Consultation outcome

Government response to Online Advertising Programme consultation

Updated 25 July 2023

Ministerial foreword

Digital technologies have become central to how we communicate, do business and live our lives in the UK. Online advertising is key in supporting our thriving digital economy, funding many of the digital services upon which we all now rely, and promoting the development of new skills and investment in our creative industries.

As a top-performing and fast-growing industry, the online advertising sector acts as a leader in innovation, customer engagement, competitive prices and the setting of shared industry best practice. Having left the EU, we can take our own proportionate approach to regulation that works to drive innovation and sustainable growth, whilst keeping UK internet users safe from criminally-motivated actors and harms associated with illegal advertising: from cyber crime and online fraud, to modern slavery.

This document summarises the responses to our public consultation on the Online Advertising Programme. We are delighted with the engagement in our consultation from stakeholders across industry and beyond. Your input has been invaluable, helping us shape the future of online advertising regulation in the UK.

The Online Advertising Programme aims to support sustainable growth for the advertising industry, as outlined in our Creative Industries Sector Vision. The Programme is part of our wider pro-innovation approach to governing digital technologies set out in the Plan for Digital Regulation. It will complement other digital regulation reforms, including the Online Safety Bill (OSB), the Digital Markets, Competition and Consumer Protection Bill, and the Data Protection and Digital Information Bill. The Programme will build a fit-for-purpose, agile regulatory framework, that protects internet users from bad actors and particularly under-18s from online advertising fraud, illegal content and illegal adverts, while supporting the long-term, sustainable growth of the online advertising sector.

Over the past decade, the industry has become a key revenue source for many businesses, and provided services that highly benefit UK internet users and customers.

It is clear from the responses we received that increasing trust in online advertising is vital for the growth of the sector. However, the scale and speed of development in this field has presented a number of challenges. A lack of transparency and accountability in the supply chain, combined with misaligned incentives, has led to insufficient action to address illegal harms associated with online advertising - negatively impacting consumer trust. More must be done, both by the government and by those across the whole advertising supply chain, to prevent bad actors using online advertising as a method of reaching victims, and therefore to support the success of this important industry.

That is why we are now announcing our intention to issue in due course a further consultation for a package of legislative reforms to empower regulators with the right tools to address these issues, working hand-in-hand with industry to find the right balance, with growth, trust, and consumer safety as our priorities. In advance, the Department will also be convening a taskforce to bring together industry and government to explore non-legislative action to address illegal harms arising from online advertising and increase the protection of children. This targeted package of measures will hone in on illegal adverts as defined under existing criminal provisions, and most importantly, protect children and young people from exposure to this criminal behaviour.

I will be paying close attention to feedback following the publication of this response, and to responses to our further consultation - as well as to the efficacy of voluntary initiatives that will reduce criminal behaviour and harm to children. The government’s key objective is to support innovation in the sector, so that it can maintain and build on the key role it plays at the centre of our digital economy and creative industries.

The Rt Hon Sir John Whittingdale OBE MP
Minister of State for Media, Tourism and Creative Industries

Executive summary

Advertising is a thriving sector that, as part of the creative industries, makes a significant and valuable contribution to the UK economy. The creative industries in total contributed £108bn Gross Value Added (GVA) in 2021^{[footnote 1]} and employs over 2 million people.^{[footnote 2]} In 2021, the advertising industry generated £19.7 billion GVA, whilst exporting £5 billion in services in 2020.^{[footnote 3]} Whilst initially hit by the COVID-19 pandemic, the advertising industry has made a significant recovery with Advertising Association figures showing the UK advertising market reached £34.8 billion in ad spend in 2022, a year-on-year increase of 8.8%,^{[footnote 4]} and a 46% increase from 2020.^{[footnote 5]} Online advertising spending made up 75% of total ad spend in 2022 (£26.1 billion), including £13.1 billion in search advertising, £11.9 billion in display advertising, and £1.1 billion in classified advertising.^{[footnote 6]}

In order for the industry to grow, thrive and innovate, trust and transparency across the whole advertising supply chain is paramount. Key to this is tackling where online advertising may cause harm, inadvertent or otherwise. The call for evidence, external research commissioned by DCMS and significant stakeholder engagement indicated a range of prevailing harms that could be attributed to online advertising, and particularly illegal advertising. The lack of transparency within opaque online advertising supply chains, coupled with the lack of accountability across key areas of the supply chain, also remains a cause for concern.

Therefore, as detailed below, we consider that legislative reform will be necessary. The government intends to introduce a new and targeted regulatory framework for online advertising, which focuses on tackling illegal advertising (as defined under existing criminal provisions) and increasing the protection of under-18s online. The new framework will introduce statutory regulation of parties in the online advertising supply chain that are not currently regulated by statute for some types of illegal advertising (including fraud and scams) or for the protection of children and young people - namely platforms, intermediaries and publishers (PIPs). This will build on existing regulation of PIPs for unlawful adverts, such as misleading advertising. This ensures that these parties in the supply chain who have the power to help prevent harmful advertising reaching consumers and children and young people play a proportionate part in that regulation.

To complement the legislation, we will also be forming a ministerial-led taskforce over the summer to drive forward non-legislative action, asking industry to work with us on addressing illegal harms and the protection of children by:

• improving the evidence base on the scale of the threat and impact of illegal harms
• building on existing voluntary industry initiatives focused on tackling drivers of illegal harms

2022 consultation

We publicly consulted on the regulatory framework for online advertising to determine what the future governance of this industry should look like from 9 March to 8 June 2022. In response to this consultation we received 115 responses, including 8 academics or academic institutions; 12 advertisers/brands; 4 broadcasters; 19 civil society organisations; 10 consumer groups; 2 intermediaries; 2 media agencies; 4 news publishers; 7 platforms; 8 regulators; 5 private individuals; and 34 respondents who did not specify a group, mostly reflecting trade bodies and associations, and a variety of anonymous groups who self-selected the ‘other’ category.

The consultation sought views on the effectiveness of the current self-regulatory framework for paid-for online advertising and considered how the government could strengthen existing mechanisms to equip our regulators to meet the challenges of the online sphere. There were some clear themes amongst the responses, notably that the current self-regulatory framework is not equipped to tackle the spectrum of harms identified in the consultation sufficiently, and in particular, illegal harms. Most respondents felt that further powers of enforcement were needed to address criminally-motivated advertising from bad actors. Many respondents highlighted the importance of further protecting UK internet users from high-risk advertising such as alcohol and gambling.

In considering the next steps, regulatory and legislative coherence is essential. A coherent approach to regulation is one that is logical, consistent and involves regulators working together to enact a framework that is understood by all regulated entities, and straightforward to navigate. As a result of these considerations, and in line with the government’s principles of smarter regulation to grow the economy, we have concluded that a tailored and proportionate approach to regulating online advertising, ensuring regulators have the necessary tools to oversee and ensure compliance, is most appropriate. To achieve this, we consider that legislative reform focused on two areas will be necessary.

First, regulation to govern illegal advertising content. This regime will address the role of platforms and intermediaries and publishers in tackling illegal advertising perpetrated by bad actors. It will build on the stand-alone fraudulent advertising duties set out in the OSB and the duties provided for under the Consumer Protection from Unfair Trading Regulations 2008.

Second, regulation to protect children against adverts for products and services that are illegal to be sold to them. This will bolster the existing self-regulatory framework in protecting consumers and children and young people by improving transparency on who is placing advertising, who sees what adverts and why, and what action is taken to prevent bad adverts reaching consumers.

As the Programme’s scope is specifically focused on the most concerning harms online arising from illegal advertising and the protection of children from products and services illegal to be sold to them, neither regime will apply to, or affect the legislation of, advertising of high-fat, salt or sugar products, which will continue to hold advertisers to account as set out in the Health and Care Act 2022.

In line with the scope of the Online Advertising Programme consultation, launched March 2022, this framework focuses on tackling the most concerning harms associated with paid-for advertising only. This includes advertising where exchange for a payment or other reciprocal arrangement is in place, such as banner or display advertising, or influencers receiving free products for promoting advertising content. Non paid-for advertising is therefore considered out of scope. Focusing on paid-for advertising will allow us to look in detail at online content where evidence shows significant harm can be caused to consumers, and also reduces the risk of unintentionally drawing in other material that could be considered promotional by some, but where its purpose may not be as clear. This approach will also build on the Online Safety Bill, which has been designed to tackle user generated content.

