Committees of Advertising Practice Codes of the UK - Essay Example

? UK CAP s (CAP/BCAP s) Introduction Globalization and liberalization of the world economy have facilitated the growth of trade and commercial activities. The living standards of the individuals all over the world have improved with the rise in the aggregate availability of goods and services. At this juncture, corporate firms entail a high degree of market competition with each other. Advertising, sales promotion and marketing have become the most important sources of success for an organization. The percentage of the total turnover invested on advertisement and promotional purposes by the consumer goods companies are increasing with time. However, the rapid growth of the profit margins of the adverting companies depicts that the advertisement practices undertaken by the companies are improving significantly over time. However, it has been proved by the economists that mixed economic systems with active public private participation is the best for an economy. It is found that the commercials launched by the companies often fail to incorporate the desired intension and seem to create commotion in the political, economic, social or cultural dimensions of the society. This is the reason for which the government owned organizations impose certain rules and regulations on the advertising agencies. This essay will throw a light on the Committees of Advertising Practice (CAP) codes of United Kingdom (U.K.). The context of the essay would analyze the underlying ethics and advantages associated with the CAP codes in U.K. on the basis of macroeconomic analysis. In the later context, the researcher would elaborate on certain perspectives based on which the CAP codes of U.K. must be reformed. The Committees of Advertising Practice are responsible for formulating and maintaining the different advertisement codes in U.K. All these committees are controlled by the Advertising Standards Authority. This authority helps the companies in creating efficient marketing campaigns abiding by the basic rules and regulations (Fletcher, 2008). Importance of Advertising The term advertisement comes from the famous Latin word ‘Advertere’, which means “to turn minds towards”. According to the views of William J Stanton, “Advertising consists of all the activities involved in presenting to an audience a non personal, sponsor identified, paid for message about a product or organization” (MU, 2012). Basically advertising helps the firms to transfer or communicate the different information about a business to the current potential buyers. Advertisement in U.K. has become almost an indispensible business activity for both the sellers and the buyers. In a world where the tastes and preferences of the consumers continuously change, advertisement acts as a catalyst for the firms to accomplish the needs and requirements of the consumers. The main characteristics that must be comprised in an advertisement made by a company are communication, information, persuasion, profit maximization, non-personal presentation, element of marketing mix and consumer choice. On further analysis, it can be stated that a good advertisement should be able to identify the sponsor and have an element of inbuilt creativity. The new product created by a company can be made popular among the consumers with the help of appropriate commercials. It also helps in augmenting the brand value of a company, thereby helping the company to enhance its market goodwill. However, it should not be ignored that advertising has several negative aspects. Often extensive amount of dramatization in the advertising campaigns of companies creates strong negative impacts on the quality and usefulness of the concerned products. The messages conveyed to the consumers are often unrealistic in nature and seem to exaggerate the product quality. Therefore, when the consumers use the products, they get highly disappointed with the difference in the actual and proposed product features. It is said that advertisements often give extraordinary importance to profit generation and ignore the ethical and moral aspects within it (BBC, 2011). For instance, over-consumption of alcohol is harmful for health, but the extensive advertisement and promotional activities of the companies in the brewing industry strongly influence the increasing popularity of alcohol consumption among individuals. Several health hazards related to heart and liver diseases occur when an individual consumes excessive amount of alcohol. Similarly, it has been surveyed by eminent researchers that extraordinary amount of processed food advertisements featuring children have increased the aggregate consumption of processed food. Such food items often contain certain added chemicals that cause certain chronic degenerative diseases. The main purpose of the paper is to analyze the ethical perspectives followed by the CAP codes in U.K. Macro Level Analysis on Ethics of Advertising The industry of U.K. advertisement is famous for its inherent creativity and effectiveness. It is well known across the globe for its positive self-imposed controls, developed for the purpose of creating advertisements. The system is based on the agreement between the media owners, advertisers and agencies. This self-regulating system claims to deliver the best quality advertisements that are legal, honest, truthful and decent. The advertising codes are written and maintained by two subdivisions. These are the Committee of Advertising Practice (CAP) and Broadcast Committee of Advertising Practice (BCAP). BCAP looks into the codes of the advertisements that are broadcasted, whereas CAP looks into the codes of the commercials that are not broadcasted in the market. It is claimed that the code developing and regulating segments of CAP and BCAP authorities in U.K. are completely controlled on the basis of ethics in business. Advertising through media are as a strong force that helps to shape the behaviour as well as the attitudes of the individuals. It is believed by the Council of Second Vatican that special communication can either be very beneficial for individuals or can generate destructive forces that are harmful to the mankind. The ethics in advertising regulations state that the advertisements made by the companies must not be manipulative, corrupt and exploitive in nature. The advertisements should uphold truth. An advertisement made by a company should provide dignity to the individuals and must be socially responsible in nature. This means that any kind of message or activity in the course of the advertisement must not alter the ecological balance of nature. The next context of the paper will explain the ways in which advertisements are advantageous to