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What ASA’s new regulations mean for online retail


The Advertising Standard Authority’s (ASA) new online marketing regulations came into force on Tuesday and the social web hasn’t stopped talking about it since. CEO of online health & beauty retailer, Aaron Chatterley, tells Retail Gazette that he welcomes the move but wants to know how the rules will be enforced.

For those not up to speed on the matter, the ASA has just been granted jurisdiction to clamp down on misleading online marketing materials, in the same way as they do on print and broadcast advertising.

This doesn’t just apply to companies’ websites, but also their social media properties on Twitter, Facebook and the like.

The ASA received over 2,000 complaints about misleading online marketing in the last year and that number is likely to go up given the recent blaze of publicity on the subject.

So what does it mean for e-tailers in the UK?

Certainly, responsible companies shouldn’t have anything much to worry about. Personally, I am fed up with less reputable rivals driving traffic to their websites by promoting services and products using Google paid for search that they don’t actually supply.

With e-commerce continuing to grow in the face of the current economic uncertainty, consumers need the additional reassurance provided by the ASA

What is of more concern is the spectre of companies and individuals making malicious complaints that suck up management time and energy. I hope the ASA adopts a sufficiently robust position to make sure this doesn’t happen.

Which brings me to my next point. The ASA tells me that they are hiring ten new staff to oversee the extension to its mandate. That is an uplift in resources of about ten per cent. Given the volume of online marketing, is that going to be sufficient?

The new regulations will be rendered largely meaningless unless complaints are dealt with in a swift, efficient manner. That requires prompt intervention with companies and also with third parties such as Google (which has committed to removing paid for search results which breach the new regulations), Facebook and Twitter.

According to the ASA’s own figures, complaints are handled within an average of 13 working days. In the online universe, 13 days seems to me to be an awfully long period of time. In 2009 the ASA handled nearly 29,000 complaints.

Considering the regulator received 2,000 complaints last year about online ads - despite the fact that it had no jurisdiction to do anything about them - what volume is it going to receive now that it does have a mandate? Maybe 5,000 or 10,000? Nobody knows the answer yet - but an increase in resources of just ten per cent looks small to me.

Then there is the question of companies selling into the UK from overseas. The ASA has working relationships with fellow regulatory bodies in other jurisdictions and can work with search engines that do reside in the UK to deal with offending material that originates overseas. But in the final analysis, these new regulations will not stop unscrupulous organisations from targeting the UK consumer.

Any overseas organisation that is determined to behave in an unscrupulous manner will not be stopped. But this committed criminality is relatively low scale.

What will prove the biggest deterrent is the commitment by Google (it is helping to pay for the enforcement of these new regulations) and other search engines to remove paid for search results that prove to be misleading. In addition, according to the ASA, Google has promised to promote ASA rulings to the top of search results. So if a company falls foul of the new regulation, it is possible that the ruling will sit on top of the search results for that company. Talk about e-commerce death!

To be successful in e-commerce you have to be visible. But more importantly, if a company’s online reputation is trashed in this way, then it can give up and go home.

Ultimately, the extension of the ASA’s powers into the online universe has to be good for consumers - and that really is the only thing that matters.

But anyone who thinks that the move is going to be a panacea for all online marketing ills is going to be disappointed.

I am going to reserve judgement on the new regulations until I see how effectively they are being enforced.

And the UK community of e-tailers should be prepared to provide input to the ASA as the effectiveness of the new regulations becomes apparent over time.

As an industry we have a vested interest in making this work.

Note: The views expressed here are those of Aaron Chatterley and do not necessarily represent the views of Retail Gazette.

Published on Friday 04 March by Editorial Assistant

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