ANA Marketing Musings

Guest Tribute in Honor of Gil Weil

A guest tribute from former ANA President Dewitt Helm in honor of Gilbert Harry Weil

Gil Harry Weil was General Counsel to the ANA for forty-nine years, until his death in April 2002 at the age of 89. The relationship spanned many decades, encountering every challenge and regulatory threat to advertising throughout the years.

For sixty-five years, Gil participated in and helped lead the fight in every one of the major battles that confronted advertisers and advertising, including numerous SAG/AFTRA contract negotiations; the FTC’s Analgesic, Nutritional Labeling and other trade regulation rulemaking (TRR) wars of the fifties and the sixties; the children’s advertising issues that led to formation of the National Advertising Division (NAD) of the Council of Better Business Bureaus (CBBB), its Children’s Advertising Review Unit (CARU) and the National Advertising Review Council (NARC); and numerous state and federal threats to impose taxes on advertising including, most notably, the Florida and federal battles of late 1987 and 1988. 

Gil was a recognized authority on the First Amendment to the United States Constitution and championed it in his practice, in testimony before Congress and state legislatures, in lectures and in contributions to professional publications. Few marketers realize that First Amendment free speech protection was extended to commercial advertising only in 1976 when the Supreme Court invalidated Virginia’s ban on price advertising for prescription drugs.  This was accomplished in large measure through Gil’s advocacy and defense of advertisers and advertising.  Gil crafted positions and arguments, filed briefs, tried cases, filed appeals and testified at the Federal and State levels with all three branches of government.  His counsel was always finely crafted and well delivered.

Having graduated from New York University in 1933, Gil worked as a law clerk while he pursued the Jurisprudence Degree he received from NYU in 1937. He was admitted to the bar in New York the same year.  He served as a reserve officer in the United States Navy in the Pacific during World War II.  Over the years, he was admitted to practice before many federal District courts and Circuit Courts of Appeal, as well as before the United States Supreme Court in 1964. He is a biographee in Who’s Who in America and Who’s Who in American Law, as well as Martindale-Hubbell’s Bar Register of Preeminent Lawyers.

His memory and insightfulness were matters of record.  No one spoke or wrote quite like Gil Weil.  Words were the tools of his trade, and it was his practice not to waste them. Adjectives and adverbs were employed sparingly. Sentences were crisp and pithy.  An adversary once was heard to observe, “Gil Weil gets through the fluff and feathers and down to the nitty gritty faster than anyone I know.”

Gil was not a social activist or one for seeking the spotlight, preferring, rather, to focus his efforts and energy in pursuit of the causes he championed on behalf of his clients. His desire to “give back” to the society was expressed in the form of philanthropy to humanitarian and social causes; a fact not well-known.  His philosophy can be summed up with, “First you seek to fill a man’s belly, and only then do you seek to fill his mind.”

We remember Gil Weil fondly and hope he is nominated into the AAF Hall of Fame.

Food Advertising – Letter to the Ad Age Editor

Below is a Letter to the Editor I recently submitted to Advertising Age regarding their 12/12/05 editorial titled, Food Companies Must Respond to Study.

I am terribly disappointed in Advertising Age’s lead editorial “Food Companies must respond to study.” While I agree with the publication’s notion that “more regulation is a bad idea,” this editorial is a “knee-jerk,” ill-conceived reaction to the Institute of Medicine report. It entirely overlooks the fact that the marketing industry has been an active, willing participant in combating the issues of childhood obesity. I’m surprised that before publishing its editorial, Ad Age did not consider all of the issues and acknowledge the substantial, constructive actions food advertisers have been taking over the past few years.

Let’s start with some basics. Childhood obesity is a serious problem. It’s a problem caused by a lack of reasonable exercise as well as an imbalanced diet – one weighted towards less nutritional foods and a higher caloric intake than recommended. Most parents have figured out how to keep their kids’ diet and exercise routines in balance. And as a result, most kids are not obese!

