Product placement must not influence the content and scheduling of a programme in a way that affects the responsibility and editorial independence of the broadcaster.
Ofcom Guidance note, ‘There must always be sufficient editorial justification for the inclusion of product placement in programmes. In particular, editorial content must not be created or distorted so that it becomes a vehicle for the purpose of featuring placed products, services or trade marks’.
No ‘undue prominence’
References must not be promotional
Identification
9.14 Product placement must be signalled clearly, by means of a universal neutral logo, as follows:
a) at the beginning of the programme in which the placement appears;
b) when the programme recommences after commercial breaks; and
c) at the end of the programme.
A universal logo must be displayed in accordance with detailed Ofcom rules
1.2 Sponsored programmes (including advertiser-funded programmes)
‘The rules seek to ensure editorial independence is preserved and a distinction is maintained between editorial and advertising. They also aim to protect against unsuitable sponsorship, and to ensure that sponsorship arrangements adhere to the principle of transparency’.
‘With the exception of the sponsorship credits, any reference to a sponsor that appears in a sponsored programme as a result of a commercial arrangement with the broadcaster, the programme maker or a connected person will be treated as product placement and must comply with Rules 9.6 to 9.14’.
1.3 European Union audiovisual legislation
Audiovisual Media Services Directive, Article 10
1. Audiovisual media services or programmes that are sponsored shall meet the
following requirements:
(a) their content and, in the case of television broadcasting, their scheduling shall in no circumstances be influenced in such a way as to affect the responsibility and editorial independence of the media service provider;
(b) they shall not directly encourage the purchase or rental of goods or services, in particular by making special promotional references to those goods or services;
(c) viewers shall be clearly informed of the existence of a sponsorship agreement. Sponsored programmes shall be clearly identified as such by the name, logo and/or any other symbol of the sponsor such as a reference to its product(s) or service(s) or a distinctive sign thereof in a appropriate way for programmes at the beginning, during and/or at the end of the programmes. […]
4. News and current affairs programmes shall not be sponsored. Member States may choose to prohibit the showing of a sponsorship logo during children’s programmes, documentaries and religious programmes.
1.4 Commercial Communications in Radio Programming
Ofcom Broadcasting Code Section Ten: Commercial Communications in Radio Programming
Identification
‘10.1 Programming that is subject to, or associated with, a commercial arrangement
must be appropriately signalled, so as to ensure that the commercial arrangement is transparent to listeners’.
For radio sponsor identification is referred to as ‘signalling’. Signalling involves considerations of Wording; Positioning; Frequency; Identity. Under signalling, the Broadcasting Code states:
Broadcasters are required to give, at appropriate times, clear information within
programming, to inform listeners of any commercial arrangement affecting that
programming.
The rules on radio sponsorship contain the same rules as television concerning product placement but do differ on the promotion of sponsor’s products or services within programmes.
All promotion of a sponsor’s product or service within programming must be scripted and copy cleared for broadcast either centrally or locally in the same way as advertisements. A presenter may front or voice a sponsorship promotion or tag during his/her programme as long as the item is clearly not a part of normal editorial. This separation or distinction can be achieved by voice inflection, pauses, tone or jingles. Listeners must clearly be able to understand that this is a ‘sell’, set apart and distinct from normal output, and stations and presenters should not attempt surreptitious endorsement or product placement within programming.
(Ofcom Radio Sponsorship Rules)
Principle of Transparency
‘Listeners should know when material is broadcast in return for payment or other valuable consideration. Signalling is the means by which transparency is achieved. Transparency of a commercial arrangement should be achieved through the appropriate signalling of a brand, trademark, product and/or service of a third party (or third parties) that has paid for broadcast exposure – by, for example: including a sponsorship credit; reference to the donor of a prize; the promotion of a premium rate number for listener interaction in programming’.
Distinction of editorial and advertising
10.2 Spot advertisements must be clearly separated from programming.
10.3 No commercial reference, or material that implies a commercial arrangement,
is permitted in or around news bulletins or news desk presentations’.
(Exceptions to 10.3 This rule does not apply to ‘reference to a news supplier for the purpose of identifying that supplier as a news source’; ‘…stations may credit news sources with a simple single acknowledgement of the news provider, whether a news agency or local newspaper. This is not regarded as sponsorship, as long as the provider has not paid for the credit and it is not presented in a way which appears to suggest that the provider has paid for the credit’ (Ofcom Radio Sponsorship Rules). So a news supplier can be referred to for the purpose of identification. There is no requirement to identify the supply of PR sourced material.
Payola (commercial arrangements made by third-party agent for music to be featured in playlists or programmes) is prohibited (Rule 10.5 ‘No commercial arrangement that involves payment, or the provision of some other valuable consideration, to the broadcaster may influence the selection or rotation of music for broadcast’).
