e-Cigarette Advertising and Commercial Free Speech

In the words of former baseball player and philosopher Yogi Berra, “It’s like déjà vu all over again.” California Senator Barbara Boxer (D) has called upon the Federal Trade Commission (FTC) to expedite its study of the e-cigarette industry examining whether their advertising is encouraging children and youth to take up vaping.

Years of experience with other disfavored products leads us to expect that – no matter the results of the study – someone in Congress will likely call for bans or restrictions on e-cigarette advertising. While they will claim to be trying to protect youth, the actual limitations will likely be much broader and ban much advertising aimed at adult and legal consumers.

To be clear, the American Advertising Federation (AAF) has no position on e-cigarettes or what the legal age to buy and use them should be.  However, AAF has a strong position on commercial free speech and opposes any effort to ban or restrict the advertising of any legal product or service to legal consumers.

Fortunately for the advertising industry, the U.S. Supreme Court agrees with us and has affirmed that commercial speech is included under the free speech provisions of the First Amendment to the U.S. Constitution.

Simply stated, the Court ruled that the government may only restrict truthful commercial speech if it can show that the restriction is “narrowly tailored” and directly advances a substantial government interest.

The right to ban a product does not give the government the right to ban the speech about the product. Besides, banning the speech will not work. The experience of other countries shows that banning advertising does not lead to a reduction in the consumption of the product.

By all means, the FTC and Congress have the right to study the advertising for these or any other products.  But they have the duty to respect and follow the Constitution, including the right of marketers to truthfully advertise legal products and services – no matter how unpopular they may be.

About the Author

Clark Rector, EVP of Government Affairs, AAF

Clark RectorAs executive vice president-government affairs, Clark Rector oversees and directs the lobbying efforts of the American Advertising Federation’s grassroots network of 40,000 advertising professionals in some 200 local advertising clubs and federations nationwide. Together, they have defeated ad tax proposals and other threats to advertising in Congress, nearly every state and numerous cities and counties. In his role as chief public policy advocate for the Federation, Rector meets with lawmakers and regulators to educate them about advertising and represent the industry’s position on important legislative and regulatory matters.  He has testified for the AAF before the U.S. Senate and Federal Trade Commission, as well as numerous state legislatures and city governments.

Prior to joining the AAF in 1988, Rector spent two years on Capitol Hill as a legislative assistant for Congressman Tom Luken of Ohio. He also spent three years working in local television in Austin, Texas. Rector is a graduate of the University of Texas and received a Master of Arts in Communication Studies from the University of Iowa.

FTC Takes Action on Native Advertising

In December, 2015, the Federal Trade Commission issued comprehensive guidelines on the affirmative disclosures needed when using Native Advertising. This includes illustrations of content that it considers to be advertising, as well as how to make “clear and prominent” disclosures that the content is advertising. (Native Advertising, A Guide for Business, FTC, December 2015, www.ftc.gov)

It is clear the FTC expects the ad industry to read, follow, and utilize the guidance. In fact, the Commission has just issued its first consent settlement since publishing its guidelines with Lord & Taylor for lack of transparency in its native advertising in a fashion magazine and on social media.

Lord and Taylor posted a photo of a dress from its Design Lab collection along with company edited caption on its Instagram account and ran an article about the dress collection online. However the Instagram post and article didn’t disclose they were paid advertisements. According to the FTC’s complaint Lord  & Taylor gifted its dress to 50 fashion influencers who were paid $1,000 to $4,000 to post on Instagram a photo of themselves wearing the dress. While they did mention Lord & Taylor’s Instagram account and the hashtag #DesignLab in the photo caption, they were not required to state that they had been compensated. The complaint states that the campaign reached 11.4 million users and resulted in 328,000 brand engagements. “Lord & Taylor needs to be straight with consumers in its online marketing campaigns,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a statement. “Consumers have the right to know when they’re looking at paid advertising.” (“Lord & Taylor Reaches Settlement with FTC Over Native Ad Disclosures,” by Nathalie Tadena, The Wall Street Journal, March 15, 2016, www.wsj.com)

Native Advertising, also known as sponsored content, has become one of the hottest marketing tactics with 75 percent of online publishers offering it to their advertisers. It is designed to look like the surrounding original or editorial content and therefore better attract consumer attention. However, as the FTC guidelines and the Lord & Taylor case show consumers often are misled into believing they are watching editorial content and not paid advertising. In response the Institute for Advertising Ethics Principle 3 urges: Advertisers should clearly distinguish advertising, public relations and corporate communications from news and editorial content and entertainment, both online and offline.

I believe there is a win-win solution in designing these ads so that the information is related to the website’s original content, including in its design, and also insuring that the consumer understands it is advertising. The FTC in its recent guidelines, states, “Terms likely to be understood include”: “Ad,” “Advertisement,” ” Paid Advertisement,” “Sponsored Advertising Content,” or some variation thereof.

