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How advertisers will need to adapt to impending regulations on Twitch and TikTok

The Drum 14 May 2020 11:34
Twitch

New legislation set to be introduced this year will change the way advertisers can target people on platforms like TikTok and Twitch. Sarah McDonald from law firm Wiggin explains what it means.

Even before social distancing measures were introduced to combat the spread of Covid-19, the virtual world was a rapidly growing space. This is evident in the explosion of international video-sharing platforms (VSPs) such as TikTok and Twitch, the Amazon-owned platform with over 15 million daily active users.

While these VSPs compete with television time amongst the younger demographic, the levels of regulation differ significantly; VSPs, which include live streaming services, have been something of an unregulated space and a legal grey-area when it comes to content and advertising compliance in the UK.

It is only since the revision of the Audiovisual Media Services Directive (AVMSD) in 2018 that a fairer regulatory environment has sought to be created between traditional broadcasters and these newer services. As the UK looks to implement the revised AVMSD, due by 19 September 2020, VSPs are preparing to have tighter regulation imposed. This could have important implications for the content of adverts and the type of adverts permitted and therefore the platform revenue streams as a result.

Until now, this EU directive has not encompassed the content on VSPs such as Twitch or YouTube, meaning that UK providers have not been under Ofcom’s restrictions in relation to sponsorship or any paid-for promotion of products or services in or around user-generated videos. Whilst the UK’s Advertising Standards Authority (ASA) is clear that advertising on social media platforms falls within its remit, providing the marketing in question is not in ‘foreign media’; it has upheld a complaint against Lionsgate for an in-stream transmission of a film advert on Twitch during a League of Legends World Championship in 2015; and it recently sent an advice note to gambling operators as a reminder that gambling advertising compliance applies to ads on VSPs, we have yet to see widespread complaints or CAP Code rules being enforced against non-complaint ads appearing there.

As a result of the revised AVMSD, advertisers may need to adapt or change either their content or their chosen methods of advertising, especially given the emphasis on the prevention of harm to minors. Twitch’s youngest users for example can be 13 and with no age-verification process required to sign-up, many are even younger. As a result, this might impact the platforms’ short-term revenue streams; a large part of the appeal of advertising on Twitch for brands was reaching a far-flung and significant audience without the same restrictions that a brand such as Coca-Cola might encounter when advertising at the cinema or on television. Nonetheless, it is unlikely that this will be a long-lasting impact, as there are enough brands with adverts that will easily pass the new basic rules to whom the growing audience on VSPs will appeal.

Clearly, the introduction of the revised AVMSD later this year will significantly change how content and advertising is served on VSPs, having an impact on the type of adverts permitted, potentially the time of day and the content it surrounds – this will therefore affect the appeal of VSPs for certain brands. Will the regulation have an impact on advertising revenue for VSPs or will this more carefully curated advertising space drive prices up in the long-term? Only time will tell, but one thing that is for certain is that brands advertising on VSPs and those users who generate an income are unlikely to suffer a lasting impact given the size of the audiences that these platforms have.

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VSPsUKVSPsSarah McDonaldAudiovisual Media Services
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