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RAMAVASH
MEDIA
STUDIES
For Mass Communication Materials.

Advertising
Regulation and
Policy in Nepal

Introduction (Written by
Advertising, a form of commercial mass communication designed to
promote the sale of a product or service, or a message on behalf of an
institution, organization, or candidate for political office. Evidence of
advertising can be found in cultures that existed thousands of years ago,
but advertising only became a major industry in the 20th century. Today
the industry employs hundreds of thousands of people and influences the
behaviour and buying habits of billions of people. Advertising spending
worldwide now exceeds $350 billion per year.1
Now, it is recognised as an important economic and social benefit. It
serves as revenue for media and subsidies the cost of the media content
or news and identifies a newly launched product in the market to the
people. However, advertising now dominates the media and has power in
shaping popular standards. Advertising is recognised as the powerful
institutions which can influence the social life and economics. Moreover,
as economic historian David Potter put, Advertising now compares with
such long standing institutions as the school and the church in the
magnitude of its social influence. It dominates the media, it has vast
power in shaping popular standards, and it is really one of the very limited
groups of institutions which exercise social control.2
Advertising has become increasingly international. More than ever before,
corporations are looking beyond their own country's borders for new
customers. Faster modes of shipping, the growth of multinational
corporations, rising personal income levels worldwide, and falling trade
barriers have all encouraged commerce between countries. Because
corporations are opening new markets and selling their products in many
regions of the globe, they are also advertising their products in those
regions.
In 2000 the United States was the leading advertising market in the world
with total advertising spending of $147.1 billion. Japan ranked second with
$39.7 billion, followed by Germany with $20.7 billion, the United Kingdom
with $16.5 billion, and France with $10.7 billion.3 While looking over the
advertising industry and its business around the world and media struggle
for advertising, some scholars have said the media are selling their
audience to the advertisers. During 1980s Canadian publisher A. Roy
Megory said, Publishers of mass circulation daily newspapers will finally
stop kidding themselves that they are primarily in the business of news,
but carry advertising messages.4 The prediction might not have come
true, at least, by way open admission by newspaper editors. But is a fact
that the 1990s have witnessed heavy price slashing by many prominent
newspapers in the West and also in South Asia.
The Nepali advertising industry has grown by leaps and bounds, especially
during the last decade after the restoration of Democracy in the country in
1990. Advertising Industry has grown due to open economic and market
policy and international relationship and also because of the credibility of
print media. The proliferation of newspapers and the electronic media and
its users has also increased in the volume of advertorials. Earlier to 1990,
during the Panchyat System in (1961-1990) the industry had very low
profile, it was because there were less media and also consumerism had
not yet developed.
According to Constitution of the Kingdom of Nepal-1990, has guaranteed
right to freedom of thoughts and expression, Cultural and Educational
rights and the Right to hold any occupation. Likewise, it has also provided
the Right to Press and Publication stating that no reading materials shall
be censored. Generally, the guarantees also imply to the advertising as
these are also the medias software that helps in development of
independent media. Advertising has been recognised as the basic source
of revenue even during the Panchyat Regime but was based to allies of
government supporting press. But regulating advertising was not the
major issue during those days.
Now, regulating advertising is a major issue. It is because of some
advertising is deceptive or encourages an excessively materialistic culture
or reinforces harmful stereotypes. It is not only the issue of Nepal but
many countries in the world has faced this problem and has regulated
advertising to prevent deceptive ads or to limit the visibility of certain
kinds of ads.
The issues of regulating advertising in Nepal are raised timely due to
deceptive advertorials published in the newspapers or broadcasted
through the electronic media. Specially, deception of the public has been
common through advertising and there are hardly any steps taken due to
lack of Advertising Acts and regulations in the country.
This study will try to explore on the policies of advertising in Nepal looking
back to the history and the relevant advertising related laws and ethical
provision, explore the challenges and squint to the historical background
of advertising in the world and Nepal and with the background of
advertising agencies in the country.

1. What is Advertising?
The word advertisement is derived from the Latin word advert ere which
means to turn the mind towards. Advertising today is world phenomena
and is defined differently by various scholars. Wright et al in his book has
defined advertising as controlled, identifiable information and persuasion
by means of mass communications media.
Today, advertising is accepted and viewed as a form of mass
communication. As M.L. Defleur put, Mass Communication is a process in
which professional communicators use media to disseminate message,
widely, rapidly and continuously to arouse intended meanings in large and
diverse audiences in attempts to influence them in variety of ways.
Advertising can be also viewed as mass communication process, where
professional communicators are involved, they use media and try to
motivate the audience influencing them in variety of ways.
According to American Marketing Association, Advertising is any form of
non personal presentation and promotion of ideas, goods and services
usually paid for by an identified sponsor. The above definition quotes
three basic ingredients; 1) It is non personal, it is directed toward a large
group of anonymous people. 2) It is typically paid for and this fact
differentiates advertisings from publicity, which is usually purchased. 3)
For special sponsor of the ad is identified, it is because in most instances
identifying the sponsor is the prime purpose behind the ad otherwise why
advertise? Perhaps the only situation in which the identity of the
advertiser may not be self evident is political advertising. Because of this,
broadcasters and publishers will not accept a political ad unless there is a
statement identified those responsible for it.
Advertising fulfils four basic functions in society, they are:
It serves as a marketing function by helping companies that provides
products or services sell their products. Personal selling, sales promotions,
and advertising blend together to help market the product.
It is educational. People learn about new products and services or
improvements in existing ones through advertising.
