A Brief Study: Advertising Regulation and Policy in Nepal

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 1980’s 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 media’s 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)
Nepal’s 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 1990’s, 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
Name of Advertising Agency
Total Amount (Rs.)
Bust of Marketing and Pvt.Ltd.
Trikon Advertising Service
Okash Pvt. Ltd
Gorkhapatra Corporation

Bust of Marketing and Pvt.Ltd.
Trikon Advertising Service
Multi national Ad Service
Gorkhapatra Corporation

Okash Pvt. Ltd.
Evergreen Advertising Service
Trikon Advertising Service
Gorkhapatra Corporation

Thompson Nepal Pvt. Ltd.
Eco Advertising
C.T.C. The Media People
Kantipur Publication

Thompson Nepal Pvt. Ltd.
World Vision Advertising
C.T.C. The Media People
Kantipur Publication

Thompson Nepal Pvt. Ltd.
C.T.C. The Media People
World Vision Advertising
Kantipur Publication

Synchro Media
Thompson Nepal Pvt. Ltd.
Media Times
Nepal Television

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, Nepal’s 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 18×14 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 o’clock 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 industry’s 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 institute’s 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.
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20. Interview, Mr. Mitrasen Dahal, J.P. Foundation
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