The Value of Advertising and Industry Standards: Facilitating Trade, Economic Growth, and Innovation

Transcription

1 2016/SOM3/CTI/SEM/007 The Value of Advertising and Industry Standards: Facilitating Trade, Economic Growth, and Innovation Submitted by: ICC Seminar on Sharing Good Practices and Experiences on Advertising Self-Regulation Among APEC Economies Lima, Peru August 2016

2 APEC SEMINAR Sharing Good Practices and Experiences on advertising self-regulation among APEC economies The Value of Advertising and Industry Standards: Facilitating Trade, Economic Growth, and Innovation Raelene Martin 22 August 2016 Lima, Peru ICC: THE WORLD BUSINESS ORGANIZATION Companies of all sizes and all sectors Chambers of Commerce local, regional and national Business Associations sectoral and national Worldwide Network Over 6,5 million companies and More than130 countries 1

3 ICC S MISSION To promote international trade, responsible business conduct and a global approach to regulation through a unique mix of advocacy and standard setting activities together with market-leading dispute resolution services. ICC S ROLE IN FACILITATING TRADE: AREAS OF INVOLVEMENT Areas of work ICC has three main activities: rule setting, arbitration and policy. Because its member companies and associations are themselves engaged in international business, ICC has unrivalled authority in making rules that govern the conduct of business across borders. Although these rules are voluntary, they are observed in countless thousands of transactions every day and have become part of the fabric of international trade. Rules-setting Arbitration Policy 2

4 IMPORTANCE OF GLOBAL TRADE Fosters global economic growth Sustainable international development Economic value creation Drives investment Global inclusion (inclusive and interconnected development) Promotes innovation Poverty reduction IMPORTANCE OF GLOBAL TRADE An open, free and fair global trading system in key sectors creates opportunities for innovation, sustainable growth and value-added employment 3

5 CO-OPERATION ACROSS SECTORS & GEOGRAPHIES IMPROVED FLOW OF GOODS/SERVICES Align best practices Improve flow of goods/services Reduce non-tariff barriers 4

6 IMPORTANCE OF GLOBAL TRADE Working together to achieve these objectives is ever more important in today s COMPLEX VALUE CHAINS & NETWORKED ECONOMIES ICC POLICY & ADVOCACY Digital Economy Marketing & Advertising Intellectual Property Taxation Competition CSR & Corruption Environment & Energy Commercial Law & Practice Customs & Trade Facilitation Banking Facilitating crossborder trade & investment Trade & investment 5

7 ICC COMMISSION ON MARKETING AND ADVERTISING Mandate: To promote high ethical standards in marketing by business self-regulation through the Consolidated ICC Code of Advertising and Marketing Communications Practice and formulate world business positions and initiatives to address government actions that affect marketing and consumer protection. CONSOLIDATED ICC CODE: THE GOLD STANDARD In existence since will mark the 80 th anniversary of the Code The ICC Code has served as the foundation and building block for self-regulatory structures around the world ICC Code harmonizes global best practices across sectors and markets; extends and strengthens SRO remits internationally APEC PSU report identifies the ICC Code as the global reference for international best practice/advertising self-regulation Helps industry build consumer trust by using high ethical standards and marketing products responsibly 6

8 WHY MARKETING SELF-REGULATION MATTERS Advertising key to competition & choice Consumer trust and confidence Protection of brands and reputation Need effective alternative to government regulation Cost-effective mechanisms to redress problems quickly and efficiently Global ad spend is on course to grow 4.6% to $579 billion this year, up from 3.9% growth last year Value of the industry Global internet ad spend expected to grow 3x global avg rate this year 15.7% Digital Media growth (many new players) Public attention on bad examples damages reputation for all Consumer trust essential to marketing effectiveness New markets: new potential, but unprepared Restrictions: alcohol, now food & beverage to kids Privacy concerns in online media Protection of children Green washing Regulatory pressure on high profile issues VALUE OF ADVERTISING 7

9 VALUE OF ADVERTISING VALUE OF ADVERTISING Global ad spend to grow 4.6% to $579 billion this year, up from 3.9% growth last year Mobile advertising expenditure expected to increase by $64 billion between 2015 and 2018, accounting for 92% of new advertising dollars added to the global market over these years Internet advertising is the main driver of global ad spend growth, driven by social media (31.9%), online video (22.4%) and paid search (15.7%). Global internet ad spend expected to grow 3x global avg rate this year 15.7%. Up to $260bn by

10 MOBILE AD SPEND GROWTH TO 2018 MOBILE = 87% ADSPEND GROWTH TO 2018 AVERAGE ANNUAL AD SPEND GROWTH % +6.3% +3.1% -5.8% +8.5% +1.8% +2.7% +2.2% 9

11 THE ECONOMIC IMPACT OF ADVERTISING Advertising-related Activities Audience-related Activities Direct effects Indirect effects Publishers Suppliers Suppliers Ad Sales Advertising Services Suppliers Suppliers Ad Spend Brands Suppliers Suppliers Consumers Induced effects Spill-over effects Extra jobs support increased consumer demand for goods/services across economy Skills, industry development, R&D, infrastructure, etc VALUE OF INDUSTRY STANDARDS The advertising industry is an integral part of the global economy, however diversity in advertising regulations can create challenges in encouraging demand for products across borders The broader adoption of advertising standards will help reduce unnecessary divergences in both advertising regulatory and self-regulatory regimes ICC Code is globally relevant and is flexible enough to adapt to different legal backstops and local needs 10

12 VALUE OF INDUSTRY STANDARDS: APEC ECONOMIES Advertising is an important driver of economic growth within APEC. Promoting alignment of regulatory frameworks to recognize a role for self-regulatory organizations (SROs) built upon international best practices will promote growth in, and trade amongst, APEC economies by reducing non-tariff barriers to trade Aligning advertising standards across the Asia-Pacific region will easier facilitate the delivery of advertising services, and enable business growth, greater regional trade and investment, non-tariff barrier reduction and drive economic growth among APEC economies VALUE OF INDUSTRY STANDARDS: ICC CODE IN PRACTICE Truthfulness not misleading Decency likely to cause offence sexual portrayal of women 11

13 VALUE OF INDUSTRY STANDARDS: ICC CODE IN PRACTICE Safety and health/children Social responsibility gender discrimination Social responsibility likely to cause offence APPLICATION OF THE ICC CODE IN APEC ECONOMIES In Australia: National code based on ICC Code In Chile: National code based on ICC Code In Singapore: National code based on ICC general principles In Philippines: Adopted ICC provisions for their national code In Canada: National code based on ICC Code In Mexico: National code based on ICC Code 12

14 REFLECTION ON OBJECTIVES AND LOOKING AHEAD To share information, policies and best practice principles regarding advertising standards to reduce barriers to trade and investment across APEC member economies To foster partnerships between governments and business, advertisers and the media in the advertising sector With the co-operation of all those present much has already been accomplished & we are on the right track to continue to build on these achievements! 13