asbof: The Advertising Standards Board of Finance Guide to the Operation of the Levy Scheme THE ADVERTISING STANDARDS BOARD OF FINANCE LIMITED

Transcription

1 asbof: The Advertising Standards Board of Finance Guide to the Operation of the Levy Scheme THE ADVERTISING STANDARDS BOARD OF FINANCE LIMITED 7 th Floor North Artillery House Artillery Row London SW1P 1RT Tel: Fax:

2 THE ADVERTISING STANDARDS BOARD OF FINANCE METHOD OF OPERATION The Advertising Standards Board of Finance Limited (asbof) is an independent body set up by the main representative organisations of those involved in non-broadcast advertising. Its purpose is to finance the self-regulatory system of advertising standards and practice. The asbof levy was voluntarily introduced after discussion with Government and the Office of Fair Trading and the scheme is operated under the guidance of all the Trade Associations concerned with the implementation of advertising. Those in membership of the Council of asbof are listed below. It is important that everyone involved be fully aware of the purpose of the scheme and of what is at stake should advertising practice not meet the standards which the self-regulatory system is designed to achieve. Advertising Association Committee of Advertising Practice Cinema Advertising Association Direct Marketing Association Directory and Database Publishers Association European Advertising Standards Alliance Incorporated Society of British Advertisers Institute of Practitioners in Advertising Internet Advertising Bureau Newspaper Publishers Association Newspaper Society Outdoor Media Centre Periodical Publishers Association Promotions & Partnerships Marketing Royal Mail Scottish Newspaper Society

3 1. LEVY 1.1 The levy is 0.1% of the advertising cost to the client for the categories of advertising defined in para The levy ranks as a normal advertising expense for tax purposes. 1.3 The levy must always be stated separately and not embodied in advertising rates. 1.4 The levy is not liable to Value Added Tax. 1.5 The wording for general use in Rate Cards and Standard Conditions of Acceptance of Orders is: 2. DEFINITIONS All advertising charges (except classified lineage and semi-display) are subject to a 0.1% Advertising Standards Board of Finance (asbof) levy, payable by advertisers to help finance the self-regulatory system administered by the Advertising Standards Authority. 2.1 The types of advertising coming within the scope of the levy scheme are: Press newspapers and magazines (including inserts) Outdoor Cinema Digital - display/banner, paid search, impression & affiliate charges - paid search charges (Pay per Click) - (Ad Serving charges are not subject to the levy) Video on Demand (VOD) Mobile phone Mobile phone ads, Internet paid search charges (cost per click), impression (viewed or clicking), payments to affiliate marketers in respect of links to retail websites, are brought within the scope of the levy as from 1 st May Advertising excluded from the levy is: Advertising outside the UK Television, radio and cable advertising by broadcasters licensed by Ofcom. These are subject to the basbof (Broadcast Advertising Standards Board of Finance Ltd) levy. This basbof levy scheme mirrors the asbof levy scheme, and has a separate Levy Guide. This guide is available on request from the basbof office, at the same address as asbof Advertising for medicinal products as defined by, and licensed under, the Medicines Act, the promotion of which is restricted to the medical, veterinary and allied professions. The exemption applies to products which are promoted for supply only in response to a medical prescription. It does not apply to medicines or allied products which are advertised to the general public and are available for purchase in pharmacies and other outlets.

