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Advertising should be clearly distinguishable as such whatever form or medium used. If not, it is considered an example of covert advertising and therefore a violation of section 4 of the Danish Marketing Practices Act [DMPA]. This section makes it an offence to employ covert marketing methods.
The hidden nature of commercial communication is characterised by a deliberate intention on the part of the sender to disguise the commercial message and its purpose to induce the consumer to buy a specific product. This type of advertising is highly efficient because the recipients don’t realise that they are being exposed to advertising. The consumers are caught off guard, and are therefore easily manipulated to act in a certain way.
The present guideline is first and foremost intended as a tool for businesses, ad agencies, lawyers and other consultancies. It outlines the DCO’s position on how section 4 of the DMPA should be interpreted and applied, and presents the general ideas that lie behind his administration of the DMPA with regard to this provision. This guideline should be perceived as a “general advance indication” which comments on typical marketing methods and concepts. The guideline is not an exhaustive account of all matters regarding covert marketing activities and commercial communication.
It is for the courts to decide on a case-to-case basis whether the rules set out in the DMPA have been violated and whether it should be considered a criminal offence.
The present guideline is a revision of the May 2005 DCO guideline on covert advertising.
Printed media: newspapers, magazines etc.
Editorial copy and advertisements in magazines and newspapers must be separated clearly so that the two cannot be confused. This is important as editorial copy is trusted and regarded as proper journalism, the product of ideas, research and a critical approach to one’s sources. Journalists are considered objective and editorially independent.
The business which advertises in e.g. a newspaper is held responsible for the content and layout, i.e. the advertisement should be distinguishable as such, cf. the principles of good marketing practice set out in section 4 of the DMPA.
Similarly, it lies with the newspaper to ensure that an advertisement is distinguishable as such and does not form part of or gets mixed up with editorial copy, cf. section 34(1) of the Danish Media Liability Act (the rules on press ethic). Please see the rules on good press ethic issued by the Danish Press Council.
Complaints concerning Danish press and publications can be lodged to the Danish Press Council, or to the owner of the media itself (if printed media). The latter type of complaint may be lodged to the Danish Press Council if the decision reached by the enterprise itself is deemed unsatisfactory. It is required that the complainant has a cause of action, i.e. the person, organisation, business etc. was mentioned, depicted or in any other way identified in the media. The Press Council may also conduct enquiries on its own initiative in the event that the case is likely to have a certain influence or considered of general importance; in reality, this does not take place very often.
However, in 2003, the Press Council issued a statement in which it criticised an advertisement in a magazine issued by a trade association. Its contents and layout was presented as editorial copy. Where the Press Ethical Rules are violated, this may also entail a violation of section 1 of the DMPA which requires business and trade to comply with the principles of good marketing practices. To do this, they must also comply with other relevant codes and legislation. The DCO has long been concerned over the development in the area and calls on the press to enforce discipline within its ranks, e.g. with the Press Ethical Rules.
In the following, a number of cases concerning printed media are discussed in which covert marketing activities, in the DCO’s opinion, were involved.
3.1. Reciprocal agreements between publishers and traders
Covert marketing is when a publisher agrees to print an article about a product/service for a trader which in return offers money, dinners, travels or hotel stays for journalists or inserts an advertisement.
It is also covert marketing when a publisher agrees to print an advertisement which in layout and contents resembles an editorial article.
This mix of advertising and editorial copy is known as ‘advertorials’ – a genre frequently used by free, weekly pamphlets, distributed on a door-to-door basis. The articles are characterised by detailed and laudatory descriptions of a company or a product. Various named – and sometimes depicted – people praise the product and its outstanding qualities while referring to their positive experiences with the product(s). Health products and alternative medicines are often advertised this way, but it is a widely used marketing technique.
If, following a reciprocal agreement, a publisher undertakes to mention or make an article about a company which in the main does not look like an advertisement although its objective is to promote a specific product or service, the publisher must as a minimum add the word ‘advertisement’. The word ‘advertisement’ must be immediately visible to the reader. Do not use fine print or put it in the corner. And do not print it on a coloured background which may blur the type. If the article covers more than one page, the word ‘advertisement’ must, as a basis, appear on all pages.
