Memorandum by Ofcom (AL 69)
1. INTRODUCTION
1.1. Ofcom (the Office of Communications)
welcomes this opportunity to submit written evidence to the House
of Commons Health Select Committee's inquiry into alcohol. We
are content for this evidence to be published.
1.2. Ofcom is the UK regulator of the communications
industries, with responsibilities across television, radio, telecommunications
and wireless communications services. Ofcom was established on
29 December 2003 and replaced the Independent Television
Commission (ITC), the Radio Authority, the Broadcasting Standards
Commission, Oftel and the Radio Communications Agency.
2. BACKGROUND
TO BROADCAST
ADVERTISING CO
-REGULATION
2.1 The Communications Act 2003 encourages
Ofcom to consider effective forms of self-regulation for its various
functions where appropriate. Against this background Ofcom decided
that a self-regulatory approach to broadcast advertising regulation
would:
— provide a one-stop shop for advertising
complaints, making it easier for the public to complain about
advertising (indeed, even before the change, more people mistakenly
complained to the ASA about TV advertising than to Ofcom's predecessor,
the ITC);
— allow all broadcast and non-broadcast
advertising (including on the internet and on phone services)
to be subject to a common self-regulatory approach, under a single
established body, thus providing greater clarity for consumers
and scope for a more consistent policy across different forms
of advertising;
— encourage the advertising industry to
take responsibility for its own behaviour; and
— minimise duplication of resources within
Ofcom and the ASA, and further the statutory objective in the
Communications Act of promoting self and co-regulation where appropriate.
2.2 Ofcom consulted extensively in October
2003 on proposals to transfer broadcast advertising content
regulation to a new system to be established under the auspices
of the Advertising Standards Authority ("ASA"). In July
2004, Ofcom's final proposals received Parliamentary approval,
under the Deregulation of Contracting Out Act 1994.
2.3 From November 2004, Ofcom delegated
day-to-day responsibility for applying the broadcast advertising
codes to the ASA. At the same time, responsibility for the TV
and Radio Advertising Standards Codes was delegated to the Broadcast
Committee of Advertising Practice (BCAP), the industry rule-making
body, comprising advertisers, agencies and broadcast media.
2.4 Nonetheless, Ofcom stands behind the
co-regulator, and retains its statutory responsibility for the
regulation of broadcast advertising under the Communications Act.
BCAP can only make changes to the Codes with Ofcom's agreement
and following public consultation, having also consulted the independent
Advertising Advisory Committee (AAC). Ofcom also retains responsibility
for taking licence compliance action against broadcasters if advertisers
fail to respond to adjudications by the ASA.
2.5 The ASA's submission to the Health Select
Committee, (section two paragraphs 5.1 to 5.7.6) describes
the approach they take to advertising regulation in more detail.
Ofcom works closely with the ASA and, as explained below, undertook
joint research to examine the impact of changes to the rules on
alcohol advertising.
3. LEGISLATION:
POWERS AND
DUTIES
3.1 Ofcom has a number of duties and powers
under the Act that are relevant when considering alcohol advertising.
Ofcom's principal duty when carrying out its functions is to further
the interests of citizens and consumers in communications matters
(section 3 (1) of the Act).
3.2 Ofcom is required to secure a number
of things when carrying out its functions which include "the
application in the case of all television and radio services,
of standards that provide adequate protection to members of the
public from the inclusion of offensive and harmful material in
such services" (section three (2) of the Act).
3.3 In performing its duties, Ofcom is required
in all cases to have regard to a number of statutory considerations
including:
(section 3 (4)): (h) the vulnerability
of children and of others whose circumstances appear to OFCOM
to put them in need of special protection'.
3.4 Under Section 319 of the Act, Ofcom
also has a duty to set, and from time to time review and revise,
standards for the content of programmes to be included in television
and radio services as appear to it best calculated to secure certain
standards objectives. Those objectives include:
"That persons under the age of eighteen
are protected (section 319 (2) (a))".
