ACMA decision on advertising to children – chance to win may be a competition and premium offer

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Premiums

ACMA considered whether the licensees had breached CTS (2005) 20 and CTS (2009) 33 regarding use of a premium offer in an advertisement.  Standard 33 (2) of CTS (2009) provides that an advertisement that contains a premium offer:

• must not make reference to the premium in a way that is more than merely incidental to the reference to the advertised product or service; and
• must not stimulate any unreasonably expectation of the advertised product or service; and
• must clearly set out any conditions that must be met before the premium may be obtained.

In determining whether the licensees had breached the CTS ACMA considered the meaning of “premium”. “Premium” is defined in the CTS 2005 and 2009 as “anything offered with or without additional cost that is intended to induce the purchase of an advertised product or service”.

The licensees argued that the TVC was a competition rather than a premium. This argument was based on previous clarification from the Australian Broadcasting Authority which provided that:

... the ABA did not hold the view that a competition is a premium. Competition gives viewers a chance to win something. A premium offer provides the additional product or service with no element of chance needed.

The licensees submitted that they had operated according to this advice since March 2005.

However, ACMA concluded that the term “premium offer” has a wide meaning. It found that the offer of a chance to win prizes by purchasing a product or service may be both a competition and a premium offer and that the definition provides that a premium is anything offered that is intended to induce the purchase of the advertised product. (Our emphasis) Further the definition did not confine a premium to being a product or service, or exclude a chance to win some other product or service.

ACMA concluded that the TVC did contain a premium and a competition and must comply with both the competition and premium requirements under the CTS.

Was the reference incidental?

ACMA then considered whether the reference to the premium was incidental. “Incidental” is not defined in the CTS 2005 or CTS 2009. In considering whether a premium is merely incidental the CTS outlines factors which may be relevant:

• the amount of time devoted to the premium offer compared to the amount of time devoted to the product or service being advertised;
• the way in which pictures, text or moving images are used to promote the premium offer; and
• the way in which sound is used to promote the premium offer.

Referring to the Macquarie Dictionary, ACMA decided that any reference in the TVC to the premium offer must be secondary to, or be of lesser importance than the primary product advertised. It was concluded that the reference to the premium in the TVC was more than ‘merely incidental’ to the advertising of the Paddle Pop product.

In forming this view, ACMA reviewed the TVC and concluded that even though the Paddle Pop product name appeared in the top left corner of the screen throughout the TVC and the voiceover referred to the product, the references to the premium were far more prominent and formed a substantial part of the TVC. Factors which ACMA considered to indicate that the reference was more than incidental were:

• the advertisement opened and closed with a visual reference to the competition (“It’s Lick-a-Prize soak-a-rama time”); and
• throughout the TVC references were made to the competition using bright colours, movement and showing prizes which may be won, while the voice over listed the prizes on offer and described how to enter the competition.

Outcome

ACMA did not record breach findings in relation to the use of premium offers as it considered that broadcasters should have the benefit of the findings of the inquiry to allow them to put in place appropriate processes and systems to ensure future compliance with the CTS. 

In response to the findings the licensees have undertaken a range of procedures including staff training and introducing procedures to ensure future compliance.

ACMA has also noted that it will amend the Guide to the CTS 2009 to clarify the position, being, that a chance to win competition prizes, offered with the intention of inducing the purchase of an advertised product or service, can fall within the definition of “premium”, such that relevant advertisements broadcast in “C” periods must comply with both the premium and competition provisions of the CTS 2009.

Contact Details

Melbourne
Dan Pearce, Partner
T: +61 (0)3 9321 9840
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Sydney
Ian Robertson, Partner
T: +61 (0)2 8083 0401
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