March 2013

Surrounding a breakfast seminar, which was held at Davis & Gilbert today entitled, “Complying with the FTC’s Final Amendments to its COPPA Rule: What You Need to Know,” I thought a great post would be to examine that very topic.  In addition, I had the chance to speak to Wayne Keeley Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus and interview him as my Q&A guest this week.

Advertising to children has long been laden with complex issues.  Advertising promoting products that target children have long faced criticism from consumer advocates and regulators who raise safety, health, or inappropriate content concerns.  In the digital age filled with online privacy and data collection concerns at every corner and constantly evolving technologies that put individuals – especially children – at risk, the Federal Trade Commission has increased its regulation and enforcement.  With the increased use of mobile technology and apps by children under the age of 13, the FTC initiated its review of the Children’s Online Privacy Protection Act of 1998 (COPPA) in 2010 to allow children’s advocates, website and app developers, and advertising executives and coalitions to chime in on how the FTC should update the outdated rule to protect children from the new dangers of social media, location-based software, video chatting, photo sharing, and more.  With COPPA’s expanded scope, the FTC is making an effort to ensure its regulations cover new technology and innovation.

The Way I See It

  • I see the new COPPA rule expanding the types of companies that are required to obtain parental permission before collecting data and information from children to reflect the digital world we live in today.  COPPA clearly covers mobile and tablet apps, location technology tools, voice recognition tools, social sharing networks including Instagram, Facebook, and Twitter, and online advertising networks, among others.
  • I see the FTC making strides in privacy and data protection regulation with the expanded COPPA provisions, and advertisers and marketers being forced to adapt to new rules for behavioral advertising in particular.
  • The advertising industry has long championed self-regulation for advertising to children, so while the new COPPA rules are broader, the industry may not have too many new practices to adapt.  Many have also begun taking stricter precautions in engaging with and advertising to children in anticipation of the expansion of COPPA.
  • I see that new restrictions on cookie-based and other identification systems could mean some websites targeting children may reduce or stop their use of advertising networks.

The Way the Industry Sees It


I sat down with Wayne Keeley, Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus, to discuss the FTC’s recent amendments to COPPA and what it means for advertisers, tech innovation, and regulation.

Let’s start by discussing CARU’s response to the expansion of COPPA.  Does the regulation overlap areas of the CARU guidelines?  In what ways is the regulation new for the industry?

Rather than overlapping, I believe that the COPPA rule modifications have brought the COPPA Rule more in line with CARU’s Guidelines.  CARU’s Guidelines represent self-regulatory practices.  Self-Regulation can sometimes go beyond what is required in the law and/or regulatory standards.  For example, CARU’s guidelines went beyond the COPPA Rule in those instances where website operators had a reasonable expectation that a significant number of children will be visiting their websites.  In those instances, CARU said they should employ age screening mechanisms to determine whether verifiable parental consent or notice and opt-out is necessitated.  The old COPPA Rule had an actual knowledge standard.  Under the new Rule, however, the FTC has provided an option for websites with mixed audiences that is closer to our self-regulatory model by providing that sites that target children as a secondary audience can screen users via an age gate.  Accordingly, operators will be required to provide notice and obtain consent only for those who identify themselves as under 13. This is a great example of how the experience gained under self–regulation can make a positive contribution to fashioning workable regulatory approaches as well.  The regulation is also new for the industry in that definitions are added and expanded and the FTC’s oversight of safe harbor programs is enhanced and strengthened. The new definition brings the collection of information for behavioral advertising within the regulation for the first time and will require child-directed sites to obtain parental consent before allowing the collection of information for interest-based advertising on their sites even if that information does not identify a specific child.

What does CARU see as the biggest threat to child safety and protection (i.e., location-based technology, personal data collection, etc.)?  Are there certain trends in social media or mobile technology that are red flags for CARU?

