Thursday, December 4, 2008

Ad Attack

In recent days RTE highlighted a report which found that broadband customers rarely get the maximum connection speeds advertised by internet service providers. The study on broadband available in Dublin, Cork, Galway and Limerick found that on average consumers benefit from just 60% of advertised speeds. Now in the past telco companies covered themselves by stating in their ads that their offers provided speeds of "up to" so many megabytes. However I thought that had all been sorted out since Comreg and Advertising Standards Association of Ireland (ASAI) had agreed a new set of advertising rules for internet providers last March. Individual consumers can check their speeds, this is one company I have used to check the speed of my broadband at home, but I am sure there are more.

Of course the regulatory regime here for the advertising industry is weak. As in other areas we have "self regulation" or what could be called light touch regulation. I would call it soft touch regulation. Obviously advertising has a role to play in informing consumers about new products or services, it can also promote competition by letting consumers know about cheaper prices or better services. And lets be honest some ads are really good and on TV can be better than the programmes.

A Leonard Rossiter Classic!

However advertising can also be deceptive and misleading as outlined above re broadband. In that case consumers are not getting "what is says on the tin" and are being ripped off by being provided with a service which is poorer than what they are paying for. But the current regulatory regime doesn't promote good practise because if a consumer believes that an advert is misleading all they can do is complain to the ASAI and a number of months later they will either uphold or refuse the complaint. By that stage the advert has served its purpose and may no longer be in circulation. Even where the ASAI has found that an advert was in breach of their codes all they can do is direct that the advert not be run again and/or make recommendations for future ad campaigns. They have no power to impose fines or penalties on those found in breach of their advertising standards even though the misleading advert could have generated considerable revenue for the company. See here for a list of the most recent cases.

As I discussed in this blog last March there is also considerable global pressure for greater regulation of junk food advertising towards children, which many believe is contributing to child obesity. CAI linked up with the Childrens' Rights Alliance to call for greater restrictions on junk food advertising here and it is positive that Minister Eamon Ryan has included a provision for this in the Broadcasting Bill which is going through the Oireachtas now. Likewise there is growing pressure to restrict alcohol advertising which appears to be targeting young people, but so far the Government have caved into the drinks lobby and only introduced "voluntary codes" which are unenforceable, weak and ineffective.

What we need to protect consumers is an advertising code underpinned by law, policed by a powerful regulator where ads can be stopped or taken down immediately and where financial penalties can be applied to act as a disincentive.