It plays economic role. The ability allows new competitors to enter the
business arena. Competition, in turn, encourages product improvements
and can lead to lower prices. Advertising reaches a mass audience, thus
greatly reducing the cost of personal selling and distribution.
It performs definite social function displaying the material and cultural
opportunities available in a free-enterprise society; advertising helps
increase productivity and raises the standard of living.5
Basically, advertising is directed to targeted audience, a specific group of
people that advertisings try to appeal. There are many target audiences
that could be defined. The most general are consumers and business.
Consequently, consumer advertising, as the name suggests, is target at
the people who buys goods and services for personal use. Most
advertising that most people are exposed to falls into this category.
Business-to-business advertising is aimed at people who buy products for
business use. Industrial, professional, trade and agricultural advertising
are all part of this category.
2. Historical Development of Advertising
It is difficult to pinpoint the development of advertising in the world; it has
been around ever since people have been around. Earliest advertisements
is said to be Babylonian clay tablet, dating back to 3000 BC which bears
inscriptions for an ointment dealer, ascribe and a shoemaker. Likewise,
modern day billboards were found in the ruins of Pompeii. Early form of
advertisement was done by town criers who were used as the medium
throughout Europe and England in the medieval period.
The change in technology also changed in the format of advertising. After
the introduction of printing press by Gutenberg in mid 15th century, it
revolutionized the printing process and developed media where
advertisement is connected. First printed ad in English is said to be
printed in about 1480AD in Britain by William Caxton, it was a hand bill of
rules guiding the clergy at Easter that was put on church doors. By 1600s
advertising made its way to the colonies with the earliest settlers from
England. Boston Newsletter, one of the early newspapers of America was
the first newspaper to publish advertisement there. Ben Franklin a pioneer
of early advertising made ads attractive and since then ads greatly
resembled what we call today as classified ads.
The first picture advertising was published to increase sales of coffee in
1652, likewise ads on chocolate and tea were also published in 1657and
1658 respectively. Advertisement was found in magazines during 1740s.
However, earlier ads were carried through posters, special cards, etc of
traders which contained their names and wares.
The beginning of industrial revolution brought major changes in the world.
Industrial Revolution brought changes in American and the European
countries because of mass production through newly invented machines
and ads were aid to reach new mass audiences. The impact of
industrialization in America and Europe following occurred:
Railroads linked all parts of country which made possible manufactures to
distribute their goods to growing market.
Influx of growing immigrants in America doubled. More people meant
larger market for manufacturer.
Invention of new communication media made it easier to communicate
with one another.
Economic production increased, people had more disposable income to
spend on new products.6
This improved economic and communication climate and helped
advertising thrive. The increased importance of advertising agency led to
birth of advertising agency. Roots of modern day agency can be traced to
Volney B. Palmer of Philadelphia. The development of electronic media like
the radio and television also enhanced the advertising and made
advertising as the major part of media in the 21st century. 3. Advertising
in Nepal
To quote the history of advertising is difficult in Nepal. It is believed that
advertising in Nepal was carried out by town criers and other public offices
for announcement of orders of officials. Advertising in the real sense
came, like elsewhere in the world in the printed form after the
development of printing press. However, the history of printing press in
Nepal is only a one and half century old, which was introduced during the
premiership of Junga Bahadur Rana. So, we can view the history of
advertising in Nepal between two periods; 1) Pre-2007 BS (pre-1951AD)
and 2) Period 2007-2046(1951-1990 AD)
3.A. Pre-2007(pre-1951AD)
Nepals first printed form of advertisement in Nepali language was
published in a cover page of a book called Mokshashiddi, by Krishna Giri in
1919 BS. This advertising announced another book being brought out by
Nepal Manoranjan Press, which is the only authentic document on
advertisement of Nepal. Likewise, the second advertisement was found
published after twenty-six years in 1945 BS. It was announcement of forth
coming monthly publication Gorkha Bharat Jivan in the cover page of
book Hasya Manjari printed from Baneras. One of the most important
and influential advertisement in Nepal was published during 1950s BS in
Sudha Sagar, considered as the first newspaper of Nepal announced the
publishing of a book viz. Nalopakhyan.
Gorkhapatra appeared on 24th Baishak, 1958 as a weekly newspaper; in
its first publication it published the rate for advertisement in the paper. We
can say that advertisement was recognised as the source of revenue for
the media even while publishing Gorkhapatra. Since then, in the name of
public notices, government orders and sanad advertisements were seen in
the newspaper. The first commercial advertisement was published in
Gorkhapatra in 1984BS. The advertisement thanked Shree 3 Maharaj and
announced on the opening of new petrol shop. In 1985BS, another
commercial advertisement was published in the name of The Himalyan
Motor Trading Company. Both the above advertisement was provided by
Bhet Narayan of Kathmandu.7
3.B. Period between 2007- 2046BS (1951-1990 AD)
The Rana Regime came to an end on 7th Falgun, 2007 BS. This resulted to
the establishment of democratic system in the country. The new political
system in the country brought significant changes in media, but especially
towards the rise in quantities of newspapers and rise in readership, which
were the factors that created an environment for advertising in the
newspapers. But lack of industrialization and economic development in
the country made it difficult for the publications to get independent on its
own and develop professionalism. The newspapers were either supported
by the political parties or were government owned.
To preserve democratic system, it was inevitable to aware people and be
informed. This effort to bring awareness in people was the work of
newspapers. It must be because of this reason the government formed
Press Commission on 29th Magh, 2014(1957) for the first time, under the
chairmanship of Justice Shree Krishna Prasad Chapagain. In its report
advertising was given priority and said, Newspapers need to be given
government advertisements of government offices, departments and
secretariats.