1.5 Video-on-demand/On Demand Programme Services (ODPS)
Video-on-demand/ODPS services were subject to co-regulation by ATVOD and Ofcom but are now regulated entirely by Ofcom. Newspaper publishers resisted being subject to ATVOD regulation. Currently none of the major UK news publishers are listed as regulated ODPS.
Commercial references in VOD services are subject to the Broadcasting Code.
- NON-BROADCASTING COMMUNICATIONS AND PUBLISHING
2.1 Editorial/Advertising
The UK Code of Non-broadcast Advertising and Direct and Promotional Marketing (the ‘CAP Code’) applies to marketing communications but not to editorial content, news or public relations materials.The advertising self-regulatory system has always asserted that its rules apply to marketing communications but not editorial. This has been upheld on the grounds of non-interference with freedom of expression and editorial freedom. This approach was tested with the growing complaints about communications on marketers’ websites (‘owned’ media) which fell outside the code. In 2010 the ASA’s digital remit was extended to cover marketing communications in marketers’s owned media.
Advertorials/Native Advertising
An advertorial is an advertisement feature, announcement or promotion, the content of which is controlled by the marketer, not the publisher, that is disseminated in exchange for a payment or other reciprocal arrangement (CAP Code Introduction III. K).
The Committee on Advertising Practice (CAP) now draws a distinction between advertising and sponsored content. The CAP guidance on social media states ‘[s]ponsorship only has the ‘payment’ element and leaves editorial control entirely with the creator; these are not ads for the purposes of the CAP Code’.
‘Ads are ads. Sponsorship is sponsorship. Labels that describe an ad as ‘sponsored’ are likely to break the rules in the CAP Code which require ads to be obviously identifiable. For the avoidance of doubt, this advice applies across all non-broadcast media, not just content on social media.’ (CAP Guidance 2016, ‘Is your ad 'obviously identifiable?' Here’s why 'Spon' is not 'ad')
[Opinion: The CAP has sought to circumscribe the conditions in which content funded by brands needs to be identified to consumers. This means a sharper distinction between advertising (requiring identification) and sponsored content. One positive outcome is that the CAP/ASA warn against any labelling that disguises advertising or is otherwise unclear to consumers. So, terms like ‘sponsored by’ ‘brought to you by’ are not permitted where the relevant content is controlled by brands and hence advertising/advertorial. However, there are two main negative outcomes. First there is a shift and diminution in the requirement to identify sponsored content. This means that content supplied or paid for by brands can be published without identification where there was no ‘control’ exercised over editorial content by brands. The second negative outcome is that the rules on identification of ‘sponsored’ material are uncertain with no clear or consistent labelling proposed.]
Determining control
The ASA adopts a two –part test for ‘advertorial’ content: payment and control. Control is the main determining factor in the requirement to identify marketing communications, since it is possible for brands to have a payment or transactional relationship with a publication but for this not to be required to be identified as marketing communications.
The guidance on what constitutes control is not entirely clear or consistent. Some CAP guidance suggests that any evidence of brand involvement in editorial constitutes control.
The CAP guidance states:
If a brand requires that they have sight of the material prior to publication (allowing them to make changes), restricts the publishers ability to refer to competitors, provides ‘key messaging’ and retains the copyright and other intellectual property rights over the content, the ASA is likely to consider there to have been ‘editorial control’ by the brand (Alpro (UK) Ltd, 21 September 2016). Similarly, the ‘publisher’ being provided with a detailed ‘brief’ or the content being subject to prior agreement with the brand’s marketing team, is likely to be considered ‘editorial control’ by the brand (Mondelez UK Ltd, 26 November 2014; Nike (UK) Ltd, 20 June 2012).
Elsewhere, the threshold is at or closer to ‘complete control’.
The CAP Guidance Note ‘Advertisement Features’ states
‘A good benchmark is whether or not the company has final approval of text and any visuals used. For example, a company might provide information to a journalist which is then used as the basis for an article or a publication might ask for a fee to reproduce a photograph or cover a story. Neither scenario would make the resulting article an advertisement feature. If, however, the company was permitted to have complete control over the content of the article, the result would be an advertisement feature’. emphasis added)
Issues: Determining the extent of control is difficult for those outside the marketer-agency -media relationship.
There is a lack of indicators for external verification of rule adherence. This is a problem because there are pressures and incentives that can lead the parties to the transaction to seek to avoid overt labelling of content as marketing communication.
The parties trusted to adhere to the rules include those who may be expected to have a variety of interests in non-disclosure. It is also the case that there are motivations towards disclosure concerning not only adherence to professional rules and regulatory standards but also maintaining reader trust in transparency and standards. As the CAP acknowledges in its guidance on advertisement features, the value of ‘native’ advertising is that it draws on the credibility associated with the publication.
Whether they are referred to as advertorials, advertisement features, advertisement promotions or the publisher’s promotion, the appeal of advertisement features is that