MARKETERS GET THE MESSAGE

Say what you will about product marketers, but they are nothing, if not smart. There is a new political wind a-blowing in Washington, with a Democratic House and Senate, and promises by lawmakers to look closely at business practices throughout the land.

That makes today's action by two different industries all the more prescient.

First, food companies that sell to kids have promised to be much more responsible in the products they advertise and the way in which those ads are delivered to our youngest consumers.

Second, the distilled spirits industry--makers of alcoholic beverages--conducted its first ever nuts and bolts media buying summit. The importance of this industry-led event is that alcohol makers are proving they want to do everything possible to make sure their products are not advertised in any media whose audience (readers, viewers, etc) is not comprised of 70% adults.

To the skeptics out there who say these self-regulatory initiatives were driven by the threat of government action, I say: "so what." It doesn't matter how these industries got to where they are--it only matters that they're here--and here to stay.

I am most impressed with the alcohol industry's educational efforts. It is bending over backwards to help distillers understand the societal and regulatory framework in which they operate, and to keep their marketing and advertising squarely within bounds. Other than those industries that are highly regulated (securities, pharmaceuticals), I do not know of many other self-regulatory efforts as robust or rigorous as that found among distilled spirits. Kudos to them for getting the message, and taking even more steps toward responsible advertising.

As for the food companies, their plan to launch new self-regulatory guidelines is exactly what the FTC had in mind when it encouraged the industry to review its messaging to children.

When policymakers and the public spoke, these industries got the message.

Adonis Hoffman, a former FCC and congressional lawyer, is a strategic communications expert in Washington.

The Senate, FCC Obesity Task Force

AAAA's Praises Obesity Task Force

By John Eggerton -- Broadcasting & Cable,
9/28/2006 3:18:00 PM

The American Association of Advertising Agencies Thursday praised the task force on media and obesity launched by Senator Sam Brownback with an assist from FCC Chairman Kevin Martin.

"We commend Chairman Martin and Senator Brownback for broadening the public policy conversation on obesity to include industry and media as well as consumer groups," said AAAA senior VP Adonis Hoffman. It is currently a Republican-heavy bipartisan effort, but Brownback said they planned to reach out to both sides of the aisle.

Brownback and Martin both said in announcing the task force Wednesday that its goal was industry-government cooperation, not regulation.

Hoffman was all for it: "I hope the Task Force will lead to a solid public-private partnership and viable solutions to address a growing societal problem," he told B&C.

"Every credible study concludes there are many factors contributing to childhood obesity, including less physical education time in schools, parental choices in diet, and more time spent on computers," said Hoffman. "Advertising is way down on the list.

The task force is seeking input from a variety of sources, and Hoffman suggests some of that should accentuate the positive. "As food companies and advertisers continue to adjusted their messages to accentuate healthy choices, they should be applauded by policymakers for responsible action."

© 2006, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

Meeting the Challenge of Diversity on Madison Avenue--Testimony of Adonis Hoffman before NY Human Rights Commission

Statement of Adonis E. Hoffman, Esq., to New York City Council,
Commission on Civil Rights, Sept. 26, 2006

Chairman Seabrook, Members of the City Council,

Good afternoon. My name is Adonis Hoffman. I am Senior Vice President and Counsel for the American Association of Advertising Agencies, also known as the 4-As. I also serve on the board of the Center for Responsible Media and Marketing, which is a think tank focused on the issues of responsible media policies and practices, and formerly on the board of the Black Education Network, a New York-based broadcast network focused on delivering quality content to African Americans. Before this, I had the honor of serving as a Senior Counsel to the Chairman of the Federal Communications Commission, where I headed up an inter-agency task force on advertising practices.

I appreciate the opportunity to testify at your hearing today on this important topic. My testimony today is in two parts. Part one is on behalf of the American Association of Advertising Agencies, which was invited to testify at the hearing. Part two is in my private capacity as a communications lawyer who has been involved in this issue for the last ten years.

I am joined at the table today by the Honorable Victor Frazer. Mr. Frazer is a former Member of the U.S. House of Representatives. He is a lawyer, and has been one of the distinguished outside advisors to the advertising industry on this issue.

PART I—On Behalf of the American Association of Advertising Agencies

1. Headquartered in New York, the 4-As is comprised of over 450 advertising agencies and media agencies throughout the country. These large and small agencies are responsible for approximately 75 percent to 80 percent of the advertising placed in all media in the U.S.

