Antitrust Law Daily Wrap Up, ADVERTISING NEWS: FTC releases fourth major study on alcohol advertising, (Mar 20, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC today released its fourth major study on alcohol industry compliance with self-regulatory guidelines, including those designed to address concerns about youth access to alcohol marketing. The study showed a 93 percent compliance rate with placement guidelines.

For the study, the FTC ordered 14 major alcohol companies to provide information on advertising and marketing expenditures from the 2011 calendar year, and advertising placement data (including audience data) for the first six months of 2011. For the first time, the agency obtained substantial information on Internet and digital marketing and data collection and use practices.

The study findings, presented in an aggregate, anonymous fashion, include: (1) How Companies Allocate Marketing Dollars; (2) Meeting Industry Standards on Ad Placement; (3) Ad Placement on Online and Other Digital Media; (4) Privacy Concerns on Online and Other Digital Media; (5) Product Placements; and (6) Outside Review of Complaints.

The study’s key recommendations include:

• When placement compliance levels fall below 90 percent for a brand in a particular media, and lack of compliance is due to wide fluctuations in measured audience composition due to small sample size, the company should consider using a higher audience composition threshold at the time of placement, to increase the likelihood of meeting the standard at the time the ad actually appears.

• Because audience demographic data for radio is now available for larger markets showing all audience members age 6 and older, the companies should review this more comprehensive data when making ad placements.

• Companies should take advantage of age-gating technologies offered by social media, including YouTube, and age gates on company websites should require consumers to enter their date of birth, rather than simply asking them to certify that they are of legal drinking age.

• Companies should improve posted privacy policies to make them brief, transparent regarding data collection and use, and understandable to ordinary consumers.

• Regarding user-generated content, companies should use blocking technologies and engage in frequent monitoring to reduce the potential for violations of the voluntary advertising and marketing codes established by the Beer Institute, the Distilled Spirits Council of the United States, and the Wine Institute.

• Alcohol companies and the industry as a whole should continue their efforts to facilitate compliance with the voluntary codes, including staff training and cross-company identification of best practices.

• State regulatory authorities, consumer advocacy organizations, and others who are concerned about alcohol marketing should participate in the industry’s external complaint review system when they see advertising that appears to violate the voluntary codes.

• Industry and others concerned with reducing underage access to alcohol are encouraged to use the free “We Don’t Serve Teens” alcohol education materials available on DontServeTeens.gov.

Previously, the FTC released studies in 1999, 2003, and 2008. Recommendations from past reports have resulted in agreements by the Beer Institute, the Distilled Spirits Council of the United States, and the Wine Institute, to adopt improved voluntary advertising placement standards; buying guidelines for placing ads on radio, in print, on television, and on the Internet; a requirement that suppliers conduct periodic internal audits of past placements; and systems for external review of complaints about compliance.

News: Advertising ConsumerProtection FederalTradeCommissionNews