3.2. Promotions and advertorials
“Advertorials” or “promotions” are advertisements ordered by advertisers and written and published by the magazine in which it is placed.
Advertisements whose layout and contents may make it virtually unrecognisable as such and lead the reader to believe that it is editorial copy must, as a minimum, be labelled with the word ‘advertisement’, cf. 3.1.
The words ‘advertorial’ or ‘promotion’ are considered inadequate substitutions as readers cannot be expected to be familiar with these terms and associate them with advertising.
A magazine may of its own initiative come up with ideas for a photo shoot or an article about a product or a company. Where the magazine introduces the idea to the company in order to have the story fully or partially funded, it must be indicated in connection with the article/reference/photo shoot that it has been subsidised and therefore is a piece of advertising.
3.3. Press releases
Press releases covering business affairs usually take the form of editorial material and thus often pass for a news item. However, in the event that a newspaper or any other media decides to bring the press release or convey its message, the media must ensure that sound journalistic evaluation lie behind the publication, cf. appendix 1. If not, it may constitute an example of covert advertising, see section 3 above.
3.4. Advertising wraps
An advertising wrap is a full-size advertisement that covers the front cover, the inner front cover, outer back cover and back cover: the front page, page two, the next-to-last page and the back is in fact one big advertisement. The front page is usually reserved for editorial news; ad wraps turn this section of the paper into an advertisement.
An advertising wrap, ordered by a telecom service supplier, was made to look like the editorial part of the paper in which it featured. The paper’s flag formed part of the advertising wrap, and the most prominent headline congratulated a member of the royal family on his birthday. In connection with this case, the DCO declared that advertising wraps must be presented in a way that makes it easy to identify it as such. Headlines and text should be easy to distinguish from the editorial ditto for readers. The DCO finds that advertising wraps should be labelled ‘advertisement’ if necessary.
3.5. Features in newspapers, magazines etc.
Newspapers and magazines frequently sent out issues that partly or fully contain specific features. If the main feature is a commercial event e.g. a new film, an exhibition or the opening of a department store, editorial matter and advertising must be separated clearly. Great care must be taken to ensure that the layout and presentation of the feature is easy to distinguish from a commercial campaign.
To what extent this will be considered an example of covert advertising depends among other things on whether commercial interests have had a say in the presentation of the feature and whether payment has been accepted for copy which cannot be categorised as traditional advertising.
An issue of a magazine covered a new film about to come out. Not only did the film and its approaching opening night receive extensive editorial coverage in several articles; the event was also heavily advertised in the magazine. Both the articles and the advertisements were scattered across the pages. The background from the advertisements was repeated several places in connection with the page references and two regular columns on editorial topics. The DCO informed the magazine that this type of presentation conflicted with the principles of good marketing practices in that the articles supported the advertisements in a way which tied the editorial and commercial elements in as if it were an integrated marketing campaign. The magazine accepted to discontinue this kind of marketing.
3.6. Separate advertising supplements in magazines and newspapers
Separate advertising supplements are often distributed along with the papers. Subjects like lifestyle, gardening, cars, fashion and travel usually fill the columns. Supplements must be labelled ‘advertising supplements’ very clearly.
It should be noted, however, that this label does not entitle the publisher/advertiser to include traditional advertisements alongside advertising masked as editorial content. Commercial content should be easily distinguishable as such. Headlines, text and visual images must not confuse readers as to its true nature. To use a type different from the editorial one or the like when referring to a company or a product may not necessarily prevent the piece from being regarded as editorial content. See 3.1. above.
The DCO informed one paper that the advertising supplement ‘Fashion, Home and Lifestyle’ was not labelled ‘advertising’ as required. Another paper along with which the same supplement was distributed had taken care to ensure that it was labelled correctly.
3.7. Free newspapers and magazines
The circulation of free and publicly available newspapers and magazines is entirely based on advertising. This convergence of commercial and media interests means that both parties must take extra care to keep paid and editorial content separated in order to observe the principles of good marketing practices as well as the principles of sound press ethics.
3.8. Newspapers and magazines targeted to business and trade
Editors are also required to keep editorial and commercial copy separated when the magazine etc. is targeted to business and trade.
