It’s a Brave New World — Navigation With the Help of Self-Regulation

By Peter Marinello

Back in 1993, when I first began evaluating adverting claims at the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc. (yes, back when the dinosaurs roamed the earth) the world of national advertising was a relatively simple place. There was print advertising, radio advertising and, of course, television advertising. As such, those three media were the only avenues for solicitation to consumers.

Shortly thereafter, the beast called online advertising suddenly invaded this nice provincial territory of advertising. Unlike the very defined parameters of the “Big Three,” attorneys and regulators found it very difficult getting their hands around this new vehicle of commercial dissemination. Advertisers themselves struggled hard to figure out the best way of optimizing this medium to communicate their “sell” messages. In fact, most traditional advertisers didn’t begin directing consumers to their websites until after 2000, which was shortly after the big Madison Avenue advertising agencies saw the need to branch out and form in-house, “digital” shops (Tribal DDB being one of the most well-known).

It wasn’t until February 2001 that a self-regulatory case was opened based solely on an online advertisement-a review I conducted then for the NAD regarding a Bonzi.com pop-up ad, which disguised itself as a Microsoft error message that claimed: “Your Internet connection is not maximized.” It was only then that we really began understanding the potential of the online claim to persuade consumer choice and attitude and, in turn, become part and parcel of the self-regulation process.

When the Electronic Retailing Self-Regulation Program (ERSP) began in 2004, the direct response landscape was still seemingly very basic: infomercials seemed to be the kings of what consumers perceived electronic direct response marketing to be and Internet marketers were regarded in some places as “rogue renegades.” Our first few cases were clearly delineated between television advertising with claims deriving only from the TV spots or web ads with claims purely based on the Internet with little overlap between the two fronts. Now, two years in, we’ve witnessed a revolution of sorts in the industry with the implementation of the Internet in direct response marketing and the creative techniques used by direct response marketers to support their DR needs.

Very quickly, televised products began to have an increased dependence on websites and utilized the cross promotional platform of banner ads, pop-ups, websites and e-mail marketing to create a complete DR package. Even the home shopping networks have utilized the Internet to create an additional avenue for reaching consumers. On top of streaming their live programming, the networks’ websites offer more products to consumers and put into place more static advertising claims, a different type of marketing for this type of live medium.

As these changes have taken place, ERSP has responded. The DR campaigns we review now include not only all televised or print advertising, but also online ads and e-mail solicitations. Accordingly, marketers are held accountable for all content both directly and indirectly linked to their site such as the websites controlled by independent e-mail solicitors.

We have noted other types of changes in the DR market, as well. For instance, we often see competitive exclusivity claims, such as “the world’s only” or “the very first,” in many of our reviews. Google and MSN have provided us with a worthwhile service that highlights similar products on the market through paid text links on the top and along the side of the results page on top of our search results. This provides us with an independent means of corroborating the veracity of such claims.

Targeted searching by users and its incorporation into mass search engines like Google has also caught our attention. This has become a handy tool for direct response marketers wishing to reach a specific audience already interested in its product or service. Targeted searching has also yielded results like marketing blogs on certain types of products, such as dietary supplements and skin care, that are paid for by marketers and which have become another avenue of direct-to-consumer advertising that we have been exploring at ERSP. As this targeted approach continues to grow, even podcasts, which once only advertised other podcasts, now feature advertising that is directly related to the subject matter of the “cast” and can certainly fall within ERSP’s procedural definition of electronic direct response advertising.

Another source of growth from the past year has been the proliferation of “less traditional” marketing firms that produce advertising content. As we see less and less of the big companies producing many of the infomercial spots, there has been a rise in agencies that incorporate short two-minute spots into marketers’ websites. These types of sites (and these types of “spots”) have been the subject of several ERSP reviews and highlight the direction the direct response market is moving toward-Internet-driven and video-on-demand content. This new advertising technique is also valuable to ERSP as a means of further identifying the “core” advertising claims being communicated by the marketer.

Broadband and all its possibilities have hit our radar, as we are beginning to see ads in front of not just streaming video, but in user-chosen media like VH-1′s V Spot or MTV’s Overdrive. These broadband channels combine both linear viewing and video-on-demand services, with news, interviews, music videos, live performances and original short-form programming. With the recent announcement by the Discovery Channel that it will be launching three new broadband channels: Discovery Channel Beyond; Travel Channel Beyond and Animal Planet Beyond, which offer exclusive short-form programming, the potential for this venue as a direct response marketing vehicle will continue to increase.

As discussed in previous editions of Electronic Retailer, broadband advertising will be an interesting development for the direct response industry. Like targeted searching, the ability to direct users already interested in a specific subject toward similar products that may also be of interest to them seems like a potentially effective (and lucrative) route for this industry. Here at ERSP, we are already beginning to monitor the first generation of advertising for new broadband services and its incorporation into other mediums such as cell phones, which appear to be on the cusp of becoming another invaluable asset to direct response marketing.

It’s amazing to think that ERSP is celebrating not only its second year this August, but 100 completed cases, as well. In that time, the direct response industry has changed rapidly. The ERSP review program has attempted to keep pace and incorporate these various advertising mediums into our monitoring efforts. We have created a multiplatform analysis in our reviews in order to encompass all aspects of direct response marketing campaigns. We have released self-regulatory decisions regarding e-mail solicitations and satellite websites. Moreover, we have made a concerted effort to incorporate the industry’s needs and wants into our forum.

It comes as no surprise that two years later, it’s been a learning-and-growing process for ERSP and the DR industry. It’s also hardly a revelation that the direct response industry has its finger on the pulse of many of the technological advancements we’ve observed in the marketplace. Nevertheless, this ongoing learning curve promises to be a steep one and we hope that with our next 100 cases, both ERSP and the direct response industry will embrace and grow with this exciting and changing landscape.

To review all ERSP cases and outcomes, visit www.retailing.org.

Peter Marinello is the director of the National Advertising Review Council’s (NARC) Electronic Retailing Self- Regulation Program (ERSP). He can be reached at (212) 705-0126, or via e-mail at [email protected].