Consistent with the government’s smarter approach to regulation, we will work with regulators and industry, specifically platforms, intermediaries and publishers, to design a proportionate approach to setting responsibilities on in-scope parties. The degree of control that a party has over the content and placement of ads, as well as its size and reach, are all important factors that will need to be considered.

To tackle illegal harms, PIPs will have a duty to put in place proportionate systems and processes to prevent users from being served illegal content through the adverts on their services, separate from existing duties under the CPRs. To protect children and young people online, PIPs will have a duty to put in place proportionate systems and processes to prevent under-18s seeing adverts for products and services that are illegal to sell to under-18s.

Regulators of the Online Advertising Programme will need to work with other existing regulators in the advertising space such as the Competition and Markets Authority (CMA), the Information Commissioner’s Office (ICO), the Financial Conduct Authority (FCA) and Trading Standards (TS). We will seek to achieve this through forums like the Digital Regulation Cooperation Forum (DRCF).

Next steps

In order to be ready to bring forward legislation to implement these reforms when Parliamentary time allows, we will be issuing a further consultation seeking views on these proposals. In addition, we will also convene a ministerial-led taskforce to bring together a range of industry stakeholders over the summer to drive forward non-legislative initiatives to tackle online advertising and increase protections for children and young people.

We are grateful for the range of responses to our consultation. The remainder of this document provides a summary of responses and sets out the government’s response in more detail.

Introduction

In February 2019, the Department for Digital, Culture, Media and Sport (DCMS) announced that it would consider how online advertising is regulated. Our aim through this work has been to foster fair, accountable and ethical online advertising that works for citizens, businesses and society as a whole. In particular to:

• ensure standards about the placement and content of advertising can be effectively applied and enforced online so that consumers have limited exposure to harmful advertising;
• promote a competitive and fair online advertising market for businesses so that all businesses can compete on merit; and
• drive transparent and ethical targeting practices for advertising online so that consumers are informed, empowered and can have trust in online advertising.

Building on previously commissioned research and the call for evidence, in March 2022 we published the Online Advertising Programme consultation. The consultation reviewed the effectiveness of the current self-regulatory framework for paid-for online advertising, independently administered by the Advertising Standards Authority (ASA). It also considered how the government can build on the existing regime, by strengthening the mechanisms currently in place and those being developed, to equip our regulators to meet the challenges of the online sphere, whilst maintaining the government’s pro-innovation and proportionate approach to digital regulation.

During this time, 115 submissions were received, including 80 by email and 35 via our survey platform. Respondents ranged from market participants engaged across various stages of the online advertising supply chain, stakeholders working in competing or complementary markets, and other interested organisations such as consumer groups. A full list of respondents is included in Annex A. All responses submitted before the consultation deadline were reviewed and taken into account in considering next steps for the Online Advertising Programme. Parts 1 to 4 of this document sets out responses to the questions asked in our consultation. Therefore the ‘summary of consultation responses’ sections broken down by the consultation questions reflect the number of respondents that addressed our questions, not the number of respondents that submitted a response overall. Figures and percentages in these summaries, therefore, represent percentages of respondents who addressed each question. 96 respondents structured their submissions in response to our questions, and 19 respondents submitted more general responses. Additionally, a response was received which raised issues in the online advertising market with regards to political advertising; comments on this topic are outside the scope of the Online Advertising Programme and have not been included in our analysis of responses.

Alongside written submissions, we ran a wide-ranging programme of stakeholder engagement across a range of interests, including roundtables and technical discussions on our detailed proposals.

As we set out in our consultation, the Online Advertising Programme looks specifically at paid-for online advertising to provide a holistic review across the online content that can generate harm for consumers and business. The review was intended to complement relevant measures and reforms being introduced through other areas of digital regulation, as well as those the government is developing to address digital competition and data protection issues across the online landscape. As such, it seeks to  build on existing (or soon to be enacted) protections such as the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), and online safety legislation being implemented to regulate user-generated content through the Online Safety Bill.

The consultation asked for views on the effectiveness of the current self-regulatory system, the rationale for government intervention, and the range of regulatory options. The consultation presented proposals for reform across six chapters:

1. Scope of the programme and context for online advertising reform

2. The online advertising market

3. Harms caused by online advertising

4. The current self-regulatory framework

5. Rationale for intervention

6. Options for regulatory reform

Overview of previous evidence and research

As part of informing our response to the Online Advertising Programme consultation, we have considered the following evidence and research.

Commissioned research

During 2019 and 2020, DCMS commissioned Plum Consulting to produce two reports focusing on the online advertising landscape.

The first report, Online advertising in the UK (2019), explored the movement of data, content and money through the online advertising supply chains. The report provided a snapshot of the UK’s online advertising market, including a summary of main advertising supply chain channels and formats; and highlighted the challenges with obtaining independently verified census-level data in online advertising. The report provided an initial assessment of potential harms and evidence on the market size, value chains, roles and market dynamics within online advertising.

The second report, Mapping online advertising issues, and the industry and regulatory initiatives aimed at addressing them (2020), built on the previous report by identifying some of the main issues and areas of harm within online advertising. Furthermore, the report highlighted gaps in the current regulatory system that expose market participants (such as consumers, advertisers and intermediaries) to harms associated with online advertising.

In 2022, DCMS commissioned Spark Ninety to produce an Online Advertising Programme Market Insights report. This report builds on the previous evidence base and provides an update on the prevalence, severity, trends and other key factors driving online advertising harms. In addition, the report presented key findings in relation to market trends, the evolution of supply chains, and key international policy developments since the publication of the previous reports.

Call for evidence

In March 2020, we ran a call for evidence on how online advertising is regulated, before carrying out a formal consultation. The call for evidence asked ten questions. The questions focused on consumer and industry exposure to online advertising harms. We sought evidence on the effectiveness of the current self-regulatory framework; the governance of online advertising; any additional measures that could improve innovation and growth in online advertising; and what role, if any, the government should play. Many of the responses to the call for evidence supported the conclusions from the reports commissioned by Plum Consulting, demonstrating consistency in the issues identified as requiring intervention. A summary of the relevant findings from the call for evidence was published as part of our formal consultation last year.

Stakeholder engagement

During the course of the consultation, the government engaged extensively with a range of stakeholders across the online advertising supply chain through roundtables, workshops, and technical discussions on the Online Advertising Programme proposals. This helped us understand in greater detail the landscape of current regulatory and industry initiatives aimed at addressing online advertising harms, and informed our policy direction and the decisions outlined in our government response. We are grateful for the time and effort stakeholders committed to help inform and strengthen our policy position.

Regulators expressed general support for the consultation. We noted their point about the need for regulatory coherence to avoid unnecessary duplication or overlap. We worked through the different regulatory options extensively with key regulators to inform how we could strengthen the current system where necessary and where to introduce the most proportionate and effective reforms.

Advertising agencies for the most part welcomed the focus of the consultation and highlighted the need to ensure the Online Advertising Programme interventions align closely with other government-led initiatives.

Advertising brands^{[footnote 7]} were supportive of the Programme’s efforts to close regulatory gaps and highlighted the importance of drawing and building on the ASA’s experience and expertise in order to strengthen the current regulatory system rather than undermine it.

Advertising trade bodies^{[footnote 8]} similarly expressed support for the existing regulatory structure and a need to sustain its effectiveness, as disruption to the current system may lead to unintended consequences and decreasing industry participation.

Intermediaries welcomed the openness of the consultation options in light of the complex supply chain examined. However, they also noted the need to focus on building and supporting existing industry initiatives, including building our understanding of how these initiatives work to support transparency and accountability in the intermediary supply chain.

Platforms and publishers’ views reflected their diverse perspectives and highlighted their active role in terms of advertising responsibility. They also noted the need to consider the cost to industry that may result from moving away from the current self-regulatory system and industry standards, given they are deeply embedded into organisations’ processes.

Broadcasters noted their agreement and alignment with the scope and rationale for intervention. They also expressed their support for bolstering the regulatory power of the ASA so that it is empowered to effectively regulate the online space, bringing it more in line with regulation in other areas including TV and radio regulation.

