Madison Ave Insights

#GivingTuesday, Take Two

Posted in Advertising, Digital, Marketing

As we reported last year, there’s a new entrant into the “holiday days” tradition – #GivingTuesday. The brainchild of New York’s 92nd Street Y and the United Nations Foundation, #GivingTuesday is a movement to create a national day of giving to kick off the giving season and is celebrated the Tuesday after Thanksgiving.

Participating nonprofits encourage donors to make an online gift on #GivingTuesday and to share stories about their gift and the causes they support on social media, tagging each post with #GivingTuesday. In 2012, the initiative’s first year, #GivingTuesday participants comprising more than 2,500 nonprofits from all fifty states saw more than $10 million in total donations. That’s a forty-six percent increase over online donations on the Tuesday after Thanksgiving the previous year. And the size of the average gift increased by twenty-five percent.  This year, Blackbaud is reporting a 90% increase in donations over last year.  In addition, below I had the chance to discuss this year’s results in length with Henry Timms, Interim Executive Director at 92nd Street Y.

So what led to #GivingTuesday? It started with Black Friday, named because it was the day a store’s profits turned from red to black. As retailers pushed their Black Friday opening hours to before midnight, Thanksgiving itself became Grey Thursday, with Cyber Monday becoming the day shoppers went online to make the purchases they didn’t get to over the long Thanksgiving shopping weekend. And then there’s Super Saturday, the last mad rush of shopping and sales on the Saturday before Christmas. The holiday shopping season can account for as much as forty percent of a retailer’s annual sales. In 2012, shoppers spent almost $60 billion on Black Friday alone.

The Way I See It

  • I see a continuing resurgence of charitable giving since the economic downturn. In 2012, Americans gave more than $316 billion. That’s up three and a half percent from 2011, and the third year of increasing contributions in a row.
  • I see mobile and online giving becoming an increasing part of the philanthropic landscape. Online donations grew by fourteen percent in 2012. That’s four times the rate giving has grown overall.
  • I see social media campaigns being the new wave of peer-to-peer giving, with donors using their social networks to find out about and develop trust in new causes and organizations.

The Way the Industry Sees It

I sat down with Henry Timms, Interim Executive Director at 92nd Street Y, to discuss the creation of #GivingTuesday and their goals for the upcoming holiday season and beyond.

 