2. Several of our member advertising agencies and media companies received invitations to testify here today. Those agencies asked that the 4-As, as the industry trade association, collate their testimony into written form and submit it for the record on their behalf. And we are happy to do that.

3. As has been well-publicized in the media, 16 advertising agencies in New York signed individual agreements with the New York Commission on Human Rights to bolster employment diversity and the numbers of African Americans within their middle and senior ranks.

4. These agreements were historic inasmuch as no other industry has made such commitments. Chairman Patricia Gatling of the Human Rights Commission and her staff deserve high marks for moving the industry forward.

5. As the advertising agencies sealed their negotiations with the Human Rights Commission, it was agreed that they would be free to proceed with their diversity plans without any hearings on the issues that were resolved as a result of many months of negotiation. Thus, following the advice of their individual legal counsel, the agencies, as you can understand, opted not to appear today. I believe there were a number of corporations that opted-out as well.

6. As a courtesy to you, Mr. Chairman, and out of our respect for the City Council system, we did not want to let the opportunity go by without affecting the record on this issue.

7. Consequently, I would like to submit this report on Advertising in New York Media for the record today.

8. This report was compiled by experts in the New York media industry who are familiar with both the challenges and opportunities that exist when it comes to this category.

9. The data were derived from independent, third-party data collection sources and standard industry research sources, including Nielsen Ad-View, TNS, Audit Bureau of Circulation, and Arbitron. These are not estimates and are not sourced from advertising agencies, but reflect standard industry measurements.

10. Much of the report is technical, and some of the data were taken from proprietary sources. Unfortunately, as much as I would like to claim to be, I am no expert in this area.

11. If you have questions or comments about the report, I am sure it can be arranged for industry experts to discuss the details with you and your staff at a working session, or if you prefer to submit them in writing.

12. I would also submit for the record a copy of Principles & Best Practices for Diversity and Inclusion in Advertising Agencies. This document was issued by the 4-As to provide guidance to its member agencies on a range of issues relating to diversity, including the expanded utilization of minority media. It was produced after consultation with a number of concerned individuals from around the country who served on the Diversity Advisory Board. I draw your attention to the fact that the Principles and Best Practices calls for increasing minority contracting by all agencies.

Finally, Mr. Chairman, the advertising industry would urge you to explore productive rather than punitive initiatives to further diversity and inclusion in the advertising and media industries.

I appreciate the opportunity to testify today. This concludes my remarks on behalf of the American Association of Advertising Agencies.


Part II—Personal Statement of Adonis Hoffman

Councilman Seabrook, now, if I can take off my advertising association hat for a moment, and speak to you in a different voice. And that is as a communications lawyer who has observed the landscape from both inside and outside of government. I would like to offer your committee a few recommendations.

First, the question of inclusion in any industry is not something that lends itself to a fast, easy solution. There are any number of industries in this country, and this City, for that matter, that have serious, serious, challenges when it comes to diversity. From Wall Street, to the broadcast networks, to the editorial rooms, to the law firms, to the accountants, insurers, and almost any other major industry, the representation of minorities, generally, and African Americans, particularly, is woefully low, especially at the most senior levels.

As the merger of major communications companies continues and consolidation within the media industry increases, opportunities for smaller players are shrinking. I say smaller players because most minority media are small players. The number of minority and black-owned media are shrinking. Whether due to lack of access to capital, increased competition from the general market media, paucity of financial resources, sale of the business by the founder, or just plain old racism, it is a fact that black media have a particularly difficult time surviving. For every BET success story, there are the untold hundreds who could not make the payroll, meet the deadlines, or cover the rent.

As media becomes larger and more bundled, it becomes increasingly more difficult for smaller and independents to survive. It is a reality that affects not only media, but also minority-owned advertising agencies, too. Their survival is something to be concerned about as well.

The real challenge is to stimulate opportunity and ownership for black and minority firms in the advertising and media space. It seems to me there are two highly laudable goals:

1. Increasing the overall number of black and minority-owned media; and

2. Increasing the current utilization of black and minority media by major corporations.

Meeting that challenge will take a sustained and multifaceted approach, and the City Council of New York can play an important role. By adopting a broader approach to the issue of economic development, the Council can investigate ways to stimulate and promote minority ownership of media and media-related entities.


Here are six recommendations:

1. Develop a City program to produce more minority owners of print, television and radio media in New York.

2.As the center of finance and private equity, the City of New York should find ways to involve the capital markets in the goal to increase minority media ownership.

3.The City should investigate the use of tax credits to stimulate investment in minority-owned media companies and to encourage minority media utilization.