CARU has always seen the collection of personal information from young children as an important issue and had adopted data collection guidelines even in advance of the COPPA legislation.  That aspect has not changed.  The modified COPPA Rule responds to technological innovation (e.g., geo-location based technology) and current technology use (e.g., increase in use of Smartphones by children).  Social media and mobile technology have always been on CARU’s radar from their inception.  Their importance to CARU has grown in direct proportion to the increasing number of young children accessing social media and mobile technology.  While young children are increasingly adopting mobile and social media technology, the basic concerns underlying the creation of CARU – that young children are a vulnerable audience and therefore need protection – remain the same.  We look forward to working with responsible industry members to assure that these concerns are addressed. This is particularly true in the expanding area of mobile apps which are developing rapidly and are subject to the new COPPA rule as well as CARU’s general guidelines if they are child-directed.

Continue Reading Understanding the FTC’s Expansion of COPPA: A Conversation with the Director of the Children’s Advertising Review Unit

2013 is already proving to be another turbulent year for Washington D.C., and many of us can’t help but keep watching with bated breath for the latest action or debate to come out of it.  And there’s no question that the regulatory and enforcement environment today is heightened across all industry sectors, even while Congress seems unable to reach agreement on any much of the legislation before it.  For marketers and advertisers, the moves made by the Obama Administration on a variety of issues will have profound implications, as we saw with the sequestration debate, privacy, tax code reform, new appointees, and more.

This year’s Association of National Advertisers Advertising Law & Public Policy Conference will focus on the major issues that are keeping marketers and advertisers up at night in light of the current realities in the federal and state governments.  For now, I share my excitement for the annual conference; after, I look forward to sharing my thoughts and key takeaways from what promise to be countless insightful and intriguing debates and discussions.

The Way I See It

  • I see many of the topics we’ve been discussing here on Madison Ave Insights under the microscope at the ANA Conference: privacy, tax reform, self-regulation, COPPA, social media, data collection and protection, FTC enforcement actions.  I see the opportunity to engage with and learn from my peers in the advertising and legal professions, discussing these cutting-edge issues of today and implications for the present and future of the industry.
  • I see an annual gathering of the industry leaders including in-house and outside counsel, government officials, agency executives, and public policy experts who are driving the dialogue on the very regulatory issues at hand coming together for a meeting of the minds – who knows what could happen.
  • This year, there are keynote addresses from Senator Mark Pryor, Chairman of the Communications, Technology and Internet Subcommittee; FTC Commissioner Julie Brill, who we interviewed here on Madison Ave Insights a few months ago; Doug Gansler, Attorney General of Maryland and current President of the National Association of Attorneys General; and Fadi Chehadé, President and CEO of ICANN.

The Way the Industry Sees It

I sat down with Dan Jaffe, Group Executive Vice President for Government Relations for the ANA, who is a conference co-chair, featured speaker, and industry and government veteran, to discuss what to expect from this year’s conference and get a preview of his thoughts on some of the main issues.

The program for this year’s conference is exceptional. What are you most looking forward to at this year’s conference?

I certainly agree that we’ve put together an outstanding program for the year.  I’m particularly looking forward to the vast array of issues that will be covered.  From ad tax issues to patent trolls, to privacy, to the expansion of Top Level Domains on the Internet, our conference will feature some of the major issues facing advertisers in 2013.  We will also be covering the treatment of women in advertising nationally and internationally, which is an important issue that I do not think has been covered very often or very well.

You will be presenting the “Report from Washington” with updates on tax reform, food advertising, advertising to children, self-regulation, online piracy, tobacco court cases, and other hot issues that are evolving in Washington as we speak.  Can you give readers a teaser regarding industry implications moving forward on some of the issues you’ll be addressing?

I will be particularly focusing on ad taxes, the efforts of various groups to undermine the ability to carry out Online Behavioral Advertising (OBA), and the effort to explosively expand the Top Level Domain system on the Internet.  Any one of these issues could severely impact the interests of the Internet and the public.  An underlying theme that I try to emphasize in my speech is that there are major fundamental societal forces driving many of the challenges facing our industry.  For example, the controversy over OBA would not exist without serious concerns by the public about hacking, misuse of locational data, and the sensitivity of financial and health information.  Food marketing would not be under fire if not for a genuine obesity epidemic cutting across many demographics.  I argue that the ad community must be proactive in responding to the threats facing us.  Companies must be doing everything possible to ensure they are in compliance with current regulations and laws.  Additionally, we have to commit ourselves to powerful self-regulation.  Self-regulation with teeth is the only sure method for holding back overly restrictive regulations on our industry.