Q
92nd Street Y and the UN Foundation had a sizeable group of “influencers” contributing support and expertise to the project. How did that group come together, and what did the members bring to the table?
A
When we first thought of #GivingTuesday, we reached out to experts in the philanthropy and social media worlds who could help us turn this idea into a successful and constructive initiative.  The notion of “a day for giving back” after Black Friday and Cyber Monday resonated with people immediately, who were really forthcoming with critical pieces of advice that set us on the right course. One big idea came from Matthew Bishop, US Editor and NY Bureau Chief for The Economist, who emphasized the importance of #GivingTuesday being the “opening day of the giving season.” Other suggestions we received early on were incorporating education and toolkits into the campaign, and creating an open-source movement. Our early advisors included my mentor Kathy Calvin, President and Chief Executive Officer of the United Nations Foundation, who has been an extraordinary partner in these efforts and her expertise and digital savvy have been at the heart of getting this to scale.   We also engaged our networks by taking the idea on the road to Chicago, Silicon Valley, and elsewhere. We invited people in those areas to brainstorm, help us shape the concept, and spread the word.
Q
What were the biggest hurdles you had to overcome in the launch of #GivingTuesday?
A
We needed resources and amplification. Both of these challenges were met – and overcome – with the help of a tremendous number of people who lent their time and expertise to #GivingTuesday.  In our first year, we launched seventy days before #GivingTuesday, and having enthusiastic and influential ambassadors like the White House and Bill Gates were especially helpful in putting us on the map. In addition, by making the movement open-source, we tried to empower leaders and influencers in their respective fields to take the movement on as their own and spread the word through their networks. The creativity and entrepreneurialism we saw around #GivingTuesday is really inspirational.
Q
How did the results meet with your expectations? What went better than you expected? Or not as well?
A
The results of the campaign remind us how generous people really are. On Wednesday last week, Blackbaud reported online giving was up ninety percent over #GivingTuesday in 2012. Obviously these kinds of results exceeded all of our expectations.  We could not have imagined seeing this kind of impact in the second year of this initiative, and we want to thank the countless people around the world that helped to make “giving back” such a proud start to the giving season. In the United States, 8,500 partners (and a total of 10,000 worldwide) – nonprofit organizations large and small, along with their corporate and business supporters – demonstrated how innovative and entrepreneurial that sector is. The range of partners is also extraordinary – international corporations and nonprofits like Microsoft, Unilever, Care and United Way; local food banks and animal shelters; campaigns in developing countries (in partnership with the UN Development Programme) that celebrated local heroes, including a group in Burundi holding a blood drive.
Q
How has what you learned last year shaped what you’re planning this year?
A
This year, we focused more on being a hub for education. We gathered the best resources and voices across sectors to provide nonprofits, corporations, religious and learning institutions, and families and individuals with a framework for sharing best practices and helping people to come up with innovative ways to raise funds in better, smarter ways. We offered Google hangouts and Facebook Q&A’s, and Google teamed up with Mashable to hold the first-ever Google Hangout-a-Thon on #GivingTuesday, where the individuals who were running campaigns could share their successes and spread the word about their causes.  One of the messages we emphasized this year was the importance of integrating #GivingTuesday into an organization’s overall year-end fundraising campaign.  With more time for organizations to plan, we saw much more of that this year.
Q
How has social media shaped the way people give?
A
Social media is providing a space in which a whole new generation of philanthropists is essentially coming of age.  It’s clear that “sharing” has become part of our culture, and it’s also clear that people are interested in sharing their passion for causes they believe in.  The “#unselfie” is a great example of this.  As you may know, “selfie” was chosen as the word of the year by the Oxford Dictionary.  #GivingTuesday turned that idea on its head with the “unselfie,” encouraging people to take photos the share how and why they were supporting the causes they believe in.  More than 7,000 photos with the tag #unselfie were posted around #GivingTuesday on Twitter, Instagram, Google+, and Facebook.  Social media campaigns like the #unselfie delivered the #GivingTuesday messages that every act of giving helps and you don’t have to be wealthy to give back.
Q
What kind of data are your participants collecting from #GivingTuesday donations, and how are they using it?
A
One kind of data, which came in right after #GivingTuesday last week, was reported by the companies who process online giving, and that data showed huge increases in giving on #GivingTuesday 2013 when compared with #GivingTuesday 2012.  Blackbaud reported a ninety percent increase in giving among the nonprofits using their service, and DonorPerfect reported a one hundred sixty-two percent increase among their clients.  Paypal reported a 99.9 percent increase in total online and mobile charitable donations this year, compared with #GivingTuesday last year. But #GivingTuesday is also about shift in thinking, and we will be gathering data from our partners to tell their stories.  We are collecting photos, videos, and anecdotal evidence that will ultimately provide a picture of the campaigns and initiatives that took place on #GivingTuesday.  We are also monitoring social media for results posted by partners, and for feedback that comes in via social media.  (The hashtag #GivingTuesday was used 269,000 times on December 3 and #GivingTuesday trended on Twitter for a good part of the day.) In addition, we’ll be surveying our partners in the coming months and ultimately sharing that information with them so we can all continue to build on the best, most successful ideas and campaigns.
Q
What’s the most interesting thing in your office?
A
Really, the most interesting thing in my office is the meetings that happen there. We have an incredible team at 92Y, and the way they are re-imagining what our organization can deliver is really inspiring.

