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New Regulation, New Rules, New Ethics Simon Rothon Senior Vice President Global Marketing Services Unilever Unilever Facts • Worldwide sales - €40 billion • Employees – c.200,000 • Research & Development - €1 billion per annum (Unilever Food and Health Research Institute) • Manufacturing sites – 337 across six continents • Advertising & Promotion - €5 billion (world’s second largest advertiser) • 150 million times a day, in 150 countries, people use our products at key moments of their day Our Portfolio The Media Landscape Then Now Television The :30 is Facing Serious Challenges: • Proliferation of Channels • Performance Decline • DVR Penetration Watershed Moment: October ‘05 Demand for Broadband grows: Penetration clears 50% of all HH’s Institutions getting Hit Hard: Music Source: New Yorker Conference “2012” – Music Advertising Self - Regulation • 40 years of compliance with the Advertising Standards Authority code • Now backed by statutory powers • Govern the rules laid down in Codes of Advertising Practice • “Legal, Decent, Honest and Truthful” Statute Law • Tobacco, alcohol, cars, gaming, financial services, food • Toys, aviation, social networking UK Stature Law Database 78 pieces of newly enacted legislation up-loaded on August 17th Some examples: • The gaming machine (circumstances of use) regulation 2007 • The national minimum wage regulations 1999 (amendment) • The companies (interest rate for unauthorised political donation or expenditure) regulations 2007 • Public health (aircraft) (amendment) (Wales) regulations 2007 European Framework for Self - Regulation • Major effort from WFA (EASA) to embed selfregulatory framework • In 5 years from 10 to 27 European states participating • Objective is to have self regulation recognised in the law • Need to inform and educate those states where there is little history or tradition of self-regulation Rama Ad In breach of Article 15 of Hungarian national code Regulation of New Media • • • • Key principles should still apply National sanctions not easy to enforce Option for “rogue” companies to go offshore Can take action cross-border in Europe but not Feasible further “offshore” • Current initiative through International Chambers of Commerce Television Without Frontiers Directive Audio Media Services directive • • A positive initiative to address the issue Drafting proving to be a challenge for legislators and stakeholders (six European Parliamentary Committees) • Issues to be resolved by Commission: i) Regulation of e-commerce (transactions vs. promotion) ii) Linear vs. non-linear definition iii) Global sanctions Rationale for Self Regulation in New Media • “Goodwill” the major component of brand valuations • New media invite much closer engagement • A stronger imperative to be legal, decent, honest and truthful But.. Issues on “Rogue” traders, fraud and “Malware” can affect legislative environment for legitimate advertisers Doing Well by Doing Good • • • • • Consumer expects high standards of ethics and responsible behaviour from advertisers Brand equity enhanced by embracing a relevant social cause Transition from “ideas” to “ideals” Examples: Dove, Persil, Flora New media lend themselves to this “interactive” approach BECEL Becel ad MISSION: TO HELP MAKE THE WORLD’S HEARTS HEALTHIER 360 Degree Marketing • • • • Co-invention of content and channels Identification of all relevant touch points with the consumer Demands consistency of message tone and manner Should lend itself to self regulation across all media Draft Findings of Major European Audit of Compliance with Self Regulatory Codes, July 2007 • • • • 8 country study 1760 advertisements reviewed 1707 found to be compliant with Codes of Practice 53 found to be in breach (3%) July 2007 Compliance Audit • • 940 internet advertisements reviewed (“popups and banners) None found to be in breach of Codes Challenges for both Legislation and Self-Regulation • • Nature of complaint: % Legality 19 Misleading 39 “Offensive” 19 Denigration 6 Other 17 Issue of “taste” across different viewer groups Need for impartial and objective adjudication New Media, New Regulation, New Ethics? The Way Forward • • • • • Major role of UK in evolving international regulatory framework UK voluntary codes adopted as basis of European framework Push for adoption of Global Framework through International Chambers of Commerce (120 countries) Self-regulation continues to be the optimum approach as “New Media” become “Media” How do you maintain legislation for an industry which evolves every 3 months?