GUEST COMMENTATOR: ANA'S DAN JAFFE

MARKETERS ARE FEELING THE HEAT IN WASHINGTON

The industry has come to a serious crossroads. Is self-regulation enough? Or will the government impose tough new restrictions on media content in the name of protecting children?

As I discussed at the Association of National Advertisers’ TV Advertising Forum in New York City last week, three major trends are increasing the political heat on marketers and the television industry. 

First: We face the most serious attack on children’s marketing since the late 1970’s. While some critics focus on food marketing, others attack children’s marketing in all media, as well as the exposure of children to indecent or violent programming. 

Second: We face serious questions about the adequacy of private sector efforts and our industry’s self-regulatory system to protect consumers, both children and adults. The advertising and media community have launched the broadest self-regulatory initiatives in history, yet some critics argue that self-regulation can never be enough.

Third:  The development of new media outlets for advertising and the convergence of media are drastically accelerating. These trends will require a rethinking of how the government regulates advertising, whether it appears on broadcast, cable, the Internet, iPods, cell phones or whatever the next delivery device for TV images turns out to be. The convergence of media also raises complex new issues about compensation of talent in advertising.

The FCC just announced a major new round of indecency fines of almost $4 million.

The agency also broke new ground by imposing a stiff fine on an advertisement, for the first time in its regulatory history, by slapping a penalty on a promotion for a DVD. 

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With indecency fines escalating, more challenges in the pipeline, and a strong majority behind the FCC chairman, advertising clearance, which already is very stringent, is likely only to tighten further.

Congress is going to keep the heat on the media and the FCC in regard to indecency and violent content. Several cable and satellite companies have announced they will offer family programming packages. In addition, the cable industry’s trade association announced that it would donate equipment to any family that could not afford the cable box needed to block specific channels in their home.

Last month, Jack Valenti, Hollywood’s former top lobbyist, announced a $300 million ad campaign to educate parents about how to use the V-chip, ratings and other tools to control their children’s viewing habits. The ads will be produced by The Ad Council and will begin airing in May.  

Our industry has come to a serious crossroads. Is self-regulation enough? Are private sector efforts enough? Or will the government impose serious new restrictions on media content in the name of protecting children?

In addition, we also face efforts to blame food marketing for increased rates of childhood obesity.

Senator Tom Harkin (D-Iowa) has legislation that would restore the FTC’s unfairness rulemaking authority in the area of food marketing to children. The Center for Science in the Public Interest has proposed that only “good foods,” as they define them, should be marketed to children. The American Psychological Association argues that all marketing to children under age 8 is inherently unfair and should be banned. 

A major report by the Institute of Medicine (IOM) called for a major shift in food marketing to kids to products that are low in calories and high in nutritional content.  The IOM stated that if the food industry did not “balance” their advertising with these types of products within two years, then the government should impose these requirements.

The marketing community is responding to the obesity challenge. Food, beverage and restaurant companies have introduced more than 4,500 new “healthier” products and menu offerings in just the last three years.

The Ad Council has partnered with the U.S. Department of Health and Human Services to develop public service ads that encourage Americans young and old to adopt better nutrition and physical activity habits and launched a child directed campaign in regard to low calorie nutritious food choices. 

The advertising community also is conducting a top to bottom review of the Children’s Advertising Review Unit (CARU) guidelines. This review is under the direction of Jodie Bernstein, the former director of the FTC’s Bureau of Consumer Protection. 

Now we will have to see if our efforts to protect children through CARU, the Ad Council and the efforts of individual marketers will be enough or will the government impose major new restrictions on marketing to children. 

One event that is certain to change the marketplace as we know it is the transition to digital TV. As broadcast, cable and the Internet begin to meld, the siloed regulatory regimes designed in the 20th century become less meaningful and rational today. Also, the more stringent governmental restrictions on broadcasting based on the scarcity rationale no longer make sense as digital compression will allow for an explosion of new station options. 

The burgeoning of new media delivery systems also has created substantial new talent compensation issues for the ad community. The current media silo approach for talent payments is leading to a “lose-lose” situation for marketers as well as the talent unions and the actors they represent.

To meet this challenge, the ANA/AAAA’s Joint Policy Committee, which directs negotiations with the talent unions, has asked the unions to join with us in seeking new compensation models that are fair to everyone. 

So throughout this year, we all need to stay tuned, alert and active to meet these new challenges.

Daniel Jaffe is executive vice president, government relations, for the Association of National Advertisers. He can be reached at 202-296-2356 or [email protected].


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