Self-Regulation: Does It work? Can it Work?
Presented to the George Mason University
Attorneys General Education ProgramArlington Virginia
April 30, 2011
C. Lee PeelerPresident, National Advertising Review Council
EVP, National Advertising, CBBB
Example: National Advertising Division
• Jurisdiction: Truth and Accuracy of National Advertising
• All media
• All Commercial Advertisers
Key Areas of Interest
• Product-performance claims
• Functional foods
• Dietary Supplements
• Green marketing
• Telecommunications
How NAD Process Works
• Complaint or staff monitoring
• Request to advertiser for substantiation
• Review of evidence
Public Decisions
All decisions
are reported in
a press release
and published
in the NAD/CARU
Case Reports.
Non-Compliance?Maker of Oregano Supplement Agrees to Pay $2.5 Million
to Settle FTC Charges
“The FTC would
Like to
acknowledge
The National
Advertising
Division
Of the Council
of Better
Business
Bureaus for
their referral
related to this
case.”
A Better Mousetrap
• Independent:Administered by an objective third party
• Transparent: The outcome of every case is publicly reported
• Accountable: Companies that refuse to comply are publicly identified and referred to the appropriate government agency
Children’s Food and Beverage Advertising Initiative
• 17 major children’s food and beverage advertisers
• Companies make public commitments about their child directed advertising
• Compliance with pledges monitored by CBBB
Changing the Landscape of Children’s Advertising
• Before (Pre-CFBAI) — Almost anything went regarding what was advertised– CARU Guidelines for how to advertise, but not
what to advertise• Few companies had nutrition standards for child-
directed advertising• No third party accountability on what was advertised
• Now — Science-based nutrition standards guide participants on what to advertise– BBB oversight provides transparency and
accountability– Program stimulates competition among
participants
Setting Standards →
Change & Improvement• ≥ 100 products changed or created to meet nutrition standards:
– Some products reformulated several times– Other products discontinued or no longer advertised
• Calories: – Virtually every individual product under 200 calories– No entrees/main dishes > 350 calories; No meals > 600 calories
• Sodium: – Pre-CFBAI some products with > 900 mg sodium– Now highest is 760 (most far less: FDA ―healthy‖ levels used by many)
• Sugars: – Pre-CFBAI some cereals had as much as 15 or 16 grams per serving– 21 of 25 cereals currently 10 grams or less per serving; limit is 12 grams
• Fats:– 2 grams or ≤ 10% calories sat fat; trans fat limits generally 0 g labeled – A number of products reformulated to lower fats to meet limits
• Positive Nutrients:– More fiber & Vitamin D (nutrients of public health concern in U.S.)– Whole grains usage has increased
Analysis of Ads on Sample of Kids’ TV
(Spring 2010)
• 87% of participant ads included 10% DV of a nutrient that is a shortfall in kids’ diets and/or ½ serving of F/V/D/WG
• 32% included ≤ 1/2 serving of veg/fruit– As a separate dish in a meal or as part of a
combination product (e.g., pasta)
• 33% included low/fat-free milk or yogurt
• 27% were for products or meals that provided ≤ 8 grams of whole grains– 8 grams a significant contribution to diet
(Dietary Guidelines for Americans 2010)
Include a shortfall nutrient or
food group to be encouraged
Do not include a shortfall nutrient or
food group to be encouraged
CARULimit amount shown being
consumed to labeled serving size
When showing meals make them
nutritionally balanced ones
Admonish against disparaging
healthy lifestyles choices, fruit and
vegetables
Depict snacks as such, not as
meal substitutes
ERSP
Advertising Police Arrive Inside Second LifeBy Jim Edwards |BNET
In a decision on a product advertised on billboards inside Second Life, the Electronic Retailing Self-Regulation Program (ERSP) found that PhotoBlocker Spray does not, unsurprisingly, make your real-life car invisible to police radar and traffic cameras.
Second Life is the online virtual world where unemployed people have fake sex and then get real-life divorces.
Principles for Online Behavioral
Advertising
The “Advertising Option Icon” and accompanying language should be displayed in or near online advertisements or on Web pages where data is collected and used for behavioral advertising.
The Icon indicates adherence to the Principles.
By clicking on the Icon, consumers will be able to link to:
– a clear disclosure statement regarding the company’s OBA data collection and use practices.
– an easy-to-use opt-out mechanism.
Alcohol Advertising Programs
• Distilled Spirits Council
• Beer Wholesalers
• Wine Institute
BBB System
• Founded in 1912
• Over 120 local BBBs Nationwide
The Journal of Consumer Affairs – Spring 2010
“The Better Business Bureau is the
third-party complaint agency most
commonly used by dissatisfied
customers who are unable to obtain
redress … .”
Are Consumers Disadvantaged or Vulnerable?
An Examination of Consumer Complaints
to the Better Business Bureau
Complaints to Better Business Bureau Up Ten
Percent Nationwide
According to an annual report released today by Better Business
Bureau, consumers filed 1.1 million complaints against North American
businesses in 2010, reflecting a ten percent increase over the previous
year.
IndustryTotal
Complaints
Rank by number of complaints
Percentage increase
over 2009
Percentage of Resolved Complaints
Television - Cable, CATV & Satellite
30,985 1 -5.0% 98.6%
Cellular Phone Services & Equipment
27,293 2 -29.6% 92.1%
Auto Dealers - New Cars 24,698 3 -8.1% 87.4%
Banks 22,648 4 -24.3% 98.5%
Collection Agencies 15,876 5 .5% 80.2%
Auto Dealers - Used Cars 14,520 6 6.1% 70.6%
Auto Repair Service 13,178 7 3.5% 65.6%
Furniture - Retail 13,018 8 -1.1% 79.1%
Internet Shopping 12,950 9 -39.8% 61.4%
Mortgage Brokers 9,545 10 17.8% 81.0%
Consumer Alerts
Weight-loss Berry Claiming Oprah Endorsement Makes Wallets Slim and Consumers Angry Warns BBB
Acai-berry product peddlers lock customers in after “free” trial expires
Arlington, VA – January 5, 2009 - Better Business Bureau is warning consumers to be wary of online ads relying on celebrity endorsements to sell acai-berry related weight loss products. BBB has received thousands of complaints from consumers nationwide who thought they were signing up for a free-trial offer of acai berry weight loss products that were supposedly endorsed by Oprah, Rachel Ray and other celebrities; in the end, the free trial cost them, month after month.
Thank you.
For more information, please visit us on the Web @
www.narcpartners.org
www.bbb.org