Consumer, civil society groups and academics raised concerns that the current regulatory framework is insufficient to deal with illegal harms, including highly organised online crime. They also expressed the need for increased protection of vulnerable individuals and children, and specifically against adverts for products and services illegal to be sold to under-18s.

Influencers and influencer agencies welcomed the inclusion of influencer advertising within the scope of the consultation. They highlighted the need to consider the importance of keeping up with technological developments in social media owned and operated spaces.

Fraud and financial organisations were broadly supportive, pointing out the need for a regulatory framework that can adapt, as criminals remain dynamic to changing regulation.

Throughout the stakeholder engagement, a number of industry initiatives were highlighted and as such we undertook work to understand their scale and impacts as part of the wider online advertising ecosystem.

Part 1: Scope of the Online Advertising Programme

The consultation asked the following questions on the scope of the Online Advertising Programme:

1) Do you agree with the categories of online advertising we have included in scope for the purposes of this consultation?

2) Do you agree with the market categories of online advertising that we have identified in this consultation?

3) Do you agree with the range of actors that we have included in the scope of this consultation?

4) Do you agree that we have captured the main market dynamics and described the main supply chains to consider?

5) Do you agree that we have described the main recent technological developments in online advertising in section 2.2.2?

Summary of consultation responses

Questions 1-3: Scope (Categories of online advertising and actors)

Nearly 50% of respondents agreed with the categories of online advertising outlined in the consultation and agreed that the consultation scope should cover all paid-for advertising, with 20% of respondents disagreeing. A frequently expressed opinion amongst respondents was to ensure that we defined our scope in a way that would avoid new or novel categories of advertising falling through regulatory gaps. This also reflects concerns that criminals may migrate to areas that are out of scope. A few respondents were pleased to see content marketing and advertising by social media influencers included in the scope of the consultation.

A common suggestion for expanding the scope of market categories within the Online Advertising Programme was to include owned media. Owned media includes any online property owned and controlled, usually by a brand. The brand exerts full editorial control and ownership over the space and content - such as a blog, website or social media channels.^{[footnote 9]} Users actively seek out this information by directly visiting the social media page or website of the business or individual. Six respondents from civil society and academia proposed the inclusion of owned media in scope. Other frequently expressed suggestions amongst those groups included adding brand marketing, alibi marketing (replacing brand names with identifiable components of the brand’s identity) and native advertising, all of which are already in scope, provided that such advertising happens in the paid-for space. There were requests to ensure that spaces such as digital radio, podcasts, new and emerging technologies (e.g. augmented and virtual reality), and gaming are also included. These categories are also in scope of the Programme, provided they are paid for. In addition, one respondent referred to e-commerce in the non-paid-for space. A few respondents suggested an expansion of search advertising to include firms such as Amazon that use paid search results, while one respondent proposed including affiliate marketing, both of which are already in scope.

There were a variety of suggestions to expand the scope of actors or to have further clarity around definitions. The most frequent suggestion from a range of stakeholders was to expand the definition of intermediaries and adtech. Examples of sub-actors that might be captured included ad exchanges, ad networks (used for in-game and in-app adverts), data brokers and agency trading decks. A similar number of respondents asked that ad agencies be separated out from advertisers (brands). Inclusion of influencers within the scope of regulated entities was another theme amongst some respondents. There were also a series of other suggestions made by individual respondents:

1. Including third parties, such as the providers of verification or attribution tools
2. Including online marketplace platforms where products are listed and advertised by multiple sellers
3. Ensuring all current host sites are included (noting that, for example, while the consultation claims open display ads can be found on paid-for newsletter advertising, the ‘hosts’ in this example would be news sites)
4. Including member-only platforms such as Patreon, in line with other walled garden services (platforms that offer an integrated ad buying service)
5. In relation to fraudulent job ads, ensuring that actors related to job ads, such as job boards, are in scope, as well as gig economy apps where both the user and worker are required to pay
6. Clarity on how to determine if certain companies are platforms or publishers

Questions 4-5: Market dynamics and technological developments There were a variety of views on market dynamics, but no particular emerging theme. A number of individual respondents recommended that we make changes to our description of supply chains, such as further considering implications for companies that have two roles (e.g. the Apple App Store). Including Data Management Platforms (owned by clients to enhance targeting) and tokenised ads on browsers like Brave (where users sign up to receive ads and are compensated) was also recommended. A few respondents suggested that we should distinguish more clearly between different types of online ads when looking at supply chains, such as those for banner ads or those for sponsored content.

In terms of the dynamics themselves, a number of stakeholders from across the supply chain suggested that the Online Advertising Programme needed to consider how changes to cookies, notably the phasing out of third-party cookies, will affect market dynamics. One respondent also suggested we consider the impact of the state of flux in the industry on the market, while an intermediary said that the consultation overlooked the challenging regulatory environment that existed due to the overlap of current market rules and statutory regulation. A few respondents noted the impact on small businesses that had to accept unfair terms or an imbalance when engaging the likes of Meta and Google. A respondent pointed to walled gardens taking on a greater role in relation to influencers (such as by effectively acting as an agent), while another said that the description overlooked the increasing agency of advertisers to use third-party verification and targeting technology.

On technological developments, a number of considerations were suggested, including the Data Clean Rooms and Multiparty Computation Initiative; the move to server-to-server integrations; tools to scan ad images and leverage machine learning; the use of content verification technologies within intermediaries to monetise data; and the Content Authenticity Initiative regarding body image concerns.

Our response

We welcome stakeholders’ general support for the scope of the Programme outlined in the consultation. As outlined in the consultation document, the Online Advertising Programme is focused on tackling the most concerning harms associated with illegal paid-for advertising. This includes advertising across a range of different online sites, where exchange for a payment or other reciprocal arrangement is in place, such as influencers receiving free products from the advertiser for promoting advertising content. We recognise influencer content is also in scope of the OSB and will work to minimise and manage any interactions. More detail on the content in scope will be provided in the further consultation.

We also acknowledge the calls for further action in owned media spaces. However, the Online Advertising Programme will not look at advertising on owned media, such as brands’ own websites or free-to-post classified ads, to limit its remit to the areas of advertising most likely to cause harm to individuals. Focusing on paid-for advertising reduces the risk of unintentionally drawing in other material that could be considered promotional by some, but where its purpose may not be as clear. We recognise the importance of freedom of expression and will look to protect this when introducing any legislation.

New provisions for user-generated content, which includes both organic and promoted posts, are set out in the OSB. As a result of the OSB, services that host user-generated content will face strict measures to tackle illegal content and protect children.

We also welcome stakeholders’ support for including intermediaries and influencers in scope. We envisage these actors would be in scope when advertising content is paid for. We acknowledge vertical integration (where firms operate at more than one point in the supply chain) within our definitions. While it may not be appropriate to apply additional regulation for the content and placement of online advertising to all data management platforms and security and verification services, we look to adopt a suitably broad definition of intermediaries so as to capture firms where it would be appropriate and proportionate to do so. We will, therefore, need to do further work to articulate which functions carried out by intermediaries within the online advertising supply chain should be within scope of regulation, and will cover this in more detail in the further consultation. In considering what future regulation may look like, we take seriously the distinctions and nuances between different types of advertising.

We aim to minimise regulatory overlap; to be cognisant of competitive dynamics; and to be sensitive to market and technological developments, such as the depreciation of third party cookies. As outlined in the consultation, the Online Advertising Programme presents a holistic, cross-sector approach that sets out how each actor might contribute to this objective, and ultimately create a more transparent and accountable market. The focus of this is to address the key regulatory gap, which is the regulation of illegal harms, building on the OSB’s regulation of user-generated content and fraudulent adverts, and complementing the CPRs by increasing the scope of statutory regulation for platforms, publishers and intermediaries. This will improve transparency, which is key to better understanding the types, prevalence and impacts of harm. Requiring platforms and networks to share more information will create a more transparent environment and enable a better understanding of the types, prevalence, and impacts of harm.

