Payday loan brands must prioritise emotion as ad scrutiny continues

The Broadcast Committee of Advertising Practice (BCAP) has decided not to implement scheduling restrictions around payday loan ads, but payment brands face a further challenge in ensuring their ads don’t exploit vulnerable consumers.

A consultation had looked into whether it was necessary to introduce scheduling restrictions on the television advertising of high-cost short-term credit (HCSTC), a category more commonly referred to as payday loans. Scheduling rules are mainly used to limit exposure of a particular audience, typically children and young people, to advertising for products that should not be directed at them.

However, the new scheduling restrictions for payday loans brands was rejected yesterday (June 30) by the BCAP.

The consultation was launched after research by charity The Children’s Society argued that ads for payday loan brands were targeting children in a bid to get them to ‘pester’ their parents.

It called for a ban on HCSTC ads appearing around TV programmes aimed at children, the introduction of a 9pm TV watershed and additional restrictions on the content of these ads.

There were also wider concerns around these types of ads targeting “financially vulnerable” consumers and ‘normalising’ the use of payday loans.

Shahriar Coupal, director of the CAP and BCAP committees, told Marketing Week that since the economic downturn it was “monitoring concerns” around ads that might unfairly exploit vulnerable people, but that scheduling restrictions should not be seen as an automatic response.

“The short of it is that it wasn’t clear to us what harm would be prevented or lessened by scheduling restrictions. That’s the crux of the matter,” he said.

“There are societal concerns about many products. We can’t simply ban them before 9pm cause of those concerns. There has to be evidence of harm.”

Shahriar Coupal, director, the CAP and BCAP committees

A further review into ad content

However, even though scheduling restrictions will not be implemented, brands such as Wonga aren’t out of the water just yet. The BCAP has announced it is now launching a further review to examine whether its rules and guidance on the content of HCSTC are fit-for-purpose, with the outcome expected in early 2017.

“We want to gain a clearer understanding of borrowing behaviour. It might require a primary research element, which would likely look at the content of ads, and how they might trigger borrowing behaviour that could lead to harm,” Coupal clarified.

One payday loan brand that has actively tried to battle the negative headlines is Wonga. It ditched its ‘Wongies’ puppet ads in favour of championing hard-working people and aimed to go “above and beyond the statutory guidelines”. In particular, Wonga pledged to work directly with media outlets to self-impose ad restrictions to mitigate its risk of appealing to the young or vulnerable, and to screen all TV stations to ensure its ads didn’t target under 18s.

READ MORE: Wonga’s marketing director: “If we can turn the brand around it will be groundbreaking”

Speaking to Marketing Week in May last year, its marketing and brand director Christopher Bibby explained: “From a TV perspective Wonga will now do a weekly audit of every show and calculate how it indexes for an under 18 audience, and remove our ads if necessary. We will also remove ourselves from channels with a bias to children. We want to forget about the Wongies altogether, that is a closed chapter.”

And the Advertising Standards Authority says it has seen a declining number of consumer complaints, which Coupal ascribes to a “change in brand behaviour” following it introducing guidance for HCSTC advertising back in 2014.

In 2013, 292 complaints relating to 145 HCSTC TV ads were received, compared to 147 complaints relating to 44 TV ads in 2015.

“In 2014, we produced guidance after having done a content review of the ads. We want to make sure they don’t trivialise the serious nature of payday loans,” added Coupal.

“Audience viewing data shows us that they are moving further and further away from children’s TV, and we’ve already seen in change in nature of advertising. So they are moving in the right direction.”

No room for complacency

Despite the inaction from the BCAP, Ian Stephens, managing partner at brand consultancy Saffron, says brands such as Wonga would be wise to continue to reassess their tactics.

“Traditionally, payday loan brands have been keen to make it look super simple to borrow money and as easy as buying a packet of crisps.”

Ian Stephens, managing partner, Saffron

“That has been a deliberate strategy. But this new review is going to put a spanner in the works,” he said.

As uncertainty creeps in ahead of the verdict in 2017, he predicts brands such as Wonga to continue to go down a more “serious” route, and to imitate bank brands such as Lloyds in trying to appeal on an emotional level.

He explained: “I suspect they have seen it coming, but this review makes it more real and could be quite challenging. They will have to take a more emotional route instead of focusing on instant gratification. This is what the banks do – even if you are using money to pay off credit card debt, their tone is based around about investing in your future.”

When asked by Marketing Week for its views on the consultation report, Wonga refused to comment.

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