America Interactive--The Republic is Not Yet Safe

By Adonis Hoffman

If history is any barometer, it will not be long before a well-meaning public servant comes up with a solution to a problem that does not exist. Policymakers just might over-react to new technologies they do not quite understand. For some, the default position becomes: when in doubt, regulate. Or at least try to regulate.

In line at the DuPont Circle Krispy Kreme in Washington, I could not help but notice the young woman ahead of me who was peering intensely into her video iPod. On the screen was a podcast of last Sunday’s Meet the Press. I asked her how she liked watching programs on such a small screen and whether it was worth the time and effort. She said her husband uploaded all of her content every morning, and sent her off to work with more programs than she could watch—all without commercials. “And, oh by the way,” she said, “we don’t really watch much TV at home, nor do we have cable—he gets most of this stuff online.”

As a parent of two teenagers, I am rapidly becoming an interactive expert out of necessity—not unlike a jailhouse lawyer—because there is so much I need to know just to keep apace in the day-to-day world of digital convergence where music, games, voice, video, products, goods and services are all within the grasp of a handheld device. In the wrong hands—say that of a fourteen year old male—this could be disastrous either due to the cost or the content. But for a responsible adult, this new world is simply marvelous.

When I talk with advertisers seeking to master today’s new world order, I encourage them to leave their value judgments at the doorstep. The ease of interactivity changes everything, not the least of which is how marketers vie for the attention of viewers, listeners and consumers. For the millions of Americans who love shopping from home via television, interactivity makes purchasing as easy as pressing a button on the remote control. For those who buy online, permission based marketing messages and RSS can cut through the usual clutter. And for wireless handheld devices, the sky is the limit.

While some experts say that better creative content is the key, I think the answer lies in the speed, personalization and medium of delivery. After all, when the ad for sales on the latest lacrosse sports gear comes over my son’s cell phone, he could care less about the creative content—although there are style points given for the “cool factor”. Three things make it most effective: First, the ad reached him where he was; second, it was for something he really wants and somehow opted into; and third, it caught his attention before and better than any other form of marketing.

But all is not rosy in this scenario. If history is any barometer, it will not be long before a well-meaning public servant comes up with a solution to a problem that does not exist.

My concern is that policymakers just might over-react to new technologies they do not quite understand. For some, the default position becomes: when in doubt, regulate. Or at least try to regulate.

This is not good for business, good for competition or good for end-using consumers. America, if not there already, is well on the road to complete media and marketing interactivity, and consumers appear to really like the power it gives them. Few people really understand how all the interactive technology works. Even fewer know anything about the complex interstitial relationships between suppliers, delivery systems and media platforms. What’s more, they don’t care.

What people care about is ease. Make it easy for them to do what they want to do with the medium that is in their hand, on their desk or in their family room, and they will be very, very happy. If marketers can help policymakers understand this simple, but powerful maxim, the republic will be safe for the pursuit of commerce, innovation and information.

If marketers do not succeed in making the case, we could see 20th century regulation imposed on new millennium technologies. Not a comforting thought.


© Adonis E. Hoffman, 2007

FCC Preps Product-Integration Inquiry--Adelstein's Pet Issue Part of Tentative Agenda for FCC’s Dec. 18 Meeting

By John Eggerton
Broadcasting & Cable, 11/30/2007 11:29:00 AM

www.broadcastingcable.com

The Federal Communications Commission is preparing a possible crackdown on product integration in TV shows.

According to sources who have seen the tentative agenda for the FCC's December meeting, it includes a proposal seeking information on how and where to put on-air disclosures for products that advertisers have paid to be worked into the plot lines of shows.

Product integration is distinguished from product placement, where a product might be used as a prop. For example, Everybody Loves Raymond creator and executive producer Phil Rosenthal told a Hill hearing audience earlier this year about a Seventh Heaven episode in which Oreos were repeatedly mentioned by name and even featured in a marriage proposal in which the ring was embedded in Oreo cream filling.
The commission isn't proposing exactly what to do, the sources said, but the item -- which is expected to pass with the help of commission Democrats -- would signal that the FCC is serious about taking some action.

