17440: ICYMI FTC VS HOLDCO WTF.

MediaPost reported Dentsu, Publicis Groupe, and WPP reached agreements with the Federal Trade Commission to stop engaging in “unlawful collusion that imposed uniform standards on brand safety.”

 

Omnicom and IPG previously reached similar agreements with the FTC during regulatory approval of Omnicom’s acquisition of IPG.

 

The holding companies are not prohibited from continuing to engage in Corporate Cultural Collusion and/or concerted hiring practices that maintain exclusivity.

 

Indeed, the FTC complaints are arguably connected to anti-Woke and anti-DEIBA+ political platforms.

 

FTC: Dentsu, Publicis, WPP Agree To Discontinue ‘Brand Safety’ Standards

 

By Wendy Davis, Joe Mandese

 

The Federal Trade Commission this morning announced agreements with three big agency holding companies — Dentsu, Publicis and WPP — to discontinue what the FTC described as “unlawful collusion that imposed uniform standards on brand safety.”

 

Citing previous agreements by Interpublic and Omnicom as part of the FTC’s regulatory approval of their merger late last year, the federal agency said Dentsu, Publicis and WPP have also agreed to a proposed order that “will stop the alleged coordinated conduct and prevent similar conduct from occurring in the future.”

 

“WPP Media confirms that it has reached agreement on a mutually acceptable consent order with the FTC on a no admit nor deny basis,” WPP Media said in a statement, adding, “We are pleased to finalize this agreement with the FTC which reflects our existing and ongoing commitment to provide our clients with unbiased advice as they decide where to place their media.”

 

“The ad agencies’ brand-safety conspiracy turned competition in the market for ad-buying services on its head,” FTC Chairman Andrew Ferguson said in a statement, adding, “The antitrust laws guarantee participation in a market free from conduct, such as economic boycotts, that distort the fundamental competitive pressures that promote lower prices, higher quality products and increased innovation.”

 

“As we explain in our complaint, the brand-safety agreement limited competition in the market for ad-buying services and deprived advertisers of the benefits of differentiated brand-safety standards that could be tailored to their unique advertising inventory,” he continued. “This unlawful collusion not only damaged our marketplace, but also distorted the marketplace of ideas by discriminating against speech and ideas that fell below the unlawfully agreed-upon floor. The proposed order remedies the dangers inherent to collusive practices and restores competition to the digital news ecosystem.”

 

The FTC cites all of the named holdco’s utilization of data from “firms like NewsGuard and Global Disinformation Index” to “promote the demonetization of disfavored political viewpoints. In a competitive market, ad agencies compete for advertisers’ business by offering brand-safety tools that provide the best quality at the lowest cost. The brand safety agreement displaced competition by insulating the ad agencies from these competitive conditions, according to the complaint.”

 

The FTC complaint also alleged the holdcos “operated through their trade associations — specifically, the World Federation of Advertisers’ Global Alliance for Responsible Media (“GARM”) and the American Association of Advertising Agencies’ Advertiser Protection Bureau (“APB”) — to establish their common brand-safety standards. Under the agencies’ brand-safety agreement, websites that included so-called “misinformation” were deemed to fall below the brand safety floor and thus risked becoming categorically ineligible for advertising revenue.”

 

The settlement still needs to be approved by a federal judge. 

17202: Omnicom, IPG, FTC, WTF.

 

Adweek reported the Omnicom acquisition of IPG is closer to being a done deal, as the FTC approved a revised consent decree preventing the White holding company from denying advertising revenue to publishers based on ideological or political stances.

 

Interesting how Adland is not trusted in certain matters, prompting the need for governmental regulation and enforcement.

 

Yet even when DEIBA+ was considered an imperative, White advertising agencies enjoyed self-regulation—and abject failure was acceptable.

 

FTC Locks In Omnicom–IPG Deal With Stricter Ad Rules 

 

Consent decree bans Omnicom from denying ad dollars to publishers based on political or ideological viewpoints

 

By Audrey Kemp

 

The FTC has approved a revised final consent order tied to Omnicom’s $13.5 billion acquisition of Interpublic Group (IPG), explicitly preventing the company from denying ad dollars to publishers based on political or ideological viewpoints—unless a client expressly directs it.

 

In June, the FTC conditionally cleared the deal with a proposed consent decree barring politically motivated ad boycotts. That order is now final, with added oversight and a clarification of scope.

 

After a mandatory public comment period, the FTC revised the order to add a compliance monitor and ensure that the restrictions only apply within the United States. The commission voted 2-0-1 to approve the order, with Commissioner Mark R. Meador recused.

 

The FTC said advertising holding companies, including through industry trade groups, have at times coordinated boycotts of certain media sites, cutting off their ad revenue and weakening their ability to produce content.

 

The order bars Omnicom from keeping exclusion lists or ideology-based blocklists unless a particular advertiser asks for one—putting the decision back in the hands of its clients.

