American Association of Advertising Agencies - 4A's - IST 618 Final Project

American Association of
Advertising Agencies, Inc. (4A’s)
IST 618 Final Project /
Laurie Tewksbury / April 2013

1

Section 1 Identifying the organization
section 2 membership
section 3 Public Policy Agenda
Section 4 Member interest in the policies advocated
Section 5 References

CONTEntS
2


CONTEntS
3

Organization info:
o  Founded in 1917 as a national trade
association

o  Represents advertising agencies in the
United States

o  750 members, which account for 80%
of the total national advertising volume

o  Members are both large, multinational
agencies and small agencies billing less
than $10 million per year

o  http://www.aaaa.org

(American Association of Advertising Agencies, Inc., 2013)

4

MISSION:
“To improve and strengthen the advertising
agency business in the United States by
counseling members on operations and
management, by providing the collective
experience of the many to each, by fostering
professional development, by encouraging the
highest creative and business standards, and by
attracting excellent people to the business.”

“To work with Federal, state, and local
governments to help achieve desirable social
and civic goals, to influence public policy, to
resist unwise or unfair legislation and regulation,
and to be the principal source of information and
advice about advertising.”

Additionally, the 4A’s mission includes
advocating advertising, representing agency
point of views to advertisers and media,
facilitating pro bono advertising work, and
counseling and professional development to
member agencies.


5

o  750 members, which account for 80% of the
total national advertising volume

6

7

SHORT-TERM GOALS LONG-TERM GOALS
“Promote friendly relations among all advertising Foster social responsibilities of advertising and
agencies and marketing communication marketing
organizations”
“Maintain friendly relations with associations “Fostering and stimulating scientiﬁc research and
representing advertisers, media, suppliers, and innovation” to continually improve advertising
consumers”
“Maintain and safeguard honesty, fairness and
good taste”
Work with the government and consumers on
matters, which affect advertising (American Association of Advertising Agencies, Inc., 2013)

8


CONTEntS
9

“The average 4A’s agency has been a member for more
than 20 years, and a dozen agencies can trace their
memberships back to the group of 111 agencies that
founded the 4A’s in 1917” (American Association of
Advertising Agencies, Inc., 2013).

Can be privately held or publicly
traded. And it’s members employ In addition, colleges and
approximately 65,000 people across universities with advertising
the United States. studies can also seek
750 membership to provide for
members with its faculty and students. The
membership fee for colleges
1250 branch
and universities are $3,000
ofﬁces. per year.

Section 2 Membership
10

Benefits of membership:

o  Consulting and advisory services on a variety
of management-related topics

o  Training and professional development
programs

o  Government relations team in Washington,
giving agencies a voice with government,
lobbying groups and other trade associations

o  Research services, including access to
specialists and numerous databases

o  Insurance and employee beneﬁts


11

How to join:
Agencies of all sizes can join the association and agency size does not play a role in membership.
They do, however, require that organizations are:

1.  An advertising agency or other organization that creates and/or places advertising or marketing
communications, which a minimum of 50% of the gross income must result from payment for
services;

2.  Adequately equipped to service its business;

3.  Its principal owners have been in business for at least two years;

4.  Have ofﬁces in the United States;

5.  Be in operating control of the agency and must disclose all facts related to ownership, control,
and bias;

6.  Maintain service standards and operate at a high level of professionalism and ethical standards;

7.  Advertising ability; and lastly,

8.  Financial responsibility and stability.

American Association of Advertising Agencies, Inc., 2013

12

As a member,
you must uphold a strong and ethical
standard of practice.

The following standards of practice have been revised in 2011 and are required of all
members. Some of the standards include staying competitive yet ethical, should
compete on merit, place a high priority on recruiting and retaining top, diverse talent,
and following a creative code of which was developed with the public interest in mind.


13

4A’s Creative Code
The creative code requires of members to “not knowingly create advertising that
contains:
False or misleading statements or exaggerations,
visual or verbal

Testimonials that do not reflect the real opinion of the
individual(s) involved

Price claims that are misleading

Claims insufﬁciently supported or that distort the true
meaning or practicable application of statements made by
professional or scientiﬁc authority

Statements, suggestions, or pictures offensive to public
decency or minority segments of the population


14


CONTEntS
15

4A’s Lobbying
the government

The 4A’s spends a portion of their time and energy on lobbying the government on
matters that affect the advertising and marketing communications industry.