After the election of 2015 BS, the government of B.P. Koirala supported the
newspaper categorizing into four levels. The government started providing
government advertisement to the newspapers from 16th Magh 2016
providing monthly amount Rs. 600 to Rs.200 by Information Department.
This policy was continued even during the Panchyat System introduced in
2017BS.
Advertising in radio started after the establishment of Radio Nepal on 27th
Chaitra, 2007BS. The advertisement broadcasted in the radio was charged
according to words. In 2027/2028 music was used for advertising. 8The
early advertising was mostly broadcasted live but after the construction of
Photo-concern studio, advertisement was then recorded here. Likewise,
Ratna Recording Sansthan operated advertising service in the country and
paid the total cost.9
Television advertising started after the establishment of Nepal Television
on 17th Magh, 2041, test transmission was conducted from 29th Shrawan
2042 to 14thPoush 2042. During this period advertising was broadcasted
from the Nepal Television. Likewise, advertisements were also broadcasted
through cinema halls. The cinema halls started in 2006BS. The
advertisements were in the format of slides.
Advertising Agency also supported towards the development of
advertising in Nepal. Nepal Advertisers was the first advertising agency
established in 2017 by Laxman Upadhya. It provided artistic and attractive
advertisement to the newspapers. Likewise the second advertising agency
was established in 2020 by Shree Keshav Lamichane viz. Nepal Printing
and Advertising Agency. This agency handled ads of some major clients
such as Janakpur Cigarette Factory, Royal Nepal Airlines Corporation and
Nepal Bank Ltd. In 2022BS International Advertising Service was
established as third advertising by Kishor Shrestha.
The period 2007 to 2046, Nepal faced two systems of ruling i.e. the
Democratic System from 2007-2017 and the Panchyat System of ruling
from 2017-2046, in the direct control of the king. During both periods the
government in the country, in the name of providing assistance to the
newspapers and to make the newspapers impartial wanted to influence
the newspapers. Advertising could be one of the means to gain support
from the media.
4. Present Situation
The situation after the restoration of democracy in 2046 (1990) has paved
the way to the development of private media. The open economic and
market policy and international relationship and also because of the
credibility of print media and also rise in the number of newspapers and
the electronic media and its users has also increased in the volume of
advertising. Today advertising has been recognised as the cornerstone for
development of media.
The rise in newspapers, FM radios and television channels after 1990 has
brought competition in the media in search for more advertisement.
Towards the beginning of 1990s government owned media were main host
for advertising products because of their large circulation, reach and
capacity. But after the decade of 1990s, the rise in private media has
enlarged the market and transaction of advertisement. However, there
have not been significant studies on the market of advertising in Nepal
even today. But some steps are initiated by Advertising Association
Agency Nepal (AAAN) to properly manage the studies in advertising in the
country.
According to AAAN, there are about 500 advertising agency in the
country, among them only 100 ad agencies are functioning. But the
transaction in advertising agency is of vast difference (see data no.1). The
ad agency has 40 to 45 per cent of total advertising share. There are
about 10-11 big ad companies which have full capacity to produce
advertising for print, audio and visual.10
Likewise, the total annual turnover in advertising in the country from print,
radio, television, outdoor advertising is Rs.2 billion. The launch of new
television stations in the country have increased television advertising to
25 per cent that is Rs.35 million transaction in the first year of the
introduction of television channel. This transaction was 25 million rupees
last year.
The economic condition of the country determines the advertising
industry, due to economic crisis advertising has decreased by 10-15 per
cent in the present situation, and one of the reasons is the Maoist conflict.
But if this trend of economic setback continues with the existing numbers
of media, it is difficult for media to sustain with the present advertising
turnover. Research in advertising is the major factor that helps boost the
product using the particular media, to reach the target group. But the
research trend in advertising is negligible. It could be because launching
the product through the research process is very costly. It is also because
of lack in research many advertisements produced by the many of the
companies and the government ads are banned.
The other trend in the present advertising in the country is using the
foreign advertising content in the Nepali media dubbing it in Nepali
language which one can find irrelevant to the Nepali culture and tradition
and society. Even though the long term policy in media have emphasized
to prioritize the advertising produced in the country and discourage the
foreign content advertising. The foreign content mainly Indian products
advertising dubbed in Nepali is increasing especially in the television
channels and also in radio because of presence of multi-national
companies in Nepal and the Indian companies. However, Nepali visual ads
are also in production but comparatively the foreign ads dominate the
Nepali television channels.
The data shows the major advertising agencies transaction between the
major media of the country. The data is obtained from the book
Patrakarita Ka Teen Ayaam published by Press Council Nepal.
Data No.1
S.N
Year
Name of Advertising Agency
Media
Total Amount (Rs.)
1
056-057
056-057
056-057
Bust of Marketing and Pvt.Ltd.
Trikon Advertising Service
Okash Pvt. Ltd
Gorkhapatra Corporation

4,642,000
4,205,000
3,295,000
2
057-058
057-058
057-058
Bust of Marketing and Pvt.Ltd.
Trikon Advertising Service
Multi national Ad Service
Gorkhapatra Corporation

4,371,000
3,830,000
3,415,000
3
058-059
058-059
058-059
Okash Pvt. Ltd.
Evergreen Advertising Service
Trikon Advertising Service
Gorkhapatra Corporation


5,213,000
4,644,000
4,533,000
4
056-057
056-057
056-057
Thompson Nepal Pvt. Ltd.
Eco Advertising
C.T.C. The Media People
Kantipur Publication

13,244,000
6,423,000
5,797,683
5
057-058
057-058
057-058
Thompson Nepal Pvt. Ltd.