 

The merger also cleared a key U.K. review last month, when the Competition and Markets Authority declined to escalate the deal to a phase-two probe. The European Union remains among the regulators still reviewing the transaction.

 

Omnicom and IPG had already been under scrutiny by the FTC, which issued a second information request earlier in the year, signaling deeper antitrust review.

 

IPG’s Q2 revenue fell year over year, but its margin hit a record high as it cut costs in anticipation of the merger. Omnicom continues to expect the deal to close in the second half of 2025.

 

The decision shows regulators are paying closer attention to how advertising holding companies use their market power in ways that could impact the flow of advertising dollars online.

13817: FTC Versus Advertising Liars.

Campaign published a story detailing how an advertiser and its advertising agency were slapped by the Federal Trade Commission for creating false advertising—a rare scenario, given that advertising agencies typically get off scot-free when advertisers’ messages are ruled misleading and illegal. Imagine if the same sense of complete culpability was applied to the increasingly popular Kumbaya bandwagon, whereby advertisers air campaigns promoting diversity and inclusion, co-conspiring with White advertising agencies where equality is a dream deferred, delegated, diverted and denied. The FTC should create a special division to investigate and crack down on such cases of hypocrisy, concealment and outright lying. Then again, any fines would probably be rendered as tax-deductible donations to ADCOLOR® and The 3% Conference, ultimately perpetuating the discriminatory shenanigans.

After an agency settles a false advertising suit, how scared should the industry be of the FTC?

By Zoë Beery

An advertising lawyer explains what marketers can learn from this unusual case.

Near-instant memory improvement, miraculous joint pain recovery and reversal of a decade’s worth of cognitive decline are just a few of the things dietary supplements CogniPrin and Flexiprin claim to do. The Federal Trade Commission begs to differ.

In a false advertising suit settled last week, the FTC slapped the supplement’s manufacturers—and in an unusual move, the advertisers who helped to sell the products—with heavy fines and a consent decree.

Direct marketing firm Synergixx and its principals Charlie R. Fusco and Ronald Jahner now face a $6.5 million sanction (which is on hold due to inability to pay) and a 20-year bar on certain advertising practices. It’s a punishment that might leave other firms quaking in their well-heeled boots. But just how nervous should they be?

“It’s a bit of a warning signal—the FTC has said they may be looking more closely at the role agencies play in the creation of advertising, and that there may be increased enforcement action among those lines.” said Linda Goldstein, a partner and head of the advertising, marketing and digital media team at law firm BakerHostetler. “We’ve seen over the last few years a consistent pattern where the FTC is looking to go as far up and down the food chain as they can. The more parties facing potential liability, from an FTC vantage point, that all helps to create an environment where violations are less likely to occur.”

The settlement closes a case brought by the FTC and the attorney general of Maine in February that took aim at nearly every element of the marketing campaign for the supplements (which, like all dietary products sold in the US, went directly to market without FDA evaluation). Elements of the campaign created by Synergixx included radio segments misleadingly presented as talk shows that didn’t disclose guests’ connection with the supplement manufacturer, print ads with fictitious endorsements and an “unconditional 90-day money-back guarantee” whose scripts (written by the agency) failed to disclose the burdensome nature of the process through which consumers could obtain refunds.

Counterintuitive as it may seem, it’s rare for federal investigations to include campaign creators in false advertising actions. When the FTC brought suit in 2016 against Volkswagen over a campaign that touted the automaker’s “clean diesel” line as being exceptionally environmentally friendly, it did not name the multiple agencies that had produced those ads. It only named VW, because the company had fitted the cars with devices to obscure massive—and massively illegal—emissions levels during testing, a level and type of malfeasance that fell outside what an agency should be expected to verify when evaluating a client’s claims. As Georgetown Law professor Rebecca Tushnet told Campaign US at the time, “the software was deliberately programmed to give bad results, [so] I don’t think the ad agency was under any duty to say ‘Hey, you didn’t by any chance fake your results, did you?’”

The CogniPrin case is more similar to a 2014 FTC suit against Sony that alleged the company had inflated claims about the capabilities of the technology in its new Vita console, a suit that also implicated the agency that marketed the device: Deutsch LA was indicted for encouraging its own employees to post positive tweets about the Vita without disclosing that they worked for the agency and were not actual product users.

“Because the agency was the one that engaged the influencers, the FTC felt the agency had a great responsibility,” said Goldstein. As with the campaign for the supplements, the Commission was taking issue not with the agency’s failure to root out the false claims themselves, but with the misleading manner in which it presented those claims.

So long as agencies aren’t running such deceptive campaigns, they should be safe from FTC investigations. But that doesn’t mean they shouldn’t blindly trust their clients, either, said Goldstein. “You don’t necessarily have to go as far as your client does in ensuring that the claims are truthful, but you have to do due diligence.” Even if the contract shields an agency from liability in criminal court for a client’s false statements, those protections won’t hold up if a regulatory body gets involved. “Even if as an agency you are indemnified by your client, the FTC does not care,” she said. “Indemnities will not shield you against an FTC action.”

