Posted: Dec 1, 2010 12:00am ET
The Federal Trade Commission (FTC) today released its long awaited report to Congress on how best to protect the privacy interests of consumers in the online world.
We commend the Commission for acknowledging that advertising provides the financial foundation for the immense number of media and Web services available to U.S. consumers. However, we strongly oppose the recommendation that Congress consider adopting a legislatively imposed "Do Not Track" regime to restrict online behavioral advertising. That would be a very bad idea, particularly in today's challenging economy.
The advertising-supported business model has fueled the explosive growth of the Internet, creating a low barrier-to entry for an immense number of entrepreneurial online businesses. According to research firm comScore, more than 200 million Americans age 15 or older use search engines each month. These consumers are going to the Internet to access - at no cost - all types of content: from news and health, to sports and entertainment, to job listing and travel recommendations. The most popular Internet search engines, news outlets, entertainment portals, photo and video sharing services and social networking sites all give consumers free access to vast content and online experiences thanks to their advertising revenues.
The online media has developed at an extraordinary pace. It took 38 years for radio to reach 50 million Americans; network television took 13 years and cable television took 10 years. It took only about three years for the Internet to reach 50 million users in the U.S. and it has been growing rapidly ever since
According to the Interactive Advertising Bureau (IAB), Internet advertising revenues in the U.S. totaled $22.7 billion for 2009 and $12.1 billion for the first half of 2010 alone. To put this in perspective, the Internet today is a bigger advertising medium than radio, outdoor advertising and about the same as consumer magazines. (www.iab.net).
However, policymakers need to refrain from imposing undue, legislatively rigid restrictions that would limit the effectiveness of interactive advertising, thereby diminishing the flow of ad dollars into this promising new media channel. This is particularly true in today's challenging economy.
Therefore, we are strongly opposed to the call in the FTC's report for a "Do Not Track" regime, similar to the "Do Not Call" registry for limiting telemarketing calls. Such an approach would be a blunt, technologically complex instrument that would actually offer consumers a false promise. A "Do Not Track" regime would not stop all online advertising. In fact, the exact opposite result is almost certain to be fostered.
Consumers who joined the "Do Not Track" registry to block all online behavioral advertising would actually see more, not less, unwanted advertising about products in which they have no interest. By limiting the ability of companies to reach the right consumer at the right time with the right message, such an approach would also seriously undermine the economic efficiency of the online marketplace. The only way advertisers could reach consumers in an untargeted environment is to proliferate ads in the hope of accidently reaching someone interested in their products.
We agree with the Commission that consumers should have transparency and choice over how information about them is collected and used. ANA has been working for several years with a wide range of companies and trade groups across the entire online ecosystem to meet this legitimate consumer need.
On October 4, 2010, these industry groups (ANA, the American Advertising Federation, the American Association of Advertising Agencies, the Direct Marketing Association, the Interactive Advertising Bureau and the Council of Better Business Bureaus) announced the details of a comprehensive new self-regulatory program that will give consumers enhanced control over the collection and use of data regarding their Web viewing for online behavioral advertising purposes. This new self-regulatory program represents the industry's response to the call of the FTC in 2007 for more robust and effective self-regulation of online behavioral advertising practices that will foster transparency, knowledge and choice for consumers. More information about this program is available at www.AboutAds.info
While the FTC report criticized the pace of self-regulation, there have been many difficult technological and structural issues that had to be resolved. These barriers now have been surmounted and the ad community is working to rapidly roll-out the self-regulatory program throughout the entire online ecosystem.
It would be totally premature to impose a legislative solution that is quite likely to be counterproductive, rather than protective of the public. The FTC report states that a program to effectively protect consumers could be accomplished through "robust, enforceable self-regulation." The advertising community is totally committed to meeting this challenge. We hope the FTC and Congress will allow our new self-regulatory program to more fully develop before imposing onerous government restrictions.
The Subcommittee on Commerce, Trade and Consumer Protection of the House Energy and Commerce Committee is holding a hearing tomorrow on the "Do Not Track" approach. We will continue to work with other industry groups to demonstrate to policymakers that this is a very bad idea for consumers, the business community and our economy.
Posted: May 12, 2010 12:00am ET
The White House Task Force on Childhood Obesity released an important report yesterday on “Solving the Problem of Childhood Obesity Within a Generation.” We commend the President and all of the members of the Task Force for their efforts to focus on real solutions to this serious national challenge. The Action Plan released today contains a number of comprehensive strategies and recommendations.
The marketing community has long recognized that childhood obesity is a serious national challenge. In the years since the U.S. Surgeon General’s groundbreaking report in 2001, the advertising and media communities have developed a broad-ranging and multi-billion dollar series of steps to help respond to this threat. There have been substantial and meaningful changes in the marketplace, in both the products that are being sold and the mix of advertising that children see. Only recently has the federal government seriously stepped up to the plate.
The Task Force report contains some good and bad news. It once again confirms the Institute of Medicine’s finding that “a causal link between marketing and increasing childhood obesity rates has yet to be firmly established.” Additionally, the report acknowledges that any effort by the government to restrict food marketing would raise important First Amendment concerns.
Nevertheless, we have concerns about the report’s discussion of food marketing and several of the specific recommendations in this area.
The report has some wide-ranging marketing recommendations that unfortunately rest on a weak analytical foundation. The various recommendations do not seem to grow organically from a careful analysis or data sets. While there are some citations to studies, the probative value of this information is not carefully examined to provide a basis for the broad conclusions that are drawn.
