What is advertising?
‘Advertising’ generally refers to a business’ distinct efforts to promote its products (ie goods or services) to its intended customers. Advertising usually involves unique promotional campaigns, usually via paid channels (eg advertisements on TV, in magazines, or on websites or social media platforms), which aim to directly accumulate sales. This differs from ‘marketing’, which refers more broadly to the collection of practices a business undertakes to prepare its products for sale and to promote its brand and products on a longer-term, more general basis.
How is advertising regulated?
Advertising in the UK is subject to various laws, regulations, and codes of practice, and to the oversight of various regulatory authorities.
The Advertising Standards Authority (ASA) is the UK’s main advertising regulator. It’s responsible for applying and considering violations of, and complaints in relation to, advertising rules. The ASA can impose certain sanctions against businesses found to have engaged in non-compliant advertising (eg by requesting that search engines or social media companies remove non-compliant content from their platforms or by publishing its own advertisements highlighting a business’ non-compliance). It can also refer issues to other bodies for further investigation (eg Ofcom, the UK communications regulator).
Key examples of rules applicable to advertising are outlined below.
The CAP and the BCAP
The CAP Code
The Code of Non-broadcast Advertising and Direct & Promotional Marketing (the ‘CAP Code’) is the key set of rules governing non-broadcast advertising in the UK. It covers most types of advertising with the exception of TV and radio advertising. For example, marketing on UK-based websites and search engines, cinema and DVD advertising, posters and billboards, newspaper and magazine ads, email marketing, and various video-on-demand services. The CAP Code is enforced by the ASA.
The CAP Code centres on the principle that all marketing communications (including advertisements) should be legal, decent, honest, and truthful. It sets out principles for businesses to abide by and rules that should be followed to help achieve compliance with each principle. These cover a wide range of essential rules as well as sector-specific ones. For example, the CAP Code requires that businesses make sure advertising materials:
are obviously identifiable as advertising to consumers, for example, by ensuring that their commercial intent is clear or by clearly identifying content as advertisements
are not likely or sure to materially mislead consumers, for example, by not:
omitting or obscuring important information about products (eg prices or products’ main characteristics)
exaggerating a product’s capability or performance
misleading consumers about who manufacturers a product
portraying testimonials or endorsements as genuine unless they have evidence of genuineness
take account of prevailing societal standards and the context of their advertising by, for example, not:
encouraging or accepting violence or anti-social behaviour
portraying individuals under 18 years old, or who seem to be under 18 years old, in a sexual way
including gender stereotypes that are likely to cause harm or widespread or serious offence
These are just a few examples of the rules imposed by the CAP Code. Various other principles and rules are in place in relation to, for example, food products, medical and beauty products, environmental claims about products, and alcohol products.
For more detail, access the full CAP Code.
The BCAP Code
The UK Code of Broadcast Advertising (the ‘BCAP Code’) regulates broadcast advertising (essentially the UK-based advertising that the CAP Code does not cover, ie radio, TV, or text services that are licensed by Ofcom). It is the broadcasters who broadcast advertisements on these platforms who are responsible for ensuring the advertisements uphold the BCAP Code, rather than the businesses who submit the advertisements. However, businesses should always make sure that their advertisements are compliant before submitting them, to ensure they can be shown or transmitted.
The BCAP Code covers similar principles and rules to the CAP Code, including restricting advertisements from being misleading or harmful or offensive. It also has specific guidance for certain subjects and sectors, like medical products and environmental claims.
For more details, access the full BCAP Code.
Key advertising regulations
Advertising materials must also comply with certain statutory Regulations.
These include The Consumer Protection from Unfair Trading Regulations 2008, which set out various rules that must be followed to ensure that ‘commercial practices’, including advertising materials aimed at consumers (ie B2C), are not unfair or misleading. For example, certain advertising practices are banned, like bait advertising (where customers are lured into engaging with an offer for one product and then, when this is unavailable, pitched an alternative product) or aggressive sales practices (eg undue pressure placed on customers to complete a sale).
The Business Protection from Misleading Marketing Regulations 2008 set out similar restrictions for advertising to other businesses (ie B2B).
For more information on these Regulations, read Marketing and the law.