The United Kingdom’s Take on Self-Regulation

Posted in Advertising, Regulatory

They had the Beatles, we’ve got the Eagles. They have Big Ben, we have the Washington Monument. There are endless comparisons to make between British institutions and those born in the United States, and things are no different the advertising field. Today, we’re talking specifically about advertising industry self-regulation, which both the United States and United Kingdom got serious about in the latter half of the twentieth century. In 1962, the United Kingdom advertising industry established its Advertising Standards Authority (ASA), which adjudicates claims of non-compliance with the British Code of Advertising Practice. Nine years later, the National Advertising Review Council – now known as the Advertising Self-Regulatory Council (ASRC) – was formed in the United States.

Both are non-governmental, industry-funded bodies that self-regulate advertising. And over their similar timelines, they have both matured into respected forces with broadened mandates (both, for instance, are tackling online behavioral advertising) that enjoy near-total industry compliance with their decisions. Of course, they are not identical. While the ASA is something of a “one-stop shop,” the ASRC has established a number of subject-specific investigatory and adjudicatory departments such as the Children’s Advertising Review Unit and the Electronic Retailing Self-Regulation Program. Also, the appellate process is substantially different in the United Kingdom, where appeals cannot go forward until an Independent Reviewer agrees to accept them.

But what fun would it be if we did things the same? That would be like tuning in to Breaking Bad and getting Downton Abbey: Albuquerque.

The Way I See It

• I see advertising industry self-regulation since the 1960s as an almost unqualified success, with enormous benefits to the public (in the form of more honest advertisements), advertisers (in access to efficient dispute resolution), and the image of the advertising industry as a whole
• The success of self-regulation has undoubtedly staved off more restrictive legislation that would have been enacted in its absence, giving the industry both here and in the United Kingdom a greater chance to define its own path.
• I see a critical moment on the horizon with the emergence of concerns around mobile advertising and food marketing to children, giving the industry a chance to again prove the value of self-regulation in those areas.

The Way the Industry Sees It

I sat down with Tim Lefroy, CEO of the Advertising Association, an industry forum critical to shaping the self-regulatory scheme in the United Kingdom, to explore the topic further.

 

Q
What are the biggest differences you see between the self-regulatory system in the United Kingdom and United States?
A
We are two nations, divided by different principles and legal systems. You have the First Amendment. In Europe we have the Human Rights Act. In the United Kingdom, where the free exchange of ideas remains highly valued, the reality is somewhere between the two. United States self-regulation ultimately has the Federal Trade Commission as its backstop, but it is administered state-by-state by the Better Business Bureau. Our Advertising Standards Authority (ASA) – the investigator and judge – is completely independent and has been for fifty years. The codes are written and updated by industry and are often enshrined in United Kingdom and European legislation. In part due to the lack of a First Amendment, the United Kingdom is more exposed to the whims of politicians where threats to bans or restrict advertising freedoms in lieu of social policy are commonplace.
Q
Is it important for the public to understand that the advertising industry is policing itself, and if so what’s the best way to get that message out?
A
Let’s be honest. Whether it’s Fred Bloggs or John Q. Public, advertising is low-priority for most. Our industries and their output pass most people by, most of the time. But if we want politicians to appreciate how self-regulation in advertising works – for industry and for consumers – we must advertise that fact. The ASA has a mission that advertising in all media is legal, decent, honest, and truthful. Those four words have, over the years, been reinforced through advertising. There is a strong correlation in the United Kingdom between trust and confidence in our system and the ASA being active in promoting legal, decent, honest and truthful advertising. A little advertising for advertising can go a long way.

Peel back the curtains and read the rest of the Q&A here!

Brand Activation Association Marketing Law Conference: Demonstrations

Posted in Advertising, Marketing, Media

We’re all familiar with the classic product demonstrations in television commercials: who hasn’t seen re-enactments of the super-absorbent paper towel, or the dish detergent that cuts through grease with a single drop?

