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Field Reports - July 2011 Issue

1 Jul, 2011 By: Jackie Jones Response

FTC to Update Guides on Online Advertising Disclosures

By Jackie Jones (
— The Federal Trade Commission (FTC) will be revising the “Dot Com Disclosures: Information About Online Advertising” guides, which advise businesses how federal advertising law applies to marketing and sales on the Internet.

The FTC is seeking public comment on how the guides should be modified to adapt to changes that have occurred in the online world since 2000, when the document was first released.

“Since the FTC staff published ‘Dot Com Disclosures,’ mobile marketing has become a reality, the ‘app’ economy has emerged, the use of ‘pop-up blockers’ has become widespread, and online social networking has emerged and grown popular,” the FTC said. “In seeking public comment on possible revisions to the guidance document, the staff is interested in the technical and legal issues that marketers, consumer advocates and others believe should be addressed.”

Any company that advertises on the Internet, or uses blogs, social media pages or mobile technology to market their brand or product could be affected by any new rules, according to a statement from Loeb & Loeb LLP, a multi-service law firm. Businesses using cookies, tracking or online behavioral advertising techniques should also pay attention to any possible changes, the law firm said.

The current FTC guidelines urge marketers to provide clear disclosure of any information consumers might need to make informed online purchasing decisions.

Public commenting is open until August 10, the FTC said. For more information, see this month’s Legal Review column from Venable attorneys Jeffrey D. Knowles and Michael A.

Television Advertising Continues to Thrive in a Digital World, Nielsen Says

NEW YORK — Despite the ever-increasing attention being placed on digital channels by advertisers and consumers alike, television advertising continues to thrive, according to new reports from the Nielsen Co.

Television advertising grew 9 percent to $18.8 billion in the first quarter of 2011, while other more traditional media — including radio and magazines — also saw decent gains, reported Nielsen, which added that increasing media options present their own challenges to marketers.

“In the ever-changing media landscape, consumers’ growing choice of platforms and media content makes it harder for advertisers to reach their desired audience,” Nielsen said in its report. “With an array of options relative investing marketing dollars, advertisers are looking to better understand and accurately measure the impact of their advertising on brand and sales goals.”

According to Nielsen, radio advertising increased 6 percent to $1.6 billion; magazines gained 7 percent, totaling $3.5 billion; while newspapers decreased 10 percent to $2.8 billion.

While no surprise to most in the industry, Nielsen also reported on the continued success of mobile advertising, with the integration of mobile ads into mobile apps finding more of an audience, especially among teenagers. Fifty-eight percent of teens said they always or sometimes look at mobile ads, according to Nielsen.

The top five product categories in first-quarter 2011 were, in order of spending: automotive, quick service restaurants, pharmaceuticals, wireless telephone services and motion pictures, Nielsen reported. In addition, consumers reported remembering brands more often when advertising is placed during sitcoms, while placements in reality TV programs are the most effective at positively impacting viewer opinion of the integrated brand, Nielsen said.

Supreme Court Backs Marketers in Prescription Drug Ruling

WASHINGTON, D.C. — The Supreme Court recently voted 6-3 in favor of eliminating a law prohibiting the use of prescription drug records for marketing, supporting free speech over a state government’s medical privacy concern.

The Sorrell v. IMS Health case ruling — an overall victory for marketers — was welcomed by the Direct Marketing Association (DMA), which has publicly backed any decision to strike the down the law.

“Pharmaceutical marketers will now be able to promote their products to those who are interested,” said Linda Woolley, DMA executive vice president of Washington operations. “The collection of prescriber-identifiable information for marketing purposes better serves the needs of doctors who desire to make the best decisions for their patients without government interference. The plaintiffs in this case tried to make it a case about privacy, but the Supreme Court accurately decided in favor of commercial free speech. We applaud the court for its decision.”

Data-mining companies IMS Health, Verispan and Source Healthcare Analytics first challenged the 2007 Vermont law that restricted the sale, transmission or use of prescriber-identifiable information for marketing purposes without the prescribing physician’s consent, according the DMA. The law had been enforced in Maine and New Hampshire, and similar legislation was proposed in about 25 other states.

Supreme Court justices upheld a ruling by a U.S. appeals court that the Vermont law infringed on commercial free speech rights, a violation of the First Amendment of the U.S. Constitution.

“Speech in aid of pharmaceutical marketing, however, is a form of expression protected by the Free Speech Clause of the First Amendment,” Justice Anthony Kennedy wrote in the court’s majority opinion. “The state may not burden the speech of others in order to tilt public debate in a preferred direction.”

Pharmaceutical marketers can use such data to more efficiently market their products, “help monitor safety issues of new medications, to reduce costs and for research purposes such as studying treatment outcomes,” the DMA contends.

Significant Growth Expected for Online Advertising Market

NEW YORK — Rapid growth is expected for the U.S. online advertising market in 2011, with spending expected to exceed $31 billion, according to a new forecast by eMarketer.

Online advertising spending in the U.S. is projected to grow 20.2 percent to $31.3 billion in 2011, up from $26 billion in 2010 when the market grew 14.9 percent, according to the eMarketer report.

“The Internet has become as fundamental as television to advertisers,” eMarketer principal analyst David Hallerman said. “As consumers continue to increase their time spent online and as the resurgent economy continues to bolster ad budgets, we’re going to continue to see an influx of dollars toward the Internet. More ad formats, such as video, and more channels, especially social media and mobile, are also key contributors to the spending gains.”

Internet ads will account for nearly all major media ad dollars spent in the U.S. this year, up from a 17-percent share in 2010, according to eMarketer. By 2015, online advertising is expected to make up nearly 28 percent of total major media ad spending, compared to TV, which is expected to maintain a share of about 38 percent for the next five years.

The increase is largely fueled by a surge in spending on display advertisements, eMarketer said. While search advertising still takes the greatest share of online ad dollars, total display advertising (including online video, banner ads, rich media and sponsorships) brought the category in “close range of search,” eMarketer said. U.S. advertisers will spend $14.4 billion on search ads and $12.3 billion on online display this year, up 19.8 percent and 24.5 percent, respectively, when compared to 2010.

“Marketers increasingly see the Internet as a place where brand advertising, especially in the form of video advertising, is effective,” Hallerman said. “Combined with greater targeting and measurement than marketers get with TV ads, the growing consumption of online video has done more to attract brands than any other online ad format.”



New Customers the Biggest Benefit of Daily Deal Sites, ForeSee Reports

ANN ABROR, Mich. — Despite recent criticism over the business models of daily deal sites, companies such as Groupon and LivingSocial could be retailers’ and advertisers’ best bet when it comes to attracting new customers, according to a new study by ForeSee Results.

Among those who purchase offers from daily deal sites, 31 percent are new customers — with many reporting that they’d never heard of the company before the offer — and 27 percent were previously infrequent customers, according to ForeSee, which examined daily deal sites as part of its annual customer satisfaction survey on the top 100 E-retailers.

ForeSee president and CEO Larry Freed wrote on his blog,, “This is compelling data, and these are the customers that provide what the daily deal model is supposed to provide: bringing you new customers to try your business or products out.”

About two-thirds of all top-100 site visitors are enrolled in at least one daily deal E-mail program, according to ForeSee’s survey, and of those who subscribe to daily deals, 46 percent do so to more than one service.

“Groupon is the most popular site among those who subscribe to daily deals; it has about twice the number of subscribers as its closest competitor, LivingSocial, and more than twice the number of purchasers,” Freed wrote. “… Just because some competitors are gaining traction doesn’t necessarily mean that Groupon will be losing it. This may be a situation where there is enough pie for everyone.”

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