4.The City should investigate tax holidays or other investment incentives for minority entrepreneurs starting media companies.

5.To facilitate access to capital, the City could provide incentives to financial institutions who lend to minority media owners.

6.To spur further economic investment and development, the City should expand its economic development zones as an incentive for media companies to locate businesses there.

Mr. Chairman, I am not an economist, but it seems to me there are any number of financial inducements the City could come up with to promote the growth and development of minority media ownership in New York.

Recognizing that city government is limited in scope and resources, it becomes even more important to partner with independent private sector entities to reach these goals. As the original architect of many of the initiatives on the table today, Mr. Sanford Moore should be encouraged to play a more constructive role as an interface between the City and the private sector. I understand that Moore’s group has had discussions with agencies and advertisers on a series of programs to achieve these very objectives. Before the City Council proceeds with more hearings, it should allow for private initiatives to take root.

As everyone knows, the media and advertising industries are at the core of a vibrant New York economy. I am sure you will find willing partners among every stakeholder if this constructive approach is followed. In short, Mr. Chairman, it is in the best interests of the City, the advertising and media industries, and minority firms alike to find ways to work together on these important issues.

I appreciate the opportunity to submit these remarks to your committee.

Responsible Advertising: Who Determines What is Right?

For better or worse, the rules of advertising are changing. I’m not talking about new techniques or creative concepts here, or even the Big Idea. Nor am I referring to the latest technologies surrounding product integration, search marketing, interactive platforms, or anything as intriguing as that.

The growing challenge for advertisers is not how to reach consumers where they are—marketers know how to do that very well—but how socially responsible the message is once it reaches those consumers. The new rules of advertising have more to do with responsibility than with Return On Investment. It is not the medium, it is the message.

We are witnessing the dawning of a new era of “responsible advertising” that seeks to protect consumers from advertising that someone, somewhere, deems socially and politically incorrect. Even if we stipulate there are categories of advertising that can—and should be—disallowed, responsible advertising goes well beyond traditional notions of content regulation. For example, should values become an indispensable part of the advertising mix?

Bolstered by political rhetoric and a conservative mood in Washington, the would-be arbiters of responsible advertising claim a public mantle, if not a public interest. Most would like to see advertising go entirely away, but would surely settle for heavier regulation at the end of the day. And they seem to be getting nearer to that goal every year. Because it is impolitic for big corporations to wage extended war with do-good public interest groups, companies prudently have disengaged from that battle and taken initiative on another front.

More and more advertisers are choosing to aggressively self-regulate the marketing of products or categories that some critics have found to be objectionable. Since most large companies have a working familiarity with the mandates of social responsibility in other areas, applying those principles to marketing and advertising has not been difficult.

Last summer, prescription drug makers established a new code of marketing practices and set up an Office of Accountability to review direct-to-consumer drug commercials. More recently, a leading food company decided not to advertise some of its products on children’s television programs that reach audiences under age 12. Many other industries have instituted marketing codes and established independent review panels. And the advertising industry has strengthened its unique self-regulatory regime through the Children’s Advertising Review Unit (CARU).

All of these actions suggest the emphasis on responsibility is well-placed.
What troubles me, though, is who gets to define responsible advertising.

Advertisers have a vested commercial interest in portraying their products in the best light possible. They are, after all, ultimately accountable to both their customers and shareholders in a competitive marketplace, and should be able to decide for themselves. It would be a mistake to abdicate this role to outside interest groups who want to do away with advertising altogether, or who would promote a system that only permits the marketing of products they alone deem to be good, healthful, nutritious, wholesome or necessary.

© 2006

Adonis Hoffman is a lawyer and strategic marketing and communications expert in Washington, DC. He is the founder and chairman of the Center on Responsible Media & Marketing in Washington.

Advertising to Kids on the Bus: Just Because You Can Doesn't Mean You Should

Marketers must learn to balance their constitutionally-protected right to commercial speech against society's expectations that companies will behave responsibly. With every legally protected right comes a duty. In the marketing context, a company should recognize that just because it can legally do something, does not always mean it should. Occasionally, restraint is the better part of wisdom.

The need for such balancing was highlighted by the recent decision of a few municipal school districts to allow commercial advertising to kids on school buses this coming fall. An enterprising company has a new system that, according to the Washington Post, “will pipe into school buses around the country a private radio network that plays music, public service announcements, contests and ads aimed at kids as they travel to and from school.”

