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Advertising Federation of Grand Rapids, Grand Rapids, MI, January 14, 1972
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Advertising Federation of Grand Rapids, Grand Rapids, MI, January 14, 1972
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The original documents are located in Box D32, folder "Advertising Federation of Grand
Rapids, Grand Rapids, MI, January 14, 1972" of the Ford Congressional Papers: Press
Secretary and Speech File at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. The Council donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Remarks by Rep. Gerald R. Ford before the
Advertising
Maffide Federation of Grand Copy
Rapids, 12 noon, Friday, Jan. 14, 1972
TODAY I HOPE TO BRING YOU UP TO DATE ON WHAT'S HAPPENING IN CONGRESS AND IN
THE BOWELS OF THE BUREAUCRACY WHICH IS OF INTEREST TO ADVERTISERS.
BUT FIRST OF ALL LET ME CONGRATULATE THE ADVERTISING INDUSTRY ON ITS
RECENTLY ANNOUNCED PLANS TO REGULATE ITSELF. I AM TOLD THIS SELF REGULATION
IS AIMED AT ENSURING TRUTH AND ACCURACY IN ADVERTISING. I DON'T KNOW IF
THE RESULT WILL BE TO BLUNT SOME OF THE ATTACKS BEING MADE ON THE ADVERTISING
INDUSTRY, BUT THAT MAY BE THE UPSHOT.
NOW LET ME GO IMMEDIATELY TO DEVELOPMENTS YOU MAY EXPECT IN THE CONGRESS,
WHICH WILL BEGIN ITS SECOND SESSION NEXT TUESDAY.
LET'S TAKE A LOOK AT WARRANTY LEGISLATION. THE SENATE PASSED A WARRANTY
BILL LAST NOVEMBER 8. IN THE HOUSE, A SUBCOMMITTEE HAS CONCLUDED HEARINGS ON
WARRANTY LEGISLATION BUT HAS NOT YET GONE INTO EXECUTIVE SESSION TO MARK UP
A BILL.
TITLE I OF THE SENATE BILL ESTABLISHED FEDERAL MINIMUM STANDARDS FOR
WRITTEN WARRANTIES. THAT IS ALSO THE SUBSTANCE OF TITLE I OF THE HOUSE BILL
INTRODUCED BY THE SUBCOMMITTEE CHAIRMAN AND IT APPEARS THE SENATE VERSION
COULD BE ACCEPTED BY THE HOUSE SUBCOMMITTEE.
TITLE II OF THE SENATE WARRANTY BILL AMENDS THE FEDERAL TRADE COMMISSION
ACT TO BROADEN FTC'S POWERS. THE ADMINISTRATION'S WARRANTY BILL CONTAINS NO
SUCH PROVISIONS. THE ADMINISTRATION HAS INTRODUCED SEPARATE LEGISLATION, so
THEY WILL PROBABLY OPPOSE TITLE II OF THE SENATE WARRANTY BILL.
THEN WE HAVE THE FLAMMABLE FABRICS ACT EXPANSION AND EXTENSION. THAT IS
HOUSE BILL HR. 5698, WHICH IS MUCH LIKE A BILL WHICH PASSED THE SENATE IN THE
91st CONGRESS. THIS WOULD REQUIRE AN APPROVED TESTING PROGRAM BY EACH
MANUFACTURER FOR ANY FLAMMABILITY STANDARD SET AND A CERTIFICATION BY THE
FORD i LIBRARY GERALIC
Digitized from Box D32 of The Ford Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential Library
MANUFACTURER THAT HIS PRODUCTS MEET THE STANDARD. THE BILL PROVIDES CRIMINAL
AND CIVIL PENALTIES UP TO $10,000 AND THREE YEARS. IT WOULD GIVE ENFORCEMENT
POWERS TO THE COMMERCE DEPARTMENT. HOUSE HEARINGS HAVE BEEN CONCLUDED AND
INDICATE A POWER STRUGGLE BETWEEN THE FTC AND THE COMMERCE DEPARTMENT OVER
WHICH AGENCY SHOULD ENFORCE THE ACT. THE OUTCOME IS IN DOUBT.
NOW WE COME TO A DISCUSSION OF THE ADVERTISERS'BOGEYMAN, THE FTC.
THERE IS NO QUESTION THAT THE FTC IS GOING AFTER THE ADVERTISING INDUSTRY.
FOR ONE THING, THEY ARE GOING TO CHECK ON ADVERTISING RATES--HOW THEY ARE SET.
THEY WILL LOOK INTO DOUBLE BILLING AND COMBINATION RATES. THE FTC ISN'T SAYING
THESE PRACTICES ARE ILLEGAL. BUT SELLERS OF ADS MAY HAVE TO JUSTIFY THEIR
CONTINUED USE.
ONE OF THE LATEST DEVELOPMENTS IS A POSSIBLE FTC CRACKDOWN ON TOY ADVER-
TISING. THIS STEMS FROM PETITIONS FILED WITH THE FTC BY A GROUP KNOWN AS ACT--
ACTION FOR CHILDREN'S TELEVISION.
ACT IS CAMPAIGNING AGAINST ADVERTISING ON CHILDREN'S TV PROGRAMS. THEY
HAVE ASKED THE FTC TO PROHIBIT TOY ADVERTISING ON CHILDREN'S TV AND HAVE SOUGHT
TO BAR ALL ADVERTISING OF VITAMINS AND OTHER DRUGS FROM CHILDREN'S TV PROGRAMS
AS WELL AS FROM FAMILY SHOWS. ACT CONTENDS THAT SUCH ADVERTISING IS UNFAIR
AND MISLEADING.
ACT NOW IS PROJECTING A THIRD PHASE IN ITS CAMPAIGN--A PETITION TO GET
THE FTC TO PROHIBIT THE ADVERTISING OF EDIBLES ON CHILDREN'S TV SHOWS.
ACT ALSO HAS GONE TO THE FEDERAL COMMUNICATIONS COMMISSION IN AN ATTEMPT
TO GET ADVERTISING RULED OFF CHILDREN'S TV SHOWS. THE FCC DECIDED EARLY LAST
YEAR TO TREAT ACT'S PETITION IN A RULEMAKING PROCEDURE FOR WHICH COMMENTS
HAVE BEEN SUBMITTED.
WHAT IS PROBABLY OF GREATEST INTEREST TO ADVERTISING AGENCIES AND AD
VERTISE S IS THE FTC ATTEMPT TO HAVE THE FCC ENLARGE ITS FAIRNESS DOCTRINE
TO INCLUDE PRODUCT COMMERCIALS.
WHAT THE TTC WANTS TO DO IS TO OPEN UP TV TO COUNTERADVERTISING. THIS WOULD
BE ADVERTISING AIMED AT REBUTTING THE CLAIMS MADE IN SPOTS CONTAINING SO-CALLED
"CONTROVERSIAL" MESSAGES.
