Research report prepared for the australian communications and media authority


Regulation of advertising and sponsorship on commercial radio



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5.3Regulation of advertising and sponsorship on commercial radio


The legal source for advertising and sponsorship rules on commercial radio is the Interstate Treaty, implemented through the state broadcasting laws. The ALM issues guidelines to help create a uniform framework for the implementation and treatment of the rules by all the state media authorities.401 Another influence on the regulation will be the European Union directives. It is clear that the Treaty picks up directly many of the definitions and provisions which are found in the TWF Directive. Since the Interstate Treaty makes no distinction between radio and television (save for a few provisions), many of the provisions originating from the TWF Directive have become applicable to radio also. This is similar to Ireland, and, to a lesser extent, the UK.

5.3.1Definitions


Relevant definitions are found in article 2 of the Interstate Treaty. Indeed, more than half of the definitions relate to advertising and sponsorship, although some of these will be relevant to television only.402

  • Advertising: any form of announcement broadcast whether in return for payment or for similar consideration or broadcast for self-promotional purposes in connection with a trade, business, craft or profession in order to promote the sale of goods or services, including immovable property, rights and obligations, in return for payment. (article 2(2)(7))

  • Sponsorship: any contribution made by a natural or legal person or an association of persons not engaged in broadcasting activities or in the production of audiovisual works to the direct or indirect financing of a programme with a view to promoting the name, the trademark, the image of the person or association, their activities or their products. (article 2(2)(9))

  • Surreptitious advertising: is the allusion to or representation of goods, services, the name, the trade mark or the activities of a producer of goods or a provider of services in programmes when such representation is intended by the broadcaster to serve advertising purposes and might mislead the public as to its nature. Such allusion or representation is considered to be intended for advertising purposes, in particular, if it is done in return for payment or for similar consideration. (article 2(2)(8))

A form of ‘surreptitious advertising’ will be product placement. Surreptitious advertising is the equivalent of the US concept of ‘embedded advertising’. Surreptitious advertising is prohibited.403 As noted in the report on the UK, the new AVMS Directive permits a limited form of product placement. Any relaxation of the current prohibition would be likely to flow into regulation of radio. However, at this stage, it would appear unlikely that Germany will take advantage of the new rules. The Directors’ Conference of the State Media Authorities rejected a proposal in 2007 for the introduction of new relaxed rules, citing concerns over the difficulty of determining influence over programming: “…the independence of program production is not served by this proposal”.404


5.3.2Advertising, sponsorship, and related rules

5.3.2.1Amount of advertising


Whilst both public and private broadcasters are allowed to broadcast advertisements, there is a very significant difference in the permitted amounts. For commercial broadcasters, the following limits apply:405

  • The proportion of broadcasting time devoted to teleshopping spots, advertising spots and other forms of advertising shall not exceed 20 per cent of the daily transmission time;406

  • The proportion of broadcasting time for advertising spots shall not exceed 15 per cent of the daily transmission time;407 and

  • The proportion of broadcasting time devoted to advertising spots and teleshopping spots within a given clock hour shall not exceed 20 per cent.408

5.3.2.2Political advertising


Advertising of a political, ideological, or religious nature is prohibited.409 Furthermore, political, ideological, or religious associations may not sponsor broadcasts.410 However, limited exceptions apply to nationwide broadcasting:411

  • During an election period, for elections to the German Federal Parliament, political parties contesting the election shall be allocated time, subject to reimbursement of costs.412

  • The Protestant Churches, the Catholic Church and the Jewish Communities shall, if they so request, be granted appropriate time for broadcasting religious programs, subject to reimbursement of costs.413

5.3.2.3General


The most important rule relating to the regulation of advertising is the separation of advertising from programming, also known as the ‘distinction rule’. Article 7(1) requires advertising to be clearly recognisable, and on radio it must be distinctly separated by means of an acoustic signal.414 Editorial independence is guaranteed by a prohibition on advertising or advertisers influencing programming either “…content-wise or editorially…”.415 The Joint Directive interprets this to mean also that the advertiser cannot exert any influence on the scheduling and placement of programs around advertising.416

Infomercials are also regulated to ensure that they are clearly identified as advertisements and not confused with editorial content. Infomercials, which are advertising presented as editorial content,417 are permitted provided that their advertising character is clearly recognisable, up front, and advertising constitutes a substantial component of the infomercial ‘program’.418 Infomercials must be announced as such at the commencement of the broadcast and identified during the broadcast.419

The rules on sponsorship are also aimed at ensuring that the audience is aware of the commercial relationship and that there is no editorial influence. In programs which are partially or totally sponsored, the fact of the sponsorship must be briefly announced at the beginning or at the end of the program.420 The content or scheduling of a sponsored program must not be influenced by the sponsor in such a way that the broadcaster’s responsibility and editorial independence are impaired.421

Sponsored programs are also prohibited from exhorting the sale or supply of the products or services of the sponsor or a third party or making any explicit reference.422 The Joint Directive advises that if, during the broadcast, the products or services are generally recommended, or in some other way emphasised as advantageous, this will constitute an exhortation.423

There are no restrictions on advertising during radio news and current affairs programming, nor are any persons who might be associated with news and current affairs prevented from appearing in advertisements. However, sponsorship of news and current affairs programming is prohibited.424



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