Regulatory Rumblings

ANA Writes to ICANN on RPMs

Posted: Feb 28, 2013 3:10pm ET

We sent a letter to the ICANN board of directors today urging them adopt significant rights protection mechanisms (RPMs) for new generic top-level domains before the new TLDs are activated. Our letter emphasizes the strong support of the Limited Preventative Registration proposal that ANA and numerous other groups put forward, with 66 organizations filing comments to ICANN urging it to adopt the Limited Preventative Registration (LPR) approach. 

Minnesota Ad Tax Threat Grows

Posted: Feb 25, 2013 3:30pm ET

With ad taxes still looming in Ohio, the threat in Minnesota is growing simultaneously. Governor Mark Dayton has put forward a broad tax proposal that would impose sales taxes on advertising and a broad range of business services.

This Wednesday, in the Minnesota House of Representatives, the Taxes Committee will hold a hearing on the bill that could implement these proposed changes, HF677. This bill, authored by Taxes Committee Chairman Ann Lenczewski, would lower the overall sales tax rate of the state from 6.8% to 5.5%, but substantially broaden the base of covered services. The Minnesota Department of Revenue released a report detailing the proposal last week. Newly taxed services include: advertising services, consulting services, publications, legal services, design services, and a number of others. Among those items still exempted are: medical services, food, and prescription drugs.

The Department of Revenue’s report states that services delivered to a buyer in another state (as is often the case with advertising services) will not be subjected to the tax. However, this proposal is still economically dangerous. According to IHS Global Insight, a highly regarded economic think tank, advertising is responsible for $109 billion in economic output in Minnesota (about 20.4% of the state’s economic output). Advertising supports 412,838 jobs in the state (about 15.1% of the jobs in Minnesota).

As in Ohio, the imposition of sales taxes on advertising, the driver of sales, will actually have the paradoxical effect of tending to diminish the revenue ultimately generated by broadening the sales tax base. ANA will be filing comments with the Taxes Committee. Advertisers, ad agencies, media, and similar groups should take immediate action to oppose these proposals before they gain unstoppable traction.

Trouble Brewing in the Buckeye State

Posted: Feb 15, 2013 10:00am ET

In the aftermath of the Fiscal Cliff and the looming sequester, most eyes have focused on budgetary matters in Washington.

But perhaps the most imminent threat to the advertising community can be found 400 miles west in Columbus, Ohio.  Ohio’s Republican Governor, John Kasich, has proposed to lower income tax levels in the state by as much as 20 percent for individuals and as much as 50 percent for small business owners. Governor Kasich’s plan would also lower the overall state sales tax from 5.5 percent to 5 percent.  To compensate for these lost revenues Kasich would vastly expand the types of services on which sales taxes would be imposed. Most state sales taxes, including Ohio presently, exempt business to business sales, including the purchase of advertising. Now, in Kasich’s new tax proposal, only services deemed “essential,” such as health care, would be exempted from the proposed expansion of the sales tax.

Governor Kasich is no stranger to ad taxes. As Chairman of the U.S. House of Representatives Budget Committee in 1995, then Congressman Kasich proposed to curtail the business tax deduction for advertising expenses.

Advertising is vital to the economic well-being of Ohio. According to IHS Global Insight, a highly regarded economic think tank and forecasting organization that utilizes the U.S. economic model originally created by  Nobel Laureate in Economics, Dr. Lawrence R. Klein,  advertising generates roughly $188 billion of economic output (or about 20% of Ohio’s economic output) annually. IHS Global Insight estimates that more than 758,000 jobs in Ohio are supported by advertising.

Advertisers should be monitoring this situation very closely.  Multi-millions of dollars annually could be on the line for both consumers and businesses.

And the challenge does not end with Ohio. Governor Mark Dayton of Minnesota, a Democrat, has proposed a similar idea. If these proposals are implemented in Ohio and Minnesota, other states, many of which are cash-strapped and have constitutional requirements to balance their budgets, might also look to taxing advertising as a source of revenue.  For states attempting to be more reliant on sales taxes, it seems extraordinarily short sighted and paradoxical that they would, at the very same time, consider placing additional burdens on advertising, the major engine of sales in Ohio and the rest of the United States.

