Why adland can’t play by the rules

The directive on broadcasting fails to understand the vital role advertising has to play in wealth creation. John Shannon explains why he believes it must not be hampered by Euro regulation

The current review of the European Commission’s directive on broadcasting in Europe is highlighting a number of misconceptions and prejudices about the role of advertising.

Generally, European Commissioners and MEPs recognise the social and economic value of commercial communications. But there remains a core of anti-advertising hardliners who continue to seek severe pan-European legislative restrictions.

Whether motivated by political expediency, political correctness or by a genuine belief that consumers need greater protection, this anti-advertising lobby risks damaging the still-frail economies of Europe and, ironically, the consumers they seek to represent. Their attitude also makes a mockery of the free-trade ideals that underpin European integration.

Those seeking to restrict advertising still seem to believe that it somehow forces people to buy things that they do not want or need and that it inflates retail prices. Some even regard advertising as a suitable vehicle for providing detailed information about a product’s cost, purpose and ingredients, thereby duplicating the role of packaging.

It seems difficult for them to understand that although advertisers use commercial communications to encourage people to buy their products or services, a company can only achieve success if it satisfies consumer requirements; that advertising may encourage trial, but can never secure repeat-purchase if the consumer rejects the product.

It is equally important to refute the argument that advertising pushes up prices. Advertising is expensive to create and to distribute, but its cost is fundamental to building mass markets, which in turn generate the economies of scale that bring prices down to affordable levels.

Europe’s food and drinks industry, for example, offers quality, consistency, safety and choice at prices so low that food is no longer the largest single item on the family budget.

On a broader scale, it must be emphasised that advertising plays a key role in driving economic growth. It is central to effective business practise and therefore to sustaining and boosting production and the creation of wealth and employment.

Numerous examples of inappropriate laws being imposed in the name of European legislative harmony have highlighted the importance that member states attach to running their own affairs.

Advertising is no exception. Working within local cultural and legal conditions, self-regulation on a local basis has been shown to be the most effective way to protect the consumer. It has also been adapted to deal quickly and effectively with the problems presented by cross-border media and advertising.

For advertisers to continue to fulfil the role I have outlined they must be allowed commercial freedom of speech. If not, their ability to satisfy demand and generate wealth will be curtailed.

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