How do we define a demonstration?  Well, a demonstration is just that: a way for advertisers to show the product functioning as it actually would, as objective “proof” of performance.  As such, it is especially important that demonstrations actually consist of a true and accurate portrayal of the product.  When the FTC began bringing enforcement actions concerning advertising demonstrations in 1959, it encountered cases where products or props had been doctored, enhanced or replaced to achieve the desired performance, and the advertiser had not disclosed any modification.  Even if the product claim itself was not false, the issue was that the demonstration was false.   For example, in the early 1990s, Volvo ran an advertisement which showed a monster truck crushing other cars, except for a Volvo station wagon, in order to show that Volvo vehicles would provide superior safety in a collision.  However, the commercial was produced by weakening the competitor vehicles’ roofs and reinforcing the Volvo’s roof, and then subjecting the Volvo to less severe crushing by the truck – none of which was disclosed to consumers.  Subsequently, the FTC issued a consent order requiring Volvo to stop depicting demonstrations that involved undisclosed mock-ups or material alterations to products.

Peel back the curtains and read the rest of the post here!

Brand Activation Association Marketing Law Conference – Data and Unfairness

Posted in Advertising, Digital, Mobile

As we interact online, we leave a breadcrumb trail of data – both personally identifiable and anonymized.  This information can be pulled straight from data shared – name, age, or address – or can be extracted from browsing habits and usage patterns.  So what restraints are put in place to stop unchecked collection and use of this data?

One touchstone used by authorities in determining data-related policies and definitions is the concept of “unfairness.”  This term is used prominently in the FTC Act and is part of the fabric of consumer protection in the United States.  In addition, unfairness is being used in policymaking and enforcement efforts to determine what types of data collection, storage or use may be impermissible because conducted or structured in such a way that do not adequately protect consumers from harm.

Peel back the curtains and read the rest of the Q&A here!

Brand Activation Association Marketing Law Conference – The Reasonable Consumer

Posted in Advertising, Digital, Marketing, Media

This week, leading lawyers, legislatures and marketers attended the 35th Annual Brand Activation Association (BAA) Marketing Law Conference in Chicago. At BAA I gave a presentation titled, “Journey to the Center of Advertising Law: Knowledge, Insights, and Practical Tips on The Most Important 2013 Advertising Developments.” Over the next few days, I will share with you three video clips from my presentation. Let’s dive into the first one…

How do we determine “reasonable consumer” behavior?  This is an increasingly important question in a world where the consumer population comprises people with differing views, perspectives, education levels, and experiences.  The “reasonable consumer” is crucial in advertising law:  this person interprets advertising, determines what claims are actually being made, decides whether there are any implied claims, decides whether a statement is “puffery,” and helps courts decide whether advertising is ultimately misleading or deceptive.

Peel back the curtains and read the rest of the Q&A here!

How to Ensure Compliance under the Telephone Consumer Protection Act

Posted in Advertising, Digital, Direct Marketing, Media, Mobile

The FCC has changed its rules to require “prior express written consent” in order to auto-send commercial calls or texts. Failure to comply can open violators up to private lawsuits, and to damages awards of up to $1,500 per violation.  So what should be done to avoid pricey violations?

First, there needs to be written consent before commercial calls or texts are sent. While this rule revision was primarily meant to address robocalls, the interaction of this priority requirement with the need for “writing” means that it will have a special impact on commercial texts.  Notably, advertisers cannot send messages to consumer numbers pulled straight from interactions that begin offline (for example, from a responses to an on-TV exhortation to text in to get a coupon code).  A consumer’s consent and opt-in cannot be implied from their response to such an ad because it does not satisfy the new rule’s written requirements.

In addition, a consumer’s consent needs to be obtained in writing.  This means that implied consent or consent drawn from context will not suffice.  E-signature by email or check-box, however, will.

At the time written consent is obtained “clear and conspicuous” disclosure must also be made that the consumer is signing up for future contacts.  There must be some connection between consent and disclosure, and disclosure under the new rules must be more robust than under the old rubric.

But how does an advertiser send a text back to the consumer if they have not yet consented?  This rule applies to “commercial” contacts; the consent-request text described above would be “transactional” because it does not contain any marketing material.  So, not all contacts are cut off, but marketers must be very, very careful about auditing contact lists going forward and about avoiding impermissible contacts that move into “commercial” territory.