In the Online Advertising Programme consultation, we explored the role of all market participants across the online advertising supply chain - from advertisers to publishers and all those in between. This unveiled a complex ecosystem with many intricacies and interdependencies between all actors in the supply chain. We have taken into consideration stakeholders’ calls and understand that care is needed to avoid significantly disrupting the existing market dynamics or creating any unintended consequences through hasty intervention. However, it is important to proactively address the problem underlying the prevalence of harmful advertising content in the categories of most concern, such as illegal advertising, which we have identified. We believe that all actors have a collective responsibility to tackle these harms for the benefit of our society, and children and young people in particular.

To achieve this, we believe it is necessary to expand the current model, which focuses mostly on holding advertisers accountable (recognising High Fat, Salt or Sugar (HFSS) restrictions will remain as a separate regime). The Online Advertising Programme will therefore target platforms, intermediaries and other publishers in the supply chain. While recognising positive progress like the ASA’s Intermediary and Platform Principles (IPP), and the FCA’s intensive engagement with platforms (which has resulted in most large platforms strengthening their advertiser verification processes for financial services), this wider group is not currently subject to formal or consistent regulation. However, it holds significant power to reduce harm and strengthen cyber security throughout the online advertising ecosystem. The OSB will impose duties on user-to-user platforms and search providers to tackle fraudulent advertising, and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) will continue to prohibit unfair commercial practices by traders. The Online Advertising Programme looks at what else platforms, publishers and intermediaries can be expected to do to reduce the most concerning online advertising harms associated with illegal advertising. These actors also hold significant data on the dissemination of advertising, which is currently inaccessible. Therefore, we think it is proportionate that we act to bring these actors under stronger and explicit regulation. Our further consultation will provide further detail on how we determine parties in scope.

Part 2: Harms caused by online advertising

The consultation asked the following questions on harms, industry initiatives, Video on Demand and rationale for intervention in relation to the Online Advertising Programme.

6) Do you agree that our taxonomy of harms covers the main types of harm found in online advertising, both in terms of the categories of harm as well as the main actors impacted by those harms?

7) Do you agree that our above description of the harms faced by consumers or society cover the main harms that can be caused or exacerbated by the content of online advertising?

8) Do you agree that the above description of the harms faced by consumers or society cover the main harms that can be caused or exacerbated by the placement or targeting of online advertising?

9) Do you agree with our description of the range of industry harms that can be caused by online advertising?

10) Do you agree that we have accurately captured the main industry initiatives, consumer tools and campaigns designed to improve transparency and accountability in online advertising?

11) Should advertising for Video on Demand (VOD) closer align to broadcasting standards or follow the same standards as those that apply to online?

12) To what extent do you agree with our rationale for intervention, in particular that a lack of transparency and accountability in online advertising are the main drivers of harm found in online advertising content, placement, targeting, and industry harm?

Summary of consultation responses

Questions 6-9: Harms

In relation to the overarching taxonomy of harms, there were some suggestions for additional categories of harms. A number of civil society actors felt that misinformation and disinformation should be included. Other respondents felt that children should have their own umbrella category or be given a special focus, potentially defined as ‘illegal to show to children’. Data collection underpinning targeting and related privacy issues were also suggested harms, with one stakeholder highlighting how the negative effects of targeting could be exacerbated for those experiencing common mental health problems. A small number of respondents argued for the inclusion of societal harms affecting individuals, such as the carbon emissions of digital advertising and political manipulation. One respondent also proposed removing the targeting of adverts from scope, given ICO work in this area. A larger number of respondents from different stakeholder groups suggested that the taxonomy could be regrouped as consumer harms (split into paid-for and owned media), illegal harms, and industry harms.

A few respondents felt further definition and clarity between ‘illegal’ and ‘legal but harmful’ harms were required. One respondent felt that harms should be reframed as ‘potentially harmful’ to demonstrate the contextual nature of harm. Some felt that the taxonomy needed more evidence. One respondent noted the overall high level of compliance with the Committees of Advertising Practice (CAP) Code and suggested refining the taxonomy accordingly.

The majority of comments and supplementary evidence on consumer harms caused by illegal content focused on fraudulent adverts. These included highlighting the specific challenges of fraudulent job ads; spoofing and clone firm investment scams (scams that try to trick people into making false investments by impersonating genuine firms); advertising surrounding crypto-assets; scam ads designed to look like editorials; and evidence around pension, investment and claim management scams. The inclusion of illegal sites as a harm (such as unregulated gambling) was also proposed. One respondent suggested fake endorsements should include both fake celebrities and brand endorsements. Finally, a number of respondents proposed the addition of animal abuse in our taxonomy of harms.

Comments on consumer harms caused by legal content covered a broad range of issues, although alcohol was referenced the most. A number of civil society groups, academics and others argued strongly for the inclusion of alcohol as part of any regulatory intervention. A smaller number of respondents suggested that the current self-regulatory system was sufficient and that alcohol itself should not be considered a harm. Similar arguments on both sides were made in relation to gambling and HFSS products, albeit in smaller numbers. Some civil society groups called for age-related advertising to mirror the approach taken by HFSS restrictions but with restrictions on alcohol advertising. Some respondents referenced gender stereotyping and body image as harms that should be addressed, with one civil society group suggesting that the volume of body image ads being aimed at girls should be considered, and others proposing clearer restrictions on weight loss and diet products. One stakeholder claimed that the ASA’s labelling requirements for advertising do not go far enough and need further enforcement, arguing the importance of clearly labelling advertising so as not to undermine informed consumer choice and free market dynamics. Other issues that a small number of respondents felt should be captured included greenwashing (suggesting a product or service is more environmentally friendly than it is), inappropriate or unaffordable lending, and inadequate warnings around the risks of investment.

There were a range of comments related to consumer harms caused by placement and targeting. There was concern around alcohol ads reinforcing gender stereotypes and being shown to children, with some evidence provided around targeting. One respondent proposed a ban on targeted ads aimed at children. Similar evidence was offered on scam ads being aimed at vulnerable groups, whilst one respondent noted that targeting appeared to be leading to debt service ads displacing accurate debt relief content. More broadly, one trade body suggested that targeting did not cause or exacerbate harms. On placement, where there was less additional data, one respondent suggested rules related to the placement of ads in close proximity to children were effective. However, another suggested that the 25% child audience rule^{[footnote 10]} needed to be reviewed, while a consumer group thought there were placement issues in relation to the later-life lending market. One respondent also felt that placement and targeting should be decoupled.

In relation to industry harms, a number of proposals were floated, albeit in relatively small numbers. In relation to brand safety, intermediaries noted the risks around influencers using live streaming and VOD. One respondent thought that brand safety vendors (firms that provide services to protect a brand’s reputation and keep it from appearing in unsafe environments) posed a threat to publishers and should be included; another referenced the risk around ‘onward journey’ harms (a user being profiled or targeted with similar content after viewing a website page or activating a link). On ad fraud, there was significant evidence offered in support of the scale of the problem. One respondent supported the inclusion of audience measurement; an intermediary proposed its removal. Possible new industry harms included advertising removed in error or due to the misapplication of regulatory requirements; harms to media and communications (including harmful placement of adverts and harms to the qualities of communication services and spaces); harms to publishers, including via unauthorised data collection; harms to small business; and financial damage to brands from industry harms and scam adverts. One respondent suggested adding established industry definitions, such as those from the Media Rating Council and the Global Alliance for Responsible Media (GARM). Nonetheless, a number of trade bodies and platforms also suggested that industry should focus on addressing industry harms, for example by taking actions via contracts, rather than relying on government intervention.

Question 10: Industry initiatives

Various proposals were made for other industry initiatives that might be considered; those are listed below in Annex B. A number of individual respondents also suggested that the Online Advertising Programme consider trade body expertise; closer coordination with the ICO investigation into ad tech and real-time bidding; and whether the ICO or CMA might assess industry initiatives. The adoption of buy-side initiatives to help tackle fraud, such as buyers.json^{[footnote 11]} and Demand Chain Object,^{[footnote 12]} were also proposed by one respondent.

Question 11: Video on Demand (VOD)

Comments from broadcasters in relation to VOD focused on a number of issues. One respondent felt that broadcasters should not be disadvantaged because they have put in place additional measures for their own VOD services. Similarly, regulators should be able to judge the effectiveness of measures taken by different actors and avoid a one-size-fits-all approach. Regulatory cohesion was considered important, as was reducing the risk of conflicting double regulation. It was the view of broadcasters that existing BCAP rules should not simply be transposed to VOD, and audience expectations should also be considered.

