ACTA UNIVERSITATIS UPSALIENSIS Uppsala Studies in Economic History, 102
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ACTA UNIVERSITATIS UPSALIENSIS Uppsala Studies in Economic History, 102 Michael Funke Regulating a Controversy Inside Stakeholder Strategies and Regime Transition in the Self-Regulation of Swedish Advertising 1950–1971 Dissertation presented at Uppsala University to be publicly examined in Ekonomikum, Hörsal 2, Kyrkogårdsgatan 10, Uppsala, Friday, 2 October 2015 at 10:15 for the degree of Doctor of Philosophy. The examination will be conducted in Swedish. Faculty examiner: Ph. D. Thomas Pettersson (Institutionen för geografi och ekonomisk historia, Umeå Universitet). Abstract Funke, M. 2015. Regulating a Controversy. Inside Stakeholder Strategies and Regime Transition in the Self-Regulation of Swedish Advertising 1950–1971. Uppsala Studies in Economic History 102. 345 pp. Uppsala: Acta Universitatis Upsaliensis. ISBN 978-91-554-9305-9. This thesis concerns the development of the self-regulation of advertising in Sweden from 1950 until 1971. Self-regulation was initiated in the 1930s due to a business desire to regulate fair competition in marketing, and while it initially was a minor operation, the 1950s and 1960s were characterized by extensive development. When self-regulation was overtaken by state policies in 1971, it included several interlocking systems, of which parts survived the introduction of the state regime. The thesis’ aim has been to analyze how the rapid regime transitions in the self- regulation regime can be understood. The existing literature identifies four major transitions that occurred during the studied time period. To understand them, the thesis has studied the policy processes leading up to these transitions. Focus has been on the business interest organizations that controlled the regime and their regulatory strategies. Theoretically, the analysis has departed from the hypothesis that tensions between these organizations, due to their members’ different market interests and varying levels of exposure to regulation and public badwill, to a significant degree informed their strategic choices as well as policy outcomes. The results show that the policy processes preceding the regime transitions were characterized by internal tensions, whereby organizations representing advertisers, and to a lesser degree media carriers, due to their members’ higher level of exposure to regulation and public badwill, successfully supported stronger market policing, while ad agencies, being less exposed, as well as a peak industry organization for the proliferation of marketing largely opposed such measures, preferring a more lenient regulation. However, due to increased exposure to regulation and bad will, the ad agencies finally abandoned their opposition and took the lead in regulatory innovation through the introduction of an extensive clearance program that survived the launch of the state regime, becoming a key component in the co-regulatory structure that followed. Keywords: advertising, advertising criticism, advertising regulation, advertising history, advertising industry, affluent society, business, business associations, business history, business interest organizations, business studies, competition, consumer, consumer politics, consumer history, consumerism, co-regulation, corporatism, economic history, history, interest groups, market regulation, marketing, marketing history, marketing regulation, marketer, policy studies, policy process, political economy, political science, postwar, regime, regulation theory, self-regulation, market self-regulation, self-regulation history, stakeholder, Sweden Michael Funke, Department of Economic History, Box 513, Uppsala University, SE-75120 Uppsala, Sweden. © Michael Funke 2015 ISSN 0346-6493 ISBN 978-91-554-9305-9 urn:nbn:se:uu:diva-260201 (http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-260201) Printed in Sweden by Kph Trycksaksbolaget AB, 2015 Contents List of Figures ................................................................................................. 9 List of Abbreviations ..................................................................................... 10 Preface ........................................................................................................... 13 Chapter One. Introduction ........................................................................ 17 Aim of Thesis ........................................................................................... 22 What is Advertising? ................................................................................ 22 Delimitation of Study .............................................................................. 23 Previous Research on the Self-Regulation of Advertising....................... 23 Theoretical and Methodological Perspectives ......................................... 30 The Dynamic of a Self-regulation Regime ......................................... 30 Method ................................................................................................ 33 Actor Categorization: Stakeholder Theory and the Exposure Hypothesis .......................................................................................... 33 Research Questions ............................................................................. 40 How to Approach the Analysis of Regime Change ................................ 41 Regime – A Key Concept in Regulatory Analysis .............................. 44 Regime Typology ................................................................................ 44 Inside Stakeholders’ Regulatory Strategies – Balancing Interests and Risks ............................................................................................. 49 Sources ..................................................................................................... 53 The Use of Names .............................................................................. 55 Outline of thesis ....................................................................................... 57 Chapter Two. Advertising and Postwar Sweden ...................................... 59 The Market Context ................................................................................. 59 The Affluent Society – A Prerequisite for Modern Advertising ......... 59 Advertising – Growth and New Concepts .......................................... 60 New Concepts of Advertising ............................................................. 63 The Public Context .................................................................................. 65 Changes in the Public Perception of Advertising – Debates and Criticism ............................................................................................. 65 The Swedish Postwar Debate on Advertising – the Critic’s Domain .......................................................................................... 65 Market Changes and Advertising Criticism as Reform Pressure – A Survey on Complaints and Self-Regulation Agency Activity .............. 69 5 The Regulatory Context .......................................................................... 73 Criticism of Advertising Self-Regulation .......................................... 73 The Institutional Landscape of the Postwar Consumer Market ......... 76 Corporatism and Consumer Representation ....................................... 78 Official State Investigative Committee Competition for Influence over Regulation .................................................................................. 83 Conclusion .............................................................................................. 88 Chapter Three. Advertising Self-Regulation until 1950 .......................... 91 Sweden – Early Adopter of Advertising Self-Regulation ........................ 91 1930s: The First Self-Regulatory Agencies ....................................... 95 1940s: Arrival of the First Broad Regimes ...................................... 100 Conclusion ............................................................................................. 102 Chapter Four. 1950–1956: the First Steps Towards a Broad Regime . 105 Pre-Merger Reforms – Sticking to a Narrow Regime ........................... 105 Factors Behind the Merger Process of 1953–1956 ................................ 112 Lack of Uniformity in Rules and Conflict over a Petition ................ 112 Advertiser Demands for Major Regime Transformation .................. 119 The Council on Advertising Practice Endorses a Merger ................ 121 Outside Pressure on Advertising and Self-Regulation .................. 125 The Merger Process and Regime Transition ......................................... 130 Advertising Affiliated Organizations and the Appointment of Council Members ............................................................................. 131 The Conflict over Fees ..................................................................... 133 The Blueprint for a New Regime ..................................................... 134 The End of the Merger Process – Safeguarding Insider Control ...... 137 Conclusion ............................................................................................ 142 Chapter Five. Self-Regulation 1957–1963: Internal Conflicts, Aborted Reforms and Broader Participation ....................................................... 149 New Efforts in Education and Information ............................................ 149 The Splitting Up of the Reform Policy Process .................................... 152 Policing