Ambiguity Behind Advertising Watchdog’s Decisions

American singer Demi Lovato’s new album has recently got into trouble with an advertising watchdog. The Advertising Standards Authority (ASA) in the United Kingdom ordered a poster for the album to be removed after it received complaints that the images shown were likely to cause serious offence to Christians.  

It seems like just another day’s work for these sanction bodies or what we term “social control agents (SCA)”. Much attention usually falls on the wrongdoers, but it’s interesting to observe how people assess the decisions of an SCA too.  

In our research recently published in the Journal of Management Studies, Gino Cattani (New York University), Marco Clemente (ZHAW School of Management and Law), Rodolphe Durand (HEC Paris) and I explore this question in the context of UK’s advertising industry.

How ASA came to be

As in many countries, advertising in the UK is regulated by both a legal (statutory) system and a voluntary system. The legal system typically applies to areas of public concern, such as health, drugs, tobacco, food, or sensitive topics, such as discrimination. On the other hand, firms in a voluntary system create a code of conduct and use a control agent to carry out regulations.

Back in 1937, the UK’s International Chamber of Commerce issued the first advertising code that, through subsequent updates, became the “model” for all other national codes, making the UK the forerunner of the voluntary system. In addition, a resolution was passed during the 1961 Advertising Association Conference in Brighton (UK) to create the Advertising Standards Authority (ASA), which officially started in 1962. People can then complain to the ASA when they notice in an advertisement erroneous information, a false promise, or anything that could hurt their feelings.

After more than 50 years in existence, the ASA is regarded as a successful example of a self-regulatory organisation. The ASA sanctions could lead to monetary loss for the affected organisations, as well as reputational damage. People trust the ASA to do its job, and, as a result, some 25,000 complaints are filed every year in the UK — about 50 percent of the total complaints of all European countries combined. The ASA had also become a “one-stop shop” for all advertising complaints across different forms of media.

The types of misconduct matter

When we examined people’s evaluation of ASA’s decisions using a dataset that includes complaints to the ASA, a survey, and a series of scenario-based experiments, our research found that the types of misconduct matter.

In fact, the ASA distinguishes advertisement-related violations into two types – either misleading or harmful/offensive advertising. Literally, misleading advertisements are those that misrepresent facts to induce consumers to purchase products they would not otherwise buy, and harmful/offensive advertisements are those that communicate inappropriate messages and cause harm or widespread offence to the public.

Our results suggested that people tend to agree more with ASA’s decisions to ban misleading rather than harmful/offensive advertising. We also found that people were more likely to indicate their likelihood to complain further to ASA when they first observed ASA’s decision to ban misleading, as opposed to harmful/offensive, advertising, because they agreed with ASA’s decision.

In his book Outsiders, American sociologist Howard Becker distinguished between rules and values. Building on Becker’s work, we believe people’s varied responses are due to different norms (i.e., rule- and value-based) associated with these two types of violations.

The rule-based norms are unambiguously defined and easy to agree with – misleading advertising. For example, in the beauty industry, it is not infrequent for companies to advertise products whose effects (e.g., smooth and young skin) are questioned by consumers and banned by ASA if collected evidence confirms that the advertisement misleads consumers.

On the contrary, value-based norms allow for different interpretations and potentially elicit fewer agreements. This is indeed what we observed in our studies. In fact, via a supplementary experimental study, we also found that reducing ambiguity is the key to making people more likely to agree with ASA’s decisions.

What can the ASA and other watchdogs learn from our results?

Why is it important for ASA and other SCAs to know that people can respond differently towards sanctions for different violations? Our study is among the first few to highlight that SCA is both an evaluating party and an evaluated one. It relies on people’s support (via submitted complaints and/or reports) to better regulate various markets and institutions. When the decision to sanction is based on value-based norm violations, in this case referring to harmful/offensive advertising, showing more facts or evidence-based judgments could win public support. The people could likely submit more complaints to the SCA after the initial sanction, if only to show their support for the sanction.  

Our results also highlighted the importance of societal participation in enforcing appropriate corporate behaviours. People file complaints with an SCA with the aim of restoring a firm’s proper behaviour. The SCA’s attention is brought to issues of public interest. By complaining to the SCA and pushing it to make a judgment call, people take an active role in determining acceptable behaviour. It becomes increasingly important for SCAs to look at distinctions between norms for which specific rules exist and norms that rely on general values and principles. As we mentioned, the SCA should try to reduce ambiguity behind their decisions as much as possible.

By Ke Michael Mai, Assistant Professor of Management & Organisation at the National University of Singapore (NUS) Business School. The opinions expressed are those of the writer and do not represent the views and opinions of NUS nor the publishers.

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