Advertising Standards Authority

History of the ASA

In 1961, the Advertising Association established the Committee of Advertising Practice (CAP) to draft a code of advertising for advertisers to adhere to. CAP drafted the first edition of the British Code of Advertising Practice (the CAP Code. The advertising industry, along with the Advertising Association had concluded that it was in their best interests to set up a system of self-regulation, because some form of regulation was inevitable and if no self-regulation system was set up, it would be a matter of legislative regulation which would bring with it the threat of fines and court orders.

In 1962, following the introduction of the CAP Code, the industry set up the Advertising Standards Authority to adjudicate on complaints that advertisements had breached the Code. The ASA operated under an independent chairman who was to have no vested interest within the industry so as to remain fair and impartial.

Not long after the inception of the ASA, the Molony Committee considered, and then rejected proposals to introduce a system to regulate the advertising industry by statute, similar to the Federal Trade Commission used in America. The Committee reported that they were satisfied that the industry could be regulated effectively from within, by the ASA. A guarded comment within the report, however, warned that the self regulatory system depended upon the satisfactory working of the ASA, and the maintaining of acceptable standards. The inference was, of course, that should the ASA not be up the job, they would be stripped of their powers and a statutory system would be put in its place.

With the ASA in place and seemingly performing well, a more level playing field was created that appeared to benefit both consumers and competitors.

How the ASA is funded

Because the ASA is non-statutory and not controlled by the Government, it is not funded either by the Government itself or by tax payers money. The ASA is funded by a voluntary levy on advertising display costs.

In order for the ASA to operate at 'arms-length' from the industry, an organisation called ASBOF was set up to collect the funding for the ASA. ASBOF exists to ensure that the ASA does not know which advertisers have contrinuted to the voluntary funding, so there can be no question of money influencing the ASA's decision. From the advertiser's point of view, it is in their interests to ensure the ASA is fully funded, to avoid the need for potentially more onerous legislative regulation. ASBOF collects a 0.1% levy on the advertising costs of non-broadcast advertisements, and a 0.2% levy on Mailsort contracts from direct mailers.

To collect money from broadcast advertisers (those on TV and Radio), an organisation called BASBOF was set up. BASBOF works in a similar fashion to ASBOF, and collects the voluntary 0.1% levy on boradcast advertising costs, allowing the ASA to operate at arms-length from the industry. Again, the ASA has no knowledge of who has paid into the levy. Under the terms of the agreement with Ofcom, BASBOF must continually demonstrate that they have adequate funding for the ASA; Ofcom has stipulated that it will not subsidise any shortfall in funding.

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