But there is a growing population of youngsters who are becoming obese – who are pursuing an unhealthy dietary course. Food advertisers are a convenient target because they market foods considered, by some, to be unhealthy. But let’s be fair, the non-obese kids are consuming these same products in a balanced way. How come they succeed while others do not?

During the past three years, food manufacturers have introduced 4,500 products with increased nutritional value – choices that offer lower levels of fats, carbohydrates and calories. The fast food restaurant industry has also responded, substantially increasing the number of “healthier” menu items. In addition, the food marketing industry has proactively taken these substantial actions:

- We have deployed public service ads through the Ad Council (the Small Steps Program and the recent launch of public service ads directed at better lifestyle choices including nutritional choices for kids)

- The Children’s Advertising Review Unit’s monitoring system is monitoring 95 percent of all kids’ marketing. CARU has brought major cases in the food advertising area and is evaluating whether further steps need to be taken in adver-gaming and licensing as part of its commitment to increase its oversight and promote responsible children’s advertising.

- Numerous companies have launched major initiatives with regard to their own advertising and to help communities develop programs to combat obesity.

You would hardly know that any of this is happening from Ad Age’s editorial! And, please, let’s also recognize that eliminating children’s advertising is not the answer. Quebec and Sweden have gone down that path – and obesity levels remain unchanged. Here in the U.S., data actually shows a surprising relationship between food advertising on TV and cable and obesity. According to the FTC, there were 34 percent more food, beverage and restaurant advertisements on TV in the 1970’s than today, yet there was far less obesity at that time. Conversely, as obesity rates rose in the 1990’s, TV and cable food ads decreased 13 percent! These findings reinforce the Surgeon General’s conclusion that there are multiple causes of obesity, no doubt one of which is that exercise has dropped precipitously in this country in recent decades.

So I would like to challenge Ad Age to help the food marketing industry look more closely and thoughtfully at what else can appropriately be done to foster healthy eating within our society – a society that cherishes freedom of choice, freedom of speech and incredible access to information and knowledge. I urge Ad Age to go beyond words and take some tangible actions on its own. How about establishing a legitimate debate platform for all interested parties to discuss real opportunities to make a difference in tackling this perplexing problem!

Q&A with Doug Wood re: SAG / AFTRA

Since the 1950’s, the advertising industry has hired and paid actors under a collective bargaining agreements with the Screen Actors Guild (SAG), the American Federation of Radio and Television Artists (AFTRA), and the American Federation of Musicians (AFofM). Each of the contracts has a term of three years, with the current agreements with SAG and AFTRA expiring in October 2006. Negotiations on new three year contracts will begin next spring. Leading that negotiation for the advertising industry will be the ANA’s General Counsel, Douglas Wood of the law firm of Reed Smith LLP. Doug and I recently sat down and discussed the challenges lying ahead and industry plans to take a leadership role in finding common ground with the unions.

Bob: Doug, can you briefly describe the industry process in negotiating with the unions?

Doug: Since the union contracts were first negotiated, the ANA and AAAA have worked together through the Joint Policy Committee, an ad hoc committee comprised of fifteen representatives appointed by the ANA and fifteen appointed by the AAAA. The JPC is led by the lead negotiator, appointed by the ANA. I currently hold that position, having been appointed in 2004. The JPC meets periodically throughout the year to discuss issues that arise in relations with the unions and, as negotiations for a new contract approach, appoints a negotiating committee to meet with the unions and hammer out a deal. The JPC is now meeting about once a month.

Bob: You recently wrote a lengthy article for The Advertiser. I recommend it to everyone. Could you briefly go over the major issues the industry and the unions have to tackle next year?

Doug: We’ve reached a critical crossroads. The current contracts are based upon a model first established in the 1950’s when there were three networks and scattered independent affiliates. Today’s media landscape is far more complicated, with new media outlets seeming to develop every week. The old contract model can’t keep up and everyone, the industry and the unions, need to step back and take a new look at how talent is hired and paid for performances in commercials.

