American Association of Advertising Agencies - 4A's - IST 618 Final Project


Published on

A final project presentation for my IST 618 Policy course at the iSchool at Syracuse University.

Published in: Business
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

American Association of Advertising Agencies - 4A's - IST 618 Final Project

  1. 1. American Association ofAdvertising Agencies, Inc. (4A’s) IST 618 Final Project / Laurie Tewksbury / April 2013 1  
  2. 2. Section 1 Identifying the organizationsection 2 membershipsection 3 Public Policy AgendaSection 4 Member interest in the policies advocatedSection 5 ReferencesCONTEntS   2  
  3. 3. Section 1 Identifying the organizationsection 2 membershipsection 3 Public Policy AgendaSection 4 Member interest in the policies advocatedSection 5 ReferencesCONTEntS   3  
  4. 4. Organization info: o  Founded in 1917 as a national trade association o  Represents advertising agencies in the United States o  750 members, which account for 80% of the total national advertising volume o  Members are both large, multinational agencies and small agencies billing less than $10 million per year o (American Association of Advertising Agencies, Inc., 2013)Section 1 Identifying the organization   4  
  5. 5. MISSION: “To improve and strengthen the advertising agency business in the United States by counseling members on operations and management, by providing the collective experience of the many to each, by fostering professional development, by encouraging the highest creative and business standards, and by attracting excellent people to the business.” “To work with Federal, state, and local governments to help achieve desirable social and civic goals, to influence public policy, to resist unwise or unfair legislation and regulation, and to be the principal source of information and advice about advertising.” Additionally, the 4A’s mission includes advocating advertising, representing agency point of views to advertisers and media, facilitating pro bono advertising work, and counseling and professional development to member agencies. (American Association of Advertising Agencies, Inc., 2013)Section 1 Identifying the organization   5  
  6. 6. o  750 members, which account for 80% of the total national advertising volume  Section 1 Identifying the organization   6  
  7. 7. Section 1 Identifying the organization   7  
  8. 8. SHORT-TERM GOALS LONG-TERM GOALS“Promote friendly relations among all advertising Foster social responsibilities of advertising andagencies and marketing communication marketingorganizations”“Maintain friendly relations with associations “Fostering and stimulating scientific research andrepresenting advertisers, media, suppliers, and innovation” to continually improve advertisingconsumers”“Maintain and safeguard honesty, fairness andgood taste”Work with the government and consumers onmatters, which affect advertising (American Association of Advertising Agencies, Inc., 2013) Section 1 Identifying the organization   8  
  9. 9. Section 1 Identifying the organizationsection 2 membershipsection 3 Public Policy AgendaSection 4 Member interest in the policies advocatedSection 5 ReferencesCONTEntS   9  
  10. 10. “The average 4A’s agency has been a member for more than 20 years, and a dozen agencies can trace their memberships back to the group of 111 agencies that founded the 4A’s in 1917” (American Association of Advertising Agencies, Inc., 2013). Can be privately held or publicly traded. And it’s members employ In addition, colleges and approximately 65,000 people across universities with advertising the United States. studies can also seek 750 membership to provide for members with its faculty and students. The membership fee for colleges 1250 branch and universities are $3,000 offices. per year.Section 2 Membership   10  
  11. 11. Benefits of membership:o  Consulting and advisory services on a varietyof management-related topicso  Training and professional developmentprogramso  Government relations team in Washington,giving agencies a voice with government,lobbying groups and other trade associationso  Research services, including access tospecialists and numerous databaseso  Insurance and employee benefits(American Association of Advertising Agencies, Inc., 2013) Section 2 Membership   11  
  12. 12. How to join:Agencies of all sizes can join the association and agency size does not play a role in membership.They do, however, require that organizations are:1.  An advertising agency or other organization that creates and/or places advertising or marketing communications, which a minimum of 50% of the gross income must result from payment for services;2.  Adequately equipped to service its business;3.  Its principal owners have been in business for at least two years;4.  Have offices in the United States;5.  Be in operating control of the agency and must disclose all facts related to ownership, control, and bias;6.  Maintain service standards and operate at a high level of professionalism and ethical standards;7.  Advertising ability; and lastly,8.  Financial responsibility and stability. American Association of Advertising Agencies, Inc., 2013Section 2 Membership   12  
