Annual Report2007-2008

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Celebrating 40 Years!

ContentsPresident’s Statement 2

CEO’s Report 4

Advertising Standards Committee Report 6

Advertising Industry Tribunal Report 8

Chairperson of the ASA 10

ASA 40 Year Celebration 11

Spotlight Issues 14

Statistics Overview 18

Statistics Decision Level 21

ASA Team 22

They Said It 23

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Mervyn E King SC

The ASA is a contract between all interested parties in the advertising industry, which is administered by the Directorate of the ASA. Whether it be a consumer or competitor complaint, the Code provides remedies from the Directorate’s decisions until a final appeal before the Appeal Committee.

It is the duty of the Directorate to ensure compliance with the Code, which includes not only content in regard to the quality of advertising, but also in the following of procedure. If one of the parties to the dispute does not comply with the procedures laid down in the Code, the Directorate, Tribunals, the Appeal Committee or the other party, could be inconvenienced or prejudiced. Consequently, once a competitor or consumer has commenced a complaint, he or she should comply with the procedures laid down in the Code.

Failure to comply with procedure with a consequential dismissal of a competitor or a consumer complaint, does not mean that the Directorate or any part of the ASA approves of the product itself. When substantiation of a claim is accepted by the ASA and a complainant is not happy with that acceptance, he or she is entitled to request arbitration in terms of the Code. Arbitration is necessarybecause the ASA could never have persons in the Directorate or on its Tribunals and Appeal Committee, who have expertise in all the products advertised in the South African marketplace.

The general public needs to know that the quality of the product, when the acceptance of substantiation is queried by a complainant, will be decided by an exper t arbitrator. The referral to arbitration occurred in only two matters in the year under review.

The ASA dealt with 2095 complaints this year. With this volume, it is obvious that procedures have to be followed in order for the ASA to carry out its function.

Statement as President of the Advertising Standards Authority

Mervyn E King SC

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Thembelihle Msibi

2007 has been an interesting and challenging year for the Advertising Standards Authority. Over that time the ASA has continued to serve the industry and the public as an effective dispute resolution body. We have experienced a steady growth in membership. I welcome the Direct Marketing Association (DMA) as media members, the Marketing Association (MASA) as core members and the Association of South African Travel Agencies (ASATA) as industry members.

The ASA is currently being legally challenged by the Tshwane Metro Council in the High Court. The challenges arise from a ruling where the ASA held that the statement “City of Tshwane, Africa’s leading capital city” is misleading as the “City of Tshwane” is not a city but a demarcated municipal area. The Metro council did not comply with the ASA ruling and as result an ad alert was issued to all our media members not to accept advertising from the Metro Council with the misleading claim. We await a cour t ruling on this matter.

The ASA team has had another busy year adjudicating on advertising complaints. 2095 complaints were handled, a slight drop from last year’s figures. The investigation of complaints is a difficult task, given the sensitivity of both advertisers and complainants. It requires persistence, precision and courtesy. I continue to be impressed by the competence with which this is done and the few complaints we receive about the management of our par t of the process of self-regulation.

Effective self-regulation operates within a framework of legal controls. The ASA therefore works closely with government and other statutory organisations. We also monitor the wide range of legislation that may impact upon the advertising landscape. The draft food and labeling regulations bill is still a burning debate; in particular the issue of the proposed banning of food and beverage advertising aimed at children.

To this end the ASA has submitted comments to the Department of Health and proposed self regulation on this issue. We anticipate amendments that will occur in our Code because of this focus.

Self regulation is favoured over governmental regulation of advertising because it is fast, cheap, and dynamic. The sanctions available to the ASA are appropriate to advertising transgressions and the process of the ASA is suitable to the fast paced world of adver tising.

Thembelihle Msibi

CEO’s Report

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5

Hamilton Maenetje

During 2007 the Advertising Standards Committee was called upon to decide interesting and often complicated complaints. Some of them implicated religious beliefs and the right to propagate them by way of advertisements.