The Way I See It

  • Many companies that cannot verify written consent in connection with previously-obtained consumer numbers may have to build their phone books back up from scratch.
  • This may present an easy target for plaintiffs’ class action lawyers, since damages per-contact can be quite high and there is a lot of potential for a company to send out numerous improper contacts at once – especially in the text message context.
  • These stakes may push advertisers and companies to look more closely at the line between “marketing” contacts and noncommercial ones.

Ronald R. Urbach is the Chairman of leading advertising law firm Davis & Gilbert LLP

Understanding Industry Self-Regulation: A Conversation with C. Lee Peeler

Posted in Advertising, Regulatory

Edith Ramirez, the new chairperson of the Federal Trade Commission (FTC), said that self-regulation can be “an important tool for consumer protection that can respond more quickly and efficiently than government regulation.”  For the advertising industry, that is certainly the case.  When advertising self-regulation was created in 1971, there were plenty of skeptics.  But today, the Advertising Self-Regulatory Council (ASRC) – which establishes the policies and procedures for advertising industry self-regulation, including the National Advertising Division (NAD), Children’s Advertising Review Unit (CARU), National Advertising Review Board (NARB), and Electronic Retailing Self-Regulation Program (ERSP) – remains critical for the industry, providing guidance on new developments and technologies, and implementing real monitoring and enforcement to preserve consumer protection standards.  This fall’s NAD Annual Conference, held in conjunction with both the CARU Annual Conference and ERSP Summit, focused on legal trends and new developments, including digital and mobile trends that are impacting self-regulation.

The Way I See It

  • I see industry self-regulation playing an extremely important role for advertisers and marketers, particularly in defining standards and encouraging transparency when it comes to critical issues including behavioral advertising, app privacy, and advertising to children.
  • In the digital age, with constantly-evolving opportunities for advertisers with new technologies and new media, self-regulation – unlike the government – is able to keep up with the swift pace of change to provide guidance, set benchmarks, and monitor for issues.
  • I see an important moment for self-regulation as it continues to develop and enforce industry best practices and standards for consumer privacy and data protection, especially through the development of apps, new smartphone and tablet capabilities, and new social networks.

The Way The Industry Sees It

I sat down with C. Lee Peeler, President and CEO of the ASRC and Executive Vice President, National Advertising, Council of Better Business Bureaus (CBBB) to discuss industry self-regulation, consumer protection, and this year’s NAD Annual Conference.  Prior to joining the ASRC, he had a 33-year career at the FTC, where he served as Associate Director of the Division of Advertising Practices and Deputy Director, Bureau of Consumer Protection.

Q
This fall’s NAD Annual Conference focused largely on self-regulation, government enforcement, and legal issues surrounding emerging social media and digital marketing.  How critical do you think this is for the industry and how is self-regulation monitoring and addressing it?
A
The advertising industry has established an extraordinary record of delivering real self-regulatory programs that address the needs of both ethical competitors and consumers.  The NAD’s Annual Conference is the place where the advertising industry can both look back at what it has accomplished and look forward to the challenges facing it. And, like the advertising industry itself, the challenge for self-regulation is going digital. That’s why our first panel was “3-inch screens and 140 characters.” We were so delighted to have representatives from Foursquare, Evidon, General Electric, and LG Electronics, as well as law professor Eric Goldman, Director of the Santa Clara University School of Law High Tech Law Institute. The advertising industry has a real opportunity in the digital space to demonstrate exactly the type of leadership and commitment to high standards and impartial oversight that it has in more traditional media.
Q
In 2012, ASRC units resolved more than 175 cases.  What have been the most prevalent issues and challenges facing the industry over the past year?
A
One of the great things about self-regulation is the range of issues and products it deals with.  NAD in the past year has handled cases for products as diverse as telecommunications, infant nutrition, over-the-counter medications and dietary supplements, and “green” products.  ERSP’s casework has included the review of claims for work-at-home programs, affiliate marketing companies, and dietary supplements. Our Interest Based Accountability Program released its first compliance guidance to the industry and a decision on certain Facebook exchange privacy practices.  Child-directed marketing in any form is always a flash point and it receives careful and continuous scrutiny by CARU.  Priorities in child-directed advertising include anything having to do with child-directed mobile apps or COPPA compliance. For the adult-focused programs,  the implementation of basic privacy protections for mobile devices, health-related claims, and practices in new media that blur the line between advertising and editorial content are among our priorities.

