Vladeck Speaks at NAD Annual Conference

Headline: FTC Plans Effort To Educate Kids About Advertising
Source: Media Post – 10.05.09

David Vladeck, the new director of the Federal Trade Commission's Bureau of Consumer Protection, put attendees of the BBB's National Advertising Division Conference on notice on Monday: The commission is reviewing practices and standards on a number of fronts, particularly around advertising to kids.

The commission, said Vladeck, plans substantial efforts this year and next around food marketing to children and adults; Internet selling techniques; endorsements and testimonials; green marketing and privacy matters; and better coordination with sister agencies, especially the Food and Drug Administration.

The actions include a new campaign directed at tweens next year that will comprise advertising, interactive elements and in-school and library programs aimed at teaching kids how to recognize and analyze advertising.

Vladeck says the reasons to address marketing to kids -- particularly around food -- are more compelling now because of the rising number of incidences of obesity, cardiovascular disease and diabetes.

"Progress has been made because of self-regulatory initiative from the Council for Better Business Bureaus (of which the NAD is part) but more needs to be done," he said. Two weeks ago, he said, the FTC served notice to get approval from the Office of Management and Budget to do a major food marketing study that will allow a direct comparison of marketing spend, profile data and market data between the new study and one done two years ago.

The multimedia ad campaign, directed at kids ages 8 to 12, will include a Web site featuring a game that teaches core ad literacy concepts. The game will also be on mobile devices. In-school curricula developed with Scholastic magazine will deal with why, where, and how commercial messages are constructed and placed, per Vladeck.

"The distinction between ads and other content is often blurred to the point that even older kids may not get when they are being pitched," he said. "The goals are to teach kids to be aware of ads, analyze and understand them, and the benefits of being an informed consumer." He added that the effort focuses on three key questions: "Who is responsible for these ads?" "What does the ad say?" "What does it want me to do?"

Dan Jaffe, executive vice president, government relations for the Association of National Advertisers, tells Marketing Daily that a number of campaigns from the Ad Council have been extremely effective, but the key is how they target their audience with actionable proposals that are also meaningful.

He also argues that such a campaign should talk about regulations that exist now. "Advertising is one of the most regulated areas, and we have made major steps on a self-regulatory basis. It is important to tell kids they have to look at all messages critically, but it is no longer a caveat emptor world we live in. It is a highly regulated world and one with tremendous incentives for advertisers."

As for the new guidelines for endorsements, Jaffe argues that the FTC guidelines are implied by the existing rules and that in many cases, disclosures should be taken as prima facie statement of fact around cases where there is a wide variation of results, not merely an advertiser's attempt to seek a safe harbor.

Jaffe, therefore, sees the removal of safe harbor disclaimers as a danger for advertisers. "The question is what [the FTC] is going to consider as a trigger for [legal action] around disclosures. In a lot of areas, it could be very difficult. What has to be kept clear is that these are guidelines, and a lot of how this will play out will be when people make claims."

Per Vladeck, the FTC is also increasing efforts around environmental-marketing claims. He said the agency has launched a green initiative that includes a review of its own "green guides" and law enforcement around false or deceptive green claims. The FTC is also linking with the FDA and Office of Consumer Litigation of the Department of Justice to enforce rules around marketing of conventional food products; dietary supplements and over-the-counter drugs.

Steve Cole: Thanks to a Mentor and Champion of Advertising Self-Regulation

How the Soon-to-Be-Retired CBBB CEO Changed the Industry

By Pete Blackshaw
Published in Advertising Age 9/24/09

Mentorship should be on Maslow's hierarchy. It's the ultimate need to help us succeed, and I've been very lucky to have several great mentors in my short business career so far.

I learned the ropes of politics and policy with Art Torres, then one of California's top-ranked Hispanic elected officials. At P&G, I was fortunate to develop a close mentee relationship with then-CMO Denis Beausejour, someone I still lean on for professional and personal advice. And in the past couple of years, I've had the most extraordinary opportunity to learn and work hand-in-hand with a tireless champion for both consumer interests and business self-regulation, Steve Cole, CEO of the Council of Better Business Bureau.

After nearly 22 years at the Better Business Bureau, Steve's retiring from the CBBB. As CEO, he led 128 national bureaus that accredit more than 400,000 businesses and satisfy tens of millions of annual consumer "service requests." He also administered all of the CBBB's advertising self-regulation work, from the National Advertising Division (NAD) and CARU (the Children's Advertising Review Unit) to the recently established Children's Food and Beverage Advertising Initiative, as part of a decades-old, internationally recognized alliance with the advertising industry to promote truthful advertising.

