Wendy Davis, May 17, 2010 10:12 PM
Consumer watchdogs are questioning whether alcohol companies inappropriately target Web users under age 21 via online video, games, social media and other digital platforms.
"Today, alcohol brands (like other major advertisers) are promoting their products across a wide spectrum of new platforms -- from social networks to mobile phones to immersive, virtual communities," the groups state in a new report that details how alcohol companies are using online social games, viral video ads and other digital marketing techniques.
The report, by American University professor Kathryn Montgomery, Center for Digital Democracy director Jeff Chester, and Berkeley Media Studies Group's Lori Dorfman, calls for the Federal Trade Commission to investigate the use of digital marketing by alcohol companies. The groups are specifically urging the FTC and state attorneys general to probe whether liquor companies are using behavioral targeting techniques -- including creating profiles of Web users -- to reach users who aren't yet legally allowed to drink.
"The FTC and other regulators need to determine whether alcohol beverage ad targeting is reaching specific young people and their networks, providing a complete picture of the industry's online data collection practices -- including whether their privacy policies are accurate," the report states.
Currently, alcohol industry self-regulatory standards call for ads to run in media where at least 70% of the audience are adults over 21. But the watchdogs say that such standards are outdated in the age of YouTube, when clips that go viral -- like Smirnoff's Tea Partay -- draw millions of hits. "Marketing is now fully integrated into daily communications and social relationships, not cordoned off in a special category of 'advertising,'" the report states.
The report also faults alcohol companies for using online age verification procedures that rely on people entering their birthdates -- a system that youngsters can bypass by providing a fake date.
Johns Hopkins associate professor David Jernigan says the study raises troubling issues. "Internet marketing immerses the audience in a world that has a single message -- and the message in this case is: It's good to drink," he says. "We need the FTC to use its power and, failing that, for the state attorneys general to use their power to start inquiring about what the industry is doing."
The self-regulatory group Distilled Spirits Council of the U.S. says that member companies "adhere to a rigorous set of content and placement guidelines for advertising and marketing materials in all media including online and digital communications channels." The organization adds that the industry's "longstanding commitment to responsible advertising regardless of the medium has been commended by the FTC and industry watchdogs."
Tuesday, May 18, 2010
Wednesday, May 12, 2010
Google-AdMob Deal Gets Extended Federal Review
SAN FRANCISCO — Google may have gotten some help from its rival Apple in its attempt to acquire the mobile advertising start-up AdMob.
The Federal Trade Commission got a two-week extension from Google and AdMob for its review of Google’s $750 million acquisition, according to two people briefed on the review process. The agency wants to use the additional time, in part, to better understand the competitive effects of Apple’s purchase of Quattro Wireless, an AdMob rival, and Apple’s impending introduction of its new iAds mobile advertising system, these people said.
Under the F.T.C.’s initial agreement with Google and AdMob, the review period was set to expire last Monday. A decision on the deal could come as soon as Friday.
According to several people briefed on the investigation, the F.T.C. has been leaning toward opposing the deal, reasoning that it would substantially diminish competition in the nascent market for advertising on mobile phones.
But the F.T.C. also must evaluate whether a strong second player in the market — Apple — would significantly change the competitive landscape and make it easier, or more difficult, for smaller players to gain entry. Google executives have pointed to Apple’s entry into the mobile ad market as a sign that the business is competitive.
One factor that could be complicating the F.T.C.’s review, said a person briefed on the process, is Apple’s famous reluctance — even with federal regulators — to open up about its business plans. It is unclear what kind of effect that the iAds system, which Steven P. Jobs, Apple’s chief executive, unveiled last month along with new software for the iPhone, could have on the overall mobile ad market. Apple’s iAds, unlike mobile ads from Google and AdMob, will appear only on the iPhone, and the system will cater exclusively to high-end advertisers, at least at first.
A representative for Google did not immediately return requests for comment, and an Apple spokesman declined to comment.
The F.T.C. and the Justice Department have begun a discussion over who will lead an inquiry into Apple’s restrictions on the terms of service for developers of the iPhone.
Another person briefed on the F.T.C.’s deliberations said that the agency’s decision on Google’s acquisition of AdMob “would have been much easier without Apple and its new ad system and terms of service provisions.”
As the F.T.C. decision approaches, battle lines are forming, with each party trying to marshal public support for its position. In the last two weeks, several prominent technology bloggers have written that the agency would be shortsighted to block Google’s activities in such a new market.
On the other hand, Martin Sorrell, chief executive of WPP, one of the world’s largest advertising groups, told the news agency Reuters on Monday that the investigation “should be rigorous” and that the F.T.C.’s review of Google’s acquisition of DoubleClick in 2007 was not “deep enough or strong enough.”
By Brad Stone
The Federal Trade Commission got a two-week extension from Google and AdMob for its review of Google’s $750 million acquisition, according to two people briefed on the review process. The agency wants to use the additional time, in part, to better understand the competitive effects of Apple’s purchase of Quattro Wireless, an AdMob rival, and Apple’s impending introduction of its new iAds mobile advertising system, these people said.
Under the F.T.C.’s initial agreement with Google and AdMob, the review period was set to expire last Monday. A decision on the deal could come as soon as Friday.