Continued vigilance toward the actions of Congress and state governments will be absolutely necessary for advertisers in 2013.

Key Congressional Leaders Strongly Question Proposed Food Ad Guidelines

Posted: Sep 13, 2011 3:00pm ET

An important letter was sent yesterday to the heads of the Department of Health and Human Services (HHS), the Department of Agriculture (USDA) and the Federal Trade Commission (FTC) on the Interagency Working Group on Food Marketed to Children’s (IWG) proposed guidelines for food marketed to children.  This letter, from House Energy and Commerce Committee Chairman Fred Upton (R-MI) and signed by 21 other House members, including three subcommittee chairs, seeks a number of long-overdue answers from the IWG.

The letter notes that the initial request from Congress required a “study” of the issue, and not recommendations directed to industry. Chairman Upton and his colleagues called the proposed recommendations formulated without the benefit of a study “little better than a shot in the dark.”  The letter notes the profound problems with the guidelines as devised by the IWG – including the difficulties of reformulating products to meet the guidelines, the broad definition of “directed to children” and what marketing activities are covered.  In addition, the letter notes that there is no evidence that the guidelines would help reduce childhood obesity.  It also highlights the misnomer of labeling these proposals as “voluntary” in light of the fact that they have the weight of the government behind them.

The 22 signers strongly called on the agencies to withdraw the proposal and conduct the study as required by Congress.  The letter concludes with 10 detailed, pointed questions to the IWG, demanding answers by September 27th.  These questions seek more information on whether the study to Congress will be completed, how the guidelines were devised, what evidence there is the guidelines would reduce childhood obesity, the costs to industry and to the economy the guidelines would impose, and whether any alternatives were considered. 

ANA, other sister associations and many representatives from the food, beverage and restaurant communities have been highlighting these concerns with policymakers on Capitol Hill since the guidelines were released in late April.  We are encouraged that Congress is asking these critical questions of the IWG and requesting that it conduct a study before issuing any recommendations.  This letter is especially important since the House Energy and Commerce Committee has significant oversight authority over the actions of the FTC, FDA, and CDC.  We hope the Committee can convince the agencies to reconsider their sweeping, overly restrictive and misguided proposal. 

TRUTH in Labeling – Voluntarism Unmasked

Posted: Jul 20, 2011 9:00am ET

Last Thursday (July 14th 2011), the FTC ended its comment period on the Interagency Working Group’s (IWG) proposed principles for Food Marketing to Children.  Comments flooded in from virtually every segment of the food, beverage, restaurant and advertising communities. They forcefully pierced the façade that these “proposals” are anything other than thinly disguised government ultimatums, despite being labeled “voluntary” by the IWG.

The IWG is made up of representatives from the Federal Trade Commission, the United States Department of Agriculture, the Food and Drug Administration and the Center for Disease Control and Prevention. They have called on industry to cease advertising to anyone under 18 years of age, any foods, beverages or restaurant meals that don’t meet their extraordinarily stringent criteria for sodium, fats, or sugar.  Products like wheat bread, most yogurts, peanut butter, and even 2% milk would violate the standards.  In fact, this proposal wipes out virtually all food, beverage and restaurant products presently advertised on broadcast, cable and in many other media to those under 18.  It would adversely affect more than 1,700 programs on broadcasting and cable alone.

And it would all be for nothing.  Many commentators to the IWG noted the utter lack of any analysis in the Interagency Working Group’s proposals to demonstrate that if they were followed absolutely to the letter that there would be any material positive impact on obesity in the US for children or the general public.

The costs, however, would be all too real.  IHS Global Insight, a noted economic research group whose report was submitted to the IWG, emphasizes that if these proposed guidelines were put into effect in 2011,  74,000 jobs would be lost, resulting in an adverse economic impact in the US  of $28.3 billion.  The report concludes that these damaging economic impacts would continue to climb steeply from 2011 to 2015, with cumulative lost sales rising to over $152 billion.