World Vision Advertising
C.T.C. The Media People
Kantipur Publication

19,694,000
8,953,000
7,793,000
6
058-059
058-059
058-059
Thompson Nepal Pvt. Ltd.
C.T.C. The Media People
World Vision Advertising
Kantipur Publication


12,751,000
12,441,000
11,893,000
7
056-059
056-059
056-059
Synchro Media
Thompson Nepal Pvt. Ltd.
Media Times
Nepal Television

40,038,000
38,535,000
20,318,000
Another relevant issue is that media take some amounts with the
advertising agency as deposits, those ad agencies need not be member of
advertising agency association but should be registered legally. According
to Mitra Sen Dahal leading personal to associate advertising agency
together said that media and ad agency agreed in the beginning of 1990s
that media would not publish any advertisement those not affiliated with
the Advertising Agency Association, it continued for about two years. But
problem started when media themselves moved in search of advertising,
he said. The media also started taking deposits with the new advertising
agency, the amount can range from Rs.50, 000 to Rs.100, 000. The
media organisation takes the deposits in order that the ad agency does
not pay the amount while working with the organisation.
In order to manage the government advertisement, it has proposed
Advertising Service Authority Board Ordinace-2059 (Bigyapan Sewa
Pradhikaran Aadhyadesh-2059). Also the government formed a committee
to evaluate the situation of the newspapers, its problems, advertising help
etc. on 22nd Shrawan 2061. The committee presented the report on 22nd
Bhadra 2061. The report has not been flashed yet.
4. Advertising Regulation
Should advertising be regulated? It is major issue in those countries where
proper advertising system have not yet developed. Some say advertising
if not regulated, the consumers and the general public could be victims of
false advertising claims and misleading and exaggerated advertisements.
This has resulted to specific sins; some controls have been made in
advertising. However, the shabby practices led to a gradual erosion of the
ancient principle of caveat emptor (let t he buyer beware) toward one
caveat venditor (let the seller beware) - that is toward regulation. So,
advertisement must be truthful at any cost.11
The general tendency is that the people believe advertising makes
people buy things they do not want, this is why some people think it
needs to be regulated. The advocates of regulation on advertising charge
that it propagates stereotypical images to false claims and also to those
like children who do not have mutual capacity to distinguish fact from a
sales pitch. Similarly, some ads tend to be vulgar and obscene and
unsuitable for viewing by younger audiences. But the major reason for
advertising to be regulated could be because of unfair and unethical
advertising and its effects and also to ensure fair practices.
Whatever the claims could be some restrictions are made for both
advertisers and agencies to do business. 12 Regulation could range form
allowable language in legal and financial advertisements to size and
placement of outdoor signs. But advertising throughout the world has
been regulated through variety of systems:
Law and regulations of legally constituted bodies.
Media control over the type of advertising acceptable for publication or
broadcast.
Self-regulation by advertisers through their own codes of conduct.
Advertising is also controlled indirectly through lobbying of consumers or
business group as well as from taxation of certain types of advertising. In
countries like Denmark, Norway and Sweden, consumer ombudsman
applies the laws regulating advertising and persuades advertisers to
comply with both national law and codes of International Chamber of
Commerce.13
Federal, state, and city governments have passed legislation restricting
advertising in various ways in the United States. The Supreme Court of the
United States has overturned some restrictions, however, ruling that
advertising is protected under the free speech provisions of the First
Amendment to the Constitution, although to a lesser extent than political
speech. In a landmark 1976 ruling, Virginia State Board of Pharmacy v
Virginia Citizens Consumer Council, the Court declared advertising to be a
semi privileged form of free expression, subject to some regulation. In the
Virginia case the Supreme Court struck down a ban that prohibited
pharmacists from advertising drug prices. The ruling removed bans that
had applied to other professionals, such as physicians and lawyers, and
enabled them to advertise their services.14
In the United States the main government regulatory agency for
advertising is the Federal Trade Commission (FTC). The FTC enforces a
variety of consumer protection laws to eliminate ads that deceive the
consumer. The FTC defines deceptive advertising as any ad containing a
misrepresentation or omission harmful to the consumer. An advertisement
does not have to be untrue to be deceptive.
The key to the FTC's regulation of advertising is its power to require that
advertisers substantiate the accuracy of their claims. So if advertisers say
that "tests prove" or "physicians recommend," they must be able to show
test results or affidavits from doctors. Moreover, companies cannot misuse
evidence.
Products that can affect health receive special regulatory attention. The
U.S. Congress banned cigarette advertising from radio and TV in 1971
under the Public Health Cigarette Smoking Act. In 1998 the tobacco
industry and the attorneys general of 46 states agreed to ban outdoor
cigarette advertising and the use of cartoon characters in advertising, a
practice that many thought had encouraged young people to start
smoking.
Advertising directed to children has received considerable scrutiny. In
1990 Congress passed the Children's Television Advertising Practice Act.
Among other things, it set limits on the amount of advertising that could
be included in children's television programming and barred hosts of
children's shows from selling products.
State laws and enforcement bureaus impose additional regulations on
certain types of advertising, particularly those involving contests. These
regulations may differ from state to state. Consequently, advertisers
planning a national contest through newspapers may have to prepare
several different versions of an advertisement to comply with the varying
laws. In some states the media are themselves regulated.
The advertising industry has resorted to self-regulation in a serious effort
to stop abuses before they occur. These self-imposed codes of ethics and
procedures aim principally to curtail not only bad taste but also
misrepresentation and deception in copy and illustrations, as well as
derogatory and unfair representations of products of competitors.
