ANA Marketing Musings

Ad Deductibility & The Social / Political Environment

Today I will talk more about the current threat to Ad Deductibility and how this is having a profound affect on the US social and political environment.

A Round of Applause? Food For Thought

This past week, ten of the largest companies in the food and beverage industry in conjunction with the industry’s self regulatory body, the National Advertising Review Council (NARC), came together to announce a historic set of children’s advertising and marketing guidelines. The purpose of this collaboration was to find a way for the food industry to contribute to the fight against childhood obesity.

Over the past few years, public policy groups such as the Kaiser Family Foundation and the Institute of Medicine (IOM) pleaded for a comprehensive effort to combat the growing epidemic of obesity in this country. In many of their reports, they recommended changes in food industry practices. Under no obligation to do so, the industry recognized that it needed to play an important, contributory role– and proceeded to embrace that role with a wide range of positive actions such as:

• The introduction of 4,500 new and healthier products over the last three years by food and beverage companies and restaurant chains
• Significant changes to advertising, promotions and products available in schools by leading  beverage and snack food companies
• Support for a variety of public service campaigns led by The Advertising Council’s “Small Steps” effort and a recently announced program to combat obesity and promote healthy lifestyles.

Along the way, many companies began reassessing their respective marketing practices and decided to pursue a markedly different path– consistent with the wishes of policymakers and public policy groups. Of note have been the efforts of Kraft, PepsiCo and General Mills.

Beyond these concrete actions, the industry is finding ways to do even more – as exemplified by the joint announcement of NARC and the ten companies under the program called the “Children’s Food and Beverage Initiative.”  No matter how you slice it, these companies are committing to devote more than 50% of their children’s advertising to messages that communicate healthy food / beverage choices and/or healthy lifestyles. Additionally, these companies are committing to eliminate advertising from schools and to reduce practices such as product placement and third party licensing.

These are real, substantive measures that represent a materially different strategic direction than anyone in the industry would have believed possible just three years ago. Moreover, they are not easy to undertake, as anyone who has managed a business with volume, revenue and profit responsibilities can attest.

Yet, what’s been the reaction from organizations like Center for Science in the Public Interest (CSPI)?  They’ve been publicly dismissive – even rude, calling this effort “pathetic” – greatly undermining their own credibility in my opinion.

Reasonable people – important policymakers – are correctly acknowledging that the industry’s actions represent real, tangible change.

• J. Michael McGinnis, who served as chair of the Institute of Medicine’s Food Marketing Committee, called the Children’s Food and Beverage Initiative “a move in the right direction….”
• FTC Chairwoman Deborah Majoras said the Initiative “shows real promise …. “
• Senator Tom Harkin noted that the Initiative “shows the industry is headed in the right direction.”
• Senator Sam Brownback stated “I appreciate this new initiative and consider it a step in the right direction.”

Are we done yet? Of course not. There is always more to do.  And the Board of NARC and the Council of Better Business Bureaus have indicated they will continue to review the self regulatory process and push for even greater change where necessary.

But let’s take a step back every now and then, and give the food marketing industry a pat on the back for doing something really good.  We know we didn’t completely save the world this week, but we should feel proud that we heeded the call of consumers and responsible policymakers: We moved the needle decidedly in a positive direction. So I, for one, am going to stand up and give us all a much-deserved round of applause. I hope others will follow.

ANA Applauds Self-Regulation Actions of CBBB and NARC

The ANA applauds as major steps forward the announcement by the Council of Better Business Bureaus (CBBB) and the National Advertising Review Council (NARC) of two significant actions in the self-regulation of advertising to children.

CBBB and NARC announced a comprehensive revision of the Self-Regulatory Guidelines for Children’s Advertising (Guidelines), strengthening the ability of the Children’s Advertising Review Unit (CARU) to provide direction to all industry sectors. In addition, under the auspices of CBBB and NARC, ten leading food and beverage advertisers established the Children’s Food and Beverage Advertising Initiative (Initiative), designed to encourage healthy dietary choices and lifestyles by shifting the mix of advertising messages to children.

We believe that with these bold steps, marketers are augmenting their commitment to strong industry self-regulation with a new pledge of ‘public interest self-motivation.  Proactively identifying socially responsible ways of serving the public, food and beverage marketers are committing to devote large portions of their annual budgets to promoting positive social change.

In heralding the revisions to the Guidelines and the boldness of the Initiative, I want to also note other major efforts by the marketing community to respond to growing concerns about obesity in America.  For example, the Advertising Council, the industry’s public service arm, is encouraging children to make better food choices and be physically more active via a campaign launched a year ago entitled "Can Your Food Do That?” In addition, over the past three years, food marketers have introduced and promoted 4,500 new and improved low fat/low calorie offerings to the marketplace.

It is especially pleasing to see important policymakers like Sen. Tom Harkin and Federal Trade Commission Chairman Deborah Platt Majoras supporting the steps being taken by the marketing industry.  Chairman Majoras said the new initiative “shows real promise, and I hope will encourage more competition in developing and marketing healthier products that are attractive to kids and their parents.”  Senator Harkin said, “These steps show that the industry is headed in the right direction in the ongoing battle to combat childhood obesity and surging rates of diabetes in children.”  Both Chairman Majoras and Senator Harkin noted that effective enforcement of the announced actions was essential to achieve meaningful results.

Clearly there is more work to be done.  We want to see expanded participation in the Initiative to include the entire food and beverage industry, with the goal of reducing obesity in America.

The Most Socially Responsible Industry in America -- Advertising

The cornerstone principle that underscores all marketing is commercial free speech. When commercial messages for legal products are truthful and non-deceptive, marketers should be completely free to market their products and services unencumbered by government regulation – or the threat of such regulation.

I raise this point – at this particular moment in time – because of the outrageous attempts by Congress to vilify advertisers and marketers for many ills in American society. As noted by my colleague Dan Jaffe in his blog, Senators Harkin and Clinton bashed food marketers for undermining the health of our children by causing obesity. Representative Moran called for the restriction of ED ads. And Senator Grassley outlined provisions to eliminate the tax deductibility of prescription drug advertising.

I have no problems with politicians calling upon various industries to support initiatives that seek to improve the social well-being of all Americans. But I do have big problems when those calls threaten to impose governmental regulation and control -- particularly when the underlying issues are poorly supported by the facts.

I am particularly frustrated when the good work and socially responsible initiatives of our marketing industry go unrecognized and unappreciated – particularly by those grand standing in the political arena.

* Think of the great work done by the Advertising Council and its media partners who provide more than $1.5 Billion in donated media to educate the public on a variety of issues including drunk driving, seat belt usage and, of course, the well-being of children.

* Think of all of the great work done by the Partnership for Drug Free America and the enormous success it has had in curbing drug usage – particularly among teens and young adults.

* Think of all of the great work done by the Children’s Advertising Review Unit and the National Advertising Division of NARC – our self regulatory body -- to ensure truthful and non-deceptive advertising.

* Think of all of the great work done by the Family Friendly Programming Forum – the advertiser-sponsored group associated with the ANA that has successfully delivered outstanding prime time network programs so that parents and kids can watch television together.

* Think of all the great work done by the AAF, the 4A’s and the AEF to promote improved advertising and marketing education at our country’s higher institutions.

The marketing industry has done more than its share to contribute to the well being of people in America. Our industry’s social responsibility track record is second to none – and I encourage any and all politicians to take a fair and balanced look at the incredible good that we do.

All of us – the media, the agencies and our marketers -- should be very proud of the indelible contributions we have made -- and will continue to make – to American Society.