Question 12: Rationale for intervention

More than half of respondents supported our rationale for intervention (56%), with only 13% opposing. 28% of respondents did not provide an answer to this question. One respondent noted that the lack of consensus between regulators and industry around key definitions pointed to the need to intervene. Most comments in support simply reiterated views expressed elsewhere in their response, such as which regulatory approach to take or what measures to introduce. Of those who made suggestions on how we might improve the rationale, one felt that meaningful content regulation was the main gap and that it was exacerbated by data-driven personalisation. Another suggested that the key driver of harm was actually that services need ads for revenue, while a separate respondent noted that platforms profit from scam ads under the current system. One recommended that the EU Digital Services Act might act as a model for the Online Advertising Programme.

Of those who disagreed with the rationale, reasons varied. A number of respondents, most notably advertisers and platforms, felt that more evidence was needed to explain gaps in the current system and explore harms further, including where they occur. Platforms, in particular, were unconvinced by evidence around the lack of transparency and accountability and suggested that illegal harms were not caused by either. One suggested that the ASA’s Online Platforms and Network Standards (OPNS) (now referred to as the Intermediary and Platform Principles (IPP)),^{[footnote 13]} should be allowed to take its course before statutory regulatory intervention is considered. Another respondent felt that the Online Advertising Programme should consider an SME exemption when deciding how to take work forward.

Our response

We agree with stakeholder feedback that a robust evidence base is vital in informing intervention. We are grateful to the respondents that highlighted important evidence as part of their submissions. In addition, in the time since consulting, we have looked to build on our evidence base by commissioning further, independent research by industry experts and carrying out desk research. The configuration of the market at present can mean that accessing comprehensive data on the threat level of harms associated with online advertising can be challenging. However, we believe that further evidence on the scale and severity of the harms taking place could be developed by tackling the lack of transparency and monitoring in the market. As a result, we intend to take action to ensure the information necessary to effectively regulate and support greater transparency and security throughout the ecosystem is accessible. Although we acknowledge the calls for the Online Advertising Programme to take action on a broader range of harms, we plan to intervene to tackle what the evidence indicates are the most concerning harms associated with illegal online advertising at present. We believe this approach is the most proportionate and will be the most effective, in line with the government’s approach to smarter regulation. We will work with the advertising industry and the self-regulatory framework to bolster initiatives where deemed effective and will be sensitive to the different capacities that firms of different sizes have. This work will also inform our approach to developing flexible, future proof regulation that can adapt to the firms and technologies of the future.

We acknowledge stakeholder feedback that highlights the importance of regulatory cohesion and avoiding conflicting regulation when applying standards to VOD. We will provide further detail, and seek views on our proposals for how rules should apply to VOD under the new framework in our further consultation.

We welcome stakeholder support for the rationale for intervention we presented in the consultation. Our assessment is that the self-regulatory framework, while valuable and effective in many areas, is not set up to address illegal advertising. As the ASA system has made clear, it is not empowered to address such illegal harms in the way it is for harmful advertising by legitimate businesses, even with some existing statutory backstops in place. In line with the feedback received on harms, intervention is deemed necessary to provide consumers, and children and young people in particular, with further protection from potential harms. We have taken on board feedback about how we define and act on harms.

We also agree with respondents that for advertising harms such as offensive adverts and industry harms such as ‘ad fraud’ (fraudulently representing advertising services that are either not delivered or delivered incorrectly), government intervention is not proportionate. We have concluded that offensive adverts and industry harms do not require regulatory intervention at this time. In line with the smarter regulation to grow the economy, we look to apply regulation proportionately, where sufficient evidence supports intervention.

After considering the consultation responses, we have decided to focus on two broad categories of unlawful online advertising and consumer and child protection.

1. Harms arising from illegal online advertising, such as fraud and scams, the spread of malware, and adverts for illegal products and services. These harms are generally perpetrated by bad/illegitimate actors using advertising to undertake criminal activity.

2. The protection of children and young people from adverts for products and services that are illegal to be sold to them, e.g. alcohol, gambling, vapes and other products/services prohibited to be sold to them. This relates to the targeting and media placement and/or content of ads.

We are developing legislation to address the regulation of online advertising in relation to these two categories and will introduce this when Parliamentary time allows. In addition to legislation, we will convene a ministerial-led taskforce to bring together a range of industry stakeholders to support this work. The taskforce will provide a forum to build understanding and identify evidence gaps, explore and potentially enhance existing industry-led initiatives, as well as consider if an industry-led approach could help address any gaps not already covered by these schemes.

Consultation responses indicated that the current self-regulatory framework is not equipped sufficiently to address illegal harms and so our non-legislative package will work with industry and relevant regulators to reduce the incidence of illegal harms facilitated by paid-for online advertising in the period before statutory regulation for these harms can be introduced. This will include looking to increase the protection of children and young people from adverts for products and services that are illegal to be sold to them. By ensuring alignment with the planned legislative approach, we believe those firms that participate in initiatives as part of this will lessen the burden of compliance with new legislation introduced to regulate online advertising. In working with industry on this agenda we will look to build upon and expand those initiatives and technological solutions proven to be effective and further strengthen joint working between government, regulators and industry.

There was general support from respondents for proactive action by PIPs to monitor and tackle the publication of misleading adverts and share information that helps prevent them. Currently, the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) prohibit unfair commercial practices by traders that are capable of distorting consumers’ economic decision-making, including misleading advertising. The CPRs establish a high level of consumer protection and apply to any business that is involved in the promotion, sale or supply of products to or from consumers. As such, all actors within the online advertising ecosystem – including PIPs – are likely to be covered by the CPRs and will need to take steps to comply. PIPs may therefore be required under the CPRs to take proactive measures to tackle the publication and dissemination of misleading content that harms the economic interests of consumers, irrespective of whether they created that content themselves. Where a business fails to take steps to comply with the CPRs, it will be at risk of action from enforcement bodies, including Trading Standards and the CMA.^{[footnote 14]} We believe that the CPRs remain the most appropriate vehicle for enforcement against misleading advertising at this stage, especially with the clarified position of their coverage of actors across the supply chain, including PIPs. In addition, the CPRs remain applicable to the fraud and scam content covered by both the Online Safety Bill and Online Advertising Programme.^{[footnote 15]} To the extent that such content comes within scope of the Online Advertising Programme – for example, fraudulent and scam content – the Online Advertising Programme is intended to be complementary to the CPRs and other legislation applicable to PIPs. We will continue to work with the Department of Business and Trade, Trading Standards and the CMA to ensure PIPs are held accountable for misleading advertising. We will also keep enforcement of misleading advertising under review as part of any Online Advertising Programme post-implementation review to ensure that this remains an effective enforcement route for misleading advertising going forwards.

Part 3: Regulatory framework

The consultation asked the following questions on regulatory reform.

Question 13) To what extent do you agree that the current industry-led self-regulatory regime for online advertising, administered by the ASA, to be effective at addressing the range of harms we have identified in section 3.3?

Question 14) Do you consider that the range of industry initiatives described in section 4.3^{[footnote 16]} are effective in helping to address the range of harms set out in section 3.3?^{[footnote 17]}

Question 15)

a) Which of the following levels of regulatory oversight do you think is appropriate for advertisers?

b) Which of the following levels of regulatory oversight do you think is appropriate for intermediaries?

c) Which of the following levels of regulatory oversight do you think is appropriate for platforms?

d) Which of the following levels of regulatory oversight do you think is appropriate for publishers?

Question 16) Following on from your answer to question 14, do you think a mix of different levels of regulatory oversight may be warranted for different actors and/or different types of harm?

Question 17) What is your preferred option out of the three permutations described under option 2?