Democratic Commissioner Jonathan Adelstein, in particular, has pushed hard for better disclosure of paid and outside material used in broadcasts, including video-news releases and paid product plugs, but Martin had also pledged to look into it. The issue was also raised in public hearings on media-ownership rules.

Industry lobbyists will be meeting with FCC officials about the issue over the next couple of weeks. They are looking to avoid disclosures that would break up the flow of a show, such as a crawl across the bottom of that Seventh Heaven episode pointing out that Nabisco had paid for the privilege.

Adonis Hoffman, senior vice president and counsel to the American Association of Advertising Agencies, said the FCC should not go in with the presumption that there is a problem or tar new forms of advertising with the payola brush.

"There is quite a bit of misinformation and misunderstanding surrounding the very term 'product placement,'" he told B&C. "Today, the opportunities for advertisers to advance brands in multiple media platforms and formats are not limited to what we all grew up with. But just because there are new forms does not mean there is something inherently sinister going on."

He continued, "It goes against logic for any advertiser to hide its message, no matter where or how it appears. The fact that a product appears embedded in noncommercial content should not be cause for alarm, provided that there is ample opportunity during the credits for acknowledgement and disclosure. What we do not want to see is the association and mischaracterization of today's branded content with the unlawful practice of 'payola,' which everyone acknowledges is wrong ... Our members would look forward to helping the commission understand current practices, terms and trends in the business."

Product integration was among a half-dozen media items circulated among the other FCC commissioners by chairman Kevin Martin. None is a lock to make the final cut, which is released publicly seven days before the Dec. 18 meeting, and items could be pulled after that, as well.

Also on the list are several media-ownership-related items the chairman would probably like to take care of all at once, including a vote on the newspaper-broadcast cross-ownership rules (although pressure from the Hill could still potentially foil that plan); proposals to boost minority broadcast ownership, including a Martin proposal to lease digital-TV spectrum to minorities, women and small business and address broadcast localism; and a vote to cap cable companies' subscriber count to 30% of multichannel-video providers.

The package of broadcast-related issues would be an attempt to bring the 18-month media-ownership-rule review to a close, although, again, that could depend on how much push-back there is from Hill Democrats, who are holding hearings and trying to pass a bill that would block a media-ownership vote.

© 2007, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

The Advertisers' Advocate

The Advertiser's Advocate

By Staff -- Broadcasting & Cable, 7/23/2007
w w w . b r o a d c a s t i n g c a b l e . c o m

Washington legislators are turning up the heat on advertisers over childhood obesity, drug ads and violent content, to name a few issues. Adonis Hoffman's job is to help explain why advertising should not be the government's “default” scapegoat. He is senior VP/counsel at the American Association of Advertising Agencies as well as director of the Center on Responsible Marketing and Media, of the American Business Leadership Institute in Washington. Complex problems can't be solved with simplistic solutions, he says. At stake is more than $10 billion worth of food advertising to kids.

How seriously are advertisers taking the childhood-obesity health issue?

The issue is perhaps one of the most important public-policy issues to come on the agenda in a while. First, we're all concerned about the health of children. Second, advertisers have been front and center on critics' lists as one of the leading causes of childhood obesity.

Is that a fair criticism?

I don't think so. It is clear that many, many factors contribute to childhood obesity. Advertising and marketing is remote at best. While policy makers, public-health experts and the food industry search for solutions, the implications for business are extremely important. Marketers of junk foods have been postulated by many as the chief contributors to childhood obesity. I think there is a disputable scientific basis for the claim, but it has taken root in an activist sector that wants to limit or abolish advertising.

You acknowledge that there is some industry responsibility for the problem as well as for the solution?

There is certainly a responsibility for the solution, and I think that, if you want to look at media as a factor in behavior, yes, media is a factor in behavior for a lot of things.

If childhood obesity is a legitimate threat, shouldn't the government step in to protect kids wherever it can, including regulating TV ads, as FCC Chairman Kevin Martin said it might have to do?

Here are some areas where the government can be helpful. How about lack of exercise? What about stimulating physical-education programs that get kids off the couch? Diet has a big, big role to play. Parental choices. Helping parents become wiser.

The FCC limits ads in children's shows. Why shouldn't it limit food ads in those shows, as Rep. Ed Markey (D-Mass.) has suggested?