THE FTC WANTS THE FCC TO ESTABLISH RULES CREATING "OPEN AVAILABILITY" FOR
PAID ADVERTISING AND PAID COUNTERADVERTISING. IN ADDITION, THE FTC WANTS FREE
ACCESS GIVEN - IN PRIME TIME - FOR THE DISCUSSION OF CONTROVERSIAL ISSUES
RAISED BY COMMERCIAL MESSAGES.
THE FTC POINTED TO FOUR KINDS OF ADVERTISING THAT MIGHT BE ATTACKED BY
COUNTER-ADVERTISERS.
ONE IS ADVERTISING MAKING CLAIMS OF PRODUCT PERFORMANCE OR CHARACTERISTICS
THAT EXPLICITLY RAISE CONTROVERSIAL ISSUES. AN EXAMPLE IS ADVERTISING OF
GASOLINE OR OIL THAT STATES OR IMPLIES THAT THE PRODUCT WILL NOT POLLUTE THE
ENVIRONMENT.
ANOTHER IS ADVERTISING STRESSING BROAD RECURRENT THEMES AFFECTING A
PURCHASE DECISION IN A WAY THAT RAISES CONTRIVERSIAL ISSUES OF CURRENT NATIONAL
IMPORTANCE. EXAMPLES ARE FOOD COMMERCIALS THAT MAY BE VIEWED AS ENCOURAGING
POOR NUTRITIONAL HABITS.
STILL ANOTHER TYPE OF ADVERTISING OPEN TO COUNTER-ADVERTISING IS THE
ADVERTISING CLAIM THAT RESTS UPON OR RELIES UPON SCIENTIFIC PREMISES WHICH
ARE CURRENTLY SUBJECT TO CONTROVERSY WITHIN THE SCIENTIFIC COMMUNITY. FOR
EXAMPLE, A DRUG MAY BE ADVERTISED AS EFFECTIVE, BASED ON SUBSTANTIAL SCIENTIFIC
PROOF, BUT THE PROOF MAY BE DISPUTED BY SOME MEMBERS OF THE SCIENTIFIC COMMU
NITY. THE FTC CONTENDS THE DIFFERENCE OF OPINION SHOULD BE AIRED so THE
PUBLIC COULD MAKE ITS PURCHASING DECISION IN FULL KNOWLEDGE OF THE DIFFERENCE
IN OPINION.
A FOURTH KIND OF ADVERTISING SUBJECT TO COUNTER-ADVERTISING IS ADVERTISING
THAT IS SILENT ABOUT THE NEGATIVE ASPECTS OF THE ADVERTISED PRODUCT. THIS
MIGHT APPLY TO ADVERTISING OF SMALL CARS, IF LOW COST AND ECONOMY OF OPERATION
WERE PLAYED UP AND SAFETY COMPARISONS WITH LARGER CARS WERE OMITTED.
ALL OF THIS RAISES THE QUESTION: WHO WOULD MONITOR THE COUNTER-ADVERTISING
TO MAKE SURE IT DID NOT CONTAIN FALSE OR DECEPTIVE STATEMENTS?
THE FTC IS NOT SEEKING TO EXTEND THE SO-CALLED FAIRNESS DOCTRINE TO NEWS-
PAPER AND MAGAZINE ADVERTISING.
A U.S. COURT OF APPEALS IN WASHINGTON HAS ALREADY HEAD THAT THE FAIRNESS
DOCTRINE MAY BE APPLIED TO A PRODUCT COMMERCIAL. THIS OCCURRED WHEN AN EN
-
VIRONMENTAL ORGANIZATION CALLED FRIENDS OF THE EARTH UNSUCCESSFULLY SOUGHT
TIME TO COUNTER ADVERTISING FOR HIGH POWERED AUTOMOBILES AND LEADED GASOLINES
ON THE GROUND THAT THEY ARE SOURCES OF POLLUTION.
THE FRIENDS OF THE EARTH CASE IS RELATED TO THE FEDERAL COMMUNICATIONS
COMMISSION DECISION OF 1969 WHICH HELD THAT CIGARETTE ADVERTISING IS A CON_
TROVERSIAL ISSUE AND REQUIRED BROADCASTERS TO CARRY ANTI-SMOKING MESSAGES.
HOWEVER, THE FCC ASSERTED AT THAT TIME--AND SINCE THEN--THAT CIGARETTS ARE A
UNIQUE CASE.
THAT WRAPS UP MY RUNDOWN ON MATTERS OF MOMENT TO ADVERTISERS IN THE CON-
GRESS AND IN THE GOVERNMENT AGENCIES. I WILL NOW TRY TO ANSWER ANY QUESTIONS
YOU MAY HAVE.
*******
&
FORD
NOTE-- (HERE IS ADDITIONAL INFORMATION ON CHILDREN'S TV. REP. TORBERT MACDONALD GERALD
BRACK
OF THE HOUSE COMMERCE COMMITTEE'S COMMUNICATIONS SUBCOMMITTEE HAS INDICATED
HE WILL HOLD HEARINGS ON CHILDREN's TV SOMETIME THIS WINTER. HE HAS NOT YET
SET A DATE.)
GERALD BY FORD LIBRARY
Advertising
ADDITIONAL SUGGESTED REMARKS BEFORE AD CLUB
EARLIER I MENTIONED THAT THE FTC IS THE "BOGEYMAN" OF ADVERTISERS. TO
KEEP MATTERS IN PERSPECTIVE I SHOULD QUOTE FROM A RECENT SPEECH BY GERALD J.
THAIN, ASSISTANT DIRECTOR FOR NATIONAL ADVERTISING OF THE FTC'S BUREAU OF
CONSUMER PROTECTION. THAIN SAYS IT JUST ISN'T TRUE THAT THE FTC IS OUT TO
DESTROY ADVERTISING AS AN INDUSTRY
"TO
THE
CONTRARY
HI
SEE
YOUR
INDUSTRY AS ONE ESSENTIAL TO A FUNCTIONING FREE ENTERPRISE ECONOMY. MY
DIVISION'S EFFORTS ARE DESIGNED TO FURTHER LEGITIMATE ADVERTISING BY ATTACKING
THOSE ADVERTISERS WHO ABUSE THE LAW.
RECENT EMPHASIS BY THE FTC HAS BEEN ON CORRECTIVE ADVERTISING, FORCING
ADVERTISERS TO DOCUMENT THEIR CLAIMS, AND REQUIRING ADVERTISERS TO SUBMIT DATA
TO SUBSTANTIATE ADVERTISING CLAIMS WITH RESPECT TO "THE SAFETY, PERFORMANCE,
EFFICACY, QUALITY OR COMPARATIVE PRICE OF THE PRODUCT ADVERTISED". THE FTC
ALSO HAS TAKEN TO NAMING THE ADVERTISING AGENCY WHICH PREPARED AN ILLEGAL AD
VERTISEMENT AS A RESPONDENT IN A COMMISSION PROCEEDING, AS WAS DONE IN THE
OCEAN SPRAY CRANBERRY JUICE CASE.