A complaint involving Jews for Jesus South Africa was one of the more complex and sensitive ones. In many ways, these kinds of complaints have required of the parties to the complaints and members of the committee to question their assumptions that may have been held for lifetimes without question.

The committee members have met the challenge with sheer dedication, volunteering their time and experience to guide consumers and the industry. I thank all the members of the committee for their dedication to the work at hand. We continued to learn from each other throughout the year. I am certain that the dedication will continue in the interest of the public good.

Advertising Standards Commitee Report

Hamilton Maenetje

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Jacquie Cassette

The past year was a relatively quiet one for the Tribunal, which perhaps is a sign that the Directorate is doing its job very well! The most significant and noteworthy happening was probably the amendment of Clause 7 of the Procedural Guide and its impact on the work of the Tribunal.

Prior to the amendment which came into effect on 31 May 2007, Clause 7 of the Procedural Guide effectively precluded all of the bodies of the ASA, including the Tribunal from considering a dispute of law concerning the legality of an advertisement. We were all as a result, invariably constrained to give deference to the opinion of the administrator of the law or dismiss the complaint.

While the purpose behind this clause was sensible, that is to prevent the ASA (which is not a court of law) from getting side tracked and drawn out into complicated disputes of law, it resulted in the untenable situation in which the Code required advertising to be lawful but prevented the ASA from considering complaints about the lawfulness of advertisements. The reality is that the advertising industry is heavily regulated and it was difficult in many instances to avoid considering the lawfulness of advertisements in disposing of complaints.

The effect of the amendment is that both the Advertising Standards Committee and the Tribunal are now empowered to consider disputes as to the legality of an advertisement. In the instance of such a complaint the Directorate is required to refer the matter to either the Committee or Tribunal and the parties will be called upon to make written submissions before the hearing to assist the Committee or the Tribunal in making its decision.

The rule that parties are only in exceptional circumstances allowed outside legal representation remains. This ensures that proceedings will not be unnecessarily hijacked by lawyers and lofty legal technicalities. Thus the ASA’s ability to effectively dispose of a complaint has been strengthened without compromising its accessibility. The amendment is a welcome one and has already assisted in the smoother disposal of complaints.

Once again I wish to thank all those loyal and tireless Tribunal members who gave freely and generously of their time and exper tise, as well as the administrative staff for their efficient suppor t.

Advertising Industry Tribunal Report

Jacquie Cassette

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Nkwenkwe Nkomo

Up to now the industry has made sure that the ASA in its role of being a self regulatory organ is vigorously promoted. We have gone through trying times when the ASA was actually challenged in the courts, in Nestle (South Africa) Pty Ltd v Mars Incorporated (2001 (4) 542 SCA), and in Telimatrix (Pty) Ltd v Advertising Standards Authority SA (2006 (1) SA 461 SCA). We are now faced with a High Court legal battle with the Tshwane Metro Council.

We welcome the Direct Marketing Association as a media member and the Marketing Association of South Africa as a core member. It is quite a significant event to have marketing representation and we are looking forward to exciting times as we further shape the self regulatory framework. We also welcome the Association of South African Travel Agencies as an industry member.

One of the important things about the ASA is our Code Review process and members are reminded that Code Review can happen any time. Members can always submit suggestions at any time of the year and those will be looked into and endorsed by the AGM.

As the new Board we are looking forward to fruitful engagement with all our members and stakeholders. We would like to make sure that Self Regulation in our country is amongst the best in the world. We trust that all of us will continue working together as we have in the past.

As we tackle the challenges of communication we understand very well that it is no longer the traditional and orthodox business we used to handle. We need to adequately arm and prepare ourselves to be able to understand more of the internet world and all other new media that is literally evolving on a daily basis. To that extent we will need to call on experts in those areas to provide ideas and suggestions as to how this new evolving world can be faced.

The ASA was set up 40 years ago by marketers, media owners and advertisers. In those days the ASA was seen more like a kangaroo court where the bigger boys were thrashing the smaller boys but the foundation that was laid in terms of advertising regulation is one that has seen this organisation evolve from the kangaroo court perception to that of fairness and equity in judgment and decision making.