Peel back the curtains and read the rest of the Q&A here!

Breaking the Traditional Agency Model in Today’s Data-Driven Economy with Cramer-Krasselt’s Chairman & CEO, Peter Krivkovich

Posted in Advertising, Digital, Marketing

Madison Avenue is a hotbed for creativity and innovation. The evolving nature of the digital world means new opportunities and platforms, and also means that agencies are constantly pushing the envelope to meet new client needs, develop new campaigns, and rise to new challenges from global competition, the economy, and the like. The constant change that agencies are moving with is what has propelled the creative industry forward all these years.

 The Way I See It

  • I see more agencies successfully melding creative and data to meet the needs of clients and deliver the type of advertising and marketing campaigns that build upon the new trove of consumer data to frame brands in a positive light.
  •  I see competition in all industry segments constantly growing, with new brands launching all over the world, and each agency being forced to develop creative that both trumps competition in its segment and also stands out for consumers in terms of advertising.

The Way The Industry Sees It

I sat down with Peter Krivkovich, Chairman and CEO of integrated marketing communications agency Cramer-Krasselt, to discuss the industry and the state of today’s agency.

Q
Cramer-Krasselt’s business model is built on the idea of integration with a constantly growing range of disciplines, from creative to public relations to CRM. How do you think this notion of integration plays into your work?
A
Integration is a highly over-claimed word. The question is not whether everyone has access to those various disciplines – the better question is how does everyone have access to them. If they are run as separate profit centers, separate profit and loss statements (P&L) with the people heading them up having separate budgets or separate revenue-based bonuses, then it can’t possibly result in sustained unbiased contributions to a marketing solution. The former is more akin to the old corporate world conglomerates. And they didn’t work out that well – few synergies beyond a revenue pile-on. Integration plays into our work from inception. Because we are outcome – rather than output – driven, because we have no profit-center walls between people, we can have a diverse group of thinkers around the table minute one, with no discipline politics agenda biasing a solution. It’s never about simply checking boxes – it’s all about connection points that will drive results and that require multiple disciplines in constant motion and in constant sync.
Q
For any creative firm, there is a constant pressure to show return on investment (ROI) and to harness data to drive results. How do you think data has changed the role of advertising?
A
Data has certainly made us smarter about the people with whom we need to connect. If we’re smarter about them we can get closer to them and be more relevant to them. And, of course, data – big or small – helps us optimize our approach in ways we never could before. We’re much more real-time now. It’s an exciting development, and really just beginning. But like integration, it’s also a terribly over-used word – and more importantly, data is a misused one.  Getting consumer information is no longer difficult, it’s prolific. Knowing which data leads to genuine actionable insights is. That’s where we concentrate our talent. Not on data compilation and output, but on what specifically will lead to an outcome for what’s next.

Peel back the curtains and read the rest of the Q&A here!

The Role of State Consumer Protection Regulation and Enforcement in a National Advertising Landscape

Posted in Advertising, Regulatory

When we think about advertising law and regulation, we typically focus on Washington, D.C. and the federal regulatory agencies – for example, the FTC’s guidance, including in many industry-specific areas, the FDA’s regulation of food products and cigarettes, and the Consumer Financial Protection Bureau’s efforts of late in the financial services sector, among others.  But state Attorneys General are also very active in the enforcement of consumer protection and advertising laws and regulations, both independently within their jurisdictions and jointly through multi-state investigations and actions.  The increased presence of many advertisers in digital and social media does not have geographical borders, and state regulators can take issue with the advertising claims and methods used in these new media platforms along with more traditional ones.