SINCE ANNOUNCING ITS SUBSTANTIATION OF CLAIMS PROGRAM, THE FTC HAS so FAR
ISSUED ORDERS TO MEMBERS OF FOUR MAJOR INDUSTRIES TO PRODUCE DOCUMENTATION FOR
THEIR ADVERTISING: THE AUTOMOBILE INDUSTRY; THE AIR CONDITIONING INDUSTRY
THE
TELEVISION INDUSTRY; AND THE ELECTRIC SHAVER INDUSTRY. THESE REQUESTS FOR
DATA APPLY TO BOTH ADVERTISEMENTS IN THE PRINTED MEDIA AND ON NATIONAL TELEVISION.
ON OCTOBER 13, 1971, THE FTC RELEASED TO THE PUBLIC THE DOCUMENTATION PROVIDED
TO IT BY AUTOMOBILE MANUFACTURERS TO DOCUMENT THEIR CLAIMS. IT IS QUESTIONABLE
HOW VALUABLE SUCH INFORMATION IS TO THE CONSUMER, BUT THE FTC BELIEVES PUBLIC
DISCLOSURE CAN ENHANCE COMPETITION BY ENCOURAGING COMPETITORS TO CHALLENGE
ADVERTISING CLAIMS WHICH HAVE NO BASIS IN FACT.
ADDITIONAL SUGGESTED REMARKS BEFORE AD CLUB - Page 2
AN AREA OF FTC ACTIVITY WHICH HAS IMPORTANT IMPLICATIONS FOR ADVERTISING
IS THE ATTENTION THE FTC HAS BEEN GIVING TO THE ADVERTISING OF FOOD PRODUCTS.
THE WHITE HOUSE CONFERENCE ON FOOD, NUTRITION AND HEALTH STATED IN ITS FINAL
REPORT TO THE PRESIDENT THAT NO OTHER AREA OF THE NATIONAL HEALTH PROBABLY IS
AS ABUSED BY DECEPTION AND MISINFORMATION AS NUTRITION. SINCE THAT REPORT WAS
ISSUED, THE FTC HAS AGGRESSIVELY REGULATED FOOD ADVERTISING. SPECIFICALLY,
THE COMMISSION HAS CHALLENGED NUTRITIONAL CLAIMS MADE FOR SUCH PRODUCTS AS
COCA-COLA'S "HI-C" FRUIT DRINKS, OCEAN SPRAY CRANBERRY JUICE COCKTAIL, WONDER
BREAD, SWIFT'S BABY FOOD, AND CARNATION INSTANT BREAKFAST.
IF WE LOOK AHEAD AT POSSIBLE FTC ACTIVITY, WE CAN EXPECT THE COMMISSION
TO PAY SPECIAL ATTENTION TO ADVERTISING AIMED AT "SPECIAL AUDIENCES" SUCH AS
THE GHETTO DWELLER, THE ELDERLY, THE HANDICAPPED, AND ESPECIALLY CHILDREN. THE
FTC STAFF HOLDS THAT WHETHER AN ADVERTISING PRACTICE IS UNFAIR OR DECEPTIVE
UNDER THE FEDERAL TRADE COMMISSION ACT DEPENDS PRIMARILY ON THE INTENDED
CONSUMER'S UNDERSTANDING OF A STATEMENT OR REPRESENTATION, AND ITS EFFECT ON
HIM. THAT TEST IS NOT LIMITED TO THE UNDERSTANDING OF A "REASONABLE ADULT".
ADVERTISING TO CHILDREN, THEREFORE, MAY BE JUDGED UNDER THE ACT ACCORDING TO THE
WAY CHILDREN UNDERSTAND ITS MEANING AND ARE AFFECTED BY IT. A MARKETING OR
PROMOTIONAL PRACTICE, DIRECTED IN SUBSTANTIAL PART TOWARD MINORS, THAT
INTERFERES SUBSTANTIALLY AND UNJUSTIFIABLY WITH THEIR FREEDOM OF BUYING CHOICE,
IS CONSIDERED AN UNFAIR OR DECEPTIVE ACT OR PRACTICE AND THUS VIOLATES THE FTC
ACT EVEN IF IT MIGHT NOT BE UNFAIR OR DECEPTIVE IF APPLIED ONLY TO ADULTS.
FORD is LIBRARY GERALD
AU mustry Starts Out
On Self-Regulation Path
By NEAL W. O'CONNOR
the National Advertising Divi-
President, N. W. Ayer & Son
Non will work with the adver-
Examining the past year in
tiser to try to correct the ad-
the advertising business, and
vertising.
looking shead to 1972, J have
-11 this falls, the complaint
to use the same word to char-
will be taken up with a panel
acterize what I see in each di-
drawn from the NARB. The
rection: Encouraging.
panel will decide whether or
s am eprouraged by the
not to support the National
emergence in 1971 of the form-
Advertising Division's prelimi-
al structure for what 1 believe
nary findings.
can be a workable system of
-11 it does, and the adver-
tiser returns to take correo-
to caruce with
Jim accuracy in advertising
tive action, the NARB will an-
The system HAR developed
nounce its findings 10 the
through the leadership of Tour
preas. All materials relating
Dirabizations the American
to the case will be made avail-
Association of Advertising
able to the Federal Trade
Agencies, the American Ad.
Commission or other appropri-
vertising Federation, the Asso-
ate government agency.
cistion of National Advertis-
As one of the agency repre-
ers and the Council of Better
sentatives on the NARB, 1 be-
Business Bureaus,
lieve that if we do our work
well, complaints will he sel-
Public on Board
tied in private. The only time
The heart of the swice
the public will hear about one
of dell-regulation is A new in-
is if we can't.
dependent organization, the
Leaser, But Sharper
National Advertising Review
A lot of people think this
woo't work. Not just consum-
Advertising agencies
er activities, but legal coun-
sels of a lot of client compa-
have come through a
nies.
I've been close enough to the
difficult, two - year
program in all the planning
recession leaner but
stages to know, however, that
chief executives of all major
sharper
advertisers and agencies I've
spoken to are totally in favor
of it.
Bored (NARB). with advertis.
They want 11 to succeed.
ers. agency executives, and
1 am encouraged that He're
representatives of the public
been able to establish this
as members.
The alarerm now going in.
mechanism to help make ad-
to operation, will swork
vertising more responsible to
the public and to itself.
through n newly organized
National Advertising Division
As 1 look at the general
in the Council of Briter BIRK.
state of the advertising busi-
ness today. 1 also find reason
need Buscaue to receive. eval.
to be encouraged.
Date and UCY on complaints
from any public or industry
Advertising agencies have
come through a difficult, 140-
source on the honesty of na-
tionk) advertising.
year recession leaner but
If an ad is found misicading,
sharper, and in a strong part-
there are three principal steps
tion to meet the requirements
that will follow:
of clients If a business upswing
develops in 1972.