Bob: Why doesn’t the old model work?

Doug: The old model is based upon separate payments for each media outlet. Today, there are separate payment schedules for network, wild spot, cable, syndication, dealer, seasonal, Internet, Hispanic only, and so on. It’s become terribly complicated and illogical since media diffusion has does not necessarily create more viewers. It makes little sense to add yet more “silos” for mobile, PDA’s, streaming, satellite, on line networks, branded entertainment, iPods, showmericals, promericials, multicasting, video on demand, digital editing, and so on. Going down that road is most likely going to increase costs without establishing a balance between fair compensation for actors and the advertiser’s return on its overall investment.

Bob: So what would the industry like to do?

Doug; We have informally proposed to the Executive Staffs of both SAG and AFTRA that we stop the clock on the current contracts for a year and jointly commission a study from a non-partisan expert to review the situation and propose options for both sides to consider. The unions agreed in the last contract to explore new methods of compensation for actors. We now need to work together on this to produce recommendations that take everyone’s concerns into consideration.

Bob: That sounds like a major undertaking. Who is going to pay for that?

Doug: There is a fund jointly administered by the unions and the industry that can be used for such purposes. We’re using such funds now in a joint study on monitoring the accurate reporting of commercial broadcasts. But if monies are not available from that fund, the industry will have to finance the study. It’s our hope that the unions will see the value of this study and agree to co-fund it.

Bob: Why do you believe such a study would provide viable options?

Doug: We can’t be sure it will, but if the industry and the unions don’t try to find a new model, we have great fear our discussions will break down, leading to a possible impasse. No one wants to have a replay of 2000 when we all suffered from a strike. So we need to work together and enlist assistance of people who can take a truly unbiased look at the situation. In the past, the ANA, AAAA, and AAF worked together and retained a Nobel Laureate to study the impact of taxes on advertising. The study has enabled Dan Jaffe and his counterparts at the AAAA and AAF to successfully head off ad taxes that would increase consumer costs and cost jobs. So we’ve been successful in other situations where we’ve had to defend a position. Working with the unions, we hope they’ll agree to jointly funding a study that will have similar success. It can be done.

Bob: What if the unions say they don’t want to work with us?

Doug: They agreed to consider this, so they can’t really just say no. But if we can’t get them to cooperate, then we’ll have to do it ourselves and bring a proposal to the bargaining table. The unions will then have to negotiate with us in good faith. It is our sincere hope, however, that the unions will be enlightened and join with us. It’s the smart thing to do.

Bob: We’ve all read the papers and heard the news of tension in the unions after the election of Alan Rosenberg as SAG President, together with his slate of Directors under the Members First banner. How does this impact the JPC’s initiatives?

Doug: The current debate within the unions is healthy. SAG and AFTRA members are openly debating what’s right and fair. Transparency in such matters is always preferred over closed door meetings. While Mr. Rosenberg has expressed some aggressive positions with regard to SAG’s agreements with gaming companies, the television networks, and motion picture studios, he hasn’t really said anything about the commercials contracts. Our contracts will be the first ones his new administration tackles. We all hope he’ll be open minded and embrace a new approach. He’s been quoted as wanting to do what’s right. We want to do the same. And what’s right is to work together.

Bob: And where does AFTRA stand in all of this?

Doug: AFTRA is a separate union. It has exclusive jurisdiction of radio commercials. We’ll negotiate separately with AFTRA in that regard. AFTRA shares jurisdiction of television commercials with SAG. It appears that any prospect of a merger between SAG and AFTRA, something attempted in years past, is out of the question now. We’re sure AFTRA will take an active role in the negotiations of the television commercial issues. In the past, the two unions have stood together on issues. While there is certainly tension between the two unions, we have not yet seen any breakdown in their solidarity with it comes to negotiations on the commercials contracts.

