Transcript Advertising Industry Self-Regulation

Better Business Bureau and the Role of SelfRegulation in the Marketplace
Consumer Safety and Health
Network Workshop
Presenters:
Rod Davis
Juan Herrera
BBB Mission, Value and Vision
• Vision, Mission and Values
• Our Vision:
An ethical marketplace where buyers and sellers can trust each
other.
Our Mission:
BBB’s mission is to be the leader in advancing marketplace trust.
BBB accomplishes this mission by:
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Creating a community of trustworthy businesses
Setting standards for marketplace trust
Encouraging and supporting best practices
Celebrating marketplace role models, and;
Denouncing substandard marketplace behavior
BBB Beginning
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Originally called “Vigilante Committees”
1st BBB established in the early 1900’s
Goal: to correct advertising abuses
In response to marketplace demands, the BBB expanded to monitor
business performance and provide consumers with vital information
to enable consumers to direct spending to “quality” businesses and
away from scams
• Presently: the 120+ Bureaus located in the US, Canada, and Puerto
Rico exist as non-profit agencies providing various services and
programs to assist consumers and businesses
– BBB staff size range from 3 to over 100 in largest BBB offices
Core BBB Services
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Business reliability reports
Membership
Complaint handling and dispute resolution
Marketplace protection
Truth-in-advertising
Business self-regulation
Consumer and business education
Charity review and reporting
Complaint Process
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BBB will not process anonymous complaints
Complaints must include a company name and sufficient information to
forward the complaint to the company
The complaint must involve a consumer-to-business or business-tobusiness transaction that relates to the advertisement or sale of a product or
service
BBBs process over one million complaints annually
Most complaints are resolved to the satisfaction of both parties while
mediation and arbitration is used to resolve over 70,000 complaints
annually
BBB helps direct consumers to more appropriate forums/agencies if the
complaint is beyond general marketplace issues (e.g. employment practices,
discrimination, violation of statutory rights, health care issues, etc.)
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Self Regulation and Regulation
BBB self regulation as a complement to regulatory initiatives:
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Develop marketplace standards (e.g. advertising guidelines for ethics and honesty)
Help consumers and regulators differentiate between the good and bad practices and businesses
Self regulation as a complement to regulation (e.g. BBB NAD and FTC, BBB AUTO LINE and
Transportation Recall Enhancement, Accountability and Documentation [TREAD] Act, BBB
Children’s Food and Beverage Initiative, etc.)
BBB Focus
– Build standards
– Encourage adherence to standards (industry/individual reports)
– Provide individual recourse (e.g. repurchase of vehicles)
– Track trends to educate public and inform/business corrections
– Engage regulatory authorities to “manage” non-compliance
– Share data to enhance regulatory initiatives (e.g. TREAD Act and FTC Consumer Sentinel)
National Advertising
Programs
NAD – 1971: Developed in response to consumers’ concerns about
truth and accuracy in advertising.
CARU – 1974: Chartered to assure that advertisers would take
special care in addressing advertising messages to a vulnerable
audience.
ERSP – 2004: Developed at the request of ERA to help combat a
negative perception of direct-response marketing and monitor
industry “outliers.”
CFBAI – 2006: Formed to address broad public concern over
advertising and childhood obesity.
NAD/CRN – 2007: Created in cooperation with the Council for
Responsible Nutrition to expand NAD’s review of dietary-supplement
advertising and rein in outrageous claims.
Health and Safety
Self-regulatory units review claims for
products that include:
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Infant formula
OTC drugs
Dietary supplements
Food and beverages
Tires
Low VOC paint
Toys and outdoor play equipment
Public Decisions
The selfregulatory
process is
transparent.
All decisions
are reported in
a press release
and published
in the
NAD/CARU/ERSP
Case Reports.
How NAD Process Works
• Complaint or staff monitoring
• Request to advertiser for
substantiation
• Review of evidence
• Goal: Complete case in 60 business
days
Key Areas of Interest
• Product-performance claims
• Functional foods
• Dietary Supplements
• Green marketing
• Telecommunications
What Is CARU?
• The self-regulatory arm of the children’s advertising
industry.
• Founded in 1974 to promote children’s advertising.
• Reviews & evaluates child-directed ads in all media &
online privacy practices as they affect children.
• Ensures compliance with our Self-Regulatory Program
for Children’s Advertising, (the Guidelines)
• Seeks changes to ads & websites through voluntary
cooperation of advertisers & web operators.
CARU’s Guidelines
The guidelines take into account children’s special
vulnerabilities:
• Children may not understand that they are being
subjected to advertising
• Limited cognitive skills
• Limited capacity to evaluate the credibility of
advertising
CARU’s Mandate
CARU reviews & evaluates advertising for:
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Truth & accuracy
Appropriateness
Online Privacy
Safety
CARU’s Scope includes:
• Advertising directed to children under 12 years of age for
advertising; and,
• Online privacy practices on websites directed to children
under 13 years of age.