And, she added, neither will an unpredictable president. “I think a lot of companies have questioned whether, under a Republican administration, there’s going to be a shift away from what has been a fairly aggressive Commission,” she said. “This is another reminder that’s not the case. If the FTC believes there’s been real consumer injury, they’re going to continue to prosecute those cases with the same degree of vengeance.”

13078: Deutsch LA’s Chicken Shit.

Adweek reported Foster Farms switched White advertising agencies, dumping Goodby Silverstein & Partners after 20 years and handing its business to Deutsch LA—all sans a review. What the cluck! The transition happened after Deutsch LA recently relaunched the poultry company’s website. In other words, an agency that got spanked by the FTC for producing misleading online messages was entrusted with Foster Farms’ digital duties—then ultimately awarded the entire business. It’s a Corporate Cultural Collusion coop coup.

Foster Farms Names Deutsch L.A. Agency of Record, Ending Over 20 Years With GS&P

Creative for poultry company leaves longtime shop

By Noreen O’Leary

Foster Farms has ended its 20-plus-year relationship with Goodby Silverstein & Partners, moving its business to Deutsch.

The Interpublic shop is now the poultry producer’s agency of record, handling creative, digital, and media planning and buying for all of the company’s products. Deutsch takes over creative from GS&P and the other account responsibilities from Organic, Direct Partners and OMD.

There was no review for the account. Deutsch was given the project of relaunching the company’s website early this year, and the additional business followed.

Foster Farms, which gave its business to GS&P in 1993, was one of the agency’s oldest clients. GS&P created “The Foster Imposters” scruffy chicken puppets that are most associated with the brand.

The Livingston, Calif.-based poultry company, which sells its chicken in the Western U.S., will work with Deutsch L.A. on the account.

12454: POM Is Wonderful Liar.

From The Los Angeles Times…

Pom Wonderful loses appeal of FTC’s deceptive advertising ruling

By Andrew Khouri

A federal appeals court has upheld a ruling that pomegranate juice seller Pom Wonderful falsely claimed in its advertising that its products could treat heart disease, prostate cancer and erectile dysfunction.

The decision Friday affirmed a Federal Trade Commission ruling against the Los Angeles company owned by billionaires Lynda and Stewart Resnick. That decision ordered Pom to stop “making misleading and inadequately supported claims about the health benefits of POM products.”

“The FTC Act proscribes — and the 1st Amendment does not protect — deceptive and misleading advertisements,” U.S. Court of Appeals Judge Sri Srinivasan wrote in the ruling.

The Resnicks helped make pomegranate juice popular by selling it in unique, curvaceous bottles and promoting its ability to fight disease and even, as one advertisement said, help consumers “cheat death.”

The ruling from the U.S. Court of Appeals for the District of Columbia Circuit, however, did not uphold all of the FTC’s order.

The three-judge panel said the company must cite only one “randomized, controlled, human clinical trial” as evidence before asserting its products can fight diseases.

The commission had required at least two.

Pom, in a statement, said that it was pleased with that reduction and that the company “has always communicated with consumers in a transparent, honest manner, delivering valuable information about the potential health benefits of our products.”

Staff writer Stuart Pfeifer contributed to this report.

12360: Chevy’s Colorado Car Wreck.

Chevrolet rolled out a new 2015 Colorado truck commercial—created by McCann Commonwealth—that can only be described as a car wreck. After all the high-priced politics, consolidations and firings, Chevrolet manages to produce thoroughly forgettable advertising that could have been hatched by a local dealership’s in-house promotional department. Besides being extraordinarily White, the contrived and clichéd commercial counters its Find New Roads™ tagline; that is, the spot reflects a road well traveled—to mediocrity. Additionally disturbing are the many comments at YouTube praising the commercial and/or linking to Chevrolet dealers. It smacks of the Deutsch LA Twitter fiasco, where the FTC ultimately charged that the agency misled consumers with positive tweets from Deutsch staffers. Yep, it’s yet another road well traveled—to digital dumbness and deception.

12302: Pizza Hut—Digital Dimwits.

Advertising Age reported Pizza Hut handed its creative digital duties to Deutsch LA. Hey, why not? The client already demonstrated questionable intelligence by approving Deutsch LA’s lame and stereotypical campaign featuring old Italians hating new menu items. So go ahead and assign the digital work to an agency that recently received a spanking from the FTC for deceptive online messaging. Incumbent Digitas will apparently stay on the roster to cover digital media buying and planning, which could be a precaution for policing Deutsch. Then again, it actually means there will now be two White agencies actively inflating YouTube views, faking Facebook likes, tweeting Twitter raves, loading up LinkedIn love, etc.