  13. 13. As a member,you must uphold a strong and ethicalstandard of practice. The following standards of practice have been revised in 2011 and are required of all members. Some of the standards include staying competitive yet ethical, should compete on merit, place a high priority on recruiting and retaining top, diverse talent, and following a creative code of which was developed with the public interest in mind. (American Association of Advertising Agencies, Inc., 2013)Section 2 Membership   13  
  14. 14. 4A’s Creative CodeThe creative code requires of members to “not knowingly create advertising thatcontains: False or misleading statements or exaggerations, visual or verbal Testimonials that do not reflect the real opinion of the individual(s) involved Price claims that are misleading Claims insufficiently supported or that distort the true meaning or practicable application of statements made by professional or scientific authority Statements, suggestions, or pictures offensive to public decency or minority segments of the population (American Association of Advertising Agencies, Inc., 2013)Section 2 Membership   14  
  15. 15. Section 1 Identifying the organizationsection 2 membershipsection 3 Public Policy AgendaSection 4 Member interest in the policies advocatedSection 5 ReferencesCONTEntS   15  
  16. 16. 4A’s Lobbyingthe government The 4A’s spends a portion of their time and energy on lobbying the government on matters that affect the advertising and marketing communications industry. Some of the matters in which they are currently lobbying include advertising deductibility, anti-piracy and counterfeiting, children’s advertising, consumer data privacy, and patent trolling (American Association for Advertising Agencies, Inc., 2013). With a continually changing and innovative industry, perhaps two of the most talked about matters in the industry right now are children’s advertising and consumer data privacy.Section 3 public policy agenda   16  
  17. 17. Partner of CFBAI   “Committed significant effort toward Supporter of COPPA  The CFBAI is a voluntary self- establishing responsible practices in two The Children’s Online Privacyregulatory program comprised of Protection Act, which sets key areas: food and beverage advertising16 of the industry’s largest requirements to website to children and online advertising operators regarding advertising tocompanies, which promotehealthy choices to children under to children.” children under the age of 13. (American Association of Advertisingthe age of 12. (American Association of Advertising Agencies, Inc., 2013) Agencies, Inc., 2013)(Council of Better Business Bureaus, 2013) Section 3 public policy agenda   17  
  18. 18. CFBAI Children’s advertisingAdvertising to children is a controversial topic primarily because children are easily influenced andtherefore the industry is “making kids want what they don’t need.” Advertising to children, under theage of 13, is a large market with a spending power of approximately $1 trillion.The 4A’s are involved in policies regarding children’s advertising, especially as it relates to food andbeverage to help battle the childhood obesity epidemic. “According to the American Academy ofPediatrics (AAP), the average child watches about four hours of television a day and sees more than20,000 commercials each year, often for high-fat, high-sugar and high-salt snacks and foods.” The4A’s, along with the rest of the advertising industry, is proactive about keeping children’s advertisingethical and effective. (Advertising Educational Foundation, 2005)Children advertising policies  Other than the 1990’s Children’s Television Act,which limits the amount of advertising that canbe aired during children’s shows, the majority ofthe children’s advertising policies in the UnitedStates are self-regulatory or simply restrictions.However, this does not mean that the 4A’shaven’t had a large role in children’s advertisingpolicy making.Section 3 public policy agenda   18  
  19. 19. CFBAI Children’s advertisingThe CFBAI, as a part of the Better Business Bureau, is a voluntaryself-regulatory program comprised of 16 of the industry’s largestcompanies, which promote healthy choices to children under theage of 12. (Council of Better Business Bureaus, 2013) According to the 2012 Federal Trade Commission report, food spending on advertising is down by 19.5%. This shows that the self- regulation by the CFBAI is effective. Additionally, the CFBAI “committed to stricter nutrition guidelines for children under 12.” (Bachman, 2012)Section 3 public policy agenda   19  