According to several people briefed on the investigation, the F.T.C. has been leaning toward opposing the deal, reasoning that it would substantially diminish competition in the nascent market for advertising on mobile phones.
But the F.T.C. also must evaluate whether a strong second player in the market — Apple — would significantly change the competitive landscape and make it easier, or more difficult, for smaller players to gain entry. Google executives have pointed to Apple’s entry into the mobile ad market as a sign that the business is competitive.
One factor that could be complicating the F.T.C.’s review, said a person briefed on the process, is Apple’s famous reluctance — even with federal regulators — to open up about its business plans. It is unclear what kind of effect that the iAds system, which Steven P. Jobs, Apple’s chief executive, unveiled last month along with new software for the iPhone, could have on the overall mobile ad market. Apple’s iAds, unlike mobile ads from Google and AdMob, will appear only on the iPhone, and the system will cater exclusively to high-end advertisers, at least at first.
A representative for Google did not immediately return requests for comment, and an Apple spokesman declined to comment.
The F.T.C. and the Justice Department have begun a discussion over who will lead an inquiry into Apple’s restrictions on the terms of service for developers of the iPhone.
Another person briefed on the F.T.C.’s deliberations said that the agency’s decision on Google’s acquisition of AdMob “would have been much easier without Apple and its new ad system and terms of service provisions.”
As the F.T.C. decision approaches, battle lines are forming, with each party trying to marshal public support for its position. In the last two weeks, several prominent technology bloggers have written that the agency would be shortsighted to block Google’s activities in such a new market.
On the other hand, Martin Sorrell, chief executive of WPP, one of the world’s largest advertising groups, told the news agency Reuters on Monday that the investigation “should be rigorous” and that the F.T.C.’s review of Google’s acquisition of DoubleClick in 2007 was not “deep enough or strong enough.”
By Brad Stone
Tuesday, May 11, 2010
FDA Asked To Restrict Drug Marketers' Use Of Social Media
If pharmaceutical companies can't adequately explain the risks of drugs in 140 characters, they shouldn't be allowed to use Twitter to advertise. That's according to the consumer advocacy group Center for Digital Democracy, which on Monday asked the Food and Drug Administration to preserve current policies on drug marketing even if they hinder the use of social media.
"Current FDA guidance on the presentation of risk information should not be compromised to the detriment of public health in favor of accommodating recent developments in online product promotion," the CDD writes. The group adds that if services like Twitter, which impose limits on posts, leave companies "unable to satisfy basic consumer-protective measures such as the fair balance requirement," those services are inappropriate for drug marketing.
The CDD also says that drug companies should not advertise in a host of digital platforms -- including email and social networking boards operated by third parties. "The only legitimate use of such tools to communicate directly with consumers is via a company's own website, and only with adherence to full 'fair and balanced' information rules," the group writes.
While the FDA probably isn't likely to ban direct-to-consumer ads, the agency could well decide that it's inappropriate to pair a drug name with a particular condition when space is too limited to describe the potential side effects, says Rebecca Tushnet, a law professor at Georgetown and expert in false advertising law.
But, she adds, even if space is short, companies might still be able to use so-called "reminder ads," which typically give the name of products but not the ailments they treat. "In the non-Twitter context, people have solved this problem with the reminder ads," she says. "In theory, it seems like that approach could still work."
The FDA recently held hearings addressing drug companies' use of social media and other online platforms to advertise. Last year, the agency told 14 large pharmaceutical companies that their search ads were misleading because the ad copy touted the benefits of drugs without also informing consumers about risks and contraindications. Drug companies immediately revamped their search strategies, both by curtailing the use of search ads and by revising the content of the ads. Now, when drug companies buy keywords to describe medical conditions, many no longer include the brand name in the ad copy or URL.
by Wendy Davis
"Current FDA guidance on the presentation of risk information should not be compromised to the detriment of public health in favor of accommodating recent developments in online product promotion," the CDD writes. The group adds that if services like Twitter, which impose limits on posts, leave companies "unable to satisfy basic consumer-protective measures such as the fair balance requirement," those services are inappropriate for drug marketing.
The CDD also says that drug companies should not advertise in a host of digital platforms -- including email and social networking boards operated by third parties. "The only legitimate use of such tools to communicate directly with consumers is via a company's own website, and only with adherence to full 'fair and balanced' information rules," the group writes.
While the FDA probably isn't likely to ban direct-to-consumer ads, the agency could well decide that it's inappropriate to pair a drug name with a particular condition when space is too limited to describe the potential side effects, says Rebecca Tushnet, a law professor at Georgetown and expert in false advertising law.
But, she adds, even if space is short, companies might still be able to use so-called "reminder ads," which typically give the name of products but not the ailments they treat. "In the non-Twitter context, people have solved this problem with the reminder ads," she says. "In theory, it seems like that approach could still work."
The FDA recently held hearings addressing drug companies' use of social media and other online platforms to advertise. Last year, the agency told 14 large pharmaceutical companies that their search ads were misleading because the ad copy touted the benefits of drugs without also informing consumers about risks and contraindications. Drug companies immediately revamped their search strategies, both by curtailing the use of search ads and by revising the content of the ads. Now, when drug companies buy keywords to describe medical conditions, many no longer include the brand name in the ad copy or URL.
by Wendy Davis
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