Deutsch Los Angeles Picks Up Digital Duties on Taco Bell

Incumbent Digitas Will Stay on Roster for Digital Media Buying and Planning

By Maureen Morrison

Deutsch Los Angeles, the lead creative agency on Taco bell, is adding digital to its duties.

Publicis Groupe’s Digitas in San Francisco had been handling digital for the chain, and just recently helped launch its mobile-ordering and payment app in late October. Deutsch handled the TV creative, but the biggest splash of that campaign was Taco Bell’s blackout of all its social media for a couple of days to draw attention to the announcement. Digitas also created the design of the app, on which it will continue to work.

Digitas will also continue to handle digital media planning and buying. Its sibling agency Spark handles media planning, and WPP’s MEC handles buying.

A spokesman for Taco Bell confirmed the change but declined to elaborate.

Digitas, which won the chain’s digital business in 2012, said in a statement that it was proud of its Taco Bell work and looked forward to doing more. “While we are disappointed by this decision especially on the heels of the transformative mobile ordering launch (which DigitasLBi had a heavy hand—and heart—in creating), we move forward with pride in our people, and conviction for our work,” the agency said. “We continue to be a valued partner for (and value our partnership with) Taco Bell, as we continue our work across digital media, mobile/app, CRM, loyalty, among others.”

Deutsch called Taco Bell a digital marketing leader. The agency has been working on some digital business for the last year and a half, but that now the shop will handle social, digital and platform work, according to Winston Binch, chief digital officer at Deutsch L.A. “We’re most successful when we’re deep in the business,” he said. “Given we’re deeply involved with the Taco Bell brand, having our digital and social team in there now will lead to really great things.”

The move is Deutsch’s latest pickup from Yum Brands, which owns Taco Bell, Pizza Hut and KFC. This summer, the agency picked up the Pizza Hut creative account from McGarryBowen without a review. Pizza Hut’s digital account remained with MRY.

Deutsch had also been taking more and more Taco Bell creative work from FCB in the last couple years, to the point that it became the lead agency on the account, though FCB still handles aspects like merchandising. Deutsch L.A. earlier this year led marketing for Taco Bell’s breakfast menu introduction, the chain’s biggest rollout in its history. The shop had picked up increasing digital work from Taco Bell as well.

Deutsch has been putting significant effort into building its digital offering in recent years. Mr. Binch, a former CP&B exec, joined Deutsch in April 2011 and has since grown its digital group to include some 200 employees, according to a person familiar with the agency.

Taco Bell spent about $327.5 million on U.S. measured media in 2013, according to Kantar Media. It’s by far the biggest spender of the Yum brands, with KFC second at $284 million and Pizza Hut third at $247 million.

12291: Santa’s Clicking His List.

Has comScore and Santa included Deutsch LA on the naughty list?

12287: Digital Deception Done Daily.

Adweek reported on the FTC spanking Deutsch LA for the White advertising agency’s deceptive messages delivered via Twitter. The Adweek story contained a few quotes worth laughing over examining.

Mom Central Consulting CEO Stacy Debroff said, “As ad agencies move from paid ad placements to the viral pathways of social media, they haven’t taken the time to train and familiarize their employees on FTC-required disclosures. For a sophisticated ad agency such as Deutsch LA, one would not expect such an amateurish social media disclosure mistake.” Um, Deutsch LA is about as sophisticated as Lloyd Christmas and Harry Dunne—and the White ad agency is definitely digitally dumber than the duo.

Razorfish Co-Founder and current Sprinklr Chief Evangelist Jeff Dachis remarked, “I think the FTC may have been piling on with the additional action against Deutsch LA to ensure that they were sending a message to the marketplace,” adding that it’s a standard industry practice for agency employees to hype their own work via social media. Give Dachis credit for being honest. But it confirms what MultiCultClassics originally stated; that is, traditional White ad agencies, digital agencies and media firms are all knowingly polluting the World Wide Web with fake comments, likes, reviews, etc. That Dachis doesn’t think it’s wrong only shows the fucked-up state of the industry.

Advertisers like Kraft and Unilever have expressed great concern over digital advertising dilemmas like viewability and fraud. Yet the companies continue to collaborate with agencies that are openly compounding the communications corruption and chaos.

Why, it’s as outrageously hypocritical as declaring commitment to diversity while conspiring with White ad agencies where exclusivity reigns.

FTC: No, Agencies Can’t Ask Staffers to Casually Tweet Nice Things About Clients

A cautionary tale about disclosure in social media

By Michelle Castillo

As brands push their messages through social media platforms like Twitter, the Federal Trade Commission is reminding marketers they need to disclose any bias on their promotional materials—even if they only have 140 characters to do so.