-The professional staff of
Many economists say it will
how the media set ad rates radio, TV, newspapers, ctc.
a
Double billing, a device whereby retailers are sent two bills
the real price of the ad and a puffed-up price for the advertiser's use
in getting his supplier to pay more of the promotional expense. Also
setting different rates for national and local firms on similar products.
And combination rates that force advertisers to place their ads
in more than one outlet owned by media firms. Also quantity discounts
large advertisers are charged substantially lower rates than the smalls.
Gov't isn't convinced these practices are illegal in every case,
but sellers of ads may eventually have to justify their continued use.
Ads that jump on the competition the media usually nix them,
"poor taste" but gov't thinks that ads should compare rival products
for benefit of the consumers, so will slam codes that bar this practice.
A big flop govt's plan to force companies to prove their ads.
Fed. Trade promised to make selected lines file substantiating evidence,
which would then be made public 50 consumers could check on the honesty.
But it's not working. For example, auto makers sent their technical data
and gov't published without evaluation, hence useless to most people.
Fed, Trade is bogged down by a great flurry of technical papers
from other lines shavers, air conditioners, TV's. Toothpaste to come.
What's ahead is a major overhaul. Gov't won't drop the program.
Wash letter
Riplinger 30,1971
FORD
LIDRARD
Remarks by Rep. Gerald R. Ford before the Advertising Federation of Grand
Rapids, 12 noon, Friday, Jan. 14, 1972
0 office Copy
TODAY I HOPE TO BRING YOU UP TO DATE ON WHAT'S HAPPENING IN CONGRESS AND IN
THE BOWELS OF THE BUREAUCRACY WHICH IS OF INTEREST TO ADVERTISERS.
BUT FIRST OF ALL LET ME CONGRATULATE THE ADVERTISING INDUSTRY ON ITS
RECENTLY ANNOUNCED PLANS TO REGULATE ITSELF. I AM TOLD THIS SELF REGULATION
IS AIMED AT ENSURING TRUTH AND ACCURACY IN ADVERTISING. I DON'T KNOW IF
THE RESULT WILL BE TO BLUNT SOME OF THE ATTACKS BEING MADE ON THE ADVERTISING
INDUSTRY, BUT THAT MAY BE THE UPSHOT.
NOW LET ME GO IMMEDIATELY TO DEVELOPMENTS YOU MAY EXPECT IN THE CONGRESS,
WHICH WILL BEGIN ITS SECOND SESSION NEXT TUESDAY.
LET'S TAKE A LOOK AT WARRANTY LEGISLATION. THE SENATE PASSED A WARRANTY
BILL LAST NOVEMBER 8. IN THE HOUSE, A SUBCOMMITTEE HAS CONCLUDED HEARINGS ON
WARRANTY LEGISLATION BUT HAS NOT YET GONE INTO EXECUTIVE SESSION TO MARK UP
A BILL.
TITLE I OF THE SENATE BILL ESTABLISHED FEDERAL MINIMUM STANDARDS FOR
WRITTEN WARRANTIES. THAT IS ALSO THE SUBSTANCE OF TITLE I OF THE HOUSE BILL
INTRODUCED BY THE SUBCOMMITTEE CHAIRMAN AND IT APPEARS THE SENATE VERSION
COULD BE ACCEPTED BY THE HOUSE SUBCOMMITTEE.
TITLE II OF THE SENATE WARRANTY BILL AMENDS THE FEDERAL TRADE COMMISSION
ACT TO BROADEN FTC'S POWERS. THE ADMINISTRATION'S WARRANTY BILL CONTAINS NO
SUCH PROVISIONS. THE ADMINISTRATION HAS INTRODUCED SEPARATE LEGISLATION, so
THEY WILL PROBABLY OPPOSE TITLE II OF THE SENATE WARRANTY BILL.
THEN WE HAVE THE FLAMMABLE FABRICS ACT EXPANSION AND EXTENSION. THAT IS
HOUSE BILL HR. 5698, WHICH IS MUCH LIKE A BILL WHICH PASSED THE SENATE IN THE
91st CONGRESS. THIS WOULD REQUIRE AN APPROVED TESTING PROGRAM BY EACH
TREAT RD LIBRARY
MANUFACTURER.FOR ANY FLAMMABILITY STANDARD SET AND A CERTIFICATION BY THE
MANUFACTURER THAT HIS PRODUCTS MEET THE STANDARD. THE BILL PROVIDES CRIMINAL
AND CIVIL PENALTIES UP TO $10,000 AND THREE YEARS. IT WOULD GIVE ENFORCEMENT
POWERS TO THE COMMERCE DEPARTMENT. HOUSE HEARINGS HAVE BEEN CONCLUDED AND
INDICATE A POWER STRUGGLE BETWEEN THE FTC AND THE COMMERCE DEPARTMENT OVER
WHICH AGENCY SHOULD ENFORCE THE ACT. THE OUTCOME IS IN DOUBT.
NOW WE COME TO A DISCUSSION OF THE ADVERTISERS'BOGEYMAN, THE FTC.
THERE IS NO QUESTION THAT THE FTC IS GOING AFTER THE ADVERTISING INDUSTRY.
TOR ONE THING, THEY ARE GOING TO CHECK ON ADVERTISING RATES--HOW THEY ARE SET.
THEY WILL LOOK INTO DOUBLE BILLING AND COMBINATION RATES. THE FTC ISN'T SAYING
THESE PRACTICES ARE ILLEGAL. BUT SELLERS OF ADS MAY HAVE TO JUSTIFY THEIR
CONTINUED USE.
ONE OF THE LATEST DEVELOPMENTS IS A POSSIBLE FTC CRACKDOWN ON TOY ADVER-
TISING. THIS STEMS FROM PETITIONS FILED WITH THE FTC BY A GROUP KNOWN AS ACT--
ACTION FOR CHILDREN'S TELEVISION.
ACT IS CAMPAIGNING AGAINST ADVERTISING ON CHILDREN'S TV PROGRAMS. THEY
HAVE ASKED THE FTC TO PROHIBIT TOY ADVERTISING ON CHILDREN'S TV AND HAVE SOUGHT
TO BAR ALL ADVERTISING OF VITAMINS AND OTHER DRUGS FROM CHILDREN'S TV PROGRAMS
AS WELL AS FROM FAMILY SHOWS. ACT CONTENDS THAT SUCH ADVERTISING IS UNFAIR
AND MISLEADING.
ACT NOW IS PROJECTING A THIRD PHASE IN ITS CAMPAIGN--A PETITION TO GET
THE FTC TO PROHIBIT THE ADVERTISING OF EDIBLES ON CHILDREN'S TV SHOWS.