Some of the matters in which they are currently lobbying include advertising
deductibility, anti-piracy and counterfeiting, children’s advertising, consumer data
privacy, and patent trolling (American Association for Advertising Agencies, Inc.,
2013). With a continually changing and innovative industry, perhaps two of the most
talked about matters in the industry right now are children’s advertising and
consumer data privacy.

Section 3 public policy agenda
16

Partner of CFBAI
“Committed signiﬁcant effort toward Supporter of COPPA

The CFBAI is a voluntary self- establishing responsible practices in two The Children’s Online Privacy
regulatory program comprised of Protection Act, which sets
key areas: food and beverage advertising
16 of the industry’s largest requirements to website
to children and online advertising operators regarding advertising to
companies, which promote
healthy choices to children under
to children.” children under the age of 13.
(American Association of Advertising
the age of 12.
(American Association of Advertising Agencies, Inc., 2013) Agencies, Inc., 2013)
(Council of Better Business Bureaus, 2013)

17

CFBAI Children’s advertising
Advertising to children is a controversial topic primarily because children are easily influenced and
therefore the industry is “making kids want what they don’t need.” Advertising to children, under the
age of 13, is a large market with a spending power of approximately $1 trillion.

The 4A’s are involved in policies regarding children’s advertising, especially as it relates to food and
beverage to help battle the childhood obesity epidemic. “According to the American Academy of
Pediatrics (AAP), the average child watches about four hours of television a day and sees more than
20,000 commercials each year, often for high-fat, high-sugar and high-salt snacks and foods.” The
4A’s, along with the rest of the advertising industry, is proactive about keeping children’s advertising
ethical and effective.
(Advertising Educational Foundation, 2005)

Children advertising policies

Other than the 1990’s Children’s Television Act,
which limits the amount of advertising that can
be aired during children’s shows, the majority of
the children’s advertising policies in the United
States are self-regulatory or simply restrictions.
However, this does not mean that the 4A’s
haven’t had a large role in children’s advertising
policy making.

18

The CFBAI, as a part of the Better Business Bureau, is a voluntary
self-regulatory program comprised of 16 of the industry’s largest
companies, which promote healthy choices to children under the
age of 12.
(Council of Better Business Bureaus, 2013)

According to the 2012 Federal Trade Commission report, food
spending on advertising is down by 19.5%. This shows that the self-
regulation by the CFBAI is effective. Additionally, the CFBAI
“committed to stricter nutrition guidelines for children under 12.”

(Bachman, 2012)

19

As a part of the CFBAI, the 4A’s spend a lot of time defending the advertising industry from lobbyists
that insist that advertising is a large cause of the obesity epidemic. To counteract this, the 4A’s are
also part of working groups to show children and their families how to live an active and healthy
lifestyle.

Advertising industry position

Parents must take responsibility for their children including what they can and cannot see, their
education and what activities in which they’re involved.

The current controls in broadcast advertising are sufﬁcient in determining which advertisements can
be aired.

Legal injunctions against food advertising would be a violation of the First Amendment.

20

COPPA Children’s advertising
The Children’s Online Privacy Protection Act (COPPA) became a
federal law in 1998. This law explains how advertising online to
children must be done, including the collection of personal
information of children under 13; requiring consent from a parent or
guardian. In 2011, the FTC proposed to update the law to keep up
with the current digital practices.
(Federal Trade Commission, 2013)

21

COPPA Children’s advertising
In 2011, the 4A’s have submitted comments to
the FTC regarding the proposed update.

If approved, the update would “revise the
deﬁnition of ‘personal information’ to include
geo-location data and persistent identiﬁers,
such as online-tracking cookies” as well as new
ways to receive parental consent.
(Dove, 2011)

Then again in 2012, the 4A’s provided comments
to the FTC arguing that their new provisions would
go beyond the scope of COPPA and would affect
online-behavioral advertising, which is currently
self-regulated. If passed, the new COPPA would
require advertisers to collect additional
information in order to comply.
(Digital Advertising Alliance, 2012)

22

As an association of advertising agencies, the 4A’s have a unique role to
play regarding data privacy. As agencies, they want the best consumer
data they can get to create the most personalized and effective
advertisements. Consumer data allows agencies to create effective
campaigns by reaching the consumer at the right time with the right
message. This data can also be used to receive consumer feedback.