4 2.2.4 Advertising of a party political nature, as this is not subject to the Code of Advertising Practice Classified lineage and semi-display advertising. These are subject to the Code of Advertising Practice. Their exclusion from the levy is simply due to the impracticability of levy collection on the very small units of expenditure involved. 2.3 The levy definitions in 2.1 & 2.2 apply to all advertisers, agencies and media companies, whether or not they are in membership of any trade association. The scheme includes Central and local Government and charities. 2.4 For clarification, Direct Mail is not covered by the Asbof levy. The separate Masbof (Mailing Standards levy) is payable on the postage cost of Direct Mail, and is charged and collected by the postal operators. 2.5 Production costs are not subject to the levy. In respect of digital advertising Ad Serving costs are similarly not subject to the levy. 3. COLLECTION AND PAYMENT 3.1 The levy will be collected from advertisers by advertising agencies or, in case of direct accounts, by media owners. 3.2 Advertising agencies and media owners will aggregate the separate levies payable to them and will in turn make a single quarterly payment to asbof. 3.3 asbof will send payment requests, which may be used as a remittance advice form, at the end of each quarter. 3.4 Payment of the levy will be due on the first day of the month following the end of a quarter, being 1 st January, 1 st April, 1 st July and 1 st October in any given year. The Treasurer of asbof will consider all requests to make alternative arrangements for payment. 4. METHODS OF CALCULATION 4.1 The aim is to create and operate a system which is simple, practical and fair to all concerned. The general rule is that the asbof levy is calculated as 0.1% of the cost to the client for the categories of advertising defined in para 2.1 above. However, there are differences in character, in scale and method of operation and in accountancy practice as between media groups. This has made it necessary to introduce some flexibility into collection and payment methods whilst adhering strictly to the common datum line of sums equivalent to a 0.1% levy on the defined categories of advertising. The variations from the general form of collection (as set out in para. 4.2 below) have been agreed with the individual groups and others concerned. The agreed formulae have been calculated in ways designed to ensure that the sums received by asbof are equivalent to a 0.1% levy on the defined categories of advertising as in paragraph 2.1.

5 To avoid confusion, the definition of the levy liability as stated in paragraph 1.6 will remain constant on all rate cards and standard conditions of acceptance of order. 4.2 Variations in Levy Calculation Press - Applicable only to Regional and Local Newspapers, Scottish Daily and Weekly Newspapers. In addition to the option to pay the 0.1% levy on direct advertising accounts themselves (where collection costs are disproportionate) a further option is open to owners of regional newspapers. Those who have difficulty in separating display from classified advertising in their accounts, may alternatively pay to asbof a levy of one-third of 0.1% on their total direct advertising, including classified lineage and semidisplay. On their advertising profile, this is calculated to approximate as nearly as possible to the 0.1% levy on display only Agencies specialising in classified advertising Advertising agencies or divisions of agencies specialising in classified advertising can have collection and accounting difficulties. It has, therefore, been agreed that they may have the option of themselves paying to asbof a sum equal to 0.025% of media billings to clients, including lineage and semi-display. This should approximate to 0.1% of defined categories Agencies specialising in financial advertising Agencies or divisions of agencies specialising in financial advertising may alternatively pay a sum equal to 0.075% of their client media billings related to financial advertising, including lineage and semidisplay. This should approximate as nearly as possible to 0.1% of defined categories. A full definition of financial advertising for this purpose is set out in the Appendix to this Guide Outdoor Due to difficulties of collection it has been agreed that:- Poster space under the size of four-sheet is excluded from the scheme. Any order placed by an advertiser direct with a poster contractor under the value of 500 excluding VAT, is also excluded. Standard conditions of acceptance and conditions of rate cards will be amended to read: All advertising charges (except poster space under the size four-sheet) are subject to a 0.1% Advertising Standards Board of Finance (asbof) Levy, payable by advertisers, to help finance the self-regulatory control system administered by the Advertising Standards Authority. All illuminated and painted signs for which advertisers are charged through advertising agencies will be subject to a levy on placement (not production) cost. This includes signs placed on football grounds and sports stadia. Signings such as shop fascias, which is normally placed