Last week, the FTC and Deutsch L.A. reached a settlement regarding the agency reportedly using social media to promote a client’s work without disclosing its bias. In 2012, Deutsch L.A. promoted the PlayStation Vita, creating a Twitter campaign that asked users to tweet positive statements about the hand-held gaming device with the hashtag #GameChanger. According to court documents, not only did the agency encourage the public to do so, but one of the assistant account executives sent a company-wide email encouraging employees to do the same. Many obliged the request on their personal Twitter accounts but did not disclose that PlayStation Vita was a client, violating the FTC’s stance that brands have to have full disclosure on marketing materials no matter what medium the ad is on.

PlayStation is no longer a Deutsch account; BBH has handled the video game company since 2013. And, the agency told Adweek, under the terms of the settlement, Deutsch L.A. did not admit to breaking any law and decided to resolve the case in order to skip prolonged legal battles.

However, the implications of the court case—that even statements made on personal social media accounts need to be transparent if there may be any brand bias—will resonate throughout the industry. Mary Engle, director of the FTC’s Division of Advertising Practices, acknowledged to The Wall Street Journal that while this was the FTC’s first case regarding Twitter and misleading behavior, “it’s unlikely to be our last.”

Stacy Debroff, CEO of social media firm Mom Central Consulting and a former litigator, pointed out that most social media firms know the FTC requires disclosure on all postings, and simply adding #client or #sponsored would have sufficed. While employees may not know the rule extends to their personal accounts, their agency is responsible for educating them. “As ad agencies move from paid ad placements to the viral pathways of social media, they haven’t taken the time to train and familiarize their employees on FTC-required disclosures. For a sophisticated ad agency such as Deutsch LA, one would not expect such an amateurish social media disclosure mistake,” she stated.

Jeff Dachis, co-founder of Razorfish and current chief evangelist of Sprinklr, said he was surprised the FTC chased after Deutsch L.A. given that it’s a common industry practice to ask agency employees to publicly support their work. He believes the government agency “over reach[ed]” considering it didn’t seem like Deutsch was trying to game the system and just wanted to build buzz for its campaign.

“I think the FTC may have been piling on with the additional action against Deutsch L.A. to ensure that they were sending a message to the marketplace,” he commented. “There are many people in the agency world that have influence in social channels, and they should use good judgment with disclosures if an agency is going to employ a strategy that benefits from that influence on behalf of clients and is receiving remuneration as a result.”

However, James Percelay, co-founder of Thinkmodo, said in his experience it’s not common to ask employees to promote their own work. He agreed with Dachis that Deutsch L.A.’s intent was probably “overenthusiasm for its campaign, not malice.” But he said he believes the agency wasn’t employing a sound strategy by tooting their own horns. Allowing organic support through social media is what is most valuable to a brand, so hashtags should be allowed to go viral on their own merits. “Once it starts to become manipulated, it undermines its effectiveness,” he pointed out.

It’s not necessary to ask employees to promote campaigns through their personal accounts, said Alyssa Galella, director of earned media at Huge. Campaigns should already have a solid launch promotion strategy that includes owned, earned and paid media. If employees are proud of their work and feel compelled to tweet about it, Huge allows them to do so—as long as it follows the letter of the law as well as client confidentiality agreements, Galella added.

“In situations like that, it’s probably better to stay away from posting about the client’s campaign at all,” she said.

12258: Deutsch LA Tweets BS.

Advertising Age reported the FTC spanked Sony and Deutsch LA for deceptive messages delivered via tweets—marking the first time an advertiser and its White advertising agency have faced charges over Twitter misbehavior.

A press release from the FTC stated that Deutsch LA “misled consumers by urging its employees to create awareness and excitement about the PS Vita on Twitter, without instructing employees to disclose their connection to the advertising agency or its then-client Sony.” The complaint also revealed “about a month before the gaming console was launched, one of Deutsch LA’s assistant account executives sent a company-wide email to staff asking them to help with the ad campaign by posting comments about the PS Vita on Twitter…”

The parties ultimately reached a settlement, with Deutsch LA presenting its own legalese-filled remarks: “Deutsch LA is pleased to have concluded negotiations with the FTC regarding 2012 advertising for the Sony Vita. In the proposed Order, Deutsch LA, Inc. did not admit to any violation of the law and sought to resolve all open issues to avoid protracted legal proceedings. Deutsch LA appreciates the FTC’s staff’s cooperation in bringing this matter to resolution.”

Wow. The only thing missing from Deutsch LA’s statement is having it read aloud with Joe Isuzu as voiceover.

Does anyone think for a millisecond that Deutsch LA is not guilty of everything the FTC charged? It goes to the digital ignorance of traditional White advertising agencies, as well as such firms’ tactics designed to boost response rates and data. Heaven forbid a shop could produce content that might inspire legitimate consumer enthusiasm. Instead, ad agencies routinely instruct staffers to view YouTube videos, like Facebook pages, tweet 140-character compliments, vote promotional support, etc.—and even recruit their personal social networks in the false festivities. Oh, and digital agencies do the same damn things.