But David Vladeck, the Director of the Bureau of Consumer Protection, has already stated in a recent blog, however, that these charges by the business community are simply “overly caffeinated.” According to Vladeck, everyone should relax because these proposals are merely “voluntary” and “provide no basis for law enforcement action by the FTC or any of the other agencies participating in the Group.”  Several other consumer activist organizations have chimed in to support this view.

However, a growing drumbeat of critics has placed a bright spotlight on this issue.  They have strongly demonstrated that the velvet glove of alleged “voluntarism” cannot hide the federal government’s coercive authority once key components of that government have stated clearly how highly regulated industries should respond to carefully defined nutrition standards. 

Kathleen Sullivan, the Stanley Morrison Professor of Law and former Dean of Stanford Law School, for example, in a submission presented to the IWG wrote:

The food marketing ‘guidelines’ cannot escape full First Amendment analysis merely because they are styled as ‘voluntary.’  A set of ‘guidelines’  issued by a group  of regulatory agencies with enormous regulatory and investigatory power over the food and media industries that are subject to those guidelines is the functional equivalent of government action, and companies may not be required to surrender free speech protections in exchange for the ‘benefit’ that government refrains from regulating them directly. (Kathleen Sullivan, Appendix A of Viacom Comments Submitted to the IWG, p. 2)

Professor Sullivan further notes that “Government action undertaken with the purpose and predictable effect of curbing truthful speech is de facto regulation and triggers the same First Amendment concerns raised by overt regulation” and that the Supreme Court has long held that such efforts are unconstitutional “even where the mode of censorship is informal and even where the acceptance of the speech restrictive conditions is nominally voluntary. “ (Ibid, p. 27). 

Professor Sullivan concludes that the IWG proposals “thus constitute an impermissible effort to substitute state censorship for parental control.” 

Martin Redish, Louis and Harriet Ancel Professor of Law and Public Policy at Nortwestern University School of Law, and a nationally regarded Constitutional law expert, has stated that the fact that the IWG proposals “are labeled ‘voluntary’ in no way camouflages their inherently coercive nature.  The force of powerful governmental agencies stands behind them, fortified by the explicit threat of mandatory regulations should voluntary compliance measures prove unsuccessful.  Government may not achieve through indirection what it is not constitutionally authorized to impose directly” (Redish, pp. 26-27).

Bruce Fein, the Associate Deputy Attorney General and General Counsel to the FCC during the Reagan administration, also has weighed in on the IWG “voluntarism” issue in the Huffington Post in an article entitled “Voluntary by Command.”  Fein forcefully maintains that “In substance, the IWG has delivered an ultimatum to the food industry: either reformulate …or cease promotion on TV, radio, websites”.  Fein points out that the enormous array of covert and overt powers that the Interagency Working Group wields “make industry compliance with the guidelines no more voluntary than yielding a wallet to a highwayman.”

The Wall Street Journal in an editorial entitled “Not So Grrreat!” (July 8, 2011) also pointed out that enforcement of clearly defined sweeping nutrition standards by the four powerful agencies of the Interagency Working Group does not have to be solely enforced whether, covertly or overtly, by the IWG.   As the Journal notes the “[IWG] doesn’t have to.  That job will be cheerfully assumed by consumer activists and their allies in the plaintiffs’ bar.”

Furthermore, as ANA’s own filing emphasizes the IWG can hope to carry out its censorship of advertising indirectly through pressuring broadcasters to refuse to accept ads that fail to meet the radically restrictive IWG nutrition standards. Under the Federal Communications Act, broadcast licenses are based on whether licensees are operating in the “public interest.”   Station owners clearly would have to fear attacks on their licenses by the FCC and activist groups if they failed to enforce bans on foods, beverages and restaurant offerings that do not meet the IWG food marketing standards.

Finally, and most tellingly, the lack of voluntarism of the IWG proposals is demonstrated by the overwhelming number of organizations representing the food, beverage, restaurant, media and advertising groups all attesting to the fact that they believe that these highly detailed, all encompassing, overly restrictive proposals will be treated as de facto government mandates rather than mere governmental recommendations by their members. 