Bob: But there could be a split?

Doug: Yes, there could be a split.

Bob: In the end, won’t critics say the industry is just looking for a way to save money by reducing talent payments?

Doug: That will be the spin some pundits will put on it. But that is not necessarily the result. In fact, we fully suspect a new model will increase some costs and lower others. This isn’t about saving money. Our mission is all about spending money wisely and fairly. It’s far too early to say how that will impact on overall costs. At the center of the debate is how to fairly deal with actor’s compensation in a landscape that is fragmenting into a myriad of media choices never envisioned in the 1950’s when the format for the current contract was created. We must find a way to fairly compensate performers while at the same time showing a fair return to advertisers on their investment in talent.

Bob: Will this encourage advertisers to produce commercials in the United States?

Doug: That will depend upon the economics. It is clearly the preference of advertisers to produce in the United States with SAG and AFTRA talent. It’s just easier and more efficient. SAG and AFTRA actors clearly represent the largest and most qualified pool of talent. The issue of off shore production, however, is clearly fair game if we open up the debate to an independent expert. Nothing is off limits. We have to let the expert make proposals free of any constraints. Off-shore productions are a big issue for the unions. It’s something the expert needs to consider.

Bob: So that we can better understand the consequences of failing to come to an agreement, please take us down the road of what will happen if we are stuck with the old system, assuming we don’t reach an impasse and a strike.

Doug: Under labor laws, both sides must negotiate proposals each presents. If the unions insist on negotiating under the old model, we will, of course, do so in good faith. But even assuming we can agree on compensations for the new silos as well as existing media, it is clear such a direction will result in substantial cost increases and contribute to an already overburdened administration of the contracts by advertising agencies and talent payroll agencies. That will mean off shore production will increase and advertisers will reduce the number of actors employed in commercials produced in the United States. Put bluntly, if we are forced into the old model, it’s a fool’s game.

Bob: It’s all about accountability, isn’t it?

Doug: Absolutely. The advertising community is moving aggressively towards “accountability”. The industry is clearly prepared to pay fairly for an actor’s performance, but it is increasingly difficult to do so under a patchwork contract approach that assumes every use in new media, regardless of its effectiveness, should garner residuals or that virtually every edit creates a new commercial.

Bob: Should we be prepared for a strike?

Doug: No one wants an impasse, but the complicated nature of the issues makes compromise under the old model difficult. While it is certain that no one wants a repeat of the strike of 2000, a strike cannot be ruled out. Astute production managers will take that into consideration in the coming year as they map out their production schedules. Advertisers who hire celebrities must also be wary of production schedules or personal appearances in the final quarter of 2006 or first quarter 2007.

Bob: How is the JPC trying to be thought leaders in this initiative?

Doug: First and foremost, we’re opening the tent to allow everyone with a stake in the issues a voice. Among other things, we’re planning meetings with the unions, talent payroll agencies, casting directors, and production companies. We’re working with the ANA and AAAA to organize workshops in a town meeting format in Los Angeles, Chicago, and New York early next year. We hope to work with the unions and commission and independent, blue ribbon study on alternatives in balancing fair compensation for actors and return on investment for advertisers. And we’re also going to launch a blog on which we’ll keep everyone informed.

Bob: Any final thoughts?

Doug: The challenges ahead are daunting, but we’re prepared and with cooperation from the unions and the help of ANA and AAAA members, talent payroll services, and the production community, we’re cautiously optimistic that we’ll have smooth sailing in 2006.

**********

Douglas J. Wood is a law partner in Reed Smith LLP, is General Counsel to the ANA, and is the advertising industry’s Lead Negotiator in connection with the collective bargaining agreements with SAG, AFTRA, and the AFofM. He is the author of the ANA publication, Please Be Advised, the Legal Reference Guide for the Advertising Executive, and is Editor-in-Chief of the online legal e-magazine, Adlaw by Request.