A paper offered ‘editorial profile solutions’ to retail sellers such as editorial copy next to an advertisement or product tests with photos published as editorial content. The DCO found this to be an example of covert advertising and in conflict with the principles of good marketing practices. The paper accepted his evaluation and subsequently changed the concept.
3.9. Commercial publications distributed to consumers
It is now common that marketing activities include commercial publications targeted to consumers. Look and contents often resemble that of ordinary papers and weekly magazines. Articles about consumer matters as well as the company and its product line usually make up the contents. They are usually available at the business premises, distributed door-to-door or sent to customers.
The DCO holds the opinion that the name, trademark or logo should appear from the publication in a way that conveys its commercial purpose clearly.
3.10. Material produced for public information
More and more public authorities, municipalities and counties included, send out information material to the public, often in the form of folders, leaflets or the like.
Advertisements may feature in such information material as long as advertising and editorial matter is kept strictly separated.
When advertisements feature in material produced for public information, it is advisable to bear in mind that it may be perceived as an official blue print or endorsement if a commercial enterprise and/or its product line appears from this kind of material.
Radio and TV programmes
Section 72 of the Danish Radio and Television Broadcasting Act lies down that advertising should be easy to distinguish from regular programmes. Sponsored programmes must be clearly identifiable as such by appropriate credits appearing at the beginning or end, or both, of the programme, showing the sponsor’s name or trademark (logo), cf. section 80 of the above Act.
Pursuant to section 8(3) of the Executive Order concerning Radio and Television Advertising and Programme Sponsorship, the sender/advertiser must be identified by means of name, logo or other business emblems in the advertising.
The broadcast management is responsible for observing the rules in the Radio and Television Broadcasting Act – also when it comes to keeping commercials and regular programmes separated.
The Radio and Television Board is the competent authority with respect to radio and television enterprise. The Board also has the competency to decide, among other things, in matters where radio and television enterprises have violated the Radio and Television Broadcasting Act with respect to its provisions on identification of advertising, sponsor identification and sponsored programmes.
The provisions in the Radio and Television Broadcasting Act are derived from the Directive ‘Television without Frontiers’. The EU Commission proposal of 28 April 2004 fleshes out how to assess covert marketing activities in relation to radio and television. This proposal forms part of the framework against which the Radio and Television Board makes its decisions.
The Radio and Television Board has dealt with several cases regarding the identification of commercial content on radio and television.
Special legislation governs this field. It follows from section 9(1) of the Danish E-commerce Act that:
‘All commercial communication that is part of or constitutes an information society service shall be framed and presented so that it is clearly identifiable as such. The party on whose behalf the commercial communication is made shall be clearly identifiable.’
The Internet is a very popular place for advertising in that it leaves more room than other media for dynamic and creative marketing activities. Websites often contain games, films, full-motion commercials and banner advertisements.
Moving features and sound leads to more intense and direct communication with website users which in turn means that it becomes harder and harder to distinguish between information, commercials, entertainment and games.
Internet advertisements should be clearly distinguishable as such and it should be stated clearly on whose behalf the advertisement is shown, cf. the section above.
When targeted to children and young people, it is even more important that the age group for which the commercial communication is intended is able to discern. See 2.1. above.
The requirements set out in section 4 on identification of commercial communication are tightened when compared to those set out in section 8 of the same Act on children, young people and marketing. This means that great care should be taken to ensure that commercial communication is straightforward and easy to distinguish as such – also in interactive media. Online games in which brands and products used as props appear regularly may therefore violate the above rules.
A game promoting marketing activities where the commercial intentions behind are obvious is, on the other hand, legal if the game is found on the business’ own website. Products, brands, logos etc. which do not belong to the trader must however not appear in the game or plays.
If a business buys its way into a chat room or fun sites in order to regularly expose children and young people to commercial messages and advertising, it acts in breach of section 8, subsection 1 and, depending on the circumstances, section 4.
Children and young people use new media frequently for both work and fun. When they seek out websites which contain games, play and fun, they are quickly carried away by these activities.
This is why it is very important, as a basis, to draw a clear line between entertainment, games, and play activities on the one hand and interactive advertising on the other when talking children, young people and marketing.
Films (motion pictures)
Product placement has become a stable feature of today’s film productions. Brands pop up invariably to make the films mirror everyday life and become more realistic. It is usually the property master that takes care of the contact to the companies from which the props are purchased, borrowed or handed over for free.