ACT ALSO HAS GONE TO THE FEDERAL COMMUNICATIONS COMMISSION IN AN ATTEMPT
TO GET ADVERTISING RULED OFF CHILDREN'S TV SHOWS. THE FCC DECIDED EARLY LAST
YEAR TO TREAT ACT'S PETITION IN A RULEMAKING PROCEDURE FOR WHICH COMMENTS
HAVE BEEN SUBMITTED.
WHAT IS PROBABLY OF GREATEST INTEREST TO ADVERTISING AGENCIES AND AD
VERTISE S IS THE FTC ATTEMPT TO HAVE THE FCC ENLARGE ITS FAIRNESS DOCTRINE
TO INCLUDE PRODUCT COMMERCIALS.
WHAT THE TTC WANTS TO DO IS TO OPEN UP TV TO COUNTERADVERTISING. THIS WOULD
BE ADVERTISING AIMED AT REBUTTING THE CLAIMS MADE IN SPOTS CONTAINING SO-CALLED
"CONTROVERSIAL" MESSAGES.
THE FTC WANTS THE FCC TO ESTABLISH RULES CREATING "OPEN AVAILABILITY" FOR
PAID ADVERTISING AND PAID COUNTERADVERTISING. IN ADDITION, THE FTC WANTS FREE
ACCESS GIVEN - IN PRIME TIME - FOR THE DISCUSSION OF CONTROVERSIAL ISSUES
RAISED BY COMMERCIAL MESSAGES.
THE FTC POINTED TO FOUR KINDS OF ADVERTISING THAT MIGHT BE ATTACKED BY
COUNTER-ADVERTISERS.
ONE IS ADVERTISING MAKING CLAIMS OF PRODUCT PERFORMANCE OR CHARACTERISTICS
THAT EXPLICITLY RAISE CONTROVERSIAL ISSUES. AN EXAMPLE IS ADVERTISING OF
GASOLINE OR OIL THAT STATES OR IMPLIES THAT THE PRODUCT WILL NOT POLLUTE THE
ENVIRONMENT.
ANOTHER IS ADVERTISING STRESSING BROAD RECURRENT THEMES AFFECTING A
PURCHASE DECISION IN A WAY THAT RAISES CONTRIVERSIAL ISSUES OF CURRENT NATIONAL
IMPORTANCE. EXAMPLES ARE FOOD COMMERCIALS THAT MAY BE VIEWED AS ENCOURAGING
POOR NUTRITIONAL HABITS.
STILL ANOTHER TYPE OF ADVERTISING OPEN TO COUNTER-ADVERTISING IS THE
ADVERTISING CLAIM THAT RESTS UPON OR RELIES UPON SCIENTIFIC PREMISES WHICH
ARE CURRENTLY SUBJECT TO CONTROVERSY WITHIN THE SCIENTIFIC COMMUNITY. FOR
EXAMPLE, A DRUG MAY BE ADVERTISED AS EFFECTIVE, BASED ON SUBSTANTIAL SCIENTIFIC
PROOF, BUT THE PROOF MAY BE DISPUTED BY SOME MEMBERS OF THE SCIENTIFIC COMMU
NITY. THE FTC CONTENDS THE DIFFERENCE OF OPINION SHOULD BE AIRED so THE
WHAT IS PROBABLY OF GREATEST INTEREST TO ADVERTISING AGENCIES AND AD_
VERTISE S IS THE FTC ATTEMPT TO HAVE THE FCC ENLARGE ITS FAIRNESS DOCTRINE
TO INCLUDE PRODUCT COMMERCIALS.
WHAT THE TTC WANTS TO DO IS TO OPEN UP TV TO COUNTERADVERTISING. THIS WOULD
BE ADVERTISING AIMED AT REBUTTING THE CLAIMS MADE IN SPOTS CONTAINING SO-CALLED
"CONTROVERSIAL" MESSAGES.
THE FTC WANTS THE FCC TO ESTABLISH RULES CREATING "OPEN AVAILABILITY" FOR
PAID ADVERTISING AND PAID COUNTERADVERTISING. IN ADDITION, THE FTC WANTS FREE
ACCESS GIVEN - IN PRIME TIME - FOR THE DISCUSSION OF CONTROVERSIAL ISSUES
RAISED BY COMMERCIAL MESSAGES.
THE FTC POINTED TO FOUR KINDS OF ADVERTISING THAT MIGHT BE ATTACKED BY
COUNTER-ADVERTISERS.
ONE IS ADVERTISING MAKING CLAIMS OF PRODUCT PERFORMANCE OR CHARACTERISTICS
THAT EXPLICITLY RAISE CONTROVERSIAL ISSUES. AN EXAMPLE IS ADVERTISING OF
GASOLINE OR OIL THAT STATES OR IMPLIES THAT THE PRODUCT WILL NOT POLLUTE THE
ENVIRONMENT.
ANOTHER IS ADVERTISING STRESSING BROAD RECURRENT THEMES AFFECTING A
PURCHASE DECISION IN A WAY THAT RAISES CONTRIVERSIAL ISSUES OF CURRENT NATIONAL
IMPORTANCE. EXAMPLES ARE FOOD COMMERCIALS THAT MAY BE VIEWED AS ENCOURAGING
POOR NUTRITIONAL HABITS.
STILL ANOTHER TYPE OF ADVERTISING OPEN TO COUNTER-ADVERTISING IS THE
ADVERTISING CLAIM THAT RESTS UPON OR RELIES UPON SCIENTIFIC PREMISES WHICH
ARE CURRENTLY SUBJECT TO CONTROVERSY WITHIN THE SCIENTIFIC COMMUNITY. FOR
EXAMPLE, A DRUG MAY BE ADVERTISED AS EFFECTIVE, BASED ON SUBSTANTIAL SCIENTIFIC
PROOF, BUT THE PROOF MAY BE DISPUTED BY SOME MEMBERS OF THE SCIENTIFIC COMMU
NITY. THE FTC CONTENDS THE DIFFERENCE OF OPINION SHOULD BE AIRED so THE
PUBLIC COULD MAKE ITS PURCHASING DECISION IN FULL KNOWLEDGE OF THE DIFFERENCE
IN OPINION.
A FOURTH KIND OF ADVERTISING SUBJECT TO COUNTER-ADVERTISING IS ADVERTISING
THAT IS SILENT ABOUT THE NEGATIVE ASPECTS OF THE ADVERTISED PRODUCT. THIS
MIGHT APPLY TO ADVERTISING OF SMALL CARS, IF LOW COST AND ECONOMY OF OPERATION
WERE PLAYED UP AND SAFETY COMPARISONS WITH LARGER CARS WERE OMITTED.
ALL OF THIS RAISES THE QUESTION: WHO WOULD MONITOR THE COUNTER-ADVERTISING
TO MAKE SURE IT DID NOT CONTAIN FALSE OR DECEPTIVE STATEMENTS?
