Research report prepared for the australian communications and media authority

1.4UK review of findings

The main sources of obligations relating to advertising and sponsorship for commercial radio licensees are located in the RAS Code (administered by the ASA) and the Ofcom Code (administered by Ofcom).

Regulation of advertising and sponsorship of commercial radio in the UK will be influenced also by the statutory obligation imposed on national commercial radio licensees to observe impartiality in news and current affairs coverage. The rule is modified slightly for local radio licensees: with respect to current affairs, licensees must refrain from giving undue prominence to the views and opinions of particular persons or bodies. Another influence on this area of regulation will be the prohibition on political advertising. This is not confined to party political advertising. The prohibition also extends to restrain certain forms of advertising which may relate to political or industrial controversy (or industrial dispute), or current public policy.

A key element of the approach towards regulation of advertising and sponsorship is the principle that, whilst advertising and sponsorship are recognised as acceptable revenue-raising activities, influence on, or interference with, the content of other programming is not tolerated. As such, there are extensive rules regulating advertising, sponsorship, and other forms of commercial influence.

Definitions are located in the RAS Code or the Ofcom Code as relevant to the subject matter of the rules. The RAS Code contains a definition of advertising which is confined to commercial activity, namely the sale of goods and services. The definition applies only where payment/consideration is received by the licensee.

The Ofcom Code includes definitions relevant to the matters with which it deals; namely sponsorship and other commercial references. In the UK it is permissible to sponsor programs and channels (radio and/or television services), and definitions are provided to reflect this. A sponsored program or channel will be one in which some or all the costs of production of a program or the costs of operating a channel are met by the sponsor.

‘Product placement’ is also defined. This is a reflection of a broader set of rules governing commercial references in programs, as noted below, which may not be clearly recognizable as advertising or sponsorship, but may constitute a form of disguised advertising. Product placement in any form is prohibited.

The key concern here is to ensure transparency and clear separation of advertising from other programming. The RAS Code with its primary responsibility for advertising reflects this in its rules:

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  Rules of general application include requirements to ensure that advertising and programming are readily distinguishable, and that listeners are not confused.
  
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  News is given particular attention, but there are no similar constraints on current affairs coverage:
  
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    Particular care is required to ensure that there is no confusion with news bulletins; and
    
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    Station presenters and newsreaders are permitted to voice advertising messages provided that they do not compromise their impartiality obligations, and a clear distinction is made between the programming material and the advertising material. They are not permitted to provide personal endorsements of products and services.
    

The same principles of transparency will apply to sponsorship. Hence, rules are in place to ensure that a sponsorship arrangement, and its nature, is transparent to the audience. Rules govern the type of sponsorship announcements which can be made and how often they need to be made, with some rules specific to radio to ensure transparency and listener awareness.

The fundamental principle of editorial independence, noted above as applying to all types of commercial content, is specifically applied to sponsorship. Hence a sponsor can not influence the content or scheduling of a program or channel if that would impair the editorial independence of a licensee.

Particular protection is given for news programming which can not be sponsored. A radio station which is primarily a news service would not be able to be sponsored as a sponsored channel. The same protection is not given to current affairs on radio. Nevertheless, the prohibition on interference with editorial interference is relevant.

Product placement, promotion of products and services within programs, and any undue prominence is prohibited. These rules are concerned with ensuring that there is no disguised advertising and that any references are editorially justified. Once again they illustrate the emphasis on separation of commercial content and other programming, and the need to maintain editorial independence.

The rules in place impose regulatory obligations on the licensee only. There are no rules in place which would impose obligations on other persons such as newsreaders or presenters. It will be a matter for licensees to institute internal compliance and due diligence measures.