“The growth of the ASA can be seen through the various committees that we have and how representative these committees have become over the last couple of years. To that extent I would like to thank everyone from the founding members of this institution 40 years ago, to all of those that have taken over the baton and my predecessor Dr. Danisile Baloyi. As we work towards our jubilee we want to maintain an effective self regulatory system for the industry while adapting to changing times.”

Chairperson of the ASA

Nkwenkwe Nkomo

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Established in 1968, the Advertising Standards Authority has 40 years of experience in safeguarding consumers, company brand assets, advertising properties and protecting advertising and commercial speech freedoms. It was established in 1968 by the advertising Industry in conjunction with marketing representation to oversee the Industry’s self regulation. The ASA remains a voluntary association of 23 member bodies who all abide by its Code of Advertising Practice.

This ASA Code of Advertising Practice was developed by the Industry, for the Industry, since the time of the ASA’s inception. In addition, the tripartite Industry members - the marketers, advertisers and media owners annually revise the Code and endorse it at an Industry plenary, the ASA’s Annual General Meeting. Whilst the Industry determines the Code, the ASA administers the Code on behalf of the Industry. A Code analysis over the years has reflected the changing societal norms prevailing in South Africa. From humble beginnings, the ASA has become an efficient and streamlined alternative dispute resolution system for both consumers and the Industry, effectively and cost efficiently resolving adver tising and sponsorship disputes.

The Industry decided on self-regulation 40 years ago, establishing the ASA as the vehicle. This system is continuously strengthened, actively maintained and remains fully endorsed by the Industry today. By self-regulating advertising and sponsorships, the Industry demonstrates an effective ability to regulate responsibly, whilst simultaneously promoting both the highest ethical standards of commercial communication and safeguarding consumer interests. The Authority actively encourages responsible creativity by the Industry, recognising that this as the lifeblood of a vibrant South African economy. The past 40 years have brought with it significant events that have shaped the ASA into the highly respected body it is today.

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ASA celebrates

40 years!

1 When the new South African Constitution came into effect in 1996, the ASA took steps to comply and amended its operations to conform to this new Constitution. The Code, its policies and procedures, were also amended to mirror the values of the Constitution.

2 In accordance with this new Constitution, legal representation was permitted before the final appeal commitee. It was also at that time that ASA committees were restructured and independent legal professionals appointed as chairpersons, resulting in the legal profession increasingly looking to the ASA as the credible self-regulating body capable of resolving advertising disputes.

3 The ASA has taken note of increasing consumer activism and invited consumer representation on the Advertising Standards Committee.

4 The ASA has always been an Industry funded, self-regulatory body and over the years, the validity of this self-regulation has been tested, recognised and confirmed by the courts. In Nestle (South Africa) Pty Ltd Mars Incorporated (2001 (4) 542 SCA), the Supreme Court of Appeal ruled that “the Registrar of Trade Marks and the Advertising Standards Authority are both obliged to perform their respective functions and neither is entitled to abdicate in favour of the other.” In Telematrix (Pty) Ltd v Advertising Standards Authority SA (2006 (1) SA 461 SCA) the same court ruled, “It cannot be doubted that the ASA owed a duty towards the plaintiff to consider and arrive at a decision”.

5 The ASA Code was also duly acknowledged by the Independent Broadcasting Authority Act (1993), which was superseded by the Electronic Communications Act (2005). Section 55(1) of this Act states that “All broadcasting service licensees must adhere to the Code of Advertising Practice as determined and administered by the Advertising Standards Authority of South Africa.”

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6 As a living document, the Code has incorporated a technical arbitration procedure, offering advertisers an extremely cost-effective way of resolving technical disputes.

7 In 2005, the ASA received a Best Practice Award from the European Advertising Standards Alliance, representing 26 countries, in recognition of an integrated consumer awareness campaign.

8 In a Department of Trade and Industry (DTI) report card issued in 2002, the DTI made it clear that consumer protection and awareness were key drivers. Whilst the regulation of advertising content in South Africa can be dealt with through effective application of voluntary controls, it was emphasised that “effective self-regulation is dependant on the continued quality and independence of the ASA.”