3.5 The additional statutory objectives
under section 319 of the Act which are relevant to alcohol
advertising are:
(2 (f)): that generally accepted standards
are applied to the contents of television and radio services so
as to provide adequate protection for members of the public from
the inclusion in such services of offensive and harmful material;
(2 (h)): that the inclusion of advertising
which may be misleading, harmful or offensive in television and
radio services is prevented;
(2 (j)): that the unsuitable sponsorship
of programmes included in television and radio services is prevented;
3.6 Section 319 (4) also requires Ofcom
to have regard— 'in particular, and to such extent as
appears to them to be relevant to the securing of the standards
objectives, to a number of matters including:
(a) the degree of harm or offence likely
to be caused by the inclusion of any particular sort of material
in programmes generally, or in programmes of a particular description;
(b) the likely size and composition of the
potential audience for programmes included in television and radio
services generally, or in television and radio services of a particular
description;
3.7 This requirement seeks to ensure that
the implementation of the duties in 319 is proportionate,
following section 3 (3) of the Act which requires Ofcom,
in performing its duties, to have regard in all cases, to:
(a) the principles under which regulatory
activities should be transparent, accountable, proportionate,
consistent and targeted only at cases in which action is needed;
and
(b) any other principles appearing to Ofcom
to represent the best regulatory practice.
3.8 Accordingly, Ofcom has at all times
to have regard to the need to act proportionately when performing
its duties. This includes the setting or revising of content standards
for alcohol advertising in such a way as to secure the protection
of persons under 18 and the protection of any others whose
circumstances appear to Ofcom to put them in need of special protection.
3.9 In addition Ofcom's regulatory principles
also require our interventions to be evidence-based in both deliberation
and outcome.
3.10 Ofcom does have powers under the Act
to prohibit "advertisements and forms and methods of advertising
or sponsorship (whether generally or in particular circumstances)"
(section 321 (1) (b)).
3.11 It should also be noted that under
section 321 (6) of the Act, the Secretary of State retains
the power to direct Ofcom to prohibit descriptions of advertisements
that should not be included in programme services and also, forms
and methods of advertising and sponsorship. Ofcom has a duty to
comply with any such direction (section 321 (6)).
4. REGULATION
OF ALCOHOL
ADVERTISING
4.1 There are two forms of regulation for
TV alcohol advertising.
— Scheduling rules: where and when adverts
appear on television.
— Content rules: the imagery, wording and
tone of the adverts.
Rules on the scheduling of alcohol advertising
4.2 Scheduling rules already limit where
alcohol advertisements may appear in the schedules. Alcohol (and
liqueur chocolates) may not be advertised in or adjacent to children's
programmes or programmes commissioned for, principally directed
at or likely to appeal particularly to audiences below the age
of 18.
4.3 Since 1999 a system of "indexing"
has helped to prevent adverts being directed at children. A programme
of "particular appeal" to children is deemed to be one
that attracts an audience index of 120 for this age group.
If a programme attracts an under-16 audience in a proportion
similar to that group's presence in the viewing audience as a
whole, it is said to index at 100. So an index of 120 is
an over-representation of that group by 20 percentage. The
proportion of 10-15 year olds in the audience is 8.24%, so
any programme which has more than 9.84% (8.24 x 1.2) of 10-15 year
olds in the audience would not be allowed to carry alcohol advertising
in or around it.
4.4 More simply put, if a disproportionately
large number of young people watch a programme, the broadcaster
cannot place alcohol adverts in or around it. This is a more targeted
approach than a pre-watershed ban as it hones in on specific programmes
appealing to young people regardless of what time they appear
in the schedule. Eg Ugly Betty goes out after 9pm. Alcohol ads
are not placed around it because of the disproportionately high
number of young people watching the show.
4.5 Indexing is the standard approach used
to limit children's exposure to a variety of advertising categories.
These include gambling, HFSS food and beverages, sanitary protection,
certain religious matter, slimming products, medicines, vitamins
and dietary supplements, matches, trailers for 18/15 certificate
films, advertising for all of which is excluded from in and around
programmes whose audiences contain a disproportionate number of
young people.
Rules on the content of alcohol advertising
4.6 The current rules reflect a review carried
out in July 2004, when Ofcom consulted on proposals to revise
Section 11.8 of the Advertising Standards Code for television
advertising relating to alcoholic drinks. The decision to review
the content rules came from a background of widespread concern
(including Government concerns expressed in its Alcohol Harm Reduction
Strategy) about the drinking behaviour amongst teenagers and young
adults, including excessive or binge drinking or anti-social behaviour
associated with drinking.