Other laws governing advertising
As well as specific advertising laws, any content that a business uses to advertise its products must abide by various other areas of law. Such content includes images, videos, audio, and text content. Key relevant areas of law include:
Intellectual property law
Intellectual property constitutes intangible assets that arise out of creativity or innovation. Intellectual property rights (IPRs) can be owned. Businesses must make sure not to infringe on IPRs owned by anybody else when advertising their products. To do this, a business must only use IPRs that it owns or for which it has a licence to use that covers the distinct use they are making of the given intellectual property. For example, using a design, animation, image, slogan, song, code, or similar that has been created by someone else in advertising material may infringe the creator’s (or owner’s) IPRs unless the creator or owner has given consent for this creation to be used in these advertising materials in the specified manner. For more information, read Intellectual property.
Data protection laws
The UK’s data protection laws (eg the Data Protection Act 2018 and the UK GDPR) govern how private individuals’ personal data (ie information about them from which they may be identified) can be used by others. If a business uses personal data at any point in the process of creating and distributing advertising materials, this must be done in accordance with data protection law.
For example, if an advertisement involves a depiction of an individual or an individual’s name (eg if a business’ advertisement features one of their customers), the business must have a ‘lawful basis’ that they can rely on to justify their use of this personal data. Consent, for example, is often an appropriate basis.
If you’re using an individual’s image, you should also be aware of their image rights and should obtain formal permission to use their image in a manner that covers both data protection considerations and other considerations (eg privacy and trade mark rights).
Certain technologies that identify an individual’s device (eg a smartphone) or the individual using a device, eg data ‘cookies’, must also be used in compliance with the law. These technologies are often used in advertising to ensure that online advertisements are targeted to the highest potential customers. For more information, read Data privacy and cookies.
Law on competitions and prize draws
Any advertising initiatives that incentivise potential customers to engage based on the possibility of winning a competition or a prize draw must be careful to abide by the Gambling Act 2005 and other instruments that dictate how such initiatives can be run. For more information, read Prize competitions and free draws and How to set up as an influencer.
Defamation and falsehoods
If any of a business’ advertising materials say anything about or portray an impression of a person, the business must ensure that these materials are not defamatory. They may be so if their content has caused or is likely to cause serious harm to the person’s reputation (eg by disparaging their business, as may occur in advertisements comparing a business to its competitors). Businesses that make defamatory statements are at risk of legal action being taken against them for defamation. For more information, read Defamation and Defamation in Scotland.
Additionally, if false information about somebody is published with malicious intent, the publisher (eg a business that publishes such a statement in its advertising materials) will be at risk of legal action being taken against them for malicious falsehood.
Online behavioural advertising
Online behavioural advertising (OBA), or ‘behavioural targeting’, is marketing activity by which a business’ potential customers are targeted and delivered advertising content that they’re statistically likely to respond to based on data collected over time (eg data about this web-user and/or similar users). This data may be collected from various sources (eg from various websites as well as physical retailers).
OBA is an excellent tool for helping businesses to leverage the resources they have available for advertising in order to receive the greatest interaction from customers and, consequently, the greatest financial returns. The information used for OBA (eg names, location data, behavioural data, IP addresses and other unique identifiers) will almost always include personal data. Consequently, it’s important that any business engaging in OBA abides by relevant data protection laws (eg by ensuring they have a lawful basis to process data and by always using data for the purposes for which it was collected or for which consent was given). Most businesses will conduct OBA via another organisation, for example, a search engine or website. This organisation (eg the search engine) will hold most responsibility for data protection compliance, but it’s still important that businesses handle any personal data that they do have access to in accordance with data protection laws and that they abide by these laws if they collect any personal data that’s fed back into OBA processes (eg when collecting cookies).
Other advertising rules
The UK Government, the ASA, and other regulatory bodies (eg the Competition and Markets Authority (CMA)) are constantly reviewing advertising practices and the risks they pose, and updating guidance and laws and response to their findings. Consequently, many different sets of guidance exist to cover advertising across various sectors and product types. Some important and/or recent examples include:
Businesses should also be aware of the direct marketing rules if they’re engaging in any advertising and marketing via email. For more information, read Marketing and the law, Considerations for email marketing and Co-marketing and co-branding.