Summary of consultation responses

Question 13: Effectiveness of the current industry-led self-regulatory regime for online advertising, administered by the ASA

On the effectiveness of the current self-regulatory regime, over 40% of those who responded disagreed that it was effective at addressing the harms identified. A quarter of respondents agreed it was effective. A considerable number of respondents acknowledged the substantial work that the ASA is doing within the confines of its remit and noted some of its proactive initiatives. Those who felt the system was working mostly reiterated its effectiveness and concerns about it being dismantled; there was also recognition for the work being done on the ASA’s new IPP, a pilot programme that formalises the role platforms and intermediaries play in the ASA’s regulation.
Despite this, many respondents felt that the ASA’s approach lacks transparency and accountability; is reactive, which is insufficient for issues such as scams and malvertising; and that it should look to move more into the preventative space. In particular, many civil society organisations felt that the current system was ineffective, and drew out harms to children, young and vulnerable people (such as targeting of alcohol to under-18s) as being in need of further regulatory action.

Question 14: Effectiveness of industry initiatives

More than 30% of respondents felt that current industry initiatives are not effective in helping to address the range of harms set out in the harms taxonomy, although over 40% either did not respond to the question or offer a view. Many recognise that the initiatives in place are valuable and important, but respondents felt that they fail to apply consistently to all players in the industry; and, as with voluntary initiatives in place at the time of consultation, lack the appropriate scale and scope, leaving significant gaps. A number of respondents believe that systemic change is needed to create a more stringent enforcement regime with sanctions, and more comprehensive take-up across the whole ecosystem. These respondents argued that this can be achieved through better collaboration across key sectors (particularly banking, technology and telecoms in the area of fraud), with greater incentives in place to encourage this. Some cite the lack of awareness surrounding initiatives as a shortcoming, and the focus initiatives place on supporting advertisers rather than protecting consumers as a limitation.

Questions 15A-D: Regulatory oversight

Across the four questions, between 25% and 33% of respondents supported full statutory regulation across the supply chain over industry self-regulation or backstopped regulation, although respondents had varying views regarding the regulatory oversight of different actors. The ASA raised significant concerns about full statutory regulation, given the effect it would have on their viability and the self-regulatory framework more broadly. Industry self-regulation was least supported for all actors with the exception of advertisers, where it was second highest. For all other groups, backstopped regulation was the second most supported choice, with an average of 19% of respondents supporting this option across the four questions.
A number of additional comments were made in response to these questions. Platforms were mostly supportive of some sort of regulation. Intermediaries, however, were mixed. Of those offering support for regulation, a few respondents suggested statutory regulation would help to manage issues around mining data and using Content Verification (CV) technologies;^{[footnote 18]} however, a few respondents felt that the case had not been made for harms occurring within the intermediary space or for the regulation of open display intermediaries. One civil society group noted that the US and EU were already pursuing legally binding options for intermediaries.

A few respondents suggested platforms and publishers should be subject to the same regulatory standards. However, a number of news publishers set out why they did not feel regulation was appropriate. Reasons for this included that small publishers tend to have less oversight over their supply chain, the investment that premium publishers had already made in preventing bad actors from buying advertising impressions on their sites, and a desire to avoid undermining attempts to rebalance the trading relationship between large online platforms and publishers, and to ensure continued support to stretched local publishers. There was little additional commentary specifically in relation to advertisers, with one broadcaster simply noting that regulating advertisers was unlikely to deal with illegal adverts. Across the responses on regulatory oversight, there was an emphasis on ensuring proportionate regulation.

Respondents who supported Option 1, a self-regulatory approach, favoured this due to concerns that the other options may lead to the dismantling of the ASA (or disrupt its funding model), which could risk losing a wealth of experience and technical knowledge, for example, in the writing of codes. Respondents also felt that, in its current mode of operation, the ASA was able to be more agile than a statutory regulation might. There were, however, reservations about the IPP and its ability to fully hold intermediaries, publishers and platforms to account as they comprise a set of principles rather than binding conduct rules. Those in favour of Option 1 cautioned that further work on collecting evidence about the scale of individual harms and potential approaches to addressing these would be valuable prior to imposing a new regulatory framework.

Supporters of Option 2, introducing statutory regulation to backstop more fully the self-regulatory approach, felt that backstopped regulation for all or some higher risk areas of harm is appropriate, such that a regulatory framework is able to bring bad actors effectively into it and ensure that such actors are unable to act with impunity. This would also create greater parity with other media. A number of respondents felt that the ASA should continue to retain ownership of the advertising codes. Overall, this option offered respondents a proportionate balance between protecting consumers, including increasing transparency and accountability across the online advertising ecosystem; whilst maintaining thriving innovation within one of the digital economy’s most valuable assets, rather than a complete overhaul of the industry’s regulatory model.

Option 3, a full statutory approach, was mostly favoured by those concerned with illegal harms (such as fraud) and protecting vulnerable groups, in particular children and young people. The rationale for many respondents was that, for these harms, the current system is not effective. Respondents felt that it was important to align the Online Advertising Programme and the Online Safety Bill measures at pace, so that perverse incentives, such as fraudulent activity moving from the large platforms covered by the Online Safety Bill to the open display market, would not be created in the time lag between the two programmes of work.

Question 16: Differing levels of regulatory oversight

There were a number of views on adopting different levels of regulatory oversight. A few respondents suggested that a one-size fits all approach was unlikely to be successful, with an intermediary saying that the Online Advertising Programme should only recommend intervention where there is a gap. In relation to actors, comments tended to focus on proportionality: applying a statutory approach depending on the size of the actor; continued self-regulation for good actors; or focusing on those actors where there are no checks in place, such as certain platforms and publishers. There was a general acceptance that stronger regulation was needed for illegal harms but with the minimum necessary regulatory approach applied to deliver that. Respondents suggested that differential approaches could reflect the degree of risk from the harm, the existing levels of regulation already in place for particular industries (e.g. gambling), and the varying levels of resourcing across different parts of the ecosystem to be taken into account. There was recognition that an industry-wide solution is required, which would necessitate collaboration and ‘networked’ compliance^{[footnote 19]} among all players.

Question 17: Which permutation of Option 2

The two most supported permutations were permutation 1 (backstopping both the CAP code for online activities and the new IPP for actors across the wider supply chain) and permutation 2 (as per (1) but also backstopping high-risk advertising segments of the CAP code). As context, however, most respondents did not have a strong view on this question (over 50% of respondents did not answer this question) and clearly for those that did not support Option 2 the question was less relevant. Questions were raised about the IPP’s effectiveness before the evaluation of its pilot, due later this year.

Our response

We welcome stakeholder feedback that highlights and recognises the important role of the self-regulatory system and the ASA in addressing a broad number of online advertising harms. We agree that building on the experience and expertise of the self-regulator and the existing framework will be important in ensuring appropriate regulation of online advertising moving forward. We note there was stakeholder agreement that the current self-regulatory system is not appropriate for dealing with all online advertising harms, in particular, illegal advertising. We welcome the broad support for our proposal to backstop the ASA in discrete areas. We understand the importance of working with the existing landscape, whilst also recognising that in areas of illegal advertising where illegitimate actors are involved, the ASA is not equipped nor empowered and therefore not an appropriate regulator and so direct statutory regulation is required. The Online Advertising Programme will put in place  statutory regulation for illegal harms (e.g. fraud, scams and other illegal offences facilitated through paid for online advertising such as human trafficking) and the protection of children and young people. The statutory regulation will enable co-regulation. We will follow the approach of the OSB in focusing our regulation around required systems and processes in place for regulated entities, and welcome support for regulatory and legislative coherence and our overall aim to improve accountability and transparency across the online advertising ecosystem. We will look to harness expertise from within the advertising industry and support industry solutions through our non-legislative package, which will be taken forward in advance of legislation being brought forward, and in tandem to our further consultation on the legislative package which we issue in due course. This will include increasing awareness and collaboration, and working with other government departments, like the Home Office and the Department of Health and Social Care, where relevant, to build on efforts to address in-scope harms, such as fraud more broadly, or alcohol, gambling and vaping as part of efforts to protect children and young people from adverts for products or services illegal to be sold to them.