  20. 20. CFBAI Children’s advertisingAs a part of the CFBAI, the 4A’s spend a lot of time defending the advertising industry from lobbyiststhat insist that advertising is a large cause of the obesity epidemic. To counteract this, the 4A’s arealso part of working groups to show children and their families how to live an active and healthylifestyle.Advertising industry position  Parents must take responsibility for their children including what they can and cannot see, theireducation and what activities in which they’re involved.The current controls in broadcast advertising are sufficient in determining which advertisements canbe aired.Legal injunctions against food advertising would be a violation of the First Amendment.Section 3 public policy agenda   20  
  21. 21. COPPA Children’s advertisingThe Children’s Online Privacy Protection Act (COPPA) became afederal law in 1998. This law explains how advertising online tochildren must be done, including the collection of personalinformation of children under 13; requiring consent from a parent orguardian. In 2011, the FTC proposed to update the law to keep upwith the current digital practices. (Federal Trade Commission, 2013)Section 3 public policy agenda   21  
  22. 22. COPPA Children’s advertisingIn 2011, the 4A’s have submitted comments tothe FTC regarding the proposed update.If approved, the update would “revise thedefinition of ‘personal information’ to includegeo-location data and persistent identifiers,such as online-tracking cookies” as well as newways to receive parental consent. (Dove, 2011)Then again in 2012, the 4A’s provided commentsto the FTC arguing that their new provisions wouldgo beyond the scope of COPPA and would affectonline-behavioral advertising, which is currentlyself-regulated. If passed, the new COPPA wouldrequire advertisers to collect additionalinformation in order to comply. (Digital Advertising Alliance, 2012)Section 3 public policy agenda   22  
  23. 23. As an association of advertising agencies, the 4A’s have a unique role to play regarding data privacy. As agencies, they want the best consumer data they can get to create the most personalized and effective advertisements. Consumer data allows agencies to create effective campaigns by reaching the consumer at the right time with the right message. This data can also be used to receive consumer feedback. There is a lot of confusion surrounding online consumer data as it relates to advertising, which causes a lot of consumer skepticism around both the collection and the use of their data.Section 3 public policy agenda   23  
  24. 24. “Privacy is a complex policy issue with a multitude of consumer expectations. These expectations can depend, variously, on age, gender, geography, community, social dynamics and Internet familiarity—as well as on established law and regulation.” (American Association of Advertising Agencies, Inc., 2013)Section 3 public policy agenda   24  
  25. 25. Founding member of DAA   Do-not-track movement   “The 4A’s believes strongly that The 4A’s have been lobbying legislation is ill-equipped to address against the do-not-track (DNT) consumer privacy concerns in such a act about consumer browsing fast-developing environment as the activity. If this act were to pass, it Internet.” would be a significant setback to the advertising industry. (American Association of Advertising Agencies, Inc., 2013) Section 3 public policy agenda   25  
  26. 26. DAA Consumer data privacy4A’s have also become a founding member of As a member of the DAA, the 4A’s createdthe Digital Advertising Alliance (DAA), in which ‘Your Ad Choices,’ an education platform,they ensure consumer privacy protection in which displays the logo whenever internetinternet advertising. Other members include the advertising is in place on a website. ThisAmerican Advertising Federation, Association logo allows consumers to know that theirof National Advertisers, Better Business Bureau, data is being used to personalize the webDirect Marketing Association, Interactive for them and, if clicked, will walk theAdvertising Bureau and Network Advertising consumer step-by-step through theInitiative. process.(American Association of Advertising Agencies, Inc., 2013) (Digital Advertising Alliance, 2013)Section 3 public policy agenda   26  
  27. 27. DAA Consumer data privacy 1. 3. 2.Section 3 public policy agenda   27  
  28. 28. DAA Consumer data privacyBack in 2009  The FTC had asked for self-regulation of online behavioral based ads.The 4A’s, as part of the DAA, responded with with practices that would make theprocess more transparent to consumers. It includes the following 7 principles.1.  Education2.  Transparency3.  Consumer Control4.  Data Security5.  Material Changes6.  Sensitive Data7.  Accountability(American Association of Advertising Agencies, et al., 2009)Then in 2011  The DAA expanded the scope of it’s self-regulatory program in order to keep the government fromstepping in to control the industry. They expanded the program to cover “all online data collectionand use, not just data collected for the purposes of advertising.” Consumers could now beginto opt-out of data collection for other purposes.(Bachman, 2011)Section 3 public policy agenda   28  