State Attorneys General offices use consumer protection laws and regulations to help shape public policy and improve communications to consumers, but they are also subject to, and driven by, the partisan politics of elections and the complex webs of relationships that operate day-to-day in state governments.  This can mean national advertisers may face state regulation from a number of different angles.

The Way I See It

  • I see state Attorneys General becoming increasingly active in enforcing consumer protection laws, with increased initiatives to regulate online, mobile, and social media.
  • I see state regulators initiating investigations and taking action in response to national advertising campaigns, which have an impact on consumers within their states and which may not comply with the letter of each particular state’s unique laws and regulations.  There is a greater need than ever to carefully consider these nuances when vetting national advertising materials.
  • I see a complicated political structure in each state when it comes to interpreting regulators’ motives and actions, and a symbiosis between the actions and interests of federal regulators and their state counterparts.

The Way The Industry Sees It

I sat down with Al Shelden, Ex-Senior Assistant Attorney General of California who was in charge the state’s Consumer Law Section, to get a state regulator’s perspective on some key consumer protection issues.

 

Q
As a former state regulator, how important do you think state Attorneys General are for shaping regulation of national advertisers and big brands?  How did you view national advertising campaigns during your tenure in California?
A
The state Attorneys General have a long history of shaping the regulation of national advertisers and big brands.  Starting in the ’80s and ’90s, the states were the first to challenge “health” advertising by cereal, fast food, and vitamin companies.  We also were the first to challenge the use of deceptive environmental claims in advertising.  The FTC and Congress followed.  Today the states are leading the way in actions against pharmaceutical companies for off label promotion of drugs.  The states’ actions and adoption of legislation against the deceptive use of sweepstakes and other product promotions also preceded federal action in these areas.  Likewise, actions brought by the Attorneys General involving improper telephonic solicitations and advertisers’ improper use of information they obtained from customers lead to the adoption of telephonic seller registration, do not call and privacy protection laws, first on a state level and then on the national level.  Since national advertising in California affects tens of million California residents, we always viewed it, and still do, as “local” advertising, meaning that any advertising which is used to obtain business from California residents must comply with California law.
Q
What has been the historical relationship between the Federal Trade Commission and state Attorneys General?  What is the current relationship like?
A
Historically, the relationship has been one of benign neglect, conflict, and cooperation.  In the 1960’s, when those states that did not yet have consumer protection laws started to adopt them, a large portion looked to the FTC and the FTC Act.  During the ’60s and ’70s, the FTC and the Attorneys General “got along” but seldom regularly worked together on issues.  Starting in the early ’80s, things between the Attorneys General and the FTC became somewhat “testy” when, under Chairman James Miller III, the FTC adopted its “deception” and “unfairness” policies.  Many states thought these policies incorrectly defined FTC case law requirements for advertisers and argued they should only be viewed as the FTC’s own enforcement guidelines. Because some states’ laws tie the meaning and interpretation of their laws to FTC regulations and decisions, there was great concern.  One state, Missouri, changed its consumer law so that it was no longer tied to FTC law.  Things remained cold until Janet Steiger became FTC Chair in 1989.  She worked tirelessly to reach out to the Attorneys General and convince them that going forward the Attorneys General and the FTC needed to be trusting partners who should be working together toward the same goals.  Her term marked the true beginning of the Attorneys General and the FTC working cases jointly, sharing information and deferring to one another in the proper circumstances.  Improving relations continued under Robert Pitofsky’s tenure and while there have been periods of ebb and flow since then, things again were very harmonious during Jon Leibowitz’s term as Chair and David Vladek’s term as Head of the Bureau of Consumer Protection. There appears to be no reason to think that such cooperation will not continue during the term of Edith Ramirez as Chair.

Peel back the curtains and read the rest of the Q&A here!