We consulted on options that included how the ASA’s IPP pilot under development (known as OPNS at the time of consulting) could comprise part of Option 1, a self-regulatory approach or Option 2, introducing statutory regulation to backstop more fully the self-regulatory approach. The ASA’s IPP pilot marks a significant positive development for the advertising industry. It is a hopeful step forward to see some of the largest firms in the online advertising supply chain participating in a pilot with the self-regulator to explore how better outcomes can be achieved in online advertising. Upon reviewing the IPP interim report, the examples of good practice highlighted are encouraging evidence of industry being proactive and innovative in working with regulators to keep UK internet users safe. Following our consultation on legislative reforms involving these principles, respondents raised questions about the IPP’s effectiveness before the full evaluation of its pilot. While respondents mentioned the IPP as an example of positive progress being made in the space, there were reservations about the IPP and its ability to fully hold intermediaries and platforms to account as they comprise a set of principles rather than binding conduct rules.

The government commends the progress that the IPP pilot has already achieved, as indicated by the interim report, and will look to support this work and its ambitions into the future. We look forward to future reporting on this pilot. We understand the importance of these principles in formalising the role platforms and intermediaries play in helping the ASA to uphold the CAP code, providing online media consumers with protection from a broad range of online advertising harms. We look forward to seeing the ASA consolidate the learnings and benefits of the IPP pilot into their approach to regulation moving forward. We hope to see wider participation from PIPs across the online advertising supply chain as this initiative will only be successful with increased engagement. However, we agree that there is the need to address illegal advertising from bad actors, which the current system and the ASA’s IPP pilot are not designed to capture. We also support respondents’ strong desire to protect children and young people under the age of 18, in particular with regard to a range of health-associated advertising content such as alcohol, gambling and other products/services prohibited to be sold to them.

We support stakeholders’ views that it is important to ensure that there is proportionate intervention to bring PIPs into scope of regulation for more serious harms. We will look to place more direct responsibility on PIPs for the ads served on their services while recognising the need to be sensitive in particular to the unique circumstances of press publishers and smaller publishers. We will also need to reflect the government’s commitment to applying regulation proportionately, with sufficient evidence to support intervening, as illustrated in the smarter regulation to grow the economy and the principles of the Plan for Digital Regulation.

At its most basic, the Online Advertising Programme is primarily aimed at delivering the Plan for Digital Regulation’s second objective of keeping the UK safe and secure online. The way we have designed the Online Advertising Programme reforms, and how we intend to implement them (through technology-agnostic systems and processes), also supports the first objective - promoting competition and innovation. The non-legislative work of the Online Advertising Programme will make use of existing innovative industry-sourced solutions, driving adoption and continued improvements. Implementing non-regulatory measures in this way will give industry a clear opportunity to demonstrate its ability to successfully tackle online advertising harms through collaboration and innovation.

Part 4: Decisions on regulatory reform

The consultation asked the following questions on regulatory reform:

18) For each of the actors, which measures (set out in the tables in sections 6.1.3 and 6.1.4) do you support, and why?

19) Are there any measures that would help achieve the aims we set out, that we have not outlined in the consultation?

Summary of consultation responses

Questions 18-19: Measures

Responses to these questions showed a considerable level of support for many of the measures proposed in the consultation. Support was strongest from consumer and civil society groups, but industry responses also showed support in some areas.

Most responses focused on the general application of the measures, rather than considering how measures might differ between different parties in the supply chain. Responses from some of the largest online platforms described recent updates to their services that mirrored closely some of the measures set out in the consultation.

Some respondents felt that more clarity could be given to how different measures might fit with the three proposed options of regulatory oversight and how different measures may be more or less relevant to particular harms.

Some respondents felt that some of the measures would be best implemented through standardised implementation (i.e. applied and enforced uniformly). Others felt that standardised implementation could risk eroding the advertising features and brand safety measures that allow players in the advertising supply chain to differentiate themselves from one another.

In relation to transparency measures, most comments were on record keeping. Some responses from industry emphasised the importance of taking a proportionate approach and setting responsibilities in line with various factors, such as the size of a business. Other responses warned that record keeping could expose sensitive market data to competitors and would therefore need very careful handling. On information sharing, there was support for increased data sharing within industry and between regulators, as well as the use of a public library or central repository to facilitate information sharing between platforms and civil society. There were no specific comments on the proposal to provide annual reports on complaints. More broadly, one respondent suggested transparency measures should be mandatory.

Comments on accountability measures were wider-ranging. Although there was some support for pre-vetting, one industry respondent argued against such measures, one suggested more consideration was needed on who should pre-vet, and another emphasised the need for a clearer definition of ‘repeat offender’. There was support from different stakeholder groups for verification measures, but a range of views on how best to implement them. Industry respondents noted possible burdens on business, especially SMEs and if enforced pre-publication. One respondent suggested that verification should be completed by independent accredited parties, while another said that verifying ad services should not be limited to ad inventories but that all actors across the supply chain should have access to and implement verification tools. One respondent felt that a balance needed to be struck between transparency, proportionality, and disclosure of sensitive information. There was strong support for customer empowerment tools, both for introducing opt-in or opt-out approaches to targeted advertising and for creating stronger consumer feedback or complaint mechanisms for personalised ads. In relation to scam ads, one respondent suggested a unified system would be best for reporting ads that slip through the net. Industry respondents did report concerns, including the risk of consumers over-flagging or of an opt-out tool drawn too widely so as to undermine the advertising system.

On high-risk ads, there was support for active scanning for misleading ads as well as for efforts around self-declaration and demonstrating care. There were comments on a minimum standard advertiser acceptance policy, including ensuring platforms and publishers do due diligence checks on intermediaries and advertisers, and support for regular reviews to assess the prevalence of fraudulent or misleading ads. One respondent noted the risk of ad acceptance policies being a barrier to SMEs, due to the burden of implementing and maintaining such policies and the business that may be lost as a result. On minimum standards for proactive review of content, one respondent noted that they already had a similar policy in place, while another said that speech-to-text analysis tools were already helping to review livestream and VOD content. There was some support for the duty of care measures, although one respondent thought it would be difficult to impose such duties to minimise harm. One respondent offered explicit support for the publication of onboarding policies. There were no comments in relation to tools for advertisers to implement brand safety.

In relation to other measures, a small number of civil society respondents proposed that more be done on ad disclosure/labelling, and one respondent referenced the labelling of altered images. One civil society group suggested that anonymised, standards-based, audited and certified age assurance techniques were needed prior to targeting; another proposed Service Level Indicators^{[footnote 20]} and quality assurance standards for recommender algorithms. Others separately noted that bolstering existing industry standards might be sufficient to address the problem.

Our response

We plan to introduce a targeted package of measures designed to tackle the most significant and concerning illegal advertising content and to protect children and young people. The regulatory framework should comprise a statutory regime to address illegal advertising and the protection of children and young people, with the potential for co-regulation.

Our proposed measures will increase the scope of statutory regulation for PIPs, reflecting the significant role they play. The measures will impose explicit statutory obligations on PIPs in relation to illegal online advertising content to build on and complement relevant existing legislation and non-statutory initiatives. Advertisers are essentially carved out from the two new regimes, as they are already held to account by the self-regulatory regime and the existing backstops in place for advertisers. They will, however, need to adapt to and align with measures that PIPs put in place (e.g. advertiser identity verification - any verification will only be used where necessary/appropriate with regulators deciding the extent).

To achieve regulatory coherence in this space, we will be seeking to legislate as soon as Parliamentary time allows, following a further consultation on the proposals. As the Programme’s scope is specifically focused on the most concerning harms online arising from illegal advertising and the protection of children from products and services illegal to be sold to them, these proposals will not affect existing legislation for the advertising of high-fat, salt or sugar products, brought forward by the Health and Care Act 2022, which will continue to hold advertisers to account. There are likely to be interactions between the Online Advertising Programme and the ICO’s data protection remit, particularly with regard to the protection of children and young people measures. We will work closely with the ICO and data colleagues to manage any interactions with data protection law and assist the overarching objective for the government in developing a coherent and consistent regulatory framework.

PIPs all have a role in bringing advertising content from advertisers to users, so we envisage a role across platforms, intermediaries and publishers to fulfil new Online Advertising Programme regulation. We will work with regulators and industry to design a proportionate approach to setting responsibilities on in-scope parties. The degree of control that a party has over the content and placement of ads, as well as its size and reach, are all important factors that will need to be considered. More detail on this approach will be shared in the further consultation.