Continue Reading ANA Advertising Law & Public Policy Conference: What Increased Legislation and Regulation Mean for Ad Land

A few weeks ago, Chester Cheetah, the beloved “spokescat” for Cheetos, joined Twitter as @ChesterCheetah with a campaign to reach 50K followers.  And when he does, “a family gets a kitten.”  Chester Cheetah is just the latest of many brand mascots that have taken social media by storm in recent years.  Furthermore, digital media is allowing brands to create more developed story lines and detailed backgrounds for their mascots, resulting in consumers becoming more drawn to the characters, and, of course, to the brand and product they represent.  The insurance industry has made quite a splash with its brand mascots, including the GEICO Gecko and Allstate’s “Mayhem,” launching YouTube channels and earning verified Twitter accounts (i.e., celebrity status).  Creating such humorous and quirky characters allows insurance companies to engage with consumers and help them better understand the complex insurance offerings, while also staking a claim in the competitive insurance landscape.

Take Progressive’s “Flo,” the now infamous female insurance broker who dominates the company’s commercials.  Known for her humor and larger-than-life personality, Flo is the same way on Twitter – posting witty one-liners and tips on insurance topics of interest, things making the news, and Progressive Insurance offerings and updates.  She has over 19K followers on Twitter and more than 5 million “likes” on Facebook; Progressive’s Facebook page only has 58,000 “likes”.  Flo is featured in many YouTube videos and has led social games and giveaways through Facebook and Twitter.

The Way I See It

  • I see online and social media allowing brands to further develop characters and brand mascots to be more than just the face of the brand, but standalone, likeable characters.  They have colored histories, interests, and well-defined traits.  Brands have found success in fully developing their mascots, as consumers are more likely to engage with and like more complex characters.
  • I see companies taking risks with brand mascots on social media, as it allows them to test how consumers respond to initiatives without making too much of an investment.  For instance, M&M’s sassy Ms. Brown held a live video chat with Facebook fans and even has her own Pandora music-streaming channel, both of which take the traditional social media campaign one step further.
  • Continue Reading Brand Mascots Come to Life on Social Media

On Friday the latest doomsday threat out of Washington became a reality as automatic federal budget cuts, known as sequestration, went into effect. What effect that will have, we can’t be sure. The latest round of debates between Congress and the White House was full of rhetoric and classic “we said, they said” as politicians “discussed” what across-the-board cuts to government agencies and defense spending would mean for the average American. But for most of us – including those of us in the advertising industry – it is a “wait and see” situation, since we likely will not know the true impact of the cuts for a while.

For the advertising industry specifically, sequestration brings with it many unknowns: whether or how the cuts will impact the industry, if the cuts will be reflected in the greater economy and negatively impact the recovery, or if regulation and innovation will stall. We will all be anticipating what the real impacts of sequestration may be on advertisers and marketers – and how cuts will shape critical public issues across the board.

The Way I See It

• I see the advertising industry only continuing to evolve with digital and mobile, interactions with consumers, and data, not to mention new technology being developed nearly every day. While industry self-regulation on major issues like advertising to children, online privacy, and data collection by apps is strong, government agencies including the FTC have only begun ramping up crucial regulatory and enforcement efforts of the advertising industry. It will be interesting to see whether this is impacted by sequestration – will other critical issues take precedence over issues impacting the advertising industry?

• We can safely predict government agencies will cut ad spending, but it is unclear whether large brands or advertisers will feel a pinch across the board. Advertising Age reported earlier this week that ad agencies that count government agencies – such as the U.S. Postal Service and the Army, the government’s top-two largest ad spenders – as clients will feel the pinch. And the agencies will see an impact in ROI from decreasing marketing. Take these budget cuts as opposed to the investment announced by NYC Mayor Bloomberg in a new initiative and marketing campaign dubbed “Made in NY” to support the booming startup scene. I see Silicon Alley and NYC on the whole seeing a great ROI from this initiative, with startups seeing more value in coming to NY thus supporting the local economy, growing tourism, and adding jobs.Continue Reading What Does Sequestration Mean for Ad Land?