9 Further acknowledgement of the ASA’s role and the relevance of effective self-regulation in the advertising indus-try came when the Department of Trade and Industry recognized the ASA in 2003 with a Consumer Champion Award - an accolade for industry associations, which effectively safeguard the consumers’ interests.

10 Over the 40 years of the ASA’s existence, the jurisprudence surrounding the ASA Code, policies, procedures, rulings, reasons and sanctions has become increasingly more effective and transparent. The reader is referred to the real time ASA’s website: www.asasa.org.za

ASA celebrates 40 years!

ASA celebrates 40 years!

Spotlight Issues

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Renault billboard stirs up offenseIn 2007 the ASA received complaints from members of the public against a Renault billboard, saying that the ad was offensive to Christians. The ad with the pay off line “wicked performance” shows a large red horned hand with long fingernails about to flick away a Renault Megane.

The directorate dismissed this complaint stating:

• while the horned hand was used as a satanic symbol,

the gesture was also used by supporters of sports teams such as the University of Texas.• in Turkey the sign was popular as a nationalist

symbol while in Hinduism the sign was used to dispel evil.

• the word “wicked” was slang used to reflect the car’s sportiness.

• when viewing the adver tisement as a whole, the ‘hypothetical reasonable person’ would realise the advertisement is a cheeky reference to the car’s performance.

• it’s not a literal or religious message and would not reasonably be interpreted as such.

Sponsorship disputes on the agendaAs we draw closer to 2010, the ASA expects a rise in sponsorship disputes which are governed by the ASA Sponsorship Code. The directorate found themselves playing referee in a matter between MTN and Vodacom. The advertisement in question was headed, “TURNING YOUNG MEN INTO BAFANA BAFANA”. Vodacom, who sponsor Bafana Bafana, argued that MTN was creating an unacceptable association between MTN and Bafana Bafana. The directorate upheld this complaint on the basis of unacceptable sponsorship practices. This matter has been appealed and the results are eagerly awaited.

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The directorate found themselves wrangled in an imitation battle between Nandos’ and MTN. MTN complained that Nando’s “Yello Hummer” campaign is imitating their Yello Summer Campaign. Nando’s argument was that “the material is not exactly the same. When dealing with this complaint, the directorate was faced with the question whether the Nando’s “Yello Hummer” advertising campaign likely evoked the MTN’s “Yello Summer” existing concept and whether it would result in the likely loss of potential advertising value for MTN. The directorate upheld and said that the “Yello Hummer” advertising campaign was a clear imitation of MTN’s ‘Yello Summer” past summer campaign. Nando’s had to withdraw the “Yello Hummer” advertising campaign including radio, print, and in-store promotional material. This matter has been appealed and it will be interesting to see how the results turn out.

Copy cat advertising

Supermarkets price perception battle

A competitor complaint was lodged by Pick n Pay against Shoprite’s shopping bags with the claim that says “Lowest prices you can trust always”. Shoprite submitted research by AC Nielsen, which showed that a Shoprite basket of 300 products for March 2007 was the cheapest. The directorate ruled that Shoprite’s claim “No.1 for lowest prices! Always” was unsubstantiated and said:

• although the independent evidence potentially supported the claim in relation to March 2007, it hardly constitutes proof that the respondent always offers the lowest prices.

• the difference in total basket price is not so substantial to indicate that this discrepancy would last for

prolonged periods.

Glamourising violence through fashion labelsThe ASA directorate dealt with a ‘Soviet’ billboard advertisement complaint depicting an act of violence involving two crash test dummies with a pay off line that further expresses violence “Hard like Mother Russia”. The dummy dressed in Soviet clothing appeared to be victorious and was holding a baseball bat being used as a weapon to attack the other dummy that was left defeated on the floor.

The directorate upheld the complaint and found that:• the triumphant and heroic representation of the dummy

dressed in Soviet clothing condones violence as well as irresponsible behaviour. • the ad makes violence seem acceptable and attractive to impressionable youth who wear or aspire to wear Soviet clothing.