  29. 29. DAA Consumer data privacyAnd later in 2012  President Obama released his Consumer Privacy Bill of Rights, which offered similar principles asthe DAA’s self-regulation.(Meece, 2012) Accountability TransparencyThe 4A’s, as part of the DAA, is being incrediblyproactive regarding consumer data privacy toavoid being controlled by the government.Consumer data is crucial to advertising and, Focused Respect for collection contexttherefore the industry needs to comply with allrequests to respect consumer privacy. Theindustry has worked diligently to prove thatthey are not misusing consumer data. Access and Security AccuracyOverall, these self-regulations have allowed foradvertising to stay relevant to consumers andprovide great insight to companies andagencies. Consumer Privacy Bill of Rights Principles  Section 3 public policy agenda   29  
  30. 30. DNT Consumer data privacy Do-not-track movement   Another key matter the 4A’s are currently tackling is the “Do-Not-Track” (DNT) acts. These acts were brought to the senate in 2003 and just recently in March of 2013. According to Dan Mitchell, the act “would allow users to opt in to a browser setting that would tell third parties, usually advertisers, not to track their browsing activity” (2013). If this act were to pass, it would be a significant setback to the advertising industry. The industry argues that they should be allowed to regulate themselves and therefore they have been strongly opposing this regulation (Mitchell, 2013). This regulation would negatively affect the advertising industry in many ways; including fewer consumer benefits and overall, a less valuable Internet experience (American Association of Advertising Agencies, 2012).Section 3 public policy agenda   30  
  31. 31. DNT Consumer data privacy "The DAA does not require companies to honor DNT signals fixed by the browserDo-not-track manufacturers and set by them in browsers. Specifically, it is not a DAA Principle or in any way a requirement under the DAA Program tomovement   honor a DNT signal that is automatically set in IE10 or any other browser. The Council of Better Business Bureaus and the Direct Marketing Association will not sanction or penalize companies or otherwise enforce with respect to DNT signals set on IE10 or other browsers.” (Del Rey, 2012) Not only has the senate seen a “Do-Not-Track” bill, but companies such as Microsoft has gone as far to develop a browser, which automatically sets the do-not-track option to ‘on.’ Fortunately, since there are no current regulations surrounding DNT, the 4A’s “are neither expected nor required to honor a DNT signal that is automatically set in IE v10 (or any other browser in such a fashion” (American Association of Advertising Agencies, 2012). However, if the industry was required to honor an automatically set signal, the industry would be prevented “from collecting data on up to 43 percent of browsers used by Americans” (Singer, 2012).Section 3 public policy agenda   31  
  32. 32. DNT Consumer data privacyThe 4A’s recognize the balance needed when it comes to consumer data privacy and through theDAA self-regulatory program explained earlier, they are keeping the consumer in mind. But, they alsokeep the consumer in mind when advocating against the DNT movement. If DNT becomes thestandard, the following negative affects would be felt by consumers and companies. The quality of the user experience on the Internet would suffer. •  Ads will no longer be tailored to your interests. •  The free content you enjoy may no longer be free as it cannot be supported by the current advertising-supported model. The advertising industry would face economic issues. •  The lack of consumer data would lower ad effectiveness and it’s economic efficiency as margins would drop.Section 3 public policy agenda   32  
  33. 33. Section 1 Identifying the organizationsection 2 membershipsection 3 Public Policy AgendaSection 4 Member interest in the policies advocatedSection 5 ReferencesCONTEntS   33  
  34. 34. While the 4A’s are involved in many different associations and policies, the two policies they are most involved with include advertising to children and consumer data privacy. Interestingly, the 4A’s and the advertising industry are currently self-regulating both topics yet the government is receiving a strong push to regulate both. Regulation of either policy would drastically change how the advertising industry operates.Section 4 member interest in the policies advocated   34  
  35. 35. Rather than lobbying to pass new policies to benefit the advertisingindustry, the 4A’s are lobbying to continue to self-regulate.If children’s advertising became more regulated, the advertising industry would: Continue to see a drop in revenue, especially if the FTC expands regulations If the updates to COPPA go into effect to packaging and peer-to- as planned on 7/1/13, advertisers peer marketing. will have only had 10 weeks to (Bachman, 2012) prepare for the change. “The new regs could cause some sites Companies will be and apps to drastically reduce more reluctant to functionality or interactivity, force create content for others behind paywalls or drive some children (fear of right out of business.” compliance) resulting (Bachman, 2013) in a loss of revenue for advertisers. (Fisher, 2013)Section 4 member interest in the policies advocated   35  