For Deutsch LA to insist it “did not admit to any violation of the law” is creative copywriting at its finest. The agency’s statement is about as honest as this yelp review of the shop’s office.

FTC Calls Out Sony—and Deutsch LA—for Deceptive Advertising

First Time FTC Has Charged An Agency Or Company Regarding Twitter Behavior

By Maureen Morrison

The Federal Trade Commission doesn’t think that Sony’s claims that its PlayStation Vita handheld device was game changing, was game-changing at all.

Sony Computer Entertainment America has agreed to settle Federal Trade Commission charges that it deceived consumers with false advertising claims about the “game changing” technological features of Vita during its U.S. launch campaign in late 2011 and early 2012. The commission also targeted ad agency Deutsch, Los Angeles, for both its traditional advertising and a social-media effort. In fact, the FTC said this is the first its charged any agency or company with deceptive conduct related to Twitter posts.

According to a FTC statement, Sony claimed that the handheld console would revolutionize gaming mobility by enabling consumers to play their PlayStation 3 games via “remote play,” and that they could engage in “cross platform” play by starting a game on a PS3 and then continuing it on the Vita, right where they left off. The FTC alleged that each of these claims was misleading.

But the FTC went farther. In a separate action, it stated that Deutsch Los Angeles, the agency handling the Vita launch, “knew or should have known that the advertisements it produced contained misleading claims about the console’s cross-platform and 3G capabilities.”

It also said that Deutsch LA “misled consumers by urging its employees to create awareness and excitement about the PS Vita on Twitter, without instructing employees to disclose their connection to the advertising agency or its then-client Sony,” said a FTC press release.

The agency used the #gamechanger hashtag in its ads to direct consumers to Twitter to talk about Vita. But, “about a month before the gaming console was launched, one of Deutsch LA’s assistant account executives sent a company-wide email to staff asking them to help with the ad campaign by posting comments about the PS Vita on Twitter and using the same ‘#gamechanger’ hashtag,” according to the complaint.

The participating employees, however, did not clearly state that they worked for Sony’s agency. In other words, the FTC said, agency employees could be mistaken for regular consumers.

“Deutsch LA is pleased to have concluded negotiations with the FTC regarding 2012 advertising for the Sony Vita,” said the agency in a statement. “In the proposed Order, Deutsch LA, Inc. did not admit to any violation of the law and sought to resolve all open issues to avoid protracted legal proceedings. Deutsch LA appreciates the FTC’s staff’s cooperation in bringing this matter to resolution.”

In all, the proposed settlement orders prohibit both Sony and Deutsch LA from making similar claims in the future when promoting the features or capabilities of handheld gaming consoles. The proposed order against Deutsch LA also bars it from “misrepresenting that an endorser of any game console product or video game product is an independent user or ordinary consumer of the product.” In addition, the proposed order requires Deutsch LA to disclose a material connection between any endorser of a game console product or video game product and Deutsch LA. These requirements are in line with the FTC’s Endorsement Guides, said the FTC.

As part of its settlement with the FTC, Sony will provide consumers who bought a Vita before June 1, 2012, either a $25 cash or credit refund, or a $50 merchandise voucher for select video games or services. Sony will provide notice via email to consumers who are eligible for the voucher after the settlement is finalized by the FTC.

Though it’s rare for the FTC to file a complaint against an ad agency, this isn’t the first time. For example, back in 2002, the FTC filed a complaint stating that Wonder Bread and its ad agency Campbell Mithun made unsubstantiated claims that Wonder Bread’s “added calcium could improve children’s brain function and memory were unsubstantiated and violated federal law.”

10856: Report From FTC Is BS.

Adweek spotlighted the FTC report showing food marketing to kids dropped 19.5% from 2006 to 2009. Um, it’s a few days shy of 2013. Where’s the latest big data? Regardless, there are at least three points to consider about the findings:

First, the advertising reduction did not ignite an equal result for childhood obesity—i.e., fewer ads did not lead to more healthy kids.

Second, it appears that the sly marketers simply shifted tactics from national TV commercials to digital and promotions. Let’s be honest. A regulated TV spot will not outperform tie-ins with video games, recording artists and movies.

Third, the food marketers are executing the same maneuvers as Big Tobacco. Specifically, they know that getting kids hooked on cigarettes/Big Macs starts by getting parents hooked. So rather than aim messages directly at youngsters, the food companies increase advertising with adults. Just survey the growing number of grown-up campaigns for fast food, slow food, soft drinks, etc. Ronald McDonald is the new Marlboro Man.

FTC Reports Food Marketing to Children Down 19.5%

Commission urges holdout companies and media to self-regulate

By Katy Bachman

Nutrition watchdogs should be pleased. Food companies are spending less money marketing to children and youth, a new Federal Trade Commission report found. Compared to 2006, food marketing targeting 2- to 17-year-olds dropped 19.5 percent to $1.79 billion in 2009.