There is a lot of confusion surrounding online consumer data as it relates
to advertising, which causes a lot of consumer skepticism around both the
collection and the use of their data.

23

“Privacy is a complex policy issue with a multitude of consumer
expectations. These expectations can depend, variously, on age,
gender, geography, community, social dynamics and Internet
familiarity—as well as on established law and regulation.”


24

Founding member of DAA
Do-not-track movement

“The 4A’s believes strongly that
The 4A’s have been lobbying
legislation is ill-equipped to address against the do-not-track (DNT)
consumer privacy concerns in such a act about consumer browsing
fast-developing environment as the activity. If this act were to pass, it
Internet.” would be a signiﬁcant setback to
the advertising industry.

25

DAA Consumer data privacy

4A’s have also become a founding member of As a member of the DAA, the 4A’s created
the Digital Advertising Alliance (DAA), in which ‘Your Ad Choices,’ an education platform,
they ensure consumer privacy protection in which displays the logo whenever internet
internet advertising. Other members include the advertising is in place on a website. This
American Advertising Federation, Association logo allows consumers to know that their
of National Advertisers, Better Business Bureau, data is being used to personalize the web
Direct Marketing Association, Interactive for them and, if clicked, will walk the
Advertising Bureau and Network Advertising consumer step-by-step through the
Initiative. process.

(American Association of Advertising Agencies, Inc., 2013) (Digital Advertising Alliance, 2013)

26


1.
3.

2.

27

Back in 2009

The FTC had asked for self-regulation of online behavioral based ads.
The 4A’s, as part of the DAA, responded with with practices that would make the
process more transparent to consumers. It includes the following 7 principles.
1.  Education
2.  Transparency
3.  Consumer Control
4.  Data Security
5.  Material Changes
6.  Sensitive Data
7.  Accountability

(American Association of Advertising Agencies, et al., 2009)

Then in 2011

The DAA expanded the scope of it’s self-regulatory program in order to keep the government from
stepping in to control the industry. They expanded the program to cover “all online data collection
and use, not just data collected for the purposes of advertising.” Consumers could now begin
to opt-out of data collection for other purposes.

(Bachman, 2011)

28

And later in 2012

President Obama released his Consumer Privacy Bill of Rights, which offered similar principles as
the DAA’s self-regulation.

(Meece, 2012)

Accountability Transparency
The 4A’s, as part of the DAA, is being incredibly
proactive regarding consumer data privacy to
avoid being controlled by the government.

Consumer data is crucial to advertising and, Focused Respect for
collection context
therefore the industry needs to comply with all
requests to respect consumer privacy. The
industry has worked diligently to prove that
they are not misusing consumer data.
Access and
Security
Accuracy
Overall, these self-regulations have allowed for
advertising to stay relevant to consumers and
provide great insight to companies and
agencies.
Consumer Privacy Bill of Rights Principles

29

DNT Consumer data privacy

Do-not-track
movement

Another key matter the 4A’s are currently tackling is the “Do-Not-Track” (DNT) acts. These
acts were brought to the senate in 2003 and just recently in March of 2013. According to
Dan Mitchell, the act “would allow users to opt in to a browser setting that would tell third
parties, usually advertisers, not to track their browsing activity” (2013). If this act were to
pass, it would be a signiﬁcant setback to the advertising industry. The industry argues
that they should be allowed to regulate themselves and therefore they have been strongly
opposing this regulation (Mitchell, 2013). This regulation would negatively affect the
advertising industry in many ways; including fewer consumer beneﬁts and overall, a less
valuable Internet experience (American Association of Advertising Agencies, 2012).

30

"The DAA does not require companies to honor
DNT signals ﬁxed by the browser

Do-not-track manufacturers and set by them in browsers.
Speciﬁcally, it is not a DAA Principle or in any
way a requirement under the DAA Program to

movement
honor a DNT signal that is automatically set in
IE10 or any other browser. The Council of Better
Business Bureaus and the Direct Marketing
Association will not sanction or penalize
companies or otherwise enforce with respect to
DNT signals set on IE10 or other browsers.”
(Del Rey, 2012)

Not only has the senate seen a “Do-Not-Track” bill, but companies such as Microsoft has gone as
far to develop a browser, which automatically sets the do-not-track option to ‘on.’ Fortunately,
since there are no current regulations surrounding DNT, the 4A’s “are neither expected nor required
to honor a DNT signal that is automatically set in IE v10 (or any other browser in such a
fashion” (American Association of Advertising Agencies, 2012). However, if the industry was
required to honor an automatically set signal, the industry would be prevented “from collecting
data on up to 43 percent of browsers used by Americans” (Singer, 2012).