To be successful with Native Advertising will require that advertisers and their agencies and publishers be ethical and follow the law. I like the way Jon Salm of MillwardBrown puts it: ” The key for advertisers will be to partner with the best publishers, and the key for publishers will be to follow the native golden rules – confidently identify native ad content, match the site’s editorial tone, and create content that resonates with the audience.” (“Getting Native Advertising Right,” by Jon Salm, January 2015, www.millwardbrown.com)

About the Author

Wally Snyder

Wally Snyder has devoted his entire professional career to working on advertising development, regulation and ethics. He served as a trial lawyer and as Assistant Director for Advertising Practices at the Federal Trade Commission before joining the American Advertising Federation where he served as president and CEO, from 1992–2008. Currently, he serves as Executive Director for the Institute for Advertising Ethics. Wally was inducted into the Advertising Hall of Fame® in 2009.

 

 

New Ethical Principles for Protecting Patient Privacy in Marketing

In response to a recent article.

Our ad industry should take note of the ethical standards being advanced for protecting the privacy of patients when marketing client case studies. The National Association of Addiction Treatment Providers (NAATP) recognized successful case studies are one of the proven tools for encouraging addiction treatment, but require consideration to ensure patient privacy and to safeguard long-term recovery.

The NAATP’s revised code of ethics deal with the practice of misleading and deceptive marketing tactics, including those that could reveal a client’s identity. The principles include “hold sacred the shared value of our patients’ right to privacy.” A treatment provider may not reveal clients identities “in the form of photographic images, video images, media coverage, nor in marketing testimonials at any time during the client’s engagement in treatment.” Even after the treatment has concluded, treatment centers are urged to use caution in seeking permission to use testimonials, and some recommend against seeking and using testimonials from young clients not in a position to give informed consent to use their stories.

Certainly, those in our industry creating and disseminating marketing materials based ob patients’ successful medical treatment should adhere to these ethical standards. In fact, the federal government has rules and regulations protecting patients’ identities and health information.

The ethics behind the NAATP principles also applies to the need to protect consumer privacy in all marketing transactions. Our Institute’s Principles for Advertising Ethics include: “Advertisers should never compromise consumers’ personal privacy in marketing communications, and their choices as to whether to participate in providing their identity should be transparent and easily made.” (IAE Principle 6)

This ethical principle relates to marketing instances when we are using personal identifiers of the consume,r including photos, names and addresses. Also, consumers should be aware that their interests in products and services is being collected online and be given the choice of opting out.

A member of the NAATP ethics committee, Bob Ferguson, was quotes saying: “You want to apply the principles of common sense, fair play and the golden rule.” And as our Institute urges” “Do the Right Thing for the Consumer.”

About the Author

Wally Snyder

Wally Snyder has devoted his entire professional career to working on advertising development, regulation and ethics. He served as a trial lawyer and as Assistant Director for Advertising Practices at the Federal Trade Commission before joining the American Advertising Federation where he served as president and CEO, from 1992–2008. Currently, he serves as Executive Director for the Institute for Advertising Ethics. Wally was inducted into the Advertising Hall of Fame® in 2009.

Advertising Ethics: Contradiction in Terms? NO!

Gene Ahner in his book on Business Ethics states, “Six Services are considered critical in a global economy: accounting, advertising, banking, insurance, law and management consulting.” For me the business and societal purpose of advertising is to provide consumers with the information needed, including competitive performance and pricing, to make our purchase decisions.  Advertising does provide the basis for product and service improvement.  After all, if you could not inform consumers about your product why would you want to improve it?

To achieve its critical role in the economy advertising must be conducted in an ethical manner.  My ethical standard is “Do the Right Thing for Consumers.”  Specifically, claims must be truthful with clear and conspicuous disclosures so they are not overstated; treat consumers “fairly” depending on the nature of the audience, e.g. children, and nature of the product, e.g. alcoholic beverages; and not contain content that stereotypes people, or contains violence, including against women.

Today’s advertising requiring ethical diligence include not blurring the line between paid ad content and editorial/news (“Native Advertising”), being transparent as to the conditions, e.g. payment, affecting consumer endorsements on blogs; protecting consumer privacy and providing choice regarding information collected online; and assuring that children understand that the messages directed to them are advertisements.

Consumers care about ethics and will reward and punish companies for how it is practiced.  Their ability to do so has been enhanced by online consumer information power.  Recent research shows that 95% of consumers have shared a negative experience; the good news is that 87% have shared a favorable one.

Perhaps, the greatest incentive for the practice of enhanced advertising ethics rests on the shoulders of our industry professionals.  Gene Ahner, who I quoted earlier, terms their ethical decisions “Ethics by Achievement,” ruled by their feelings, and hearts, not their brains.

When you know how important your profession is you should want to do your best ethically and professionally.

About the Author

Wally Snyder

Wally Snyder, Institute for
Advertising Ethics, AAF

Wally Snyder has devoted his entire professional career to working on advertising development, regulation and ethics. He served as a trial lawyer and as Assistant Director for Advertising Practices at the Federal Trade Commission before joining the American Advertising Federation where he served as president and CEO, from 1992–2008. Currently, he serves as Executive Director for the Institute for Advertising Ethics. Wally was inducted into the Advertising Hall of Fame® in 2009.