Online marketing and the CAP Code - what you need to do

Recent changes have meant that online marketing communications are now subject to more stringent regulation. If you conduct any online marketing, it is important that you understand these changes.

What has changed?

Until recently, online marketing was relatively loosely regulated. As on 1 March 2011, though, marketing messages and content under your business’s control must comply with something called the non-broadcast Committee of Advertising Practice (CAP) Code.

The CAP Code now applies to a wide range of online advertising and marketing materials. It applies to material regardless of whether or not you have paid for it. The material that comes under the scope of CAP now includes:

• banner ads
• PPC ads
• pop-ups
• paid-for listings on things like price comparison sites
• ads contained within emails
• any statement on your website promoting your products or services
• any marketing communications under your control which you do not pay for – for example social networking sites.

What is the CAP Code?

The CAP Code is a code of practice that governs non-broadcast advertisements, sales promotions and marketing communications. It is written by the Committee of Advertising Practice, and administered by the Advertising Standards Authority.

Broadly, the purpose of the Code is to ensure that statements made about products or services are accurate and not misleading. The Committee itself says that compliance with the Code should mean that “marketing communications are legal, decent, honest and truthful and consumer confidence is maintained.”

How do I comply?

There are 21 separate sections of the Code. Some of the sections apply generally to all areas, while others apply to specific trades, products, or services.

It is very important that you read the full CAP Code in order to familiarise yourself with all of the rules that apply to you. We have compiled a list of some of the most important rules to which your online marketing must adhere – but you should remember that this list may not be exhaustive, particularly if you sell things like financial products, tobacco, food, or weight control products.

Some of the most important provisions of the Code include:

• it must be clear to consumers when something is a marketing communication
• it must be clear to consumers when an unsolicited email is a marketing communication, without the recipient needing to open the email
• your commercial intent must be clear in all your communications. You may not pose as a consumer
• any advertorial must be clearly marked as such, for example by heading them ‘advertising feature’
• marketing communications must not mislead, either by omission or by the inclusion of material, misleading information
• any marketing communication that includes the price of a product must also include: the main characteristics of the product; the identity and address of the marketer; delivery charges; notification of the consumer’s right to cancel or withdraw their order, where applicable
• subjective claims must not be presented as fact
• you must be able to substantiate, with documentation, any claims made in marketing materials
• marketing materials must not include anything likely to cause serious or widespread offence, encourage or condone lawbreaking, or encourage or condone antisocial behaviour

In the case of sales promotions:

• you must make a ‘reasonable estimate’ of response, and ensure that you are capable of meeting the response
• you must not encourage a purchase as a precondition of application for a promotion, if the stock of promotional items is limited
• you must normally fulfil applications within 30 days
• all ‘significant conditions’, including methods of participation, free-entry routes, start and end dates and so on, must be clearly communicated.

Again, please note that this list is not exhaustive. You should read the CAP Code yourself in order to familiarise yourself with the rules that apply to your marketing communications.

What else do I need to know?

In addition to the CAP Code, there is a range of other rules to which your online marketing communications must adhere. These include the Electronic Communications Act 2000 (which requires you, amongst other things, to get opt-in permission from recipients of email marketing communications unless they are customers, and to provide an opt-out link with every email), and the Distance Selling Regulations.

It is vitally important that you understand and comply with your responsibilities and obligations. If you are in any doubt, make sure that you seek independent legal advice – or contact the Advertising Standards Authority for one-on-one help.