Several advertising trade associations are concerned with maintaining
high standards. The associations believe it is good public relations to do
so, inasmuch as advertising that weakens public confidence damages the
impact and influence of all advertising.
Individual media and media groups often establish their own codes of
ethics. Some newspapers and magazines refuse to publish advertising for
tobacco and alcoholic beverages; most of them, in varying degree,
investigate the reliability of advertisers before accepting their copy. Some
publishers have strict rules about the presentation of advertising to
prevent the publication of false or exaggerated claims and to preserve the
aesthetic tone of their publications.
Radio and television stations generally try to investigate the company and
its product before broadcasting advertising messages that might cause
unfavourable reactions. The networks and the National Association of
Broadcasters have established codes regulating the advertising of medical
products and controlling contests, premiums, and other offers. All the
networks maintain so-called acceptance departments, which screen both
commercial and non-commercial scripts, either deleting or challenging for
substantiation any questionable material. Most magazine publishers have
their own strict rules on acceptance of advertising copy.
The American Advertising Federation, an organization of leading national
advertisers, has long campaigned for truth in advertising. Other
organizations that promote ethical standards are the American Association
of Advertising Agencies and the Association of National Advertisers. The
Institute of Outdoor Advertising encourages its members to improve the
design of their advertising posters and signs and, more importantly, to
make sure they do not erect advertising billboards in locations where they
will mar the landscape or otherwise offend the public. The best-known and
most active watchdogs in the advertising field are the Better Business
Bureaus, which bring pressure to bear on unethical advertisers through
persuasion, publicity, or, in extreme cases, legal action. The fact that local
and national bureaus are subsidized by both advertisers and media
reflects the conviction of modern business management that good
advertising is good business.15
Likewise, in Great Britain government department advertising is organised
by Central Office of Information which appoints agencies for different
campaigns. Legal control of British ad falls into two areas: a) common and
private law areas and b) stautue law areas. Under Advertisements (Hire
Purchase) Act 1967 any advertiser is expected to be familiar with the laws
of defamation, contract, copyright, trade descriptions and fair trading and
so on. Advertising ethics comes under the purview of the Advertising
Standard Association (ASA) and the Code of Advertising Practice
Committee. Radio and television ad is also controlled by a similar but
more extensive Code which is included in the Independent Broadcasting
Authority Act 1973 so that its strictness here has the force of law.16
The Indian Advertising is also governed by three categories of law: the
constitutional law, the Indian Penal Code and Criminal Procedure Code
(1973) and the legislation which are related to press. The Indian
advertisement are controlled by different Acts of the country like Drugs
and Cosmetics Act, 1940; Drugs Control Act, 1950; Drugs and Magic
Remedies Act 1954; Copyright Act, 1957; Trade and Merchandise Marks
Act, 1958; Prevention of Food Adulteration Act, 1954; Pharmacy Act; Prize
Competition Act, 1955; Emblems and Names (Prevention of Improper Use)
Act, 1950; Consumer Protection Act, 1986; Indecent Representation of
Women (Prohibition)Act, 1986, AIR/Doordarshan Code; Code of Ethics for
advertising in India issued by the Advertising Council of India; Code of
Standard in relation to the advertising of medicines and treatments;
Standards of practice for Advertising Agencies.17
The description on regulation on above countries in the world quotes on
regulating advertising and what kind of laws effect the adverting and why
advertising must be regulated.
5. Regulating Advertising in Nepal
There is no specific law relating to advertising in Nepal. Advertising is
affected by the relevant constitutional provisions, governmental
administrative and regulation and self regulation of the industry itself.
As advertising is directly related with the media, to see the legal provision
in the country, it is necessary to observe the provision on press provided
that by the constitution. The earlier constitution of Nepal introduced in
2004 BS (1948)18, the interim constitution in 2007 BS (1951AD),
Constitution of Kingdom of Nepal-2015 BS and Constitution of Nepal 2019
BS (1962), had endorsed freedom of press as fundamental rights of the
people. The provision in the constitution can also be interpreted for
advertising in the country.
However, the first prototype code was promulgated in the form of a
decree (Sanad) issued by Prime Minister Dev Sumsher J.B. Rana to guide
the operations of first official newspaper Gorkhapatra. The decree set
limits what were not to be printed and gave freedom to what should be
printed for public knowledge. This was for the first time advertising was
prioritized through the decree published in 1958 BS. It states advertise
useful facts for all(Duniya lai Hunya Istihar) 19 , this shows
advertising has also been prioritized during the initiation of Gorkhapatra.
The constitution of the kingdom of Nepal-1990 has the provision in the
Article12, which says all citizens have freedom of opinion and expression.
Likewise, Article 13 provided the Press and Publication Rights to all the
citizens and has guaranteed pre censorship in any of the written matters
shall not be allowed unless it undermines the sovereignty and integrity of
the Kingdom of Nepal, or which may jeopardise the harmonious relations
subsisting among the people of various castes, tribes or communities; or
any act of sedition, defamation, contempt of court or incitement to an
offence; or on any act against which may be contrary to decent public
morality and behaviour. The provisions in the constitutions even though
does not have clear provision for advertising, it has enough room that can
be interpreted by the lawyers which also relates to advertising.
Likewise, all the advertising agencies to work within the country have to
be registered as service industry at Cottage and Small Scale Industries
Department, Commerce Department. It is regulated by Company Act 1958
and Cottage and Small Scale Industry Act 1963.