THE FTC IS NOT SEEKING TO EXTEND THE SO-CALLED FAIRNESS DOCTRINE TO NEWS-
PAPER AND MAGAZINE ADVERTISING.
A U.S. COURT OF APPEALS IN WASHINGTON HAS ALREADY HEAD THAT THE FAIRNESS
DOCTRINE MAY BE APPLIED TO A PRODUCT COMMERCIAL. THIS OCCURRED WHEN AN EN
VIRONMENTAL ORGANIZATION CALLED FRIENDS OF THE EARTH UNSUCCESSFULLY SOUGHT
TIME TO COUNTER ADVERTISING FOR HIGH POWERED AUTOMOBILES AND LEADED GASOLINES
ON THE GROUND THAT THEY ARE SOURCES OF POLLUTION.
THE FRIENDS OF THE EARTH CASE IS RELATED TO THE FEDERAL COMMUNICATIONS
COMMISSION DECISION OF 1969 WHICH HELD THAT CIGARETTE ADVERTISING IS A CON_
TROVERSIAL ISSUE AND REQUIRED BROADCASTERS TO CARRY ANTI-SMOKING MESSAGES.
HOWEVER, THE FCC ASSERTED AT THAT TIME--AND SINCE THEN--THAT CIGARETTS ARE A
UNIQUE CASE.
THAT WRAPS UP MY RUNDOWN ON MATTERS OF MOMENT TO ADVERTISERS IN THE CON-
GRESS AND IN THE GOVERNMENT AGENCIES. I WILL NOW TRY TO ANSWER ANY QUESTIONS
YOU MAY HAVE.
R.FORD
NOTE-- (HERE IS ADDITIONAL INFORMATION ON CHILDREN'S TV. REP. TORBERT MACDONALD ALBRARY
*******
39
OF THE HOUSE COMMERCE COMMITTEE'S COMMUNICATIONS SUBCOMMITTEE HAS INDICATED
HE WILL HOLD HEARINGS ON CHILDREN's TV SOMETIME THIS WINTER. HE HAS NOT YET
SET A DATE.)
JEBARY
(Advertising
ADDITIONAL SUGGESTED REMARKS BEFORE AD CLUB
EARLIER I MENTIONED THAT THE FTC IS THE "BOGEYMAN" OF ADVERTISERS. TO
KEEP MATTERS IN PERSPECTIVE I SHOULD QUOTE FROM A RECENT SPEECH BY GERALD J.
THAIN, ASSISTANT DIRECTOR FOR NATIONAL ADVERTISING OF THE FTC'S BUREAU OF
CONSUMER PROTECTION. THAIN SAYS IT JUST ISN'T TRUE THAT THE FTC IS OUT TO
DESTROY ADVERTISING AS AN INDUSTRY "TO THE CONTRARY SEE YOUR
INDUSTRY AS ONE ESSENTIAL TO A FUNCTIONING FREE ENTERPRISE ECONOMY. MY
DIVISION'S EFFORTS ARE DESIGNED TO FURTHER LEGITIMATE ADVERTISING BY ATTACKING
THOSE ADVERTISERS WHO ABUSE THE LAW.
RECENT EMPHASIS BY THE FTC HAS BEEN ON CORRECTIVE ADVERTISING, FORCING
ADVERTISERS TO DOCUMENT THEIR CLAIMS, AND REQUIRING ADVERTISERS TO SUBMIT DATA
TO SUBSTANTIATE ADVERTISING CLAIMS WITH RESPECT TO "THE SAFETY, PERFORMANCE,
EFFICACY, QUALITY OR COMPARATIVE PRICE OF THE PRODUCT ADVERTISED". THE FTC
ALSO HAS TAKEN TO NAMING THE ADVERTISING AGENCY WHICH PREPARED AN ILLEGAL AD
VERTISEMENT AS A RESPONDENT IN A COMMISSION PROCEEDING, AS WAS DONE IN THE
OCEAN SPRAY CRANBERRY JUICE CASE.
SINCE ANNOUNCING ITS SUBSTANTIATION OF CLAIMS PROGRAM, THE FTC HAS so FAR
ISSUED ORDERS TO MEMBERS OF FOUR MAJOR INDUSTRIES TO PRODUCE DOCUMENTATION FOR
THEIR ADVERTISING: THE AUTOMOBILE INDUSTRY; THE AIR CONDITIONING INDUSTRY
/
THE
TELEVISION INDUSTRY; AND THE ELECTRIC SHAVER INDUSTRY. THESE REQUESTS FOR
DATA APPLY TO BOTH ADVERTISEMENTS IN THE PRINTED MEDIA AND ON NATIONAL TELEVISION.
ON OCTOBER 13, 1971, THE FTC RELEASED TO THE PUBLIC THE DOCUMENTATION PROVIDED
TO IT BY AUTOMOBILE MANUFACTURERS TO DOCUMENT THEIR CLAIMS. IT IS QUESTIONABLE
HOW VALUABLE SUCH INFORMATION IS TO THE CONSUMER, BUT THE FTC BELIEVES PUBLIC
DISCLOSURE CAN ENHANCE COMPETITION BY ENCOURAGING COMPETITORS TO CHALLENGE
ADVERTISING CLAIMS WHICH HAVE NO BASIS IN FACT.
ADDITIONAL SUGGESTED REMARKS BEFORE AD CLUB - Page 2
AN AREA OF FTC ACTIVITY WHICH HAS IMPORTANT IMPLICATIONS FOR ADVERTISING
IS THE ATTENTION THE FTC HAS BEEN GIVING TO THE ADVERTISING OF FOOD PRODUCTS.
THE WHITE HOUSE CONFERENCE ON FOOD, NUTRITION AND HEALTH STATED IN ITS FINAL
REPORT TO THE PRESIDENT THAT NO OTHER AREA OF THE NATIONAL HEALTH PROBABLY IS
AS ABUSED BY DECEPTION AND MISINFORMATION AS NUTRITION. SINCE THAT REPORT WAS
ISSUED, THE FTC HAS AGGRESSIVELY REGULATED FOOD ADVERTISING. SPECIFICALLY,
THE COMMISSION HAS CHALLENGED NUTRITIONAL CLAIMS MADE FOR SUCH PRODUCTS AS
COCA-COLA'S "HI-C" FRUIT DRINKS, OCEAN SPRAY CRANBERRY JUICE COCKTAIL, WONDER
BREAD, SWIFT'S BABY FOOD, AND CARNATION INSTANT BREAKFAST.
IF WE LOOK AHEAD AT POSSIBLE FTC ACTIVITY, WE CAN EXPECT THE COMMISSION
TO PAY SPECIAL ATTENTION TO ADVERTISING AIMED AT "SPECIAL AUDIENCES" SUCH AS
THE GHETTO DWELLER, THE ELDERLY, THE HANDICAPPED, AND ESPECIALLY CHILDREN. THE
FTC STAFF HOLDS THAT WHETHER AN ADVERTISING PRACTICE IS UNFAIR OR DECEPTIVE
UNDER THE FEDERAL TRADE COMMISSION ACT DEPENDS PRIMARILY ON THE INTENDED
CONSUMER'S UNDERSTANDING OF A STATEMENT OR REPRESENTATION, AND ITS EFFECT ON
HIM. THAT TEST IS NOT LIMITED TO THE UNDERSTANDING OF A "REASONABLE ADULT".
