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Direct buy advertising

24 January 2018

The Phone-paid Services Authority is aware of an increase in the use of direct buy advertising1 in certain sectors of the phone-paid services industry, including games and lifestyle products consumed online.

Direct buy advertising can provide genuine value to businesses and consumers. The direct buy advertising model provides greater promotional control for the provider of the service and therefore may be less susceptible to the risk of abuse of the affiliate marketing cost per acquisition model.

However, it, too, has its risks. Through our ongoing programme of monitoring, we have noted the frequency of adverts from phone-paid service providers appearing in videos on major platforms and apps that are highly likely to appeal to children. We are therefore concerned that consumers, often young, are engaging in phone-paid services unknowingly. 

In addition, the PSA currently has several investigations into services that have been advertising using this model. Some of these have generated significant levels of complaints from consumers to the PSA.

Addressing the issue
While we appreciate that it may be difficult to completely prevent adverts for phone-paid services reaching children, we are aware that there are a number of  tools currently available to help. For example, Google’s Adword campaign safety measures include negative keywords, manual exclusions, topic exclusions and parental status exclusions. We also understand that providers can monitor where their adverts are placed which should enable them to assess the efficacy of their use of these safeguards.

We would urge providers using direct buy advertising as a promotional method to take steps to ensure that children are not exposed to inappropriate or unsuitable promotions, or promotions that enable charges to be easily incurred or incurred without parental consent. This is likely to be in breach of the PSA Code of Practice (14th edition). Such steps should include fully understanding the tools currently available, their capabilities and how best to employ any safeguards afforded by them.

The PSA are working with stakeholders to ensure that direct buy advertising can be used compliantly and with confidence. These include the major platforms, MNOs, Level 1 and Level 2 providers. We intend to consult on guidance for industry in the near future. This is intended to give providers the confidence to advertise their services compliantly using direct buy advertising and ensure that the consumers subsequently engaging with or being charged for their services are satisfied.

Should industry need compliance advice on their promotions or services using direct buy advertising in the interim, please contact our compliance team on compliance@psauthority.org.uk.

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1In this instance, we define direct buy advertising as the placing of adverts via major online platforms without the use of third parties.