Information for media buyers
How is Australia’s advertising self-regulation system funded?
Responsible advertisers assist in maintaining the self-regulation system’s viability and support its administration by agreeing to a levy being applied to their advertising spend.
Funding of Ad Standards and its secretariat support of the Ad Standards Community Panel and Ad Standards Industry Jury is provided through the voluntary levy - Ad Standards receives no government funding.
The levy is collected mainly through media buying agencies but also directly from advertisers and advertising agencies that buy their own media space. The levy is collected by the Australian Association of National Advertisers (AANA) and is used to fund the operations of Ad Standards.
The levy is applied to the gross media cost of all advertising communications, regardless of the media type.
What is the levy money used for?
All levy monies are applied exclusively to the maintenance of the self-regulation system. The levy is used to administer the self-regulation system including:
- general Ad Standards administration and operation of the self-regulation system, including maintenance of complaints management
- Ad Standards staff overheads
- Ad Standards Community Panel recruitment, overheads and meetings
- research on community standards in advertising
- Code training for industry
- advocacy and awareness raising of self-regulation
- liaison with Code owners on all Code issues, including reviews.
Why should advertisers pay the self-regulation levy?
As an advertiser, support of the self-regulation system through the payment of a levy is critical to ensure Ad Standards can continue to deliver a national system of advertising self-regulation.
Advertisers, advertising agencies, media proprietors and media agencies know that there is no government intervention in the self-regulation system and to maintain this position it is necessary to have adequate support from the very industry the system has been established to serve. This includes having sufficient financial support to allow for the independent adjudication of complaints in a transparent, fair and balanced manner that has the confidence of the community, advertisers and Government.
Ad Standards exists so that the community, industry and government have confidence in, and respect for the advertising self-regulatory system and that they are assured that the general standards of advertising are in line with community values.
By paying the levy, advertisers support this mutually beneficial approach and ensure that Ad Standards can continue to respond to complaints in a timely and fair manner, is transparent in its decision making and continues to be accountable to both advertisers and the community.
Does an advertiser’s levy contribution impact on the Ad Standards Community Panel’s adjudication of complaints?
The foundation of the self-regulation system is the independent assessment and adjudication of complaints in line with the prevailing advertiser Codes, regardless of the status of financial support.
As the levy collection function is at arms-length from our operations, Ad Standards does not know whether an advertiser pays the levy in assessing if a complaint against that advertiser is within its jurisdiction. Similarly, the Community Panel considers all valid complaints against all advertisers without any knowledge of whether or not they pay the levy.
Choosing to ‘opt out’ of the levy payment does not mean that an advertiser will be discriminated against or negatively impacted. Information about who pays the levy is kept confidential from the Community Panel. This ensures total segregation between complaint adjudication and financial support.
While the status of levy system participation does not influence Community Panel decisions, the financial support of all advertisers is critical to ensure that the entire system is resourced appropriately to continue to deliver a best practice system that is benchmarked to international standards.
Under what authority is the levy applied?
There is no statute underlying the advertising self-regulation system. Accordingly, the collection of levy by media buyers is undertaken on the authority of the self-regulation system itself, endorsed by the Media Federation of Australia and with the support of the Commonwealth Government.
What arrangements apply overseas?
There are many different approaches to support advertising regulation internationally and these vary depending on the unique systems applied in each country. Some are based on subscription, membership, levy payment and any number of combinations depending on how advertising regulation is administered.
The Australian levy rate of 0.05% is in line with international standards. The levy rate for several of our international counterparts:
- UK - 0.1% of non-broadcast and broadcast advertising expenditure.
- Direct marketing sector – 0.2% (up to a maximum of 57.000€).
- New Zealand – 0.06%
- in addition to media proprietors providing direct financial support to the NZ Advertising Standards Authority.
- Sweden - 0.05%.
Other hybrid models include:
- Ireland - 0.2% of media spend plus subscription and membership fees.
- Netherlands - 0.025% plus a range of fees.
- Greece - 0.02% plus an annual fee of 300€.
How to contribute levy
Please contact the Australian Association of National Advertisers for further information on how to contribute to the levy.