In the digital world, the most effective advertising is not always advertising in the traditional sense. Instead of buying ad space or time on a Web site, many marketers prefer to build their own sites or mobile applications or to promote their brands using social media, encouraging consumers to spread the word.
While some of this activity remains unregulated, prompting concerns that the Internet is a haven for misleading or unscrupulous marketing, with brand owners doing things they would not dream of doing offline, the loopholes that allow this double standard are slowly closing.
Last week, the Advertising Standards Authority of Britain, which monitors the content of most forms of advertising in that country, including paid Web ads like banners and sponsored search links, provided details of a plan to extend its oversight to social media, company Web sites and other nontraditional digital marketing activities. That means advertisers could run afoul of the standards authority for a misleading blog post or even a consumer’s Twitter postings, if they were part of a campaign employing user-generated content.
The British regulator was not the first to do this. The standards police in more than a dozen other European countries had already extended their monitoring to cover new kinds of marketing, after pressure from the European Commission in Brussels. In the United States, the Federal Trade Commission recently published guidelines for marketing via social media and blogs.
But the British approach is interesting because it includes particularly tough sanctions for violators and because it is being underwritten by a major online player, Google.
Under the system, set to take effect in March, the Advertising Standards Authority will study consumers’ complaints about the content of corporate Web sites, social networks and mobile applications, as it now does for traditional advertising. Offenders will be asked to remove misleading or inappropriate claims.
Those who refuse will be referred to Google, which has agreed to block paid search advertisements to these marketers’ Web sites — an enforcement mechanism that the standards authority and Google say is the first of its kind. Furthermore, Google has agreed to post warnings from the standards authority alongside search links to violators’ Web sites.
The system is not airtight — it will not cover Web sites based outside Britain, for example. On mobile devices, many people bypass Google and go straight to applications or Web sites.
But Google still accounts for 80 percent of Web searches in Britain, and advertisers say they welcome Google’s involvement, after the company dragged its feet for several years, delaying adoption of the new system.
“It certainly adds credibility to the enforcement mechanism,” said Stephan Loerke, managing director of the World Federation of Advertisers in Brussels.
Google has even agreed to finance the system with an undisclosed amount of “seed capital.” The money is needed because the standards authority’s normal source of financing, a levy on paid advertising, would not work for other forms of company-sponsored marketing.
The collaboration is not driven entirely by altruism. The standards authority is an industry-financed body that operates independent of the government. Marketers, ad agencies and Internet companies are eager to demonstrate that “self-regulation” can protect consumers at a time when the future of marketing is under scrutiny.
Lawmakers in the United States, Europe and elsewhere are investigating the practice of “behavioral targeting,” in which consumers’ Web browsing patterns are mined for clues about their interests, so that marketers can show them relevant ads.
Consumer groups say this raises privacy concerns, and a European Commission panel recently proposed far-reaching restrictions on the practice.
Advertisers and Internet companies say that if behavioral targeting is banned or curbed, the advantages of digital marketing disappear. As they battle against the proposed restrictions, a bit of new self-regulation may be a small price to pay.