Also, we believe the report seriously undervalues the efforts of the Children’s Food and Beverage Advertising Initiative (CFBAI). The 16 companies that are currently participating in the Initiative carry out almost 80% of television food, beverage and restaurant advertising directed to children under age 12. Through the voluntary commitments of the CFBAI participants, the landscape of children’s advertising is significantly different than it was several years ago. While more can be done, this deserves to be acknowledged. In addition, the CFBAI has recently expanded the scope of media venues that are covered by the pledge program.
It’s also worth noting that food and beverage advertising has actually declined while obesity rates have grown. ANA and the Grocery Manufacturers Association (GMA) have conducted several studies of ad spending and exposures using Nielsen Media Research data. Each survey has shown that the amount of spending for food and beverage ads directed to children has significantly declined over the last decade. FTC studies have confirmed this finding as well.
In addition, The Task Force report fails to acknowledge the significant efforts of The Ad Council to address this challenge. The Ad Council has partnered with the Department of Health and Human Services (HHS) since 2004 on obesity prevention public services ads. The “Small Step” campaign was launched in 2004 and was expanded to target children in 2005. In 2008, HHS and The Ad Council launched a new series of public service ads featuring characters from the film, “Where the Wild Things Are.”
Media companies (broadcast, cable, online, print and outdoor) have donated almost half a billion dollars to this effort. The Ad Council’s childhood obesity prevention campaign has received almost $178 million in donated media support and the adult obesity campaign has received more than $318 million in donated media support. Millions of dollars of time and talent have also been donated by marketers and advertising agencies in the development and creation of the public service ads.
Earlier this year, The Ad Council was asked by First Lady Michelle Obama to support her “Let’s Move” initiative by developing messages to the American public that will achieve that program’s goals.
While the report acknowledges First Amendment interests, several of the specific recommendations raise those very same concerns. For example, Recommendation 2.8 proposes involving the Federal Communications Commission (FCC) in the development of a system of ratings for TV commercials that would enable parents to block “unhealthy food and beverage advertising from all programming.”
Recommendation 2.9 notes that if voluntary efforts to limit the marketing of “less healthy foods and beverages” do not yield substantial results, the FCC should consider changes in the laws regulating advertising during children’s programming.
Any effort by the FCC to restrict food marketing or impose a commercial ratings and blocking system would raise very serious First Amendment concerns. It would also seriously undermine the economic foundation that advertising provides for television programming, particularly children’s television.
We are pleased that the Task Force report acknowledges the need for a multi-faceted comprehensive approach that involves more physical activity and nutrition education. We have been lobbying with other groups for several years for increased funding for the anti-obesity programs of the Centers for Disease Control and Prevention.
It is past time for the government to step up to the plate and work on multi-faceted solutions, rather than placing its primary emphasis on restricting advertising.
We very much appreciate the fact that the report calls for more industry self-regulation and that FTC Chairman Jon Leibowitz stated that new legislation or regulation should be the last resort. We are completely committed to strong self-regulatory efforts, but those efforts must be reasonable and appropriate and based on careful analysis and research and marketplace realities.
The ad community is redoubling its efforts to help meet the challenge of obesity in the United States. We will work with the White House Task Force and all other interested groups to continue to accelerate those efforts in the future.
Posted: Feb 16, 2010 12:00am ET
The Federal Communications Commission (FCC) has issued an examination into the “Future of Media and Information Needs of Communities in a Digital Age.” The FCC states its goal is to “assess whether all Americans have access to vibrant, diverse sources of news and information that will enable them to enrich their lives, their communities and our democracy.” To reach this goal, the Commission asks forty-eight detailed questions. These questions deal with issues as diverse as the information needs of citizens and communities, financial trends, the state of both commercial and non-commercial media, and the move to internet and mobile content platforms. Advertising issues are very prominent among this list.
The FCC states that its starting point in this examination is the First Amendment and the guarantees it provides to a free press. It also states that it plans to draw on its proceedings relating to media ownership and children’s issues in looking at the future of the media. It plans to conduct additional workshops and hearings and potentially commission new research in many of these areas as well.
Among the wide-ranging questions it asks are the effect trends in advertising are having on the viability of the media – including the impact trends in targeting ads to consumers will have on consumer privacy. The FCC also asks whether commercial television is following through on its commitments relating to children’s programming and whether the obligations of broadcasters should be extended to cable and satellite. It concludes by asking commenters if there are any additional questions it has failed to ask.
The FCC has asked for comments by March 8, 2010. We will continue to monitor this proceeding as the implications it could have for advertisers and ad-supported media are potentially very substantial.
Posted: Dec 15, 2009 12:00am ET
Today, ANA is taking part in a discussion at the Federal Trade Commission’s public forum on “Sizing Up Food Marketing and Childhood Obesity.” The panel discussion covers “Advertising to Children and the First Amendment.” Our statement points out the many steps the industry is taking to address concerns about childhood obesity, such as through the Ad Council, the Children’s Advertising Review Unit (CARU), and the Children’s Food and Beverage Advertising Initiative (CFBAI). Conversely (and unfortunately), the government has yet to step up to the plate in a similar fashion. ANA argues that we can solve the challenge of obesity without supersizing censorship or downsizing First Amendment protections.
We must focus on more effective approaches in dealing with the actual causes of childhood obesity. Report after report has shown that advertising is not a primary causal factor in childhood obesity – in fact, advertising on children’s programming has been declining while obesity rates have gone up.
Most importantly, however, we also contend that any restrictions on food and beverage advertising would raise serious constitutional issues by restricting truthful, non-deceptive speech. The Supreme Court has long been clear that the government can only restrict speech as a last resort.
You can read ANA's statement here.