Most of the decrease came from fewer ads on TV. At the same time, food companies increased by 50 percent spending in new media, such as online, mobile and viral marketing, which are cheaper than TV. Companies have also stepped up integrated marketing and cross-promotion campaigns that combine traditional media with other platforms, from digital to movies to packaging to toy premiums.

For the first time, the report, released today, also analyzed the nutritional profile of foods marketed to youth, finding that self-regulation by the food industry has resulted in “modest nutritional improvements,” particularly in heavily-marketed categories such as cereals, drinks and fast-food kids’ meals.

The FTC’s follow-up report, “A Review of Food Marketing to Children and Adolescents,” was anticipated for the better part of a year, but the controversy over the federal government’s attempt to establish voluntary food guidelines for marketing to children may have sidelined the update. By the end of next year, the 16 member companies of the Children’s Food and Beverage Advertising Initiative—which represents 90 percent of all food marketing to children—committed to stricter nutrition guidelines for children under 12.

“More companies have joined, hundreds of foods have been improved or newly created to meet science-based nutrition criteria, and the CFBAI itself has expanded and become even more rigorous,” said Elaine Kolish, director and vp of the CFBAI, which operates under the Better Business Bureau.

While FTC chairman Jon Leibowitz gave due recognition to the food industry’s efforts to help reduce the nation’s obesity epidemic, he noted that there were still a few food company holdouts and media companies that need to step up.

“The encouraging news is that we’re seeing promising signs that food companies are reformulating their products and marketing more nutritious foods to kids, especially among companies participating in industry self-regulatory efforts. But there is still room for improvement. We will look for continued progress by the food industry and greater participation by the entertainment industry,” Leibowitz said in a statement.

Some of the food companies that have not joined the CFBAI include Chuck E. Cheese’s, Topps Candy, and IHOP. Among media companies, Disney, for example, won accolades for its commitment to adopt strict in-house nutritional standards for children’s ads, but Viacom has yet to adopt a similar policy and has often faced criticism from nutrition watchdogs.

Nutrition advocates are still left with plenty to advocate, especially since self-regulation fails to cover the full range of marketing strategies, like packaging and toy giveaways.

“Self-regulation as its currently structured isn’t working yet. The CFBAI still doesn’t cover packaging and that’s the biggest spending category after TV or the toy,” said Margo Wootan, director of the Center for Science in the Public Interest.

The Center for Digital Democracy, alarmed at marketing shift towards new digital techniques, such as peer-to-peer viral campaigns and neuromarketing, suggested the FTC convene stakeholders to develop “fair digital marketing practices for children and teens.”

Even with a generally positive report, advertisers are bracing for a fight. “This will bring attention back onto the food advertising issue, adding new fuel to the fire for 2013,” said Dan Jaffe, evp of the Association of National Advertisers. “The advertising and media community have done more than any other sector to respond to the obesity issue. The question is, what is enough?”

At least one advertising attorney believes the FTC is on shaky ground as it tries to nudge the food and beverage industry to do more. “It’s policy-making masquerading as exercising enforcement authority…. Companies should not be led to believe that further compromise and cut back on spending and marketing will satisfy the FTC or the food industry critics,” said John Feldman, a partner with Reed Smith, in a statement. “They will not be satisfied until there is a ban on kids advertising altogether.”

The kids food fight heats up even as there is emerging evidence suggesting that the nation has begun to slowly turn the corner on the nation’s childhood obesity problem. A study by the Robert Wood Johnson Foundation found that a number of places, including Philadelphia, New York, Mississippi and California, are showing small declines in childhood obesity rates.

8989: Ad Industry Vomits On FTC Guidelines.

The Chicago Tribune published a story that ultimately reflects poorly on the advertising industry. Advertisers and ad agencies are whining about the FTC guidelines regarding healthy foods and marketing to kids. The report stated, “Advertisers and food and beverage industry officials called the government’s new guidelines for advertising directed toward children a ‘reckless’ maneuver in light of today’s fragile economy.” In short, the lousy economy is being used to defend unhealthy foods being produced for and promoted to children, with corporate wonks warning that jobs will be lost. Heaven forbid companies might see possibilities in creating and selling new, wholesome products—and no, spraying Cocoa Krispies with special chemicals to support your child’s immunity is not the answer. Hey, it’s so much easier to churn out oddly shaped chicken obscenities.

Food, advertising industries call voluntary guidelines unreasonable

FTC advertising guidelines encourage advertisers to promote healthy foods to kids, as well as limit fat and sugar in order to combat childhood obesity. Food, beverage and advertising industry reps say doing so could mean job loss for many.

By Andrew Seidman, Washington Bureau

WASHINGTON—Advertisers and food and beverage industry officials called the government’s new guidelines for advertising directed toward children a “reckless” maneuver in light of today’s fragile economy.