We will work with the Online Advertising Programme regulator(s) to ensure that enforcement is proportionate and fair; we want to incentivise good practice, rather than punish every breach. We recognise some of the positive steps industry has taken, mirroring the measures proposed in the consultation; we look to build on rather than undermine such action.

To tackle illegal harms, our legislation will place a duty on PIPs to put in place proportionate systems and processes to prevent users from encountering illegal content by means of the service. We expect that fulfilling this duty will involve measures that make it harder for criminals to access and abuse the online ad supply chain, that detect and mitigate unlawful adverts quickly and efficiently, and that concern the sharing of information with regulators surrounding suspicious activity to support efficient and effective regulation and increase cyber resilience. These responsibilities will be proactive and go beyond notice and takedown. Adopting a systems and processes approach aligns with the principles of the government’s Plan for Digital Regulation to ensure that regulation is agile and flexible in order to actively promote innovation.

To protect children and young people online, our legislation will place a duty on PIPs to put in place proportionate systems and processes to prevent under-18s seeing adverts for products and services that are illegal to sell to them. As above, we expect that fulfilling this duty will involve proactive measures that detect and mitigate problem adverts quickly and efficiently and measures concerning the sharing of information with regulators to support efficient and effective regulation.

We will consult on the details of regulatory powers for Online Advertising Programme regulators in a further consultation.

Annex A: List of respondents to the consultation

• 5 Rights Foundation
• Advertising Association
• All Response Media
• Association of Online Publishers (AOP)
• Advertising Standards Authority (ASA)
• Asahi UK
• Asbof
• Bet 365
• Betting & Gaming Council
• British Beer and Pub Association
• British Retail Consortium (BRC)
• BT Group
• BullionVault
• Carnegie UK
• Cats Protection
• Channel 4
• Children’s Food campaign
• Committee of Advertising Practice (CAP)
• Competition & Markets Authority (CMA)
• Danone
• Direct Line Group
• DMG Media
• Dogs Trust
• European Advertising Standards Alliance (EASA)
• Federation of Small Businesses
• Financial Conduct Authority (FCA)
• Financial Services Consumer Panel
• Financial Times
• Gambling Commission
• Global Disinformation Index
• Google
• Guardian Media Group
• Gumtree
• Heineken
• IAB UK
• Information Commissioner’s Office (ICO)
• Influencer Marketing Trade Body
• Institute of Economic Affairs
• International Council for Ad Self-Regulation (ICAS)
• ISBA
• ITV
• Juul Labs
• Klarna
• Luke Evans MP

• Meta

• Molson Coors Beverage Company
• Money Saving Expert
• News Media Association
• Obesity Action Scotland
• Open Rights Group
• Paramount
• Portman Group
• Professional Publishers Association (PPA)
• Ripple XN
• Sky
• Snap
• Spectrum
• Stop Scams UK
• The British and Irish Law Education Technology Association (BILETA)
• The Conscious Advertising Network (CAN)
• The Gambling Related Harm APPG (‘the APPG’) and Peers for Gambling Reform (PGR)
• The Institute of Practitioners in Advertising (IPA)
• The Investment Association
• The Scotch Whisky Association
• The Society of Pension Professionals
• The Telegraph
• Tiktok
• Trading Standards
• Trustworthy Accountability Group (TAG)
• TSB
• Twitter
• UK Finance
• University of the Arts London
• Welsh Government
• Which?
• World Federation of Advertisers (WFA)
• Yahoo
• 38 Anonymous respondents:
  • 4 academics
  • 4 advertisers (including brands)
  • 14 consumer and civil society groups
  • 1 media agency
  • 9 marked as ‘other’
  • 1 online platform
  • 5 private individuals

Annex B: Suggested industry initiatives for consideration from consultation responses

• Various TAG initiatives, such as TrustNet, Brand Safety work, Threat Exchange and certification schemes
• Various IAB UK initiatives, such as TechLab standards, Gold Standard and Ad Verification Guidelines
• GARM
• UK Online Measurement (UKOM)
• Branded Content Marketing Association’s Influencer Marketing Best Practice Guidance
• Influencer-related initiatives noted by the Influencer Marketing Trade Body
• Impress Standards Code
• Content Authenticity Initiative on body image
• End Surveillance Advertising to Kids Coalition
• SAFERjobs work on fake job ads and parallel work with BEIS on a jobs-related co-regulatory framework
• CAN work with Google prohibiting climate denier ads
• StopScams pilot project on data sharing
• International Alliance for Responsible Drinking (IARD), which works with platforms on alcohol ads
• Media Rating Council guidelines and audit programme
• Google’s work on verification
• TikTok’s work on financial services
• EDAA’s Youronlinechoices
• Gambling awareness tools
• Citizens Advice Scam Action service
• Market-based AI tools

1. DCMS, 2021, DCMS Sectors Economic Estimates: Monthly GVA (to December 2022) ↩

2. DCMS, 2022, DCMS Sector Economic Estimates: Workforce, 2021 ↩

3. DCMS, 2022, DCMS Sectors Economic Estimates 2020: Trade in services ↩

4. AA/WARC, 2023, Advertising Association and WARC Expenditure Report ↩

5. AA/WARC, 2021, AA/WARC: Ad market set for strong rebound ↩

6. AA/WARC, 2023, Advertising Association and WARC Expenditure Report ↩

7. This includes any brands paying for their advertising to be displayed online ↩

8. This includes trade bodies representing actors involved in the advertising supply chain, such as advertisers, brands, or agencies ↩

9. Halford JC, Gillespie J, Brown V, Pontin EE, Dovey TM. (2004). Effect of television advertisements for foods on food consumption in children. Appetite. Apr 1;42(2):221-5 ↩

10. No medium with an audience that is more than 25% under 16 should be used to advertise HFSS products or lotteries, and not more than 25% under 18 for alcohol, gambling and e-cigarettes (although advertising around the latter is banned to all ages on certain media). https://www.asa.org.uk/static/44dc1935-0766-4378-91171e6954ae560a/Age-restricted-ads-online-targeting-guidance.pdf ↩

11. A buy-side transparency standard by the IAB Tech Lab. Buyers.json is a mechanism for advertising systems and other intermediaries between payor and publisher to publicly declare the buyers that they represent. https://iabtechlab.com/buyers-json-demand-chain/ ↩

12. A buy-side transparency standard by the IAB Tech Lab. DemandChain Object enables sellers to see all parties who are involved in buying the creative embedded in a given bid response. https://iabtechlab.com/buyers-json-demand-chain/ ↩

13. The ASA’s OPNS is now called the Intermediary and Platform Principles (IPP). This initiative from the self regulator is a pilot that extends their regulatory remit online. It will explore putting on a more formal footing, and bringing consistency to, the ways in which platforms and intermediaries participating in the pilot cooperate with the ASA to promote advertisers’ awareness of the rules online and to help the ASA to secure compliance in cases when an advertiser refuses to amend or withdraw an ad that breaks the rules ↩

14. For example, the CMA took action against Facebook (now Meta) in relation to concerns that it was not doing enough under consumer law to prevent online influencers from endorsing businesses without making it clear that they had been paid or given free gifts to do so ↩

15. The FCA provides further regulation in this space holding parties to account when they issue misleading promotions under their Financial Promotions Regime ↩

16. This section contains a range of initiatives that bring industry together to address drivers of harm, such as standards (the Internet Advertising Bureau’s (IAB UK) Gold Standard, and the Trustworthy Accountability Group’s (TAG) certification programmes), audience measurement (Project Origin) and identity transparency in the supply chain (e.g. Ads.txt, Sellers.json and Buyers.json) ↩

17. We created a taxonomy of harms for advertising, both consumer and industry harms, that covered a range of legal and illegal harms. These are discussed further in Part 2, above ↩

18. ‘Content verification technologies emerged to help with managing brand safety online and play a crucial role in giving advertisers a layer of trust when investing in digital advertising.’ However, ‘misuse or overzealous use of such technology can lead to reduced reach and scale for advertisers, and a loss of revenue for publishers’. Source: The Content Verification Guide, IAB UK, 2020 ↩

19. Refers to applying proper controls/policies and adopting best practices to comply with industry standards ↩

20. Service level indicators are quantifiable measures of the reliability of a service ↩