Advertising Rules Explained

Michael Hedges July 9, 2008

Rules on advertising are getting tougher and, often, tediously specific. Ad rules appear in media laws, consumer protection rules and commercial codes. Regulators, lawyers all, delight in their craftsmanship as much as seeing broadcasters pour over every sentence and clause – and every new interpretation. It’s rare – and revealing – when a regulator explains it all.

Swiss media and telecoms regulator OFCOM (Office for Communication) released a handy, dandy guide to advertising, sponsorship and product placement rules. The release comes as several new broadcasters are granted radio and television licenses. Nothing is new, really, since the major re-write of Switzerlands’ 2006 Law on radio and Television (LRTV) and the companion 2007 Order on radio and TV (ORTV). But the guidelines show just how complicated ad rules have become and the importance regulators place in enforcing them.

Swiss law, largely found in the LRTV 2006, clearly defines broadcast advertising and sponsorship separately. For broadcasters advertising exists when advertising time is available and that time is exchanged in “return for a fee or similar contribution” to a third party. Swiss law recognizes “public announcements” as advertising as well as “self-advertising” or self-promotion.

Sponsorship, also an acceptable form of broadcast financing, is different. Sponsors “participate in the financing of a program” in exchange, essentially, for brand promotion. Swiss rules for broadcast advertising insure separation from “the program” and limit the amount of ad time. Sponsorship rules insure “transparency” and prevent “undesirable influence over the content.”

Any television ad over 60 seconds is considered “program length advertising,” and must be identified (“This is an ad.”) plus it must be accompanied by either an audio or visual “separation signal.” 

The amount of advertising allowed depends on the broadcaster. Public broadcaster SSR-SRG is allowed advertising on television but not radio. Public television can sell 8% of its daily output to advertisers and 12 minutes per hour. Privately owned broadcasters may sell 15% of their daily output as advertising, with the sale 12 minute per hour restriction. This applies to radio and TV channels licensed in Switzerland and any foreign television channel received in Switzerland but not to foreign radio channels, for which there are no restrictions. Private radio and TV channels are allowed eight program length ads per day, totaling no more than 3 hours. The public broadcaster may not sell program length ads.

Like most regulators, OFCOM seems obsessed with strict definitions of and rules for interruptions, advertising or not. Breaks are not allowed in children’s programs or broadcasts of religious services. Feature films, TV movies, news and public affairs shows, political programs and religious programs may be interrupted for ad breaks, under various conditions. All other programs, usually referring to TV, can be interrupted each 20 minutes. In theory, explains the guidelines, a 25 minute television program can be interrupted twice so long as at least 20 minutes of program occurs between the end of the first break and the beginning of the second. It’s 20 minutes that matters.

But there’s an exception. The number of ad breaks allowed is calculated by the total duration of the program or movie including ad content. The example given in OFCOM’s guide says two breaks are allowed if a program or movie is 80 minutes provides there are 10 minutes of ads inside; ergo, at least 90 minutes. If less than 90 minutes, ads included, one break is allowed.

None of that applies to public broadcaster SSR-SRG. Almost. Programs, including movies, on public TV longer than 90 minutes can be interrupted only once.

OFCOM doesn’t even try to impose these rules on radio channels from outside Switzerland. Austria, Germany, France and Italy surround Switzerland. Some restrictions apply to foreign TV channels.

Regardless, ad breaks must be separated by at least 20 minutes on private TV, more restrictive on public TV and only in news, public affairs and religious programming broadcast from foreign channels seen in Switzerland.

Ads for distilled alcoholic beverages are banned, but not beer, wine or hard cider. And don’t try to be tricky with words. A non-alcoholic beverage cannot be advertised in a way similar to an alcoholic beverage and, please note, the product advertised must be available on the market.

Don’t even try to advertise prescription drugs. Medications that require “counsel” from doctors or pharmacists or “specialized consultancy” can be advertised with explicit restrictions on wording, including any warnings. Over-the-counter medications are not restricted.

OFCOM has retained and updated rules on self-promotion, which must be separated from “the program” and is considered advertising time, except when the promo only makes reference to “the program.” In other words, promos including any sponsor reference (“…brought to you by…”) are ads. Ad-lib comments from DJs about any commercial product or service that includes, for example, directing a listener to a Website where a product or service could be bought may fall under this restriction.

Sponsorship is different. OFCOM includes in this set of rules any program acquired from a third party and any sponsors that might come from that third party so long as the Swiss broadcaster “influences” the production. This includes co-productions. And a program may have but one sponsor.

OFCOM rules allow radio sponsors when a “moderator” is present. This is a bit hazy. OFCOM wants radio broadcasters to keep four months of recordings, just to keep everybody honest.

Sponsorship messages may be broadcast at the beginning and end of a program unless the “program” is less than a minute long. In other words, don’t get carried away with sponsor messages. If it’s a short “program” – traffic report, for example – only one sponsor tag is allowed. The sponsor tag cannot be longer than the program. A sponsor tag can appear before or after an ad break but not more than once each ten minutes.

Those tags must include “sponsored by…,” “brought to you by…,” “supported by…”. A sponsors brand can be mentioned so long as the sponsors name is attached. Contact points can be included in the sponsor tag but keep it simple. And, again, don’t try to be clever with words. An email address written to include a banned product (distilled spirits, for example) doesn’t fly. Words like “new,” “coming soon” or any sort of claim are prohibited.

News broadcasts and political broadcasts cannot be sponsored but political satire can be. Producers of alcoholic beverages cannot sponsor anything, except – maybe – mentioning a non-alcoholic product. Similarly, a big Swiss pharmaceutical company can sponsor a radio or TV program but no product can be mentioned in the tag.

The OFCOM guidelines as released don’t even mention tobacco products. All are banned and everybody knows it.

Perhaps the most recent addition to a broadcasters bouquet of revenue opportunities is product placement. This is a bit more tricky. Notification at the beginning of a program – obviously referring mostly to television – is “compulsory.” Essentially, a message at the beginning of a program needs to say something along the lines of “Company A placed Baggie Jeans in this program.” If the company name is itself banned from sponsorship the product name may be used.

There are, of course, exceptions. At the beginning of a program it is not necessary to mention “goods or services of little value” provided free to a producer or at a reduced price. Specifically, if the value of the product or service provided does not exceed 1% of the programs’ budget or CHF 5000 disclosure at the beginning of the program is not necessary. However, it seems, everything and anything must be disclosed at the end of a program.

And don’t try to make “an advertising statement” with product placement. On this subject, OFCOM guidelines use the word “illegal.”

Prizes for competitions do not, generally, fall under the product placement rules. There’s no obligation to mention products or services provided for contests under product placement rules but these contributions may be mentioned under sponsorship rules.

Switzerland’s advertising rules are, like all Swiss law, very logical. OFCOM, in offering general guidelines to broadcasters, emphasizes areas where the various revenue sources are forbidden and how they may and may not be presented. Not being in the European Union allows Swiss broadcasters a bit more flexibility, certainly in product placement. But, as in all of Europe, advertising rules are not an abstraction.

How do Swiss ad rules compare with others? Tougher? Easier? Let me know.

You can download the OFCOM ad rules guidelines in French, German and Italian from the OFCOM website.