ADVERTISING TO CHILDREN, THEREFORE, MAY BE JUDGED UNDER THE ACT ACCORDING TO THE
WAY CHILDREN UNDERSTAND ITS MEANING AND ARE AFFECTED BY IT. A MARKETING OR
PROMOTIONAL PRACTICE, DIRECTED IN SUBSTANTIAL PART TOWARD MINORS, THAT
INTERFERES SUBSTANTIALLY AND UNJUSTIFIABLY WITH THEIR FREEDOM OF BUYING CHOICE,
IS CONSIDERED AN UNFAIR OR DECEPTIVE ACT OR PRACTICE AND THUS VIOLATES THE FTC
ACT EVEN IF IT MIGHT NOT BE UNFAIR OR DECEPTIVE IF APPLIED ONLY TO ADULTS.
GERALD R. LIBRARY FORD
MU mustry Starts Out
On Self-Regulation Path
By NEAL W. O'CONNOR
the National Advertising Divi.
President, N. W. Aper & Son
sion will work with the adver-
Examining the past year in
tises to try to correct the ad-
the advertising business, and
vertising.
looking shead to 1972, J have
-11 this falls, the complaint
to use the same word to char-
will be taken up with a panel
acterize what 1 are in each di-
drawn from the NARB. The
rection: Encouraging.
panel will decide whether or
1 am eprouraged by the
not to support the National
emergence in 1871 of the form-
Advertising Division's prelimi-
at structure for what 1 believe
nary findings.
can be a workable system of
-11 it does, and the adver-
sell Issulation to ensure trub
tiser returns to take correo-
1701 accuracy in advertising.
tive action, the NARB will an-
The system BAR developed
nounce its findings to the
through the leadership of Tour
preas. All materials relating
DiRAbizations - the American
to the case will be made avail-
Association of Advertising
able to the Federal Trade
Agencies, the American Ad
Commission or other appropri-
vertising Federation, the Asso-
are government agency.
cistion of National Advertis-
As one of the agency repre-
ers and the Council of Better
sentatives on the NARB, 1 be
Business Bureaus,
lieve that if we do our work
well, complaints will he set-
Public on Board
tied in private. The only time
The heart of the DRIVE system
the public will hear about one
of self-regulation is A new in-
is if we cap't.
dependent organization, the
Leaner, But Sharper
Personal Advertising Review
A lot of people think this
won't work. Not just consum-
Advertising agencies
er activities, but legal coun-
sely of a lot of client compa-
have come through a
nies.
difficult, two - year
I've been close enough to the
program in all the planning
recession leaner but
stages to know, however, that
chief executives of all major
sharper
advertisers and agencies I've
spoken to are totally in favor
of it.
Board (NARB). with advertis.
They want it to succeed.
ers. agency executives, and
1 am encouraged that He're
representatives of the public
as members.
been able to establish this
The avarents now going In.
mechanism to help make ad-
to operation, will sweek
vertising more responsible to
the public and to itself.
through n newly organized
National Advertising DISTRION
An 1 look at the general
in the Council of BATER HALL
state of the advertising busin.
ness today. 1 also find reason
need BUSCAUE 11) receive. eval-
Date and UTY on complaints
to be encouraged.
from any public or industry
Advertising agencies have
come through a difficult, two
source on the honesty of na-
tionk) advertising.
year recession leaner but
If an ed is found misleading,
sharper, and in & strong part-
there are three principal steps
tion to meet the requirements
that will follow:
of clients If a business upswing
-The professional staff of
develops in 1972.
Many economists say it will
Suab as have the media set ad rates, radio, TV, newspapers, ctc.
a
Dauble billing a device whereby retailers are sent two bills
the real price of the ad and a puffed-up price for the advertiser's use
in getting his supplier to pay more of the promotional expense. Also
setting different rates for national and local firms on similar products.
And combination rates that force advertisers to place their ads
in more than one outlet owned by media firms. Also quantity discounts
large advertisers are charged substantially lower rates than the smalls.
Gov't isn't convinced these practices are illegal in every case,
but sellers of ads may eventually have to justify their continued use.
Ads that jump on the competition the media usually nix them,
"poor taste" but gov't thinks that ads should compare rival products
for benefit of the consumers, so will slam codes that bar this practice.
A big flop
govt's plan to force companies to prove their ads.
Fed. Trade promised to make selected lines file substantiating evidence,
which would then be made public 50 consumers could check on the honesty.
But it's not working. For example, auto makers sent their technical data
and gov't published without evaluation, hence useless to most people.
Fed, Trade is bogged down by a great flurry of technical papers
from other lines shavers, air conditioners, TV's. Toothpaste to come.
What's ahead is a major overhaul. Gov't won't drop the program.
Wash letter
Kiplinger 30,19.71
FORD LIBRARY y
Remarks by Rep. Gerald R. Ford before the Advertising Federation of Grand Rapids,
12 noon, Friday, Jan. 14, 1972.
Today I hope to bring you up to date on what's happening in Congress and in the
bowels of the bureaucracy which is of interest to advertisers.
But first of all let me congratulate the advertising industry on its recently
announced plans to regulate itself. I am told this self-regulation is aimed at
ensuring truth and accuracy in advertising. I don't know if the result will be
to blunt some of the attacks being made on the advertising industry, but that may
be the upshot.
Now let me go immediately to developments you may expect in the Congress, which
will begin its second session next Tuesday.
Let's take a look at warranty legislation. The Senate passed a warranty bill
last Nov. 8. In the House, a subcommittee has concluded hearings on warranty
legislation but has not yet gone into executive session to mark up a bill.
Title I of the Senate bill establishes Federal minimum standards for written
warranties. That is also the substance of Title I of the House bill introduced by
the subcommittee chairman and it appears the Senate version could be accepted by the
House subcommittee.
Title II of the Senate warranty bill amends the Federal Trade Commission Act
to broaden FTC's powers. The Administration** warranty bill contains no such
provisions. The Administration has introduced separate legislation which would give
the FTC injunctive powers. Republican members of the House subcommittee seem to feel
that any broadening of FTC powers should be the subject of separate legislation, so
they will probably oppose Title II of the Senate warranty bill.
Then we have the Flammable Fabrics Act expansion and extension. That is House
bill HR. 5698, which is much like a bill which passed the Senate in the 91st Congress.