4.7 Following the consultation, new rules
for television advertising came into force on 1 January 2005 with
a "grace period" until 30 September 2005 for
advertisers who might have already committed themselves to campaigns
which might not comply with the revised rules. In tandem with
this process, the Committee of Advertising Practice (CAP) amended
the alcohol rules in the non-broadcast advertising Code.
4.8 In particular, the changes to the Codes
sought to prevent alcohol advertising having a strong appeal to
"under 18s" and, in particular, being associated with
youth culture. For example a new rule in the TV Code requires
that alcohol advertising "must not be likely to appeal strongly
to people under 18, in particular by reflecting or being associated
with youth culture". The rules are also designed to protect
vulnerable groups by preventing suggestions that alcohol can increase
popularity or confidence etc. As a result of the rule changes,
at least one alcohol advertising campaigns that ran in Europe
and the United States were banned in the UK.
4.9 Ofcom did not propose changes to the
scheduling rules in 2004, considering a time-based ban would not
be effective or proportionate. The rationale being that although
a 9pm ban would reduce the exposure of under 18s to alcohol advertising,
they would continue to see alcohol adverts after the watershed.
Such a pre-watershed ban could inflate the cost of advertising
spots for all advertisers after 9pm, and would also result in
an overall fall in advertising revenues for broadcasters.
5. EVIDENTIAL
BASIS FOR
CURRENT POLICIES
5.1 Ofcom's regulatory principles (http://www.ofcom.org.uk/about/sdrp/)
explain that we seek to ensure that policy decisions are evidence-based,
drawing on market data as well as qualitative and quantitative
research.
5.2 The 2007 research on Young People
and Alcohol Advertising was designed to assess the effect
of the content rule changes. Ofcom and the ASA commissioned joint
research both before and after the implementation of the new rules
into young people's response to alcohol advertising, together
with more general background research into young people's drinking
habits and the alcohol advertising market. This research Young
People and Alcohol Advertising is described in more detail below
and included in full in at Annex 3.
5.3 At present this research report is the
most up to date detailed evidence available to Ofcom, and its
contents continue to support the Ofcom's policy position on the
scheduling restrictions for alcohol advertising.
Trends in TV advertising activity, and the amount
seen by children and young people
5.4 In brief, the report found that expenditure
on TV alcohol advertising has declined in recent years, but has
increased in other media, particularly outdoor media (eg poster
sites), the press and radio. Although the number of alcohol advertising
spots on TV has increased somewhat children's exposure to alcohol
advertising has fallen significantly between 2002 and 2006.
Source: Nielsen Media
KEY SUPPORTING
DATA ARE
AS FOLLOWS:
Advertising Spend
5.5 Year-on-year trends show that TV advertising
spend on alcoholic drinks fell by 21.1% (£26 million)
between 2005 and 2006, compared with a 6.0% decline in total
UK television advertising spend. In comparison alcoholic drinks
advertising spend on outdoor and radio grew at an above-average
rate.
5.6 TV's share of total alcohol media spend
has been in steady decline (down from 65.1% in 2002 to 49.1%
in 2006) as outdoor, press and radio account for a growing proportion
of spend. In 2006, advertisers spent £194 million advertising
alcohol products on television, radio, press, outdoor and cinema.
Of this, £95 million (49.1%) was spent on TV advertising.
This compares with £3.8 billion was spent on by categories
of advertising in the UK on TV advertising.
5.7 We do not have detailed market data
on alcohol advertising beyond 2006, however indications are that
TV spend on alcohol advertising has remained fairly flat in 2007 and
2008.
Additional measurements
5.8 Although advertising spend provides
the broad market context, it doesn't necessarily provide an accurate
indication of the volume of advertising appearing on TV. Due to
fluctuations in the cost of advertising it is important to also
examine both number of individual adverts or "advertising
spots" being broadcast and the level of viewing of those
advertising spots.
5.9 The number of advertising spots aired
tends to increase as channels numbers grow, but audience fragmentation
means that the increase in the number of spots does not necessarily
translate into an increase in exposure to advertising.
5.10 To establish how many people actually
see the adverts that are broadcast we also measure "advertising
impacts". One impact equates to one person viewing an advert
once. Ten impacts could be one person viewing an advert ten times,
two people viewing an advert five times or ten people viewing
an advert once.