CARU Annual Conference: Online Behavioral Advertising & Industry Self-Regulation for Marketing to Children

Posted in Advertising, Digital, Direct Marketing

Consumer protection in our digital age is becoming an ever more complex challenge, with technology constantly evolving and always “newer” new media emerging at lightning speeds. In recent years, online behavioral advertising has taken center stage as one of today’s most hotly-debated marketing practices. There seems to be a consensus amongst regulators that the industry, through self-regulation, should take on the challenge of establishing a transparent opt-out program for addressing privacy concerns and allowing consumers to choose not to have their data collected for future targeted ads.  However, the water gets more murky when it comes to online and mobile advertising to children.  Advertising to children is laden with issues and I’ve talked here on Madison Ave Insights about how the FTC and other regulators have taken a particular interest in children’s privacy and data security.

This year’s Children’s Advertising Review Unit (CARU) Annual Conference will discuss a number of critical issues in children’s advertising, including apps, social media, and location and other data security.  With more children online (even at school) in today’s age, how do we as advertisers ensure we are keeping kids safe?

The Way I See It

  • I see more challenges arising with new digital, mobile, and social media to address privacy and data security concerns through self-regulation, especially when it comes to children.  With new technologies emerging, the advertising industry is forced to adopt new standards to meet the issues for regulators and consumers.
  • A lot of progress has been made in recent years to address privacy and data security challenges raised by new technology and social media, including the CBBB’s self-regulatory guidelines that implemented the Ad Choices program to allow consumers to opt out of targeted online advertising.
  • I see an increasing commitment from the advertising industry to self-regulate when it comes to children’s issues, as well as new online and mobile platforms, which is a strong signal that the industry will meet calls from regulators to enforce privacy and data issues.

The Way The Industry Sees It

I sat down with Genie Barton, Vice President and Director, Online Interest-Based Advertising Accountability Program and Mobile Marketing Initiatives at the Council of Better Business Bureaus (CBBB), to discuss the effectiveness and challenges of online behavioral advertising (OBA), especially for children.

 

Q
Online behavioral advertising (OBA) has been under the microscope in recent years with regulators and consumers.  How have you worked to address these issues and what do you expect to improve with OBA moving forward?
A
Regulators and privacy advocacy groups have varying degrees of concern about the collection and use of data to provide consumers with advertising that is based on their previous browsing activities across websites and time.  In addition, some consumers also have concerns, but there is a high degree of debate regarding consumer preferences. Some studies show significant concern, while others show that in real life scenarios, consumers prefer ads that are relevant over ads that are random.  But what I think we can all agree on is that the two largest areas of concern for regulators, privacy advocates and consumers stem from the largely “invisible” nature of online interest-based advertising.  The industry responded to those concerns, as expressed by the Federal Trade Commission in a staff report providing guidance on how to implement self-regulatory principles governing OBA, by creating consensus principles that provide the transparency and control that were missing.  I like to say that the DAA Principles took the mystery and potential “creepiness” out of interest-based advertising by providing real-time notice and a direct link to an easy-to-use opt-out. These innovations—the sideways blue triangle known as the AdChoices Option Icon, which appears in all interest-based ads, and takes the consumer to an explanation of OBA and a link to a choice mechanism—shine a light for consumers on interest-based ads.
Q
How do you navigate the complexity of and constant changes in online and mobile advertising?  Any tips for advertisers?
A
I navigate this ecosystem with a lot of help from my friends and fabulous staff, and by constant reading and discussions with people in the industry. Just when I think I have a handle on something, there is another innovation. But that is what makes the job fun and keeps it fresh.  I would advise advertisers to make privacy a positive differentiator for their brand. To do this successfully, the advertiser has to be extremely careful with what companies it engages to guide it on developing an ad campaign. Be sure to deal with an agency and all others in the ecosystem that follow (and ensure that you will be following) the highest industry standards. While an OBA campaign can be the most effective way of reaching the right customer, doing it without the transparency and control provided by the DAA program can actually damage the brand and its relationship with its customers. A recent study showed that consumers prefer to do business with companies that engage with their customers on privacy issues. The study also showed that consumers click on ads with the icon more readily than on ads without it.  So providing consumers with transparency and choice is a positive for the bottom line.

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