The Press and Publication Act 1991 (2048), in its Section 14 and 15 have
the provision that any publication should not bring hatred to the king and
the royal family in any form, undermines the sovereignty and integrity of
the Kingdom of Nepal, or which may jeopardise the harmonious relations
subsisting among the people of various castes, tribes or communities on
any act against which may be contrary to decent public morality and
behaviour. Likewise, Section-15 has the provision that publication of notice
on the specific subject, incident or related to any area can be published
within the time limited that it can be published and should be authorized
and ordered to have it published.
The National Broadcasting Act 1992 has regulated radio broadcasting
media for advertising in radio in the broadcasting through its Section 14
and 15. Section-14 has scheduled specifically provided for access to radio
broadcasting time for advertising but it also has the provision for banning
advertising of goods related to tobacco or alcohol drinks on the ground of
public health. Section-15 of the Broadcasting Act have the provision that
cannot be advertised which bring hatred to the political parties, obscene
materials, remove the elected government using the agitating force, bring
incitement and fear among the citizens, speaking against the non-aligned
character of Nepal and materials that may jeopardise, insult the
harmonious relations subsisting among the people of various castes,
tribes or communities are not allowed to have them broadcasted. Likewise
there are laws that relate to the content of broadcasting, which also can
be associated with advertising because the broadcasters are required to
ensure compliance in anything that is put On Air.
Cinematograph Act 1969 (amended in 1990) has regulated in the
production of movies, its exhibition and distribution business. There are
also laws that directly relate to advertising but it is also affected by the
general limitation on the content of messages, under different laws from
copyright to the Public Offences laws. The Defamation and Libel Act- 2016
in Section 6 has the provision for punishment if published any materials
which have libellous character. Likewise, Nepals Copyright Act -2022 have
clearly mentioned advertising through any media to audience, about the
creative work showing the writing belongs to others is a punishable act.20
There is also law that would require the Press Registrar to make
information available on circulation etc. to advertisers upon payment of a
certain fee; this could help advertisers to make media decisions,
depending on of course the reliability of the information so provided.
There are also laws governing general business such as Contract Act 2056
and Patent and Trade Mark Act 2020, where advertisers would have to
abide by. Also the laws that affect commercial broadcasting also affect
advertising and so do laws relating printing and packaging, where they
exist. Also laws to control gambling and money lending affect advertising
Advertisers may face both civil and criminal actions for violating law.21
Advertising is also affected by Consumer Protection Act 2054 which states
information on the product and service can be provided to the consumers.
The information must be truthful on the quality of the product and service.
Likewise, the Children Act 2048 also has the provision that the children
should not be posed negatively in the media. In accordance to the
Medicine Act, Nepal Medical Council (NMC) has framed a Code of Conduct
to regulate advertising. The Code of NMC says it is unethical to solicit
patients directly or indirectly by a physician, by groups of physicians or
by institutions organisations. Also self advertisement of the physician is
incompatible to the principles and is allowed to use 1814 inch size
signboard and write their names.
Also Nepal Bar Association has framed a Code of Conduct for Lawyers in
2051. It says that for the commercial purpose advertising on the legal firm
must not be done. Also it has the provision of punishment if violated; the
punishment can range to the cancellation of the registration of the firm or
the lawyer.
Advertising are also regulated through the Directives on Advertising of the
government owned media. Gorkhapatra Corporation Advertising Directive-
2053 (amended 2057); Radio Nepal Advertising Directive-2060 and Nepal
Television Commercial Directive-2059 (amended 2061) also have the legal
base on the types of advertisings that could be published by those
government media. The government has banned the advertisements
related to alcohol and tobacco products in the electronic media since
2055BS. However, the advertisement of alcohol and tobacco have picked
up in the newspapers and in the hoarding boards of the capital and other
parts of the city.
The Code of Conduct for the Journalist also affects the advertising, the
Journalist Code of Conduct 2003 has clear provision for advertising in
Section-4, sub-section 12 stating Not to present advertising in the form of
news. It elaborates neither to present an advertisement as news nor to
refute news by way of advertisement; and a communication media shall
generally refute news published and broadcast in another media.
Other lesser media like hoardings, leaflets, and mobile media are also
used and are governed by laws related to print and electronic. The
management of hoarding board and banners and posters and wall
painting in the public area is now handled by the concerned municipality.
There is also legal provision in advertising expenses in Nepal. Finance is
the key factor that controls the amount that the firm is capable of
spending for a creative activity of advertising. Here advertising budget
depends upon the government rule (Act). For the tax purpose prior to
2049 BS any company, industry, profession, vocation and business
incurring expenses for advertisement and entertainment should not
exceed 2 per cent and 1 per cent of the gross profit. After the introduction
of Industrial Act 2049, the government changed the rules of spending on
advertisement expenditure under the Industrial enterprises Act 2049; any
industry incurring advertising expenditure can deduct up to 5 per cent of
the gross income. Any other similar expenses shall be allowed to be
deducted while assessing the taxable income. 22
6. Advertising Policy
Even though advertising in Nepal lack Advertising Act and regulations, but
other laws related to mass media, consumers act, copyright act,
defamation and libel, contract act etc. affects the advertisements
published in the media. Looking over to the historical development of
media in the country, advertising has been a neglected subject. It is not
that no works have been made to develop advertising business in the
country. Timely, provisions on advertising are mentioned in the
government policy while media issues are raised. Until the restoration of
democracy in the country in 1990 AD, advertising issues were not so far
discussed, even the history of media in Nepal is as century old and
establishment of advertising agency is nearly approaching 50 years. Some
steps are also taken by the government to develop advertising in the
country.
The government formed Press Commission on 29th Magh, 2014(1957) for
the first time, under the chairmanship of Justice Shree Krishna Prasad
Chapagain. The report suggested that, Newspapers need to be given
government advertisements of government offices, departments and
secretariats.