To attempt to dismiss these concerns as merely “caffeinated” political hyperventilation by the business community, completely belittles and ignores the enormous economic stakes involved.  In light of the billions of dollars of potential adverse impacts and lack of evidence that the IWG proposals will provide material positive benefits to society, these counterproductive and insufficiently considered proposals should be withdrawn.

Regulatory Supersizing

Posted: Jul 5, 2011 11:30am ET

David Vladeck, the Federal Trade Commission’s Director of the Bureau of Consumer Protection, in a parting shot before the Fourth of July, released a blog post entitled “What’s on the table.”  The blog mocks, disparages, deprecates and dismisses a broad range of serious issues raised by the business community concerning the Interagency Working Group’s (IWG) Proposal on Food Marketed to Children.  The IWG, by the way, is made up of four powerful Federal Agencies: the FTC, the US Department of Agriculture (USDA), the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC).

This blog, unfortunately, is extremely disappointing.  By simply labeling the wide range of issues outlined by a broad cross-section of the advertising, media, food, beverage and restaurant communities as “myths,” it signals a striking unwillingness to seriously examine the growing critique of the IWG’s food and marketing recommendations.

The IWG proposal itself makes clear, however, how much is really at stake.  The proposal states that, “The Working Group recognizes that if the proposed nutrition principles were fully implemented by industry a large percentage of food products currently in the marketplace would not meet the principles.”  In fact, of the 100 most advertised food and beverage products in the US, 88 of them would fail to meet the IWG’s proposed nutrition standards.  Bananas, grapes, broccoli and a few other similar fruits and vegetables would be the only food products to make the cut.

The proposal, in a major understatement, notes that efforts to reformulate products to meet the nutritional goals might present “technical difficulties and challenges in maintaining the palatability and consumer acceptance of the product.” Stripped of bureaucratic legalese, this means that the IWG proposals are calling on industry to eliminate virtually all existing food, beverage and restaurant advertising directed to those under 18 years of age. 

During this extremely difficult economic period, this proposal, if acceded to by industry, would have multibillion dollar adverse impacts in the marketplace for the media, food, beverage and restaurant communities.

But not to worry - in an excess of regulatory modesty, the blog maintains that the proposal is “voluntary,” “not a rulemaking proceeding,” and “provides no basis for law enforcement actions by the FTC or any of the other agencies participating in the Group.”  This is a classic example of attempting to deflect criticism of government action and overreaching by claiming that it is so inconsequential as not to be of any concern.

This “Inconsequentiality Defense,” however, falls apart under even the slightest examination.  The four agencies of the Working Group have authority over virtually every aspect of the growing, marketing, labeling and advertising process that is fundamental to the health and well-being of the food, beverage, restaurant and advertising communities. The highly technical, restrictive and detailed IWG proposal was the product of a more than 23 month effort by an interagency task force.

The proposal explicitly states that it covers all media and virtually every theoretical type of marketing from product placement in movies, to point of purchase displays, to word of mouth advertising, to charitable and sporting activities.  In fact, after describing 19 other marketing categories to be covered by the IWG proposals, the final marketing category listed is “other.”

Most significantly, the proposal claims that while its goals are “ambitious” they are “warranted by the urgent need to improve children’s diet and health and address the epidemic of childhood obesity.”   Is it at all plausible under these circumstances that publicly held companies are not having a regulatory “Sword of Damocles” dangled over their head if they fail to “voluntarily” accept the IWG’s stringent marketing proposals?  Could they simply ignore these proposals without fear of government retribution?

Certainly, Martin Redish, a renowned constitutional scholar and law professor at Northwestern University, doesn’t think so.  Redish notes, “Simply as a matter of common sense it is all but inconceivable that the  federal government would incur the burdens and expense involved in establishing the Interagency Working Group and preparing the advertising regulations only  to have the food industry summarily ignore them.”  Redish then concludes, “The voluntary nature of the regulations is therefore appropriately deemed to be nothing more than a precursor to coercive enforcement in the event that the industry fails to comply.”

Therefore, labeling the IWG program as “voluntary” certainly should be considered a violation of truth in labeling laws.  Furthermore, if broadcasters accepted ads for foods, beverages or restaurant offerings that did not meet the IWG standards they would obviously open themselves up to facing challenges to their station licenses for failure, as is required under the Federal Communications Act, to operate in “the public interest.”

