Otto van der Harst – Stichting Reclame Code

Established to promote responsible advertising practices, the Stichting Reclame Code (SRC) creates and enforces the Dutch Advertising Code, a comprehensive set of rules that ensures all advertising is honest, legal, decent and truthful. In this interview, Otto van der Harst, CEO of SRC, discusses the vital role of self-regulation in maintaining trust within the advertising ecosystem. He explains how the SRC is adapting to the rapidly changing digital advertising landscape by using data-driven decision-making and AI to monitor new forms of advertising on platforms like YouTube, TikTok and Instagram.

The role and importance of Self-regulation in advertising

SRC operates as a self-regulatory organisation, which helps the advertising industry adhere to practical and ethical standards without requiring extensive government regulation. Self-regulation has proven to be an efficient and flexible way to enable timely responses to new advertising phenomena that may not be covered by existing laws. For example, self-regulation allows the industry to create practical, industry-specific rules and guidelines that can adapt to changing market dynamics and consumer expectations.

“Trust is the key currency when it comes to advertising and brands. Brands can only thrive if there is a good level of trust between brand owners and consumers,” Otto says. Self-regulation shows that industries can be responsible actors; of course, there are laws and government regulations needed, but not everything should be a responsibility of the lawmakers; mature industries take matters in their own hands to build trust and a level playing field. This highly practical approach enables faster responses to emerging issues, such as misleading advertising or problematic marketing practices.

Especially with social media and other new online phenomena, that were not anticipated in consumer laws to cause problems, questions arise. This calls for new, time-consuming, legislation to gain control over social media, misinformation and bad advertising. However, instead of only being dependent on government officials or EU lawmakers, self-regulation can give guidance and rules within the industry itself. “We are not against legislation, we work both ways to make sure we get a balanced approach, that there is a cohesive and broadly supported set of rules, and that we use the benefits of self-regulation. One of the great advantages of self-regulation is that it can be practical and gets broad support from all involved; advertisers, media and creators. We create an efficient and practical set of rules everyone understands,” Otto assures.

He mentions an example of alcohol promotions in supermarkets; “Self-regulation in the alcohol industry may prohibit building beer crate castles in supermarkets for promotion, but you would never find such a practical measure in a law. Laws often contain larger, more general normative agreements that must be interpreted by court case law. For example, the law may say you must not mislead, but what misleading actually is as opposed to seducing consumers, is not written in the law. With self-regulation, we can further explain such ‘open norms’ with practical direction.”

“One of the great advantages of self-regulation is that we create an efficient and practical set of rules everyone involved understands.”

Challenges and changes in the advertising landscape

There are significant changes in the advertising landscape, particularly the shift from traditional media (like television, radio, and print) to new digital platforms (like social media, YouTube, TikTok, and Snapchat).

This shift has created new challenges for self-regulatory bodies, as new media often involve a greater number of smaller advertisers and influencers who may not be aware of existing advertising regulations; “The number of advertisers has grown explosively. This is because social media allows relatively small parties to build significant recognition for very little money and to send out many different messages. These are parties often unaware of the regulations,” Otto says.

Ensuring that all the information is on a professional level is becoming an increasing challenge for SRC. “Previously, you only needed to know a few media channels, and you already knew how a campaign could or could not be steered in a different direction. Now you have potentially a lot of misinformation. Things spread through channels you didn’t even know existed.” He continues; “What you hear now is that for instance Donald Trump hardly advertises on the big TV networks anymore but focuses on the smaller corners of the internet, where he specifically targets his audiences very selectively and there, he cultivates an abundance of messages. That shows you how dramatically changed the communication game has changed.”

“Previously, you only needed to know a few media channels, and you already knew how a campaign could or could not be steered in a different direction. Now you have potentially a lot of misinformation.”

Impact on Brand Building and Creativity

As advertisers turn more and more towards digital platforms and social media, KPIs like conversion results have become more interesting as well. Otto sees that the long-term brand building has suffered from this; “There are fewer really big brand campaigns with specific emotions being cultivated. Because brands want to earn your money quickly with the next click. So you see that big brands are also a bit hesitant, wondering if they should still run such big, well-known campaigns or focus them on specific channels.”

Otto also sees that there is little less ‘creativity’ in communication nowadays. Creativity skills are more concerned with targeting a specific part of an audience that then resells your product to their followers, not about coming up with a fun plot or a funny film idea. “So, as smartly as you can, you quickly build market share for your products. Some brand names still have a lot of resonance from the past when they were heavily involved in brand building, but if you look at the last Olympic Games and the past football championships this summer, the brands that stand out there are very different from what they used to be, which reminds me that the game is being played differently now.” He finds it fascinating how markets adapt to the times and how the online revolution has changed the way we look at shopping and brand relationships.

“There are fewer really big brand campaigns with specific emotions being cultivated.”

Integration of data and AI to improve processes

For an organisation like SRC, it is important to stay connected with what is happening in the market. This means that when more than 70% of media spending goes to social media, SRC also needs to understand those media. “We need to understand all forms of advertising on TikTok and Snapchat just as well as we understand a newspaper ad or TV commercial. Therefore, we have recently started using AI and large tools to review and examine lots of content for possible violations of the advertising code. For example, we can query combinations of words to filter out those three or four posts that contain those word combinations from twenty thousand posts made on Dutch social media each day.”

He adds that research shows that trust in traditional media is much higher than in social media; “Consumers generally feel more positive about a TV commercial broadcast after a news programme, then when they see an Instagram post with random international advertising content, as they do not know if it is entirely legitimate.”

By proactively monitoring social media posts, the SRC has developed a system that is not only reactively responding to complaints but also looking for possible violations of the advertising code of conduct, working towards creating more trustworthy and transparent advertising online as well. Furthermore, the SRC has co-developed an e-learning and certification process for influencers to learn the rules of what they can and cannot do online when it comes to advertising.

Internally, monitoring online ads with the help of AI also helps SRC make the work more efficient; “In monitoring online advertising we believe that AI-assisted processes can be implemented, allowing us to review much more content without having to do this manually.” Also in writing legal texts, AI is becoming more prominent. “We think it is inevitable and could allow us to process many more complaints with the same team. That doesn’t mean the thinking stops, but the writing becomes more of an editing task. So you’ll never see AI as a replacement for legal thinking, but you can certainly use it as an aid.”

“In monitoring online advertising we believe that AI-assisted processes can be implemented, allowing us to review much more content without it all having to be done manually or by human hand.”