Advertising is the Villain?? No Way !!

For once, the advertising industry may actually be in agreement with what public policy groups and the government think about the role of food advertising. In a report released Tuesday, December 6, 2005, the Institute of Medicine (IOM) said television advertising influences what children under 12 eat. We, at the ANA, agree.

Let’s be perfectly clear, the role of advertising is intended to influence choices and preferences. But to lay the blame of childhood obesity on the doorstep of advertisers is outrageously irresponsible and downright shameful. The Institute of Medicine ought to be embarrassed by their recommendation to have Congress enact legislation mandating the shift of advertising to what are considered “healthy foods”. And Senator Harkin should be equally embarrassed for supporting recommendations he knows very well are completely unconstitutional.

Importantly, food advertising on children’s programming has consistently declined over the last 25 years – yet obesity levels continued to rise. This one sheer fact should cause the IOM and Senator Harkin to rethink that advertising is the culprit in this blame game.

Let’s get back to a few basics, IOM and Senator Harkin:

- Food is a free and legal product. Consumed in a balanced diet, no food by itself will make you unhealthy – unless one has a specific medical condition.

- If food is consumed in a balanced diet, the odds are very strong that people are unlikely to become obese. Remember the key word – balance.

- Due to effective self regulation by CARU, The Children’s Advertising Review Unit, food advertising is not permitted to demonstrate food consumption of an imbalanced diet – one that would lead to obesity. Net, advertisers are required to advertise responsibly. Compliance is near 100%.

- How does the IOM explain the rise of childhood obesity when Nielsen supplied data suggest that food advertising on TV and cable to children has actually declined by 13% since 1993? And, Senator Harkin how is it that childhood obesity has risen when the government’s Federal Trade Commission found that advertising during children’s programming declined by 34% since 1977. Didn’t the IOM report say that television advertising is associated with rates of obesity? If that’s the case, why hasn’t obesity declined?

- Children under 12 are not responsible for bringing food into the house – the place where most food is consumed. That responsibility belongs to parents or guardians – who generally have an understanding of what constitutes a healthy and balanced diet

- Parents or guardians have an endless supply of all kinds of healthy foods to choose from when they enter grocery stores. No one is forcing them to buy anything that would not be in the best interests of their children. So whatever they decide to buy is a result of “freedom of choice” and personal and parental responsibility.

- As a free and legal product and with parental freedom of choice, food advertisers -- who are marketing their products according to government supported CARU principles – are afforded the constitutional protections and privileges outlined in the First Amendment. It’s called Commercial Free Speech.

- For anyone who thinks that the government can successfully trample on Commercial Free Speech rights as the IOM and Senator Harkin propose, there have been children advertising bans in Quebec and Sweden. Obesity rates in those parts of the globe have not been reduced.

- Our educational institutions have, as a basic part of the curriculum, the responsibility for teaching children the benefits of a healthy eating and balanced diets, nutrition and exercise. For adults that may not fully understand this, there is plenty of literature on the subject. And, by the way, there is an advertising campaign, sponsored by the Advertising Council, which promotes healthy eating and living.

- If food advertising were to have an effect on obesity, one could postulate that rates of obesity are uniform. Why is it that obesity rates in San Antonio are at 31% while in Santa Fe the rate is at 15%. This doesn’t make sense.

If we are going to attack a problem, then let’s cut out the political posturing and public policy rhetoric. Food marketers have been doing quite a bit during the past two years to respond to the obesity issue. Let’s give them credit for doing so.

In the meantime, let’s stop the empty blaming of advertising for the obesity crisis. Isn’t there enough rationale here to suggest that personal and parental responsibility is at the heart of the solution? We know there are plenty of food choices. We know there is plenty of nutrition education. We know that getting kids to go out, play and get more exercise will help. Let’s get real and cut out the nonsense being spewed by the IOM and Senator Harkin.