New Regulation, New Rules, New Ethics

Simon Rothon

Senior Vice President Global Marketing Services

Unilever

Unilever Facts

• Worldwide sales - €40 billion• Employees – c.200,000• Research & Development - €1 billion per annum

(Unilever Food and Health Research Institute)• Manufacturing sites – 337 across six continents• Advertising & Promotion - €5 billion

(world’s second largest advertiser)

• 150 million times a day, in 150 countries,

people use our products at key

moments of their day

Our Portfolio

The Media Landscape

Then NowChaos Theory

BreakoutSessions

Today’s Panels:• Digital re-aggregration of media dust

• Digital is making the media universe fly apart at an accelerated rate

Rishad

Peter

John

Bob

TelevisionThe :30 is Facing Serious Challenges:• Proliferation of Channels• Performance Decline• DVR Penetration

Demand for Broadband grows: Penetration clears

50% of all HH’s

Watershed Moment: October ‘05

Institutions getting Hit Hard: Music

Source: New Yorker Conference “2012” – Music

Advertising Self - Regulation

• 40 years of compliance with the Advertising Standards Authority code

• Now backed by statutory powers• Govern the rules laid down in Codes of

Advertising Practice• “Legal, Decent, Honest and Truthful”

Statute Law

• Tobacco, alcohol, cars, gaming, financial services, food

• Toys, aviation, social networking

UK Stature Law Database

78 pieces of newly enacted legislation up-loaded on August 17th

Some examples:

• The gaming machine (circumstances of use) regulation 2007

• The national minimum wage regulations 1999 (amendment)

• The companies (interest rate for unauthorised political donation or expenditure) regulations 2007

• Public health (aircraft) (amendment) (Wales) regulations 2007

European Framework for Self - Regulation

• Major effort from WFA (EASA) to embed self-regulatory framework

• In 5 years from 10 to 27 European states participating

• Objective is to have self regulation recognised in the law

• Need to inform and educate those states where there is little history or tradition of self-regulation

Rama Ad

In breach of Article 15 of Hungarian

national code

Regulation of New Media

• Key principles should still apply• National sanctions not easy to enforce• Option for “rogue” companies to go offshore • Can take action cross-border in Europe but not

Feasible further “offshore”• Current initiative through International Chambers

of Commerce

Television Without Frontiers Directive

Audio Media Services directive

• A positive initiative to address the issue • Drafting proving to be a challenge for legislators

and stakeholders (six European Parliamentary Committees)

• Issues to be resolved by Commission:

i) Regulation of e-commerce (transactions vs. promotion)

ii) Linear vs. non-linear definition

iii) Global sanctions

Rationale for Self Regulation in New Media

• “Goodwill” the major component of brand valuations

• New media invite much closer engagement • A stronger imperative to be legal, decent, honest

and truthful

But..

Issues on “Rogue” traders, fraud and “Mal-ware” can affect legislative environment for legitimate advertisers

Doing Well by Doing Good

• Consumer expects high standards of ethics and responsible behaviour from advertisers

• Brand equity enhanced by embracing a relevant social cause

• Transition from “ideas” to “ideals” • Examples: Dove, Persil, Flora• New media lend themselves to this “interactive”

approach

Becel adBECELMISSION:TO HELP MAKETHE WORLD’SHEARTS HEALTHIER

360 Degree Marketing

• Co-invention of content and channels• Identification of all relevant touch points with the

consumer• Demands consistency of message tone and

manner • Should lend itself to self regulation across all

media

Draft Findings of Major European Audit of Compliance with Self Regulatory Codes, July 2007

• 8 country study• 1760 advertisements reviewed• 1707 found to be compliant with Codes of

Practice • 53 found to be in breach (3%)

July 2007 Compliance Audit

• 940 internet advertisements reviewed (“pop- ups and banners)

• None found to be in breach of Codes

Challenges for both Legislation and Self-Regulation

Nature of complaint: %

• Issue of “taste” across different viewer groups• Need for impartial and objective adjudication

Legality 19

Misleading 39

“Offensive” 19

Denigration 6

Other 17

New Media, New Regulation, New Ethics?The Way Forward

• Major role of UK in evolving international regulatory framework • UK voluntary codes adopted as basis of European framework• Push for adoption of Global Framework through International

Chambers of Commerce (120 countries)• Self-regulation continues to be the optimum approach as “New

Media” become “Media”• How do you maintain legislation for an industry which evolves

every 3 months?