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April 23, 2008

New U.K. Advertising Regulations Have Online Implications

Online word of mouth and buzz marketing techniques are to be governed by new U.K. legislation, which comes into effect on May 26, subject to parliamentary approval.

Under the new Consumer Protection from Unfair Trading regulations, it will be illegal to "Falsely claim or create the impression that the trader is not acting for purposes relating to his/her trade, business, craft or profession," or to "falsely represent oneself as a consumer."

In layman's terms, it will be a criminal offense to plant positive messages about a brand in blogs or forums, use brand ambassadors or buzz marketing specialists, and to seed viral ads, without clearly stating that these actions are being carried out by, or on behalf of a brand.

In addition, there are new implications for ads including an "invitation to purchase." These will now be required to include a full description of the advertised product, which could prove difficult given the limited space available in many interactive ad formats such as banners, buttons and text messages.

In practice, it seems highly unlikely that these laws can, or will be enforced, given the sheer scale of the Internet and its global nature. That said, it will undoubtedly be in the interests of major advertisers to keep firmly within the confines of the law.

As Marina Palomba, IPA Legal Director noted, "While many advertisers will continue with such campaigns and get away with them, this is in my view a risky and undesirable way forward. If advertisers and their agencies ignore the ethics of responsible advertising, the damage to the advertising and marketing industry generally will be considerable, undermining all commercial messages, their effectiveness and the self regulatory systems."

The new regulations will implement the European Union's Unfair Practices Directive (UCPD) in the U.K., which should have already been introduced by the end of 2007.

U.S. regulators have also looked into the WOM marketing industry.

Posted by Jack Marshall at April 23, 2008 1:08 PM

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