This would require an approved testing program by each manufacturer for any flammability
standard set and a certification by the manufacturer that his products meet the
standard. The bill provides criminal and civil penalties up to $10,000 and three
years. It would give enforcement powers to the Commerce Department. House hearings
have been concluded and indicate a power struggle between the FTC and the Commerce
Department over which agency should enforce the Act. The outcome is in doubt.
come
Now we could to a discussion of the advertisers' bogeyman, the FTC.
There is no question that the FTC is going after the advertising industry.
For one thing, they are going to check on advertising rates--how they are set. They
will look into double billing and combination rates. The FTC isn't saying these
sellers of ads
practices are illegal. But
may have to justify their continued use.
FORD
One of the latest developments is a possible FTC crackdown on toy advertising.
This stems from petitions filed with the FTC by a group known as ACT--Action for
LIBRARY
-2-
Children's Television.
ACT Is campaigning against advertising on children's TV programs. They have
asked the FTC to prohibit toy advertising on children's TV and have sought to bar
all advertising of vitamins and other drugs from children's TV programs as well as
from family shows. ACT
contends that such advertising is unfair and misleading.
ACT now is projecting a third phase in its campaign--a petition to get the FTC
to prohibit the advertising of edibles on children's TV shows.
ACT also has gone
to the Federal Communications Commission in an a ttempt to
get advertising ruled off children's TV shows. The FCC decided early last year to
treat ACT's petition in a rulemaking procedure for which comments have been submitted.
What is probably of greatest interest to advertising agencies and advertisers
is the FTC attempt to have the FCC enlarge its
Fairness Doctrine to include
product commercials.
What the FTC wants to do is to open up TV to
counteradvertising.
This would be advertising aimed at rebutting the claims made in spots containing
so-called "controversial" messages.
The FTC wants the FCC to establish rules creating "open availability" for paid
advertising and paid counteradvertising.
In addition, the FTC wants free access
given--in prime time-ford
the discussion of controversial
issues raised
by commercial messages.
The FTC pointed to four kinds of advertising that might be attacked by
counter-advertisers.
One is advertising making claims of product performance or X characterists
that explicitly raise controversial issues. An example is advertising of gasoline
or oil that states or implies that the product will not pollute the envi fronment.
Another is advertising stressing broad
recurrent themes affecting a
purchase decision in a way that raises controversial issues of current national
importance. Examples are food commercials that may be viewed as encouraging poor
nutritional habits.
Still another type of advertising open to counter-advertising is the
advertising claim that rests upon or II relies upon scientific premises which
are currently subject to controversy within the scientific community. For
example, a drug may be advertised as effective, based on substantial scientific
proof, but the proof may be disputed
by some members of the scientific
community. The FTC contends the difference of opinion should be
aired so the
public could make its purchasing decision in full knowledge of the difference in
opinion.
-3-
A fourth kind of advertising subject to counter-advertising is advertising that
is silent about the negative aspects of the advertised product. This might apply to
advertising of small cars, if low cost and economy of operation were played up and
safety comparisons with larger cars were omitted.
All of this raises the question: Who
would monitor the counter-advertising
or
to make sure it did not contain false
deceptive statements?
The FTC is not seeking to extend the so-called
Fairness Doctrine to newspaper
and magazine advertising.
A U.S. appeals court
in Washington has already held
that the
Fairness Doctrine may be applied to a product commercial. This occurred
when an environmental organization called Friends of the Earth unsuccessfully sought
time to counter advertising for high-powered
automobiles and leaded gasolines
on the ground that they are sources of pollution.
The Friends of the Earth case is
related to the Federal Communications
Commission decision of
1969 which held that cigarette advertising is a
controversial issue and required broadcasters to carry anti-smoking messages. However,
the FCC asserted at that time-and since then-that cigarettes are a unique case.
That wraps up my rundown on matters of moment to advertisers in the Congress
now
and in the government agencies. I will
try to
answer any questions you may
have.
NOTE:
(Here is additional information on children's TV. Rep. Torbert MacDonald of the
House
Commerce Committee's communications subcommittee has indicated he will
hold hearings on children's
TV sometime this winter. He has not yet set a date.)
FORD & LIBRARY GERALD
Additional Suggested Remarks before Ad Club
Earlier I mentioned that the FTC is the "bogeyman" of advertisers. To
keep matters in perspective I should quote from a recent speech by Gerald J.
Thain, assistant director for National Advertising of the FTC's Bureau of
Consumer Protection. Thain says it just isn't true that the FTC is out to
destroy advertising as an industry and he adds: "To the contrary, I see your
industry as one e ssential to a functioning free enterprise economy. My
division's efforts are designed to further legitimate advertising by attacking
those advertisers who abuse the law."
Recent emphasis by the FTC has been on corrective advertising, forcing
advertisers to document their claims, and requiring advertisers to submit
data to substantiate advertising claims with respect to "the safety, performance,
efficacy, quality or comparative price of the product advertised. " The FTC also
has taken to naming the advertising agency which prepared an illegal advertisement
as a respondent in a commission proceeding, as was done in the Ocean Spray
Cranberry Juice case.
Since announcing its substantiation of claims program, the FTC has so far
issued orders to members of four major industries to produce documentation for
their advertising: the automobile industry; the air condi tioning industry;
the television industry; and the electric shaver industry. These requests for
data apply to both advertisements in the printed media and on national television.
On Oct. 13, 1971, the FTC released to the public the documentation provided to
it by automòbile manufacturers to document their claims. It is questionable
how
valuable such information is to the consumer, but the FTC believes
public disclosure can enhance competition by encouraging competitors to c hallenge
advertising claims which have no basis in fact.
An area of FTC activity which has important implications for
advertising NLD FORD LIBRARA
is the attention the FTC has been giving to the advertising of food products.
add ad club material.
The White House Conference on Food, Nutrition and Health stated in its final
report to the President that no other area of the national health probably is
as abused by deception and misinformation as nutrition. Since that report was
issued, the FTC has aggressively regulated food advertising. Specifically, the
commission has challenged nutritional claims made for such products as Coca-Cola's
"Hi-C" fruit drinks, Ocean Spray cranberry juice cocktail, Wonder bread, Swift's
baby food, and Carnation Instant Breakfast.
If we look
ahead at possible FTC activity, we can expect the commission
to pay special attention to advertising aimed at "special audiences" such as the
ghetto dweller, the elderly, the handicapped, and especially children. The FTC
staff holds that whether an advertising practice is unfair or deceptive under the
Federal Trade Commission Act depends primarily on the intended consumer's
understanding of a statement or representation, and its effect on him. That test
is not limited to the understanding of a "reasonable adult." Advertising to
children, therefore, may be judged under the Act according to the way children
understand its meaning and are affected by it. A marketing or promotional
practice,
directed in substantial part toward minors, that interferes
substantially and unjustifiable with their freedom of buying choice, is
considered an unfair
or deceptive act or practice and thus violates the FTC
Act even if it might not be unfair or deceptive
if applied only to adults.
#######
FORD & LIBRARY GERALD