The explanatory notes concerning section 4 states the following: No absolute requirements apply as to whether the identification of the sender should take place in the advertising or in connection with it, even if this is the most practical procedure. The identification requirement will be considered fulfilled where, following an agreement concerning the display of specific products, it is stated in the roll-up titles before or after the film that products supplied by one or more businesses were used or displayed according to agreement.
To have one’s products promoted in connection with a children’s film will not in general be in keeping with the considerations that business and trade is required to take under section 8 of the Marketing Practices Act. This applies regardless of whether the existence of such agreement is stated in the rolling titles. Children and young people will rarely read these titles; the youngest age group cannot read it whatsoever.
Many films intended for a grown-up audience are likely to appeal to children and young people, who may watch these films. Business and trade should therefore thoroughly consider whether these films should be subjected to the same standard with respect to product placement as the children’s films mentioned above.
7. Objects of art (books, paintings, music etc.)
If a writer, musician or painter agrees to advertise for a private enterprise and/or its products, or agrees to make mention of or use a private enterprise’s products in their respective pieces of art, it will constitute a clear example of covert advertising unless it is stated clearly and visibly that an agreement has been entered into and with whom.
Listeners, readers and art lookers trust the piece of art to be the result of talent and personality. They do not expect a commercial tie-in.
In a sponsorship marketing program, a corporate sponsor commits itself to support, often financially, for instance athletes, sport clubs, clubs in general, exhibitions, museums, theatres, schools and day care institutions in exchange for promotion of the company. Depending on the circumstances, such a sponsorship may be considered a covert marketing activity. The DCO has not dealt with any complaints regarding sponsorships and covert marketing yet.
One can say it is an example of school sponsorship when a corporate sponsor donates free materials and instruction to a school. Children may start developing a liking for the sponsor and its products, without even being aware of it. This indirect commercial pressure on children in schools and day care centres prompted the DCO to list a number of recommendations and principles regarding in-school marketing activities and marketing in day care centres in his guideline ‘Children, young people and marketing’. They are aimed at eliminating this commercial pressure – whether it is overt or covert. See 2.1. above.
9. Advertisement display pillars and poster people: Ways of appearing in advertising
The media has dealt with this issue on several occasions. While the DCO has not handled any complaints regarding this issue yet, he holds the opinion that it may constitute an example of covert advertising. In order to be so, an agreement has to exist between the business whose products are being promoted and the person who displays the advertising. To present a gift to someone or to put goods or products at someone’s disposal without obliging the receiver to use the gift or the product in any particular way is not considered advertising.
9.1. Celebrities and other “famous” people
Some private enterprises give their brands away for free – usually clothing, jewellery, bags or watches – to celebrities in order to “build buzz” for their brands, hoping that if the brand is worn by a famous person, then others will follow. If the business makes arrangements with the person(s) as to how they should wear the article, the persons become an advertisement display pillar when parading the brands in public. Being role models to many people, the effect of this kind of celebrity advertising is likely to have a huge impact; however, it constitutes an example of covert advertising.
A celebrity might also enter into an agreement with a business to do promotion for which he or she is paid. The general rule is obviously that the advertising must be easy to identify as such. If e.g. a footballer is paid to do the usual exultation in front of a specific advertising hoarding after having shot a goal, then it is considered an example of covert advertising.
9.2. Ordinary people
Ordinary people may also be offered brands at a reduced price or for free in exchange for using them on a daily basis and/or according to instructions/recommendations. This also constitutes an example of covert advertising according to the DCO. As display pillars, they may inspire family, friends and colleagues to purchase the product.
9.3. Children and young people
Children and young people influence each other’s taste in food, drinks, sweets, clothing, toys, music, mobiles etc. Some businesses take advantage of this trend by making arrangements with other young people to display the business’s brand at popular hang-outs – discos, cafés etc. Dressed in the latest fashion outfit or equipped with the latest mobile, the young person get his/her peer group’s attention when promoting the products and, as a result, provide inspiration for the next purchase. This, however, constitutes another clear example of covert advertising, and it will be considered an aggravating circumstance if this kind of marketing activity deliberately is designed to target children and young people.