Apparently, there is nothing in law, regulation or policy that prohibits such advertising. To be sure, the school districts, suffering from funding cutbacks and shortfalls, could use the extra money. Advertising revenues could supplement a host of sorely-needed school expenditures ranging from teacher salaries to physical education programs.

But at what cost?

Marketers have much more to lose than to gain by going forward with such a plan. Doing so risks the wrath of many. Moreover, ads on school buses could bring unnecessary attention to the thriving business of advertising to children altogether—at a time when the practice itself is under considerable scrutiny.

Prudence suggests this is a bad idea. It is a bad idea not because advertising to children is wrong. It is a bad idea because advertising to children on a school bus is not wise.

Some things should be out of bounds, even if the rules allow them. It is a classic case of a short-sighted, context-void, idea that should not see the light of day. And just because advertisers can do it, does not mean they should.

If the last two years have proven anything to marketers, it is that children (and to a lesser extent youth) are in a very special category. Society demands and expects that they be treated differently by everyone, but especially by marketers and media. The siren song coming from Capitol Hill, interest groups and even consumers is blaring: we are watching.

Right now, advertising to children is undergoing a thorough review. Congress, the Federal Trade Commission and the Children’s Advertising Review Unit (CARU) of the Better Business Bureau all are examining ways to meet the challenges of a new media environment in which commercial messages aimed at kids seem to be coming from everywhere.

I believe the answer for all stakeholders involved lies in the balance between the rights of marketers on the one hand, and their capacity to be responsible corporate citizens on the other. If they are wise, marketers will refrain from exercising their rights and go to great lengths, instead, to prove their responsibility.

© 2006

Adonis Hoffman is a lawyer and marketing communications expert in Washington, DC. He is the founder and chairman of the Center on Responsible Media & Marketing.

Global Challenges in Advertising: A Look Across the Pond

Twice a year, a distinguished group of advertising experts and practitioners from around the world convene under the aegis of the International Chamber of Commerce (ICC) to discuss major issues and challenges facing the marketing and advertising sector. The 2006 session of the ICC Commission on Marketing and Advertising was held in New York this week and was focused on emerging challenges to industry self-regulation.

Delegates came from Belgium, India, Italy, Mexico, the Russian Federation, Sweden, Switzerland, Turkey, the United Kingdom and the U.S., representing leading corporations, advertising agencies, media companies, trade associations and law firms involved in marketing, advertising and commercial communications. In addition to a broad discussion on the challenges of self-regulation, a dedicated task force met to review possible changes to the ICC Code of Advertising and Marketing Communication Practice.

While many who follow advertising issues in the United States may not be familiar with this group or the series of codes it promulgates, it is a big deal in Europe where the advertising sector and governments take the ICC's deliberations quite seriously. There, the ICC's position on marketing and advertising practice sets a high standard for a wide range of commercial marketing communications, and plays a key role in advertising litigation and enforcement.

International Self-Regulation

For example, the ICC Code sets out clear guidelines on basic matters such as decency, honesty, truthfulness and social responsibility in marketing and advertising. There is a decidedly protective (and some say over-protective)element to marketing communications directed toward children and young people, recognizing their inherent sensitivities. The Code speaks to everything from sales promotions, sponsorship, direct marketing, and the uses of electronic media to environmental advertising.

At its core, the Code is a self-regulatory framework that complements existing national and international laws. It is intended to bolster public confidence in advertising by showing that the marketing and advertising sector abides by the principles of corporate responsiblity and respect for consumers' privacy and preferences.

In Europe, there remains a patchwork of laws and regulations governing advertising of certain products such as food, and advertising to certain markets, such as children or youth. Variations from country to country make it difficult to plan global campaigns. The ICC Code provides companies with a credible and reliable set of guiding principles that respect those frameworks. As such, it is an indispensable tool for companies seeking to expand their global reach into new and emerging markets.

As the ICC turns its attention to newer practices involving product placement, branded content, and direct marketing, it is paying close attention to the concerns of consumers, regulators and non-governmental organizations in Europe. As it turns out, European concerns are not much different than those in the United States, especially on the matter of transparency and disclosure in commercial communications.

One other message is clear. Self-regulation in advertising, a practice that has been heralded in the United States by serial chairmen of the Federal Trade Commission from both political parties, is alive and well in Europe. The robust self-regulatory regime put forth by the ICC in its Code of Advertising and Marketing Communication practice is something in which the advertising industry can take pride.

Unfortunately, much of the good work and adherence to ethical principles remains hidden from the very consumers it is designed to protect.

(c) 2006 Adonis Hoffman