Commercial spots aired
5.11 Despite the decline in spend, the number
of alcohol advertising spots on TV increased by 7.4% between 2005 and
2006, driven in the main by increased promotion of cider drinks.
The volume of alcopop advertising fell 67.6% between 2005 and
2006.
Impacts/exposure
5.12 Over recent years children and young
adults were exposed to fewer alcohol commercials on television.
Between 2002 and 2006 there was a decline of 31.1% and
39.0% in 16-24 and 10-15 year olds advertising impacts
respectively.
5.13 In line with the changes in commercial
spots and advertising spend there was an increase in exposure
to cider advertising and a fall in exposure to alcopop advertising.
Trends in TV advertising content, and the impact
on children and young people
5.14 The Young People and Alcohol Advertising
research also set out to measure the extent to which the changes
to the alcohol advertising rules made in 2005 may have impacted
on the appeal of alcohol for people under 18. The results must
be treated with some caution, as the considerable market and cultural
changes (such as changes in licensing laws, changes in the types
of drinks consumed, etc) mean that the two waves are not directly
comparable. In particular, it is difficult to discern clearly
the impact of these advertising rule changes on young people's
attitudes and behaviour towards both alcohol and alcohol advertising.
5.15 Against that background, there were
some positive indications of changes in behaviour. The research
found that 11-13 year olds were less likely to have drunk
alcohol at all, but there was very little change in the proportion
of 11-17 year olds saying they regularly drink to get drunk
between the two waves of research. There was a significant fall
in the proportion of 18-19 year olds regularly drinking to
get drunk. The age at which it is most common for young people
to report regularly drinking to get drunk is now 20 to 21 years
old. Reflecting a shift in the balance of advertising, alcopops
were less popular, and cider was more popular.
5.16 In terms of perceptions, young people's
ability to recall alcohol advertising had declined (which is probably
linked to the reduction in their exposure to TV advertising) since
the introduction of the new rules. There was no change in how
much young people say they like the adverts and there was an increase
in those saying the adverts make the drink look appealing and
would encourage people to drink it. However the proportion of
young people saying they feel the alcohol commercials are aimed
at them had declined.
Key supporting data are as follows:
5.17 Based on our survey the proportion
of 11-13 year olds who have never drunk alcohol has increased
from 31% in 2005 to 46% in 2007. (Consistent with 2007 Government
findings)
5.18 Alcopops have declined in popularity—when
asked about the brands of alcohol that they drink mentions of
alcopops overall have dropped from 69% to 58%. This is particularly
the case for those aged 14 or over.
5.19 In line with general fashions in alcohol
consumption, there was an increase in the amount of cider that
young people report drinking. This is particularly the case among
14-17 and 18-21 year olds—three in ten young people
from both these groups have drunk cider in the last six months
(compared to 14% and 11% respectively in 2005).
5.20 Recall of alcohol advertising has declined
between the two waves of research. There was a significant decline
in the average number of unprompted mentions of alcohol adverts
from 3.95 to 3.31. Among the different sub-categories of
drinks, there was a decline in recall of beer, alcopop, vodka
and spirit advertising and an increase in recall of cider advertising.
5.21 A comparison of media activity during
the pre and post waves of research shows that total alcohol advertising
spend fell by 2.9% and television advertising spend fell 26.2%.
Between the two phases of research, there was a decline in spend
across the beer, alcopops and spirits sub-categories and an increase
in advertising spend among vodka and cider brands.
5.22 Therefore with the exception of vodka,
the downward shift in television advertising spend was matched
by a downward shift in advertising recall—and for cider
the increase in spend was accompanied by an increase in recall.
Based on this analysis it is not possible to attribute the fall
in recall of alcohol advertising to a reduction in appeal of advertising
as most changes in recall are mirrored by changes in advertising
spend.
5.23 Making like for like comparisons between
the adverts from the 2005 and 2007 waves of research
must be approached with caution. However, based on a range of
measures used to test the broad appeal of each television commercial
tested in the quantitative stage, the following conclusions can
be made:
5.24 The likeability of adverts (based on
a ranking of advertisements from 1-10, one for "don't like
it at all" and 10 for "like it a lot") has
not changed between the two waves of research.
5.25 Young people are more likely to say
that the adverts make the drink look appealing and that they will
encourage people to drink.
5.26 However young people are less likely
to say that they feel the adverts are aimed at them
12 June 2009
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