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Safety of genetically modified foodsThe ASA directorate considered a consumer complaint against a Monsatano’s print advert for promoting the safety of genetically modified foods. The ad carried the heading: “is your food safe?” and contained the claim “this is one of the most extensively tested and controlled types of food, and no negative reactions have ever been reported. The complaint said the “no negative reactions” claim was false and cited a scientific study on the dangerous effects of genetically modified food products.

The ASA upheld this complaint and said:

• a hypothetical reasonable person would interpret the claim to mean that tests were conducted and that no negative reactions were found.• the onus was on Monsanto to provide independent credible expert verification of the “no negative reactions” claim.

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Microsoft XBOX packaging Consumers made an objection to Microsoft’s “XBOX 360” gaming console packaging for advertising an “Xbox Live feature” which was not available to the South African market. The exterior packaging states, “Xbox Live is not available in all countries. Please go to www.xbox.com to check availability.” When the link is accessed, there is no reference that the feature is unavailable in South Africa. The directorate had to decide whether the Microsoft’s ‘XBOX’ packaging is likely to create a demand for a feature that is not available, or lead consumers to believe that the feature is available in this country. The directorate upheld and Microsoft had to amend its packaging.

Total complaints received 2095

Statistics – Overview

Consumer andpublic bodies 93%

Competitor 7%

Not formally investigated 71%

formally investigated 29%

formally investigated 61%

Not formally investigated 39%

Upheld 21%

Dismissed 25%

Voluntary Undertakings 35%

Resolved between parties 15%

Other 4%

Upheld 44%

Dismissed 35%

Voluntary Undertakings 15%

Other 6%

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Statistics– Specifics

CATEGORIES

Business Supplies 14.5% Automotive 9% Finance & Insurance 7% Foodstuff & Confectionery 6% Health & Medicinal 5% Cosmetics & Toiletries 4% Spirits & Beverages 3.5% Personal Effects 3% Travel & Holiday 3% Competitions 3% Direct Marketing 3,5% Religious Organisations 2.5% Retails 2.5% Employment 2% Entertainment 2.5% Media 2% Computers 2%Audio Visual 2%Household Goods 2.5%Property 2%Furniture & Fabrics 1.5%Hardware & Gardening 1%Government 1%Clothing & Footwear 1%Cleaners & Polishes 1.5%Other 12.5%

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MEDIA

TV 32% Newspaper 14.5%Outdoor 11% Internet 9.5% Radio 8% Magazine 5% Packaging 4% SMS 3% Brochure 3% Pamphlet 2.5%POS 2%Email 2% Direct Mail 1.5% Cinema 1%Fax 0.5 Poster 0.5

CONTRAVENTIONS

Children and young people 4% Comparative advertising 1.5%Disparagement 2%Imitation 2%Exploitation of goodwill 2.5%Misleading claims 36%Non availability of product 6.5%Offensive Advertising 5.5% Responsibility 6%Substantiation 12.5%Discrimination 2%Gender 2.5%Legality 4.5Medical and related 2%Other 10.5%

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Statistics– Specifics

Statistics – Decision Level

Appeal Appeal

ASC AIT

Directorate Directorate

Consumer Competitor

93% 82%

6%

1%

15%

3%

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ASA TeamASA Team

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It is advertising and the logic of consumerism that governs the depiction of reality in the mass media.Christopher Lasch

Advertising is a tax for having an unremarkable product.Robert Stephens

I do not have much patience with a thing of beauty that must be explained to be understood. If it does need additional interpretation by someone other than the creator, then I question whether it has fulfilled its purpose.Charlie Chaplin

Advertising isn’t a science. It’s persuasion. And persuasion is an art.Bill Bernbach

Advertising - a judicious mixture of flattery and threats.Northrop Frye

Advertising is the art of convincing people to spend money they don’t have for something they don’t need.Will Rogers

They said it....

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Notes

Telephone 011 781 2006 Fax 011 781 1616Email info@asasa.org.za Website www.asasa.org.za

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P O Box 41555 Craighall 2024Company Registration Number 1995/00784/08 C

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