media, society and market (CAP, 2013). Advertisement Advantages to Market (U.K) A market is basically a place of contact between a buyer and a seller. It is the place where they strike a deal about the product prices and exchange the produced goods and services. As recorded in 2012, the gross domestic product of U.K. was $2.4 trillion (Aaker, 2011). The business market in U.K. is wide and its exclusive contribution has made U.K. the third largest market economy in the European Union. The market of U.K. is the second best for importing the services from U.S. and also, the fifth largest importer of consumer goods from the same. U.K. is a developed country, which is one of the biggest exporters of electronic goods in the global market. The expanded market of U.K. helps to generate large number of employment opportunities for the individuals there and rest of the world. Advertisements made by the corporate companies have largely helped in the growth of the market in U.K. There were many difficult situations when the market of U.K. had experienced severe losses, but appropriate and efficient advertising has helped to upkeep the growth of the market of the country. The price, branding and quality aspects of the products and services sold in the market of U.K. are correctly conveyed through the advertisements. The commercials of the different companies are sophisticated and attractive. The efficient commercial codes of the corporate consumer goods producing companies have substantially helped in increasing the sales of the products and services in the economy. A higher demand in the market created by the domestic individuals has helped to augment the productivity thresholds of the companies. The rising requirement of production in different companies has increased the aggregate employment opportunities in the nation. Thus, superior and proficient advertisements in U.K. have not only helped to improve the living standards of the individuals, but have also helped in enhancing their per capita income levels (by creating employment opportunities) (CAP, 2013). Advertisement Advantages to Media In history, the primary form of media was newspaper. In the current epoch, there are different forms of media like, internet, television and radio. It is always claimed by the market researchers that the growth of media, in both economic and non-economic aspects, have helped to augment the level of economic growth in a nation. However, it should also be considered that without the growth of marketing, promotional and advertisement activities, media could not have improved to such a great extent. U.K. is a developed nation largely because it has many profit making business organizations in its economy. There are many multinational companies based in U.K. These organizations operate across all the nations in the world. In order to communicate to all the customers worldwide, these companies spend a substantial amount of turnover in marketing and sales activities (Ansoff, 1987). Advertisements are the only way though which these companies can communicate their product and service messages to a large base of customers. As advertisements are broadcasted through different forms of media, the growing importance of advertisements given by the companies has augmented the growth of media in U.K. Many business organizations are now actively using the process of social media marketing to market their products. According to the companies in the contemporary world, social media marketing is cost and time effective in nature. It is the source of marketing that helps to enhance the business-to-business relations as well as the business-to-consumer relations in the market (Sullivan, 2012). Figure 1: Growing Importance of Advertisements (Source: Bughin and Spittaels, 2012) As stated in the above diagram, over time, the importance of advertisements in the economy of U.K. is significantly increasing. This indirectly shows the growing importance of media in the market. It has been estimated that about 38% of the aggregate revenue generated by the media companies come from advertisements. In the gross revenue generated from advertisements by the companies, almost 58% of the total revue comes through digital advertising. Figure 2: Growing Importance in Digital Advertising (Source: Bughin and Spittaels, 2012) As shown in the graph, digital mode of advertising has a high share in the market at present. The above context states that media in the economy of U.K. has largely improved with time and the contribution of media in the gross domestic product of U.K. has also increased significantly (CAP, 2013). Advertisement Advantages to Society Economic progress largely depends on the social and cultural aspects of a country. It is empirically found that those nations that are less socially rigid, have a stronger economic framework than the other nations where the society is highly orthodox in nature. It was stated by the famous entrepreneur, Steve Jobs that consumers’ perspectives largely depends on the facts portrayed by the companies. Thus, it is true that advertisements substantially affect the views of the society. The tastes and preferences of the consumers are substantially affected by the messages or the codes advocated through the advertisements (Alkhafaji, 2003). The spending powers of the consumers are highly discretionary in nature. This is the power that portrays the extent to which the consumers can afford to spend for other goods and services, apart from the basic necessities. It has been claimed by the researchers in the market that the discretionary powers of the consumers have increased in most of the nations with the growing advertisement practices. It is believed that good codes or messages conveyed through the advertisements can be highly beneficial for changing the orthodox or traditional views of the society. The issues related to the societal issues like, caste, creed, religion or sex, can be easily resolved through ethical advertisements. However, it should also be considered that if the advertisements are non-ethical, then it can cause severe destructions and disturbances in the society (CAP, 2013). Changes to be adopted in the U.K. CAP/BCAP Authorities It has been proved that advertisements have huge contribution in the growth of an economy. Its involvement in the growth of markets, society or media is highly crucial. The consumer’s economic and non-economic perceptions are highly sensitive to the messages and codes conveyed in the advertisements. Thus, if the codes in the advertisements do not abide the ethical principles, then it can create serious negativities to the consumers’ discernments. The U.K. CAP and BCAP authorities have largely taken vigorous initiatives to check that the advertisement codes are created on the basis of ethical principles. However, there are a few aspects that are still to be considered (CAP, 2013). The main features that must be sufficed with the advertisement codes in order to abide the ethical perspectives are: Legality Honesty Decency Truthfulness Dignity Fair Competition Heath and Well Being Infancy Protection The ways in which the U.K. CAP and BCAP codes should be reformed are: The Article 18 of the Consumer Protection states that ‘Marketing communication should not include any direct appeal to children and young people nor should persuade their parents or other adults to buy products for them.’ There Consolidated Code of ICC states that the marketing activities of a company that are aimed at the children should not harm them mentally, physically or morally. There are certain advertisements that should not be observed by the children below 18 years. Some websites just have a single box to click for the children to gain access by giving confirmation of having consulted adults before visualizing the site. Currently, children have easy access to internet, so such low level of restrictions in the internet media can allow them access to certain advertisements, which they are not recommended to see. The CAP and the BCAP authorities must try to use impose more regulations on the websites to check the access to advertisements (with adult content) by children (Pitt, 2010). The codes have still not resolved the issue of behavioural targeting of the children. This is a special practice that involves in sending special cookies to the personal computers of children. These cookies help to access the different sites of advertisements that the children visit, the duration of time of their stay in the sites and also, to find their actual buying decisions. This can be highly beneficial for the companies as the tastes and the preferences of the children substantially influence the demand pattern created by the parents or the households. Since marketing activities targeted at the children are highly complex in nature and the children resemble the future population of a country, the above two reforms are highly crucial for the CAP and the BCAP authorities. It is true that that the alcohol advertising rules have been strengthened in U.K since 2005, but the ASA (Advertising Standards Authority) must try to be impose more regulations on the advertisements of the of the alcohol companies. There are many such brewing companies that still target the children below 18 years to sell their alcohol. These advertisements generally capture the youth and provoke them to spend more on alcohol and such. The CAP code have already set the rule of non broadcasting the advertisements related to alcohol but the regulations on the advertisements messages are still to be improved (MHRA, 2013). The pharmaceutical industry in the global market is enjoying booming powers. The political authorities of countries relax a lot of regulations on these companies as they invest a lot of money in the research and development of new medicines. However, in U.K. medical treatment has now become almost a luxury service. There have been innumerable complaints registered against the advertisements and their products of the drug producing companies in U.K. The organization of Regulating Medicines and Medical Devices has claimed that many pharmaceutical companies practice non-ethical means of business (Forbes, 2013). Apart from over the counter drugs, the advertisements of medicines are not broadcasted but even then, the BCAP authorities must ensure greater regulations on the medicine companies (CAP, 2013). The ASA also prepares various codes with an underlying message of ‘fundraising’. It has been found that many individuals have issues associated with the concept of fundraising. They constantly object to certain concepts like, street collecting. Although the Fundraising Standards Board looks into such issues, yet the ASA should also introduce special codes for conveying the true meaning of ‘Fundraising’ activities to the individuals (Gov, 2013). As the importance of protecting and conserving environment is growing in the society, the ASA should frame new codes that especially aim to protect and preserve the environmental resources (Femina, 2010). Conclusion Privatization and Disinvestment policies have proved to be highly beneficial for the economies in the world. However, maximization of social welfare cannot be achieved without the contribution of public control. Capitalistic economies often create unequal distribution of powers, which often result in the inappropriate resource allocation. Thus, the modern scholars feel that mixed economy with proper blend of socialistic and capitalistic standards is best suited for any nation. The context of the essay has helped to emphasize the value of advertisements in both commercial and non-commercial aspects. The ASA in U.K. is truly a well-coordinated organization that rolls out sophisticated advertisements. However, as stated in the above context, there are still some areas of concern, which needs improvement or reformation, in the CAP and the BCAP codes. It can be concluded that, with the help of the above mentioned changes, the organization can improve its ethical perceptive in business. Ethics is one of the most crucial factors with strong influencing powers. In order to experience better values from the national products, the ASA must constantly try to improve on its codes. This is because with better advertisements, the level of business of the companies would also improve. A rise in the productivity of the companies would help to generate more employment opportunities and national income growth of the country. Thus, advertisements are the key driving force of economic development, provided the messages are based on the principles of ethics (Hegarty, 2011). Reference List Aaker, D., 2011. Strategic Market Management. New Jersey: John Wiley & Sons. Alkhafaji, A. F., 2003. Strategic Management: Formulation, Implementation, and Control in a Dynamic Environment. London: Routledge. Ansoff, H. I., 1987. Corporate strategy. 2nd ed. London: Penguin. BBC, 2011. Mobile internet use nearing 50%. BBC News, 31 August. Bughin, J. and Spittaels, S., 2012. Advertising as an economic-growth engine. [pdf] Mckinsey. Available at: [Accessed 30 November 2013]. CAP, 2013. Helping you get your ads right. [online] Available at [Accessed 30 November 2013]. Femina, J. D., 2010. From Those Wonderful Folks Who Gave You Pearl Harbor: Front-line Dispatches from the Advertising War. London: Canongate. Fletcher, W., 2008. Powers of Persuasion: The Inside Story of British Advertising. Oxford: Oxford University Press. 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