Finally, the blog fails to discuss, and barely acknowledges, the most glaring problem with the IWG proposal, which is its failure, despite Congress’ direction for them to do so, to relate or analyze the relationship of their proposals to preventing obesity among children and teens.  While the costs of acceding to the IWG mandates, as already noted, would be in the multibillions of dollars, the proposal is strikingly silent on any estimate of the benefits that the proposal would purportedly provide.

For all of these reasons, the ANA is calling on the IWG to withdraw its proposal as counterproductive, potentially seriously economically damaging and not responsive to Congress’ direction to the Interagency Working Group to focus on the evidence on how to combat obesity among our children in the United States.

The FDA's New Graphic Warnings for Tobacco Products Violate the First Amendment

Posted: Jun 21, 2011 3:07pm ET

The Food and Drug Administration (FDA) today unveiled a set of nine new graphic warnings that must appear on all tobacco packages and ads next year.  We believe that these gruesome, graphic warnings are excessive and violate the First Amendment.  The new text and graphics requirements would convert product packages and marketing into platforms for the government’s viewpoint.  While the government can require neutral and factual labeling, it cannot turn packaging and advertising into graphic billboards for the government’s messages.

The new warnings required by the FDA include graphics of cadavers, smoke coming out of a hole in a throat and a lung filled with cigarette butts.  These types of labels clearly are not constitutionally permissible.

ANA joined with the American Advertising Federation (AAF) to file comments in January in opposition to the FDA’s proposal.  Those comments, which were written by noted First Amendment attorney Bob Corn Revere with the law firm Davis Wright Tremaine LLP, are available here

While the FDA’s rule relates to tobacco advertising, the underlying premise would set a very dangerous precedent for all other marketers – that the government can tell companies what they must say and portray in their advertising.  This is precisely the kind of paternalism that the First Amendment does not permit.  ANA now will seriously consider legal avenues for challenging the new graphic warnings.

Last year, ANA filed a “friend of the court” brief with the U.S. Court of Appeals for the Sixth Circuit in a lawsuit brought by six major tobacco companies challenging the marketing restrictions in the Tobacco Control Act.  That law contains the most burdensome advertising restrictions ever passed by the Congress.  We are very hopeful that those restrictions will also ultimately be thrown out by the Supreme Court.

The OBA Battle Continues

Posted: May 27, 2011 9:00am ET

Since January, there have been important legislative actions relating to online consumer privacy and Online Behavioral Advertising (OBA), which could have very significant effects on the future of online advertising and the Internet ecosystem.  Meanwhile, the Digital Advertising Alliance's (DAA) Self Regulatory Program for Online Behavioral Advertising, in which ANA is a key player, has been steadily increasing its visibility and also ramping up its enforcement efforts. 

Four major privacy bills have been introduced in the House of Representatives.  Congresswoman Jackie Speier (D-CA) introduced a bill, H.R. 654, that directs the FTC to establish a "Do-Not-Track" regime, which would allow online users to opt out of having their information collected for the purposes of online behavioral advertising and other tracking.  Congressman Bobby Rush (D-IL) has a bill, H.R. 611, that is similar to his bill introduced in the last Congress.  Congressmen Cliff Stearns (R-FL) and Jim Matheson (D-UT) have introduced a bill, H.R. 1528, that calls for consumer opt-outs of data collection that would last for five years and prescribes standards for the FTC to approve self-regulatory programs.  Finally, Congressmen Ed Markey (D-MA) and Joe Barton (R-TX) have introduced a bill, H.R. 1895, that prohibits the collection and use of data from children and teens for the purposes of behavioral advertising and creates a so-called "Eraser Button" that would allow for the deletion of publicly available personal information by consumers.

Do Not Track Should Not Pass Go

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.

Focusing on Real Solutions to Childhood Obesity

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.

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About This Blog

Focuses on all federal and state government and legal initiatives that threaten national advertisers' freedom of commercial speech. The blog is penned by Dan Jaffe, the ANA's Group Executive Vice President, Government Relations, who also heads the trade association's Washington office.