Indeed, we're all losing a mentor.

Steve and I met about eight years ago during my passionate, arguably naive crusade to turn PlanetFeedback.com into "the Better Business Bureau on Steroids." We connected on mutual passion for driving win-win, trusted relationships between consumers and businesses.
Two years ago, Steve invited me to serve on the Council of Better Business Bureaus' Board, and shortly thereafter, to serve as board chair. I still have that role, and it's given me no shortage of excuses to tap his knowledge, experience base and personal lessons accumulated over the years.
The best leadership lessons come from tough, sometimes seemingly impossible situations. The venerable 100-year old BBB faces many challenges, from managing "digital disruption" to keeping pace with the new age of consumer control, where "complaint escalation" has taken on radically new meaning.

Steve met the test, and then some. He modernized the BBB's branding, worked with his broad membership to put a smart five-year strategic plan in place, and brought consistency and new offerings to the web services of over 100 bureaus. He actively supported the BBB's delicate transition from "satisfactory" scores to actual letter ratings. Several years ago, along with incoming CEO Steve Cox (then CMO), he introduced the expansion of the successful International Torch Awards ceremony to recognize global leaders in marketplace trust.
Impact on self-regulationBut here's the point I really want to underscore -- especially to this audience. Steve Cole has done more than just about anyone to promote advertising self-regulation since American Advertising Federation's (AAF) Howard Bell pioneered the system in the early '70s.

"Steve is a historic leader who never sought a place in history. He took a CBBB teetering and wobbling and figured out how to make it relevant, survive and grow at a time when that seemed truly difficult -- if not downright impossible," said Bob Liodice, CEO of the Association of National Advertisers (ANA).

For nearly 20 years, he served as general counsel of the NARC board -- which sets policies and procedures for advertising industry self-regulation -- and influenced countless operational decisions that have led to continued success of the programs. He drafted the decisions of the National Advertising Review Board, the self-regulatory system's appellate unit.

As CBBB CEO, he expanded the role and scope of self-regulation. He recruited Lee Peeler, a veteran FTC lawyer, to lead the programs; solidified the CBBB's relationship with other key organizations; successfully pushed for a NARC board expansion to include other industry leaders such as the DMA, IAB and ERA (Electronic Retailing Association); strengthened the success of existing programs; and introduced success new ones.

"He agreed to champion one of the most complex self-regulatory issues in advertising history: self-regulation of online behavioral advertising," Mr. Liodice said. "While still a work in progress, Steve's unrelenting support led to the adoption of self-regulatory principles that will become the backbone of an accountability system that will be leveraged throughout the U.S. and, likely, around the world."

When children's food advertising was under attack, Steve helped recruit former FTC consumer-protection rock star Jodie Bernstein to lead a historic groundbreaking effort to revise the historic CARU guidelines, and create an innovative self-regulatory program to address concerns about the marketing of food and beverage products to children. This model is so successful that it has been implemented in Canada, the EU and a number of other countries.

Recently, he's helped facilitate important, timely dialogue with groups such as the Word-of-Mouth Marketing Association (WOMMA) that are pushing for self-regulation in word-of-mouth and social media.

In fairness, Steve Cole didn't check off every box. Indeed, the nation's oldest trust organization is far from out of the woods. But he pushed against the grain, endured some grief along the way, and got an impressive amount of work done -- effectively laying the foundation for his capable and committed successor, Steve Cox.

Importantly, he did so while staying true to his "consumer" passion and sensibility. We all owe Steve Cole a debt of gratitude. His "ROI" is not as crystal clear as a click-through rate, but trust me, we're all benefiting from his industry mentorship.

Council of Better Business Bureaus Names Stephen A. Cox as President and CEO

ARLINGTON, VA - September 2, 2009 – The Board of Directors of the Council of Better Business Bureaus has named Stephen A. Cox as President and CEO. Founded in 1912, BBB is the nation's oldest trust organization, with 124 BBBs serving communities across the U.S. and Canada. BBB evaluates and monitors more than four million local and national businesses and charities, and more than 400,000 businesses are now BBB Accredited Businesses. The organization also oversees advertising industry self-regulation efforts, from children's marketing standards to direct response advertising, and enjoys a mutually supportive relationship with more than 200 corporate partners.

Cox has served as the Council’s Vice President of Communications since July 2006. He will assume leadership of the organization effective October 8 - at the conclusion of BBB’s International Assembly in Boston - replacing Steven J. Cole, who is retiring after 22 years with the Council, first as General Counsel and Corporate Secretary, and for the past four years as President and CEO.

