Ofcom, the independent regulator for the UK communications industries (including broadcast television and Video On Demand (VOD)) recently published a report on the future of advertising on TV and TV-like services in light of “developments in technology, consumer behaviour and service delivery by broadcasters and others”.
From a legal perspective, the report is interesting as it includes observations on the state of, and possible changes to, the regulatory regime affecting broadcast and VOD advertising.
The main conclusions from the report are:
- That TV advertising is likely to remain “the dominant form of commercial communication until beyond 2020”.
- However, the rise of personalised internet based distribution is likely to continue with “broadband, smart mobile devices, cheap screens, cloud-based services and social media” having a cumulatively disruptive effect on traditional broadcast distribution, which will inevitable drive change in the advertising industry.
- Traditional linear TV spot advertising will inevitably decline as brands find new ways to engage with consumers, including, for example, by investing in content.
- The current regulatory framework for broadcast advertising will remain necessary until beyond 2020, but will have to accommodate certain changes, notably the breakdown of the distinction between content and advertising.
Legally speaking, it is the fourth of these conclusions that is most interesting. Advertising in the UK is governed by a complex regulatory framework, including the Ofcom Broadcasting Code, the BCAP Code: the UK Code of Broadcast Advertising, the CAP: UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing and the ATVOD Code for On-Demand Programme Services. It can be difficult for brands and broadcasters to interpret what affects them and when. This may become even more difficult as developments in technology and consumer behaviour move the industry further into areas that were not envisaged when the current regulations where drafted. However, no wholesale changes to the regime currently look likely. Instead, stakeholders must continue to work with (and interpret) the regulations that are already in existence. It is arguable that this is the most sensible approach. Whilst broadcasters, advertisers and brands may want regulatory clarity, none appear to want further layers of regulation. Besides, other checks and balances already exist. As one advertising executive, quoted in the report, put it “Regulatory referral is damaging, but it takes ages for the wheels to turn. And while a damaging ruling is bad, it's limited compared to being held to account on Twitter if we get something wrong”.
The full report is available here