Brand enforcement: the use of the Advertising Standards Council of India as an effective tool

"Unable to attract even a single girl, frustrated man sues Axe,” shouted headlines. The allegation was that a man had failed to attract any girl despite using Axe products for more than seven years, even though the Axe advertisement suggested that the product helps men to instantly attract women. Though it was mistaken for a genuine news report across the world, this was in fact a satirical report that seemingly stemmed from a multitude of controversies surrounding the Axe ads, reported on fakingnews.com, an Indian website.

Nevertheless, this highlights a serious concern in the Indian market. The proliferation of brands, immense choice and increased competition have led to an overabundance of advertisements. Th e advertising industry grew by 20 percent in 2010 compared to 8 percent in 2009, leading to aggressive advertisers pushing the advertisement regulation barriers.

In 1985, keeping pace with worldwide practices, Indian marketing and advertising professionals set up the Advertising Standards Council of India (ASCI) to self-regulate the content of advertisements. The council’s main objective is to promote responsible advertising to enhance the public’s confidence.

"THE INABILITY TO IDENTIFY ADVERTISERS OF CERTAIN PRINT ADS HAS LED TO NON-COMPLIANCE IN THAT SECTOR."

While the importance of ASCI’s role was acclaimed time and again, its lack of legal status and the non-binding nature of its rulings on nonmembers resulted in the intended regulations being less effective than envisioned. Various suits seeking interim relief against ASCI orders were filed. The court held that any directions issued by ASCI were not binding and that it was designed to complement legal controls, not to usurp or replace them, and set aside orders in certain cases.

In August 2006, the Ministry of Information & Broadcasting gave ASCI its legal teeth by deeming that all TV commercials in India must abide by the ASCI advertising guidelines. Th ese became part of the Cable TV Act’s advertising code. Th e code covers four broad principles: to ensure truthfulness and honesty of representations, to ensure that ads are not off ensive to public decency, to safeguard against the promotion of products hazardous to society and to ensure fairness in competition.

Under the code, complaints can be made by the general public, intra-industry or suo moto by the council. Th ese are reviewed by the Consumer Complaint Council, which issues the requisite orders. Th e ad is included in ASCI’s media release listing, issued once every three months, along with the Quarterly Compilation Report of decisions.

This is circulated to all requisite nationwide authorities. The act also allows reviews and punishments, such as imprisonment for up to two years and/or a fine of up to RS1000 ($22); corrective advertisements to neutralise the effect of misleading advertisements, and the issuance of apologies—Star News and MTV had to run a scroll for three days apologising for screening the ‘New Axe deodorant’ advertisement.

However, cautious brand owners have been able to substantiate the claims made and overcome such concerns—Colgate and Complan commercials were pulled up for being misleading by ASCI, but the companies were able to provide supporting data and continue with their screening.

Compliance in the TV sector is near 100 percent due to the Cable TV Act; however, the inability to identify advertisers of certain print ads has led to non-compliance in that sector. Such noncompliance results in more severe repercussions: longer imprisonment terms and higher fines; a declaration as to the non-compliance in the listing; possibly networks directly being asked to remove the offending ads; and errant networks also facing repercussions for defying the Cable Television Network rules.

Brand owners need to be careful to follow the code as the repercussions could have a negative impact on the repute of the brand, result in financial losses as channels may refuse to air future ads or even ads for other products by the same company.

In the event of an adverse ASCI order, either you comply or go to court. Water purifier maker Kent’s obtained a stay against an ASCI order based on an intraindustry complaint of disparagement against its advert that contained the words ‘Dunia ka sabse shudh paani’ (world’s purest water).

Despite the binding, cheaper, faster redressal provided by ASCI, some conflicts go straight from the television screen to the courtroom. For ASCI to act, the ad has to have run for at least a week, and then the procedure takes at least 45 days. The incentive of immediate action in the form of an injunction or discontinuance of the ad prompts court actions despite their being time-consuming, cumbersome and ultimately, expensive.

Regardless of concerns, ASCI’s clout is increasing. It provides a confidential nonbinding opinion to advertisers about their advertisements’ compliance with its code and with government rules, known as ‘copy advice’. Complaints increased fourfold this year and the ratio of intra-industry complaints has gone up to about 40 percent as rivals scrutinise ads minutely, taking advantage of every loophole.

Riding on growing industry acceptance, ASCI is in the process of setting up a fast-track mechanism to resolve disputes in 10 days, to serve as a quicker and cheaper mode of dispute resolution, so as to avoid pressuring the courts in pursuit of speedy redress. Also, the Consumer Affairs Ministry is proposing to establish an advertising regulator to regulate the advertising content on Indian media.

ASCI regularly amends its provisions in light of upcoming concerns, such as surrogate advertising, brand-extension ads, and codes for automotive vehicles and food and beverage segments. A grant of $100,000 from the World Federation of Advertisers, and winning the Best Practice Bronze Award at the European Advertising Standards Alliance Awards highlights its international recognition.

Advertising expert Jef Richards said: “Advertising is speech. It’s regulated because it’s often effective speech.” The ASCI code has not only equipped the public with the knowledge that all that glitters is not gold, but also taught brand owners how to tread vigilantly, as failure to comply with the ASCI code may result in brand damage and should be taken into consideration by brand owners advertising in India.

ASCI, especially through its proposed fast-track system, is arming brand owners with a faster and more cost-effective means of redress against brand disparagement by competitors.

Essenese Obhan is the founding partner of Obhan and Associates. He can be contacted at: essenese@obhans.com

Shalika Bhalla leads the trademark department at Obhan & Associates. She can be contacted at: shalika.bhalla@obhans.com