“Steve Cox is an outstanding choice to lead our organization as we approach our 100th year anniversary of driving marketplace trust. I've seen him in action, and he gets results,” said Pete Blackshaw, Chairman, Council Board of Directors. “In partnership with outgoing CEO Steve Cole, he's already laid an impressive foundation for BBB's digital future, launched outstanding new products and services, and has elevated our standing and stature across the marketplace. His ethics are without peer and I'm excited to work with Steve to lay a foundation for BBB's next 100 years.”

Cox has grown Council communications activities into a multi-faceted operation. His efforts have been instrumental in the success of the ongoing BBB system re-branding effort, launched in October 2007, and in redesigning the BBB International Torch Awards program, now a signature marketplace trust-focused national event held annually in Washington, DC.

“Business and charity leaders, and consumers and donors all inherently understand the requirement for trust in today’s marketplace – trust serves as both a moral and economic foundation,” said Cox. “Together, in serving with our BBB leaders, National Advertising Review Council partners, BBB Wise Giving Alliance team and corporate partners, I look forward to continuing our work in addressing the challenge of building a marketplace where buyers and sellers can trust each other.”

Prior to joining the Council, Cox worked for Booz, Allen, Hamilton – a global strategy and technology consulting firm. In 2005, he retired from the United States Marine Corps after 23 years. During the 1990-1991 Gulf War he received the Bronze Star Medal for valor in combat during the liberation of Kuwait City. Following the events of 9/11, he served as a Marine Corps spokesperson for the first deployment of U.S. forces to Afghanistan. He was then assigned as the first U.S. spokesperson for terrorist detainee operations at the detention facility in Guantanamo Bay, Cuba, and later deployed as the first U.S. spokesperson for Coalition counter-terrorism operations in the seven-country Horn of Africa region. In his last assignment, he served as the Director of Community Relations for the Marine Corps, at the Pentagon in Washington, DC.

For the past six years, Cox has also worked with the William Randolph Hearst Foundation’s United States Senate Youth Program. Annually, he leads a team in managing daily operations and mentoring more than 100 of the nation’s top high school students while coordinating activities with staffs at the White House, Supreme Court, Senate and Departments of Defense, State and Justice.

Cox is originally from Memphis, TN and a graduate of the University of Tennessee at Chattanooga. He has also earned a Master’s Degree in Marketing and a Master of Business Administration degree from the University of Maryland (University College).

Outgoing President and CEO Steve Cole has enjoyed a distinguished career with the Council since 1987. With the rise of the Internet in the mid-1990’s, he is credited with spearheading the creation of BBBOnLine, the organization’s trustmark program that continues to provide today’s online marketplace with support in identifying and engaging trustworthy businesses. As President and CEO, Cole led the BBB system through far reaching organizational changes, including a revitalization and repositioning of the BBB brand; the creation of an integrated network of BBB Web sites that are now receiving more than four million unique visitors per month, and growing rapidly; the development and implementation of BBB Accreditation for those businesses meeting and upholding BBB Standards for Trust; and the establishment of a unique self-regulation program for the marketing of food and beverages to children.

“I am extremely proud of what we’ve accomplished, and am confident that Steve Cox will lead BBB to many future successes. BBB is needed more than ever, and is in position to play the leading role in advancing trust in the rapidly changing marketplace," said, Cole. “The opportunity to work with thousands of passionate professionals across the BBB system and with our corporate partners and colleagues at the National Advertising Review Council on so many important projects, programs and initiatives has been an honor and privilege.”

Self-Regulation Shouldn't Be Advertising's Best-Kept Secret NARC's Fine Work Needs to Noticed