31

The 4A’s recognize the balance needed when it comes to consumer data privacy and through the
DAA self-regulatory program explained earlier, they are keeping the consumer in mind. But, they also
keep the consumer in mind when advocating against the DNT movement. If DNT becomes the
standard, the following negative affects would be felt by consumers and companies.

The quality of the user experience on the Internet would suffer.

•  Ads will no longer be tailored to your interests.
•  The free content you enjoy may no longer be free as it cannot be
supported by the current advertising-supported model.

The advertising industry would face economic issues.

•  The lack of consumer data would lower ad effectiveness and it’s
economic efﬁciency as margins would drop.

32


CONTEntS
33

While the 4A’s are involved in many different
associations and policies, the two policies they are
most involved with include advertising to children
and consumer data privacy. Interestingly, the 4A’s
and the advertising industry are currently
self-regulating both topics yet the government is
receiving a strong push to regulate both.

Regulation of either policy would drastically change
how the advertising industry operates.

Section 4 member interest in the policies advocated
34

Rather than lobbying to pass new policies to benefit the advertising
industry, the 4A’s are lobbying to continue to self-regulate.

If children’s advertising became more regulated, the advertising industry would:

Continue to see a drop in
revenue, especially if the
FTC expands regulations If the updates to COPPA go into effect
to packaging and peer-to- as planned on 7/1/13, advertisers
peer marketing. will have only had 10 weeks to
(Bachman, 2012) prepare for the change.

“The new regs could cause some sites Companies will be
and apps to drastically reduce more reluctant to
functionality or interactivity, force create content for
others behind paywalls or drive some children (fear of
right out of business.” compliance) resulting
(Bachman, 2013) in a loss of revenue for
advertisers. (Fisher, 2013)

35

Rather than lobbying to pass new policies to benefit the advertising
industry, the 4A’s are lobbying to continue to self-regulate.
r
owe
ould l ncy.
ta w ie
er da mic efﬁc
nsum ono
of co d it’s ec
lack n
ues: eness a
iss ctiv
mic e
econo ad eff
If consumer Face

data privacy
became more
Have to pay more for consumer data as it would become more expensive to
regulated, the marketers because fewer companies (only ﬁrst-party data owners)
advertising would have access to this now exclusive data. (Meyer, 2012)
Need
industry would… the c to determ
urren
t (an ine a new
d suc
cess way to pr
ful) m o
odel vide free
of ad c
vertis ontent to
ing w c
ould onsumer
no lo s
nger because
be vi
able.

36

BUT WAIT!
The 4A’s are not lobbying children’s advertising and consumer
data privacy only for their own beneﬁt. Added regulations to the
industry would negatively affect the consumer as well.

Here’s how:

Do-Not-Track and other Regulations on children’s
regulations on targeted The online ads consumers advertising may result in
advertising would require will see will become less companies creating less content
consumers to pay for relevant to their interests (websites, apps, videos, etc.) for
content as it would no and therefore, will become children under the age of 13
longer be supported by more irritating once again.
because the cost and risk to
an advertising model. comply will become too high.

37


CONTEntS
38

Advertising Educational Foundation. (2005). Advertising to children. Retrieved from http://
www.aef.com/on_campus/classroom/speaker_pres/data/3005

American Association of Advertising Agencies, Inc. (2013). American association of advertising
agencies. Retrieved from http://www.aaaa.org/Pages/default.aspx

American Association of Advertising Agencies, Inc. (2013, March 28). Comments regarding the ftc/
dojpatent assertion entity activities workshop. Retrieved from http://www.ftc.gov/os/comments/
pae/pae-0035.pdf