In 1971 (2028BS) New Communication Plan arrived with the motto for
communication development, stress role of media in national
development and provides for points system of evaluation and
categorization of private newspapers. Communication Plan-1971 deals
with policy, decision, and programme has provision related to
advertisement for Radio Nepal and Gorkhapatra Corporation. It has
emphasized to produce commercial programmes through radio to earn
revenue; advertisement is identified as one of the source of revenue. It
has focused on the foreign advertising agencies and businessman to
advertise in Radio Nepal largely making contacts to Indian Advertisers.
The plan has also focused study on the quantity of radio sets in the
country and import radio sets. It has set the language standard for
advertisement where the use of Nepali and English were allowed. The
policy also states that the commercial programmes can not be
broadcasted at any time in the morning and till 9 oclock in the evening.
Likewise the commercial programmes can only be broadcasted after the
completion of afternoon and evening programmes.
The plan for Gorkhapatra Corporation pronounce that advertising and the
news policy needs amendment and to increase the number of pages of
the newspaper. Likewise the plan also states to charge the fee of
government advertisement according to rule set forth and Advertisement
Department will look to all sort of advertisement in the newspaper.23
Similarly, National Communication Policy and Programmes of HMG
appeared in 1988. A 30-page documents for the first time, recognises
importance of regular audiences survey and recommends them but the
policy for advertising was also limited to the government organisation
only.
National Communication Policy-1992 enclose policies relating to
advertisement. The Communication Policy has clearly stated to provide
government advertisements to private newspapers on the ground of its
regularity and classification. Also manage the environment to provide the
government and semi-government industrys advertisement to the private
newspapers those classified. This provision would also work for the
monthly, bi-monthly, tri-monthly and the literary newspapers.
The Policy-1992 for Radio Nepal and Nepal Television discourages the
advertisement of alcohol and tobacco. Likewise, for the quota of
advertisement and newsprint the press council would work for auditing
and circulation until the associated publisher, advertisers and the
advertising agency are not involved in classifying the published
newspapers. 24
No separate policy have been framed for advertising till 2001, the earlier
policies for advertising were acquainted with government media and lack
professionalism, it also ignored private organization. So, timely the
association for advertising agency AAAN25 had demanded for clear policy
for advertising. The bulletin of AAAN-2055 has clearly raised the issue for
National Advertising Policy as slogan for the advertising agency. 26
The market of the advertising has increased according to the research
paper published by IIDS27 in 1996 AD said that the advertising between
1972-1986 AD, the expenses on advertisements rose by 7 times from 0.4
billion to 3.2 billion. As the advertising market was and is increasing after
the liberalization of economy, need of separate advertising policy was the
demand of the time. During the period AAAN suggested 11 point proposal
for national policy on advertisement business in 1999 AD28. Finally,
separate advertising policy appeared in 2001. Under the Long-term Policy
of Information and Communication-2001, the government introduced
Long-term Policy for Advertising.
This is first nation wide advertising policy introduced by the HMG. The
Long-term Policy for Advertising is divided into two sections. The first part
deals with the aim and objective and second deals with policy and
programmes. The aim and objective of the policy-2001 is to develop
advertising business as national industry, and to manage and enhance
national economy. It also aims for impartial and free press and identify
advertising as the main source of revenue. Likewise, the final aim is to
make advertisement affective through inspection of use of language, style
and cultural aspect.
The Policy and programme have altogether 28 points; the proposal of
AAAN has also been accepted. The policy and programmes deals with
clear specification of the right and responsibilities of all parties of an
advertisement and draw up a national advertisement code of conduct that
is in line with the constitutional provisions and national values and ethics.
To introduce the policy recognising advertising agency be associated
directly or indirectly with advertising association and also recognise
advertising business as service industry entitled to all the facilities. The
entry of multinational advertising agencies will have to provide 20 per
cent domestic share compulsory and use of Nepali labour and creation for
its development.
There is also programme to set up an independent body to monitor the
electronic media (audio-visual), digital media, foreign advertisement, and
also establish impartial, representative, free censor board. Registration of
newly advertising agency would be based on the uniform criteria through
the recommendation of recognised advertising association. Set up
advertisement subject in the academic curriculum from school and in the
training institute and also adopt nationalistic approach in advertisement
production through standardization of the language for advertisement,
which should uphold Nepali character. It has also divided advertisement
into commercial and social responsible. The policy deals for the legal
management of advertisements of product through trade mark and
copyright; also it promotes advertising through internet.
The policy is negative towards exaggerated advertisement of the product
that directly affects the health of the consumers like foodstuffs, medicines
and liquors etc., for publication and broadcasting these advertisements
needs consent from the authority and also re-evaluate the ban on alcohol
and tobacco in electronic media according to World Health Organization
(WHO) standard.
To categorize advertising agency in four types according to capital
investment, yearly transaction, number of staffs, relation with different
media and infrastructure. The policy also discourages the foreign content
to be dubbed in Nepali language, and also to determine the rate of
advertisement of films, documents and social welfare and commercial
ads. Likewise, manage the outdoor advertisements and stop the wall
painting and wall poster advertisement. The policy also facilitates to
provide advertisements to the newspapers and electronic media according
to their classification, the advertisement would also be provided to private
media that could be quarterly, monthly, bi-monthly, tri-monthly and half
yearly on same ground of classification. The government ads would be
provided through the Department of Information.
Also the government would manage the ads from foreign sole distributors
in Nepal to publish through the national media targeting the domestic
audience; the policy also supports the local media with providing ads. It
has clearly stated that any publication and broadcasting media should not
exceed advertisements to 40 per cent of total contents of the publication
and broadcasting. The policy also states that any industry or firm,
organisation should spend 5 per cent of the total profit in advertisement.