Advertising Age
by Rance Crain

As if you needed another sign that times are tough, here's a fairly reliable measure: The number of cases handled by the advertising industry's best-kept secret -- self-regulation -- are on the rise.
Last year the National Advertising Division of the Council of Better Business Bureaus handled 214 cases, up 22% from 2007. And in 2008 ad challenges, in which one advertiser challenges a competitor's claim, rose 31% to 81 cases.
Why the increased activity? It's a deadly fight for share of market out there, and in down times advertisers tend to revert to hard-hitting comparative advertising. NAD's purpose is to substantiate these kinds of attack ads, and it can do it faster and cheaper than litigation can.
The Federal Trade Commission seems to like the idea of letting advertisers settle their own disputes. When the National Advertising Review Council, the body that sets the policies and procedures for the NAD to enforce, started 38 years ago, then-FTC Chairman Bob Pitofsky wasn't an early convert.
"If the truth be known," he said 10 years ago, "there was some skepticism about how the whole thing would work. The FTC had been burned time and time again by unkept promises of self-regulation by other industries. But this group has proved the skeptics wrong. Today, advertising has the best self-regulatory system of any industry in the country."
The outgoing chairman of the FTC, William Kovacic, is also a fan. But the current crop of FTC commissioners don't seem as convinced, although they seem somewhat willing to give self-regulation a chance. In issuing guidelines for online behavioral advertising, FTC Commissioner Jon Leibowitz said the industry needs to do a better job of "meaningful, rigorous self-regulation, or it will certainly invite legislation by Congress and a more regulatory approach by our commission."A joint industry task force quickly seized on that statement as an endorsement for self-regulation, and said it supported FTC's goal of a "comprehensive and effective self-regulatory program."
But in spite of rhetoric, advertising self-regulation still remains "relatively unknown and underappreciated by the industry it serves," in the words of C. Lee Peeler, president-CEO of the National Advertising Review Council. By "underappreciated," he means that self-regulation has a "low profile in comparison to its value" to the advertising industry.
Even financial support comes from a relatively small group. There are about 150 corporate supporters, 50-plus law firms, 10 or fewer ad agencies and a dozen associations, Mr. Peeler told me.
So why is NARC the best-kept secret in the business? "That's the puzzle," he said. "When self-regulation is working well, it goes relatively unnoticed. The work of NAD is really very workmanlike."
An exception, Mr. Peeler said, is the children's food and beverage initiative, which a recent survey shows has "pretty good recognition among parents and very strong support from children's food and beverage advertisers."
The Children's Advertising Review unit, as it's called, gets support from about 100 children's advertisers. But when the NARC strategic planning group reached out to key stakeholders last year, they were consistently told there were relatively low levels of awareness of NARC and its programs among advertisers, and especially among agencies.
I guess we're part of the problem because Mr. Peeler said the trade press doesn't do a very good job of covering case settlements or other NARC activity. Mr. Peeler, who worked for the FTC for 33 years before joining NARC in 2006, gently lifted us off the hook when he said that "we don't have winners and losers, but participants and supporters of the process."

Advertising Industry Self-Regulation Expands Board of Directors

CEOs of DMA, ERA, IAB Join Board of National Advertising Review Council

New York, NY – Jan. 27, 2009 - The National Advertising Review Council today announced expansion of the NARC Board to include Julie Coons, President and CEO of the Electronic Retailing Association (ERA), John A. Greco, Jr., President and CEO of the Direct Marketing Association (DMA) and Randall Rothenberg, President and CEO of the Interactive Advertising Bureau (IAB).

The appointments of Ms. Coons, Mr. Greco and Mr. Rothenberg expand the NARC Board, which sets policies and procedures for advertising industry self-regulation, to 11 members from eight members.

The move represents the first expansion of the Board since the organization was founded more than 30 years ago.

“The advertising industry has changed dramatically since NARC was created,” said Eric Mower, NARC Board Chair and President and CEO of Eric Mower and Associates, Syracuse, NY. “The ERA, DMA and IAB are strong, effective supporters of self-regulation. The participation of Ms. Coons, Mr. Greco and Mr. Rothenberg will significantly strengthen the board’s ability to build on the success of our self-regulatory programs and provide important perspective on the many new issues faced by the advertising industry.”

"We've been actively involved in encouraging self-regulation since 2004, when ERA and NARC
developed a self-regulatory program for direct-response marketers. Through our Electronic Retailing Self-Regulation Program (ERSP), we have developed an ongoing partnership with the NARC and consider it the gold standard for ethical advertising practices. It is an honor and privilege to join the board and I look forward to working with my fellow board members to ensure the continuation of a healthy and vibrant self-regulatory community,” said Ms. Coons.

"In a digital economy, many of the distinctions between direct marketing and advertising have
diminished and it is important for all sectors in these communities to work together in promoting ethical business practices,” said Mr. Greco. “I'm delighted to join the NARC Board and look forward to advancing the principles of self-regulation."

“As we look to the future of advertising, it is clear that interactive marketing is playing an
increasingly prominent role and it is essential that we continue to demonstrate to consumers and the government our commitment to the highest standards of ethical conduct,” said Randall Rothenberg. “I look forward to working with my fellow NARC board members to build on the outstanding tradition of self-regulation that they have established.”

"NARC programs have an outstanding record of success and are regularly cited by the government and business community as a model of effective self-regulation,” said C. Lee Peeler, President of NARC. "This expansion comes at an opportune time and strengthens our ability to raise the profile and broaden the role of self-regulation in promoting high standards of ethical business conduct."