  36. 36. Rather than lobbying to pass new policies to benefit the advertisingindustry, the 4A’s are lobbying to continue to self-regulate. r owe ould l ncy. ta w ie er da mic effic nsum ono of co d it’s ec lack n ues: eness a iss ctiv mic e econo ad eff If consumer Face data privacy became more Have to pay more for consumer data as it would become more expensive to regulated, the marketers because fewer companies (only first-party data owners) advertising would have access to this now exclusive data. (Meyer, 2012) Needindustry would… the c to determ urren t (an ine a new d suc cess way to pr ful) m o odel vide free of ad c vertis ontent to ing w c ould onsumer no lo s nger because be vi able.Section 4 member interest in the policies advocated   36  
  37. 37. BUT WAIT!The 4A’s are not lobbying children’s advertising and consumerdata privacy only for their own benefit. Added regulations to theindustry would negatively affect the consumer as well. Here’s how:Do-Not-Track and other Regulations on children’sregulations on targeted The online ads consumers advertising may result inadvertising would require will see will become less companies creating less contentconsumers to pay for relevant to their interests (websites, apps, videos, etc.) forcontent as it would no and therefore, will become children under the age of 13longer be supported by more irritating once again.   because the cost and risk toan advertising model. comply will become too high.  Section 4 member interest in the policies advocated   37  
  38. 38. Section 1 Identifying the organizationsection 2 membershipsection 3 Public Policy AgendaSection 4 Member interest in the policies advocatedSection 5 ReferencesCONTEntS   38  
  39. 39. Advertising Educational Foundation. (2005). Advertising to children. Retrieved from http:// Association of Advertising Agencies, Inc. (2013). American association of advertising agencies. Retrieved from Association of Advertising Agencies, Inc. (2013, March 28). Comments regarding the ftc/ dojpatent assertion entity activities workshop. Retrieved from pae/pae-0035.pdfAmerican Association of Advertising Agencies, Inc. , Association of National Advertisers, , Council of Better Business Bureaus, , Direct Marketing Association, , & Interactive Advertising Bureau, (n.d.). Self-regulatory principles for online behavioral advertising. (2009). Retrieved from http:// Documents/online-ad-principles.pdfBachman, K. (2011, November 07). Advertisers move to stop digital privacy regulations: Daa expanding self-regulatory program. Retrieved from technology/advertisers-move-stop-digital-privacy-regulations-136405Bachman, K. (2012, December 21). Ftc reports food marketing to children down 19.5%: Commission urges holdout companies and media to self-regulate. Retrieved from news/advertising-branding/ftc-reports-food-marketing-children-down-195-146169Bachman, K. (2013, April 14). Loads of companies are violating childrens privacy: Requesting more time to comply. Retrieved from companies-are-violating-childrens-privacy-148574Section 5 references   39  
  40. 40. Council of Better Business Bureaus. (2013). Childrens food and beverage advertising initiative. Retrieved from Rey, J. (2012, October 09). Online ad industry: go ahead and ignore microsofts do not track browser. Retrieved from microsoft-s-track-browser/237659/Digital Advertising Alliance. (2012, September 24). Coppa rule review, 16 cfr part 312, project no. p104503. Retrieved from COPPA-Comments_Sept-2012.pdfDigital Advertising Alliance. (2013). Your ad choices: How internet based advertising finds you. Retrieved from http://www.youradchoices.comDove, L. (2011, September 16). Federal trade commission revisits childrens privacy . Retrieved from Trade Commission. (2013). Childrens online privacy protection act of 1998 . Retrieved from, T. (2013, March 7). Changes to the childrens online privacy protection act explained. Retrieved from protection-act-coppa-changes-explainedSection 5 references   40  
  41. 41. Meece, M. (2012, February 23). President obamas consumer privacy bill of rights. Retrieved from privacy-bill-of-rights/Meyers, S. (2012, October 17). The real impact of do not track: It will consolidate dominance of microsoft, yahoo, facebook, google, amazon, and ebay . Retrieved from article/digitalnext/real-impact-track/237808/Mitchell, D. (2013, March 4). Why do not track faces an uphill road. Retrieved from http://, N. (2012, October 13). Do not track? advertisers say, "dont tread on us.". Retrieved from advertisers-fire.html?emc=eta1&_r=1&Section 5 references   41  
  42. 42. While creating this presentation in April 2013, the 4A’s and the government were in the midst of updates to both COPPA and the Do-Not-Track Act. Here’s how to follow up on the policies and the 4A’s progress. 4A’s Children’s Advertising: FTC COPPA:’s-privacy 4A’s Consumer Data Privacy: FTC Do-Not-Track: 5 references   42