American Association of Advertising Agencies, Inc. , Association of National Advertisers, , Council of
Better Business Bureaus, , Direct Marketing Association, , & Interactive Advertising Bureau, (n.d.).
Self-regulatory principles for online behavioral advertising. (2009). Retrieved from http://
www.bbb.org/us/Storage/0/Shared Documents/online-ad-principles.pdf

Bachman, K. (2011, November 07). Advertisers move to stop digital privacy regulations: Daa
expanding self-regulatory program. Retrieved from http://www.adweek.com/news/
technology/advertisers-move-stop-digital-privacy-regulations-136405

Bachman, K. (2012, December 21). Ftc reports food marketing to children down 19.5%: Commission
urges holdout companies and media to self-regulate. Retrieved from http://www.adweek.com/
news/advertising-branding/ftc-reports-food-marketing-children-down-195-146169

Bachman, K. (2013, April 14). Loads of companies are violating children's privacy: Requesting more
time to comply. Retrieved from http://www.adweek.com/news/advertising-branding/loads-
companies-are-violating-childrens-privacy-148574

Section 5 references
39

Council of Better Business Bureaus. (2013). Children's food and beverage advertising initiative.
Retrieved from http://www.bbb.org/us/childrens-food-and-beverage-advertising-initiative/

Del Rey, J. (2012, October 09). Online ad industry: go ahead and ignore microsoft's 'do not track'
browser. Retrieved from http://adage.com/article/digital/online-ad-industry-ahead-ignore-
microsoft-s-track-browser/237659/

Digital Advertising Alliance. (2012, September 24). Coppa rule review, 16 cfr part 312, project no.
p104503. Retrieved from http://www.aaaa.org/news/agency/PublishingImages/Venable_DAA-
COPPA-Comments_Sept-2012.pdf

Digital Advertising Alliance. (2013). Your ad choices: How internet based advertising ﬁnds you.
Retrieved from http://www.youradchoices.com

Dove, L. (2011, September 16). Federal trade commission revisits children's privacy . Retrieved from
http://www.aaaa.org/advocacy/gov/news/Pages/091611_ftc_privacy.aspx

Federal Trade Commission. (2013). Children's online privacy protection act of 1998 . Retrieved from
http://www.ftc.gov/ogc/coppa1.htm

Fisher, T. (2013, March 7). Changes to the children's online privacy protection act explained.
Retrieved from http://socialmediatoday.com/rachel-boothroyd/1284861/children-s-online-privacy-
protection-act-coppa-changes-explained

40

Meece, M. (2012, February 23). President obama's consumer privacy bill of rights. Retrieved from
http://www.forbes.com/sites/mickeymeece/2012/02/23/president-obamas-consumer-
privacy-bill-of-rights/

Meyers, S. (2012, October 17). The real impact of do not track: It will consolidate dominance of
microsoft, yahoo, facebook, google, amazon, and ebay . Retrieved from http://adage.com/
article/digitalnext/real-impact-track/237808/

Mitchell, D. (2013, March 4). Why do not track faces an uphill road. Retrieved from http://
tech.fortune.cnn.com/2013/03/04/why-do-not-track-faces-an-uphill-road/

Singer, N. (2012, October 13). Do not track? advertisers say, "don't tread on us.". Retrieved from
http://www.nytimes.com/2012/10/14/technology/do-not-track-movement-is-drawing-
advertisers-ﬁre.html?emc=eta1&_r=1&

41

While creating this presentation in April 2013, the 4A’s and the government
were in the midst of updates to both COPPA and the Do-Not-Track Act.

Here’s how to follow up on the policies and the 4A’s progress.

4A’s Children’s Advertising:
http://www.aaaa.org/advocacy/gov/Pages/ChildrensAdvertising.aspx

FTC COPPA:
http://www.business.ftc.gov/privacy-and-security/children’s-privacy

4A’s Consumer Data Privacy:
http://www.aaaa.org/advocacy/gov/Pages/ConsumerDataPrivacy.aspx

FTC Do-Not-Track:
http://www.ftc.gov/opa/reporter/privacy/donottrack.shtml

42

American Association of Advertising Agencies - 4A's - IST 618 Final Project

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Similar to American Association of Advertising Agencies - 4A's - IST 618 Final Project

Similar to American Association of Advertising Agencies - 4A's - IST 618 Final Project (20)

Recently uploaded

Recently uploaded (20)

American Association of Advertising Agencies - 4A's - IST 618 Final Project