A Diamond Anniversary: The ASA 2022 Annual Report outlines key priorities after 60 years of regulation

The Advertising Standards Authority has published its 2022 annual report celebrating 60 years of ASA ad regulation. The report sets out the ways in which the ASA system has changed and evolved over time in response to societal concerns. It focuses on the ASA’s current goals and recent initiatives, including its work using AI and machine learning for proactive regulation and tackling issues including greenwashing, cryptocurrency ads and protecting children from being targeted by age-restricted ads.

In 2022 31,227 ads were amended or withdrawn following ASA intervention. This is a significant increase from 2021. Meanwhile, CAP delivered 1 million pieces of advice and training to businesses on the advertising rules, a record amount.

Some of the key points from the report include:

Irresponsible Crypto and NFT Ads

After identifying cryptocurrency advertising as a ‘red alert’ issue, the ASA has made moves to counteract the unique and unregulated nature of cryptocurrency and NFTs. Action relating to Crypto includes the issuance and publication of an Enforcement Notice to 60 crypto firms, requiring ads to include risk warnings, and avoid trivialising investment risks and taking advantage of inexperienced consumers.

The ASA believes that NFTs carry similar risks to Crypto for investors, and, in response, has published three rulings which set out several key principles:

1. Ads for NFTs are now required to include risk warnings and information on fees
2. Ads for NFTs should not exaggerate their value.

Greenwashing

The ASA continues to prioritise tackling misleading and socially irresponsible green claims through their Climate Change and Environment project. Following research into consumer understanding of carbon neutral and net-zero claims, the ASA found that many consumers were confused by key terms in relation to carbon offsets in support of claims of carbon neutrality.

In response, the ASA has increased its focus on monitoring carbon neutral and net-zero claims in sectors such as banking and finance, and plans to take further action this year through high profile investigations. The ASA has also published additional guidance and a new eLearning module on environmental claims.

Protecting Children

The report discusses the ASA’s strategy to prevent children from being exposed to potentially harmful ads, such as ads for alcohol and gambling. The ASA’s current focus is on TV and online adverts for alcohol and gambling companies. The ASA believes that recent evidence they have gathered supports their October 2022 rule change which restricted gambling and lottery ads by determining that they must not “be likely to be of strong appeal to children or young persons”. Gambling advertisers may not use sports stars or other celebrities likely to be of “strong appeal” to under-18’s.

CAP has issued additional guidance for age-restricted ads online, which suggests that the protection of children will continue to be a major focus for the ASA this year.

Influencers

Over the last few years, the ASA has identified influencers and the brands that instruct them as particular areas of concern. The ASA considers that consumers should know whether the digital content they’re engaging with features an opinion that has been paid for, and ads and marketing communications must be identifiable as such.

The ASA has been struggling to get influencers to comply with these codes and in response, has continued to apply sanctions to non-compliant influencers. It has also taken a pro-active approach to preventing issues before they arise, by sending targeted advice to influencers nominated for social media awards, and using machine learning to identify ad content that is likely to be unlabelled. The technology also calls attention to brands who often contract with influencers, enabling the ASA to contact them to provide guidance, or to punish repeat offenders.

The Intermediary and Platform Principles (IPP) pilot

The ASA continues to deliver online ad regulation through a system of self-regulation, which aims to ensure that all parts of the UK ad industry play their part, and through formal arrangements with other UK consumer protection regulators.

The Intermediary and Platform Principles (IPP) pilot was launched in 2022 in collaboration with Amazon Ads, Google, Index Exchange, Meta, Yahoo and other companies in the digital ad supply chain. The IPP pilot aims to address the lack of understanding among consumers, advertisers, agencies and the like about the role that these businesses play in supporting the ASA’s online regulation. The pilot revolves around six principles, being that online platforms must:

1. Bring to advertisers’ attention, in a reasonably prominent way, the requirement for advertisements aimed at a UK audience to comply with the CAP Code.
2. Ensure their advertising policies and contract terms require advertisements  aimed at a UK audience to comply with the CAP Code.
3. Assist the ASA in promoting the public’s and advertisers’ awareness of the ASA system.
4. In relation to protecting children, take appropriate measures to make advertisers aware of: the tools or controls that can be used on the service to support advertisers to comply with the requirements; who provides and/or selects the tools and controls; and who is responsible for activating and controlling them.
5. On receipt of a relevant notice from the CAP Compliance function:
   1. Act swiftly to remove a non-compliant ad that is the subject of a specific breach of the CAP Code as determined by, or directly related to, a published ASA ruling, in instances where the advertiser fails to appropriately amend or withdraw its non-compliant ad.
   2. Act swiftly to remove a non-compliant ad that is indisputably a prima facie breach of the CAP Code, in instances where the advertiser fails to appropriately amend or withdraw its non-compliant ad.
6. Respond promptly to reasonable requests for information from the ASA in relation to advertisers’ use of the company’s services, to assist investigation of a suspected breach of the CAP Code, in instances where the information cannot be obtained from the advertiser.

The ASA published its interim IPP pilot report at the end of 2022 (please access the report here) A full report will be published in Autumn 2023.

Article co-authored by Bernice Ewetade, Trainee Solicitor