6 direct through contractors, will not be subject to the levy. 4.3 Overseas Advertising placed by overseas clients in UK media is subject to the levy, but advertising in British publications with a predominantly overseas circulation is exempt. 5. RECOGNITION AGREEMENTS Recognition agreements should incorporate a clause on the following lines: 6. QUERIES That (it) will conform to and support the provisions of the British Code of Advertising Practice including all decisions, rules and regulations from time to time issued by CAP and/or the Advertising Standards Authority. That it will support fully and conform to the provisions laid down by asbof regarding the levying of the media cost to clients, on all display advertisements. These require advertisers, which are clients of the agency, to pay to the agency, and for the agency to collect and pay to asbof, those sums required for the maintenance of the ASA and CAP, who ensure that consumers are made aware of, and are fully protected, under the provisions of the Code. Queries should be directed initially to the appropriate Trade Association, which will also accept enquiries from non-members in the same branch of the industry or media group (see list in para 8). 7. APPEALS OR DISPUTES Any problem that cannot readily be resolved by the Trade Association concerned should be directed to: The Treasurer The Advertising Standards Board of Finance Limited 7 th Floor North Artillery House Artillery Row London SW1P 1RT Tel: Fax: ADDRESSES AND TELEPHONE NUMBERS Advertising Association Tel: th Floor North Artillery House Artillery Row London SW1P 1RT Cinema Advertising Association Tel: Corinthian House 279 Tottenham Court Road

7 London W1T 7RJ Direct Marketing Association Tel: DMA House 70 Margaret Street London W1W 8SS Directory & Database Publishers Association Tel: Queens House 28 Kingsway London WC2B 6JR Incorporated Society of British Advertisers Tel: Langham House 1B Portland Place London W1B 1PN Institute of Practitioners in Advertising Tel: Belgrave Square London SW1X 8QS Institute of Sales Promotion Tel: Margaret Street London W1M 8SS Interactive Advertising Bureau Tel: Ingram House Fax: John Adam Street London WC2N 6LU Newspaper Society/ Newspaper Publishers Association Tel: St Andrew s House St Andrew Street London EC4A 3AY Outdoor Advertising Association Tel: Summit House 27 Sale Place London W2 1YR Periodical Publishers Association Tel: Queens House 28 Kingsway London WC2B 6JR Royal Mail Tel: Mail Media Centre Stukeley Street London WC1V 7AB Scottish Newspaper Society Tel: Lansdowne Crescent Edinburgh EH12 5EH

8 APPENDIX Categories of financial advertising available for alternative levy operation authorised by asbof 1. Dividend Notices, Closing of Transfer Books, Notices of AGM, Bond Drawings and Share Quotes These are usually run as classified advertisements, but sometimes, however, they are increased to display size to gain more attention. 2. Balance Sheets, Statements of Conditions, etc. These are extracted from companies Report and Accounts and therefore have to comply with the provisions of the various Companies Acts. 3. New Issues (Offers for Sale, Prospectuses, Tenders, Introductions) The contents of these advertisements have to be approved not only by the many professional advisors but also by the Stock Exchange Council. The advertisements themselves are a Stock Exchange requirement. (See Admission of Securities to Listing.) 4. Takeover Announcements All such announcements, including advertisements, are subject to the City Code on Takeovers and Mergers, and the code is enforced by the Panel on Takeovers and Mergers. All such advertisements have to be vetted by the Panel and have a responsibility statement included. 5. Interim Statements Under Stock Exchange regulations all quoted companies must either circulate an Interim Statement to shareholders or advertise in the Press. In most cases, therefore, the advertisements are a requirement to fulfill obligations. 6. Preliminary Results and Chairman s Statements Although not required to do so, most companies use one or both of these occasions to advertise their results, activities and prospects to interested audiences. Virtually all the factual information so presented is extracted either from the Return submitted to the Stock Exchange or from the Company s Annual Report (most of which is prepared to the demands of the various Companies Acts). 7. Tombstones These notices are advertised in connection with completed financial deals, some form of syndicated loan, credit facility or arrangement which has been finalised between a bank (or consortium) and the client. The item itself is naturally the subject of legal requirements on both sides and the advertisement purely records its completion it is placed for information purposes only. December 2014