The commercial time limits are a legitimate use of the FCC's regulatory authority because it has nothing to do with content. It's a time limitation. To take that authority and extrapolate it into content— as in, you can only advertise food that somebody determines is healthful—that gets us into a qualitative determination by the government into what we can say and consumers can hear. There is no such thing as an unhealthy food. There are unhealthy diets.

What is the biggest government threat to commercial speech?

I am very troubled by the notion that advertising and marketing has been seen as the cause of so many societal ills, whether it is obesity, the high cost of prescription drugs, violence. There has been an automatic default to go immediately to marketing and advertising.

What is driving this issue? Politics?

Sen. Sam Brownback [R-Kan.] and Sen. Tom Harkin [D-Iowa] have taken on the childhood-obesity issue and have legitimate concerns about the public-health issue. To ask the advertisers and marketers to come into a larger group of stakeholders is perfectly legitimate. To zero in on marketing and advertising as the single most controllable factor for solving the problem misses the mark. A lot of activity has developed around these issues. It is driven in part by public advocates and public policy, but it is also driven by the marketplace. I can't tell you how many Dateline NBC specials there have been on advertising to kids, junk food, the perils of food marketing. And yet in some very credible research and polls, parents rate marketing and advertising way down in the single digits as causes of childhood obesity.

On the viral-marketing front, the FTC has been asked to look into the practice. Should parents be concerned that kids are being sold products by marketers posing as fake online friends?

To the extent that those practices exist, they represent a very small portion of marketing and advertising practices. Social marketing is a reality. I would like to see disclosure for social marketers and buzz marketing. If my next-door neighbor who just got a Chevy Tahoe and says it is the best truck he's ever had and he is a paid endorser, I want to know that. But I don't think the viral marketing to kids is at such a serious level at this point. I would like to see perhaps an FTC guideline or rule that, like every other form of marketing, you have to be truthful, fair and accurate.

© 2007, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

Seeking Answers to Google-Doubleclick from FTC

4A's And ANA To FTC: We Want Answers!

by Tameka Kee, Media Post, Online Media Daily
Thursday, May 31, 2007 6:00 AM ET


WITH A JOINT LETTER TO the FTC and the Justice Department, the 4A's and the ANA made it clear that marketplace restriction is one of the possible implications of the $11 billion wave of online advertising mergers and acquisitions.

"Advertising on the Internet is one of the fastest-growing sectors of marketplace promotion," the letter said. "Therefore, ensuring its competitiveness is critical for all participants."

So while market analysts, bloggers and journalists alike have been content to theorize how deals like Google/DoubleClick and WPP's acquisition of 24/7 Real Media will affect how online advertisers do business, the two major advertising associations want definitive answers.

"When all of the acquisition announcements came out, we said, there's so much stuff going on here and we don't know what the implications are," said ANA CEO Bob Liodice. "We simply asked the people who could best assess this to use the tools and ability and look at the market dynamics as a whole."

Given the FTC's wealth of antitrust experience, relative manpower and federal budget, the agency is well equipped to tackle both micro issues such as how the merged companies should handle pricing and inventory management, and macro questions such as whether the deals affect just online advertising or advertising as a whole.

While neither organization would comment on specific concerns, maintaining industry-wide competitiveness was a key consideration. "As a trade association, we have a vested interest in making sure that the Internet remains competitive as an advertising/marketing space," said Adonis Hoffman, legal counsel for the 4A's. "But it's fair to say that a lot of people are looking at the impact that these combinations will have on the marketplace."

Industry players--from publishers to brand executives to smaller ad networks--will be affected by how these deals play out, but independent agencies offer a unique perspective.

"I think the big issue will be what are the definitions of the categories of business," said Tom Bedecarre, CEO of AKQA, the largest remaining independent agency, which took a majority investment from private equity firm General Atlantic Partners earlier this year. "The people putting up noise are doing it for competitive reasons. It smacks to me of paranoia and fear in the face of change."

According to Gal Trifon, Eyeblaster's founder and chief executive officer, "these deals erase the familiar demarcation lines. When the dust finally settles after the recent frenzy of acquisitions, we believe that this complexity will drive demand for independent campaign management solutions."