The National media policies of 1971, 1988, and 1992 have been framed in
the view of the requirement of national mass media organisation and
hence the documents scarcely bear a provisional or local perspective. This
explains the imbalance in the distribution of resources and chronic
absence of district and community-based media initiatives. The above
advertising policies are only limited to government owned media and only
a statement have been endorsed to provide advertisements to the private
media in accordance to classification. The media policy also lacks in
thinking about developing the advertising as an industry. IIDS research
report states that private sector press are at a disadvantage from the
viewpoint of getting the share of advertisement revenue, since the three
largest government media- Gorkhapatra Corporation, Radio Nepal and
Nepal Television- bag almost whole bulk of the advertisement revenue
leaving very little for the private sector press.
Even today the total bulk of advertisement belongs to the government.
So, to properly manage the advertisement in the country, the government
announced the Long-term Communication Policy 2001. This policy in
comparison to earlier policies has unique character, but the policy
remaining only as a document is the tragedy. The policy included 90 per
cent of suggestion recommended by AAAN, however lack of law in
advertising has made the policy ineffective said Bhaskar Raj Karnikar,
chairman of AAAN.29 In fact it is truth, nothing so far has happened from
the formation of laws to the development of uniform code of conduct.
7. Argument on Advertisement30
The above regulations and policies in the country directly or indirectly
affect advertising. But lack of Advertising Act has resulted to major
advertising debate. The use of language and the theme of content,
sometimes the sentences or the words are debatable and those
controversial commercials have also been banned.
Many advertorials published and broadcasted have brought controversies
some examples are: The advertising produced by Ministry of Health the ad
on condom (Jhilke Dai! Cha Chaina Condom) was banned stating that the
ad language is not accepted by Nepali culture. The words Jhilke Dai were
removed and was broadcasted then, but now this ad is stopped. The
advertising of washing soap O.K and Puja; both their advertising
undermined the product to show their product as best, this unhealthy
competition of product advertisement was broadcasted several times on
Nepal Television which was against the advertising policy of NTV. It cannot
be denied that this kind of advertisement will not be published in the
coming up days. Unless there is any complain on advertisement of a
product, the publicity continues in the media in the present day. No one is
there to monitor in this kind of issue, this is why censor board is needed.
Some advertisements published in the newspapers are deceptive;
especially educational institutes guarantees for excellence on computer
hardware in a much stipulated period, also some advertorials guarantees
to make people perfect in English language in a month, which is totally
false.
Also use of children in advertisements has proliferated to advertise the
product of noodles, chocolates, biscuits, oil etc especially for the edible
product, without thinking of the psychological aspect of children. Also use
of women in the advertisement with the traditional concept of domination
is shown in Nidhi Tea ad.
Like wise the use of sensational terms are found in the products; like a
friend in hard times, there is no better way to relax, what can satisfy
more than virgin. The ad of Virgin whisky tells nothing more than to
attack virgin girls, which can easily corrupt the youths.
These kinds of advertisements are the commonly used in the Nepali
media; also use of ad meant to broadcast in television is used for the
radio, what it portrays to the listeners, it is matter of research. This kind of
ad will bring no impact to the listeners or rather mislead them and is
entirely contrary to the system of choosing media. So, it is necessary to
check the advertisements published and broadcasted in present day
through regulation or be self-regulated.
9. Challenges and issues
After the decade of 1990s, advertising has become a growing industry.
The investment in the advertising sector has also increased. But still the
Nepali advertising faces challenges for its development. The major
challenges and issues are:
i. Lack in legal and ethical guidelines for advertising agencies and the
private media.
ii. Impact of foreign advertisements.
iii. Lack special monitoring sector.
iv. Impact of advertising in the content of news.
v. Lack in government advertisements to the local newspapers.
vi. Advertising Agencies still depend upon 15 per cent commission
provided to them by the media organisation.
vii. Lack in advertising educational institution.
viii. Lack proper execution of the out-door advertisement policy.
ix. Lack awareness in people about the advertisements exposed to them.
x. Lack proper functioning of Audit Bureau of Circulation (ABC) to tell
about the circulation of newspapers.
xi. Lack research in advertising.
xii. Industries have closed down due to Maoists problem, so advertising is
facing hardship.
So, if the advertising industry is to prosper in the country, the above
mentioned bottlenecks should be considered.
10. Conclusion
In the modern era media without advertisement can barely be thought
about, but advertisement must strive to informative, qualitative and
socially responsible advertisements so that the advertisements truthful
can better the life of the people.
The deceptive information about the product will disadvantages to the
people, so it can also lead to disbelief in the media because of false
advertising. So, media must be very careful in case of publication and
broadcasting of advertisement. Each media organisation should frame
their own code of conduct as being one of the responsible media
organisations.
But, our media have not been able to frame such code of conduct by
themselves excluding the government owned media. In practice most
private commercial media have the impact of advertising in news. More
often news is dropped when ad is more. The policy of 40 per cent is
advertisement of the total content of the newspapers is not in practice for
the daily and most influential newspaper like Kantipur Daily. Even though
media organisation lacks the proper regulatory system, they should
themselves be regulated. But media in Nepal either the government or the
private sector have violated the rules and guidelines set forth by them in
written and unwritten form.
In response to complaints of advertisements being deceptive and
exaggerated claims, both government and the advertising industry should
set up advertising guidelines to prevent misleading, offensive and
excessive advertising. The policy set forth by the government needs
monitoring. In a nutshell, a proper guideline is the need of the time that
could be regulatory or ethical.