CARU Decisions
Depict proper safety equipment
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CARU recommended that Street Surfing modify broadcast advertising for the company’s “Whiplash
Scooter” to depict the use of appropriate safety gear. The company agreed to do so.
Don’t advertise to kids products labeled “Keep out of reach of children”
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CARU recommended that the Johnson & Johnson Healthcare Products Division of McNeil-PPC, Inc.
discontinue advertising Listerine Smart Rinse during child-directed programming. The product,
manufactured in colors and flavors that may attractive to children, is labeled “Keep out of reach of
children. If more than used for rinsing is accidentally swallowed, get medical help or contact a
Poison Control Center right away.”
Avoid Disparaging Healthy Foods
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CARU determined that Tyson Foods Inc. should modify television advertising to avoid discouraging
or disparaging healthy lifestyles and to better depict foods in the context of a balanced meal. The
advertising at issue featured vignettes of children who were avoiding consumption of balanced
meals that included meatloaf, spinach fettuccine, veal chops, salmon or tuna casserole. CARU
determined that the advertising at issue was directed to children under the age of 12 and that the
advertising discouraged and disparaged healthy lifestyle choices and recommended the advertiser
discontinue the advertising at issue.
“Part II:
Guidelines on
Online
Privacy
Protection”
Website Safety, Privacy
• CARU examines Websites directed to children to
assure that privacy practices conform to CARU’s
guidelines and to the federal Children’s Online
Privacy Protection Act (COPPA).
• More than 60 Website privacy cases since 2008.
• Emmy-nominated public service announcement:
“Do you know where your children are … on the
Internet?”
BBB Self Regulation and
Food Marketing
• Two distinct but complementary BBB
kids self-regulation programs
• CARU addresses “how” foods are
advertised
– Has “Guidelines” that apply to all
children’s advertisers
• CFBAI addresses “what” foods are
advertised
– Membership program: participants
make “pledges”
The New Yorker 2003
CFBAI’s Goals
• Respond to Institute of Medicine and FTC
calls to action for self regulation to do more
to address childhood obesity
• Shift the mix of products advertised
primarily to kids under 12 (“child-directed”)
– Fewer calories, and lower in fats, sodium, sugars
– More nutrient dense
• Bring transparency and accountability to
industry member commitments
• Help industry be part of the solution
– Support efforts of parents, schools
The Landscape of Children’s
Advertising Is Changing
• Before (Pre-CFBAI) — Almost anything
went regarding what was advertised
– CARU Guidelines for how to advertise, but not
what to advertise
• Few companies had nutrition standards for childdirected advertising
• No third party accountability on what was advertised
• Now — Science-based nutrition standards
govern participants’ child-directed ads
– BBB oversight provides transparency and
accountability
CFBAI Requirements
as of January 2010
• 100% advertising of only healthier products, or
no advertising commitment required
• Advertising coverage
– Traditional measured media: TV, radio, print, Internetboth 3d party and company-owned
– Digital & mobile media: ads on cell phones, video games
rated “EC” or labeled as child-directed, DVDs of childdirected G rated movies and similar content
– Word of mouth advertising that is primarily child
directed
• No product placement in child-directed content
• No advertising to kids in schools (pre-K through
6th grade)
CFBAI’s 17 Participants
CFBAI =
Change & Improvement
• Self regulation is moving the needle
– Compliance is virtually 100%
• 12 participants changed or created > 100
products to meet meaningful nutrition
standards
• 5 participants: No child-directed
advertising or no candy advertising
Self Regulation is Critical and
Beneficial
• Self regulation via an independent third
party is a credible alternative to
government regulation
• CFBAI provides leadership & oversight
for industry-led program
– Rigorous, meaningful standards
– Dynamic and forward looking
– Provides an important non-company insider
POV
Wait! Wait!
(There really is more)
• Electronic Retailing Self-Regulation
Program (ERSP)
ERSP
ERSP examines advertising claims made in direct
response advertising, including claims made in blog
postings, twitter feeds, infomercials and home
shopping channels.
Key issues:
• Disease treatment and prevention claims.
• Weight-loss claims.
• Product-safety claims.
NARC Online Archives
The NARC Online Archive is an electronic database of
NAD/CARU/ERSP decisions, as well as the decisions of the
NARB, the systems appellate unit.
The archive is the single largest repository of advertising law
decisions and it is available to universities and law
enforcement and regulatory agencies at no charge.
For more information about the archive, please contact
Rey Persaud, [email protected],
Thank you
For more information please visit
www.bbb.org
[email protected]
[email protected]