After Congress asked the Federal Trade Commission, along with three other federal agencies, to develop a strategy to target childhood obesity, the FTC released a set of guidelines in April. They call on advertisers to encourage children to choose healthy foods and to limit the amount of saturated fat, trans fat, added sugars and sodium in food marketed to children.

That could mean a facelift for cartoon characters like Tony the Tiger, who promotes the cereal Frosted Flakes. One serving of the flakes contains 12 grams of sugar – four more than the guidelines suggest is healthy for kids in a serving of cereal.

On Friday, industry officials pushed back, saying the guidelines would eliminate virtually all advertising presently directed toward kids under the age of 18. Only 12 of the 100 most consumed foods in the U.S. would meet the FTC’s criteria, said Dan Jaffe, executive vice president of the Association of National Advertisers.

“In discussing this with a broad cross-section of industry, the reaction is that the proposals here are so stringent and so unrelated to any question of whether the products that would be created would be palatable to consumers,” Jaffe said. “Just because you meet an arbitrary set of numbers doesn’t mean you can come up with products that will move off the shelves.”

If advertising takes as big a hit as industry officials expect, 74,000 jobs could be lost in 2011, said Mike Raimondi, vice president of IHS Global Insight, an economic forecasting company. Between 2011 and 2015, moreover, the cumulative lost sales in the food and beverage supply chain would amount to $152 billion, Raimondi said.

But the FTC and nutrition advocates note that the guidelines are voluntary, though food companies will be under pressure to follow them. In 1980, Congress stripped the FTC of its rulemaking authority to police junk ads directed toward kids, said Margo Wootan, nutrition policy director at the Center for Science in the Public Interest, a nonprofit health advocacy group.

“Far from banning the Easter bunny, as the industry’s fear-mongering goes, the Interagency Working Group—at the instruction of Congress—simply proposed a voluntary set of nutrition standards that food companies could (or could not) adopt as part of their existing self-regulatory program,” Wootan said in a statement. “It’s a shame the industry is using such overheated rhetoric to fight reasonable, voluntary nutrition guidelines aimed at reducing kids’ risk of obesity, diabetes, and other diet-related diseases.”

And while companies have agreed to self-regulation on food marketing, it’s hardly working – “junk” still accounts for 80% of food advertisements targeted toward kids, Wootan said later in an interview.

Given the deluge of information coming from all directions in a media-saturated age, the FTC’s guidelines could play an important role in attacking childhood obesity.

“Current marketing campaigns for foods pervade every aspect of a child’s life, from TV, to product placements in movies, to social medial like Facebook, to their cell phone, and even to their school,” FTC spokeswoman Elizabeth Lordan said.

6866: Live Report From Cannes? More Like Dead.

Yes We Cannes with a MultiCultClassics Monologue…

• USA TODAY reported attendance at Cannes is down about 40 percent this year, and entries are off by 20 percent. Hey, if President Obama displayed outrage over CEO bonuses, what will he think about ad honchos lounging in France—especially the wonks hoping to make General Motors’ “critical vendors” list?

• The FTC is preparing to target bloggers who receive compensation for reviews, creating new guidelines to follow. “If you walk into a department store, you know the (sales) clerk is a clerk,” said and FTC official. “Online, if you think that somebody is providing you with independent advice and … they have an economic motive for what they’re saying, that’s information a consumer should know.” In the meantime, everyone feel free to send money and swag to MultiCultClassics.

• Drugstore chain Walgreen reported fiscal 3Q profits dropped 9 percent. Note to Walgreen accountants: Cymbalta® can help.

• A new study shows great white sharks display many of the same traits as human serial killers. However, the Black sharks will still probably receive harsher sentences.

6564: No More Big, Fat Liars.

From The Chicago Tribune…

Federal Trade Commission’s plan to change rules on ad endorsements, testimonials worries marketers

Extreme results, disclaimers to be overhauled by FTC

By Mary Ellen Podmolik

Consumers lured by advertisements promising rock-hard abs, sparkling white teeth and bulging bank accounts soon may get a reality check.

Updated guidelines on ad endorsements and testimonials under final review by the Federal Trade Commission—and widely expected to be adopted—would end marketers’ ability to talk up the extreme benefits of products while carrying disclaimers like “results not typical” or “individual results may vary.”

Instead, companies would be allowed to tout extreme results only if they also spelled out typical outcomes.

“For a good part of the last decade, we have noticed a problem, particularly with consumer testimonials,” said Richard Cleland, assistant director of the FTC’s division of advertising practices. “The use of consumer testimonials had become almost a safe harbor for companies as long as they threw in some sort of disclaimer about results not being typical.”

The changes are sending shudders through companies that worry about their ability to motivate consumers to buy their products if they can’t sell the sizzle.

“There would never be another Jared,” said Julie Coons, president and chief executive of the marketing trade group Electronic Retailing Association, referring to Jared Fogle, who became Subway’s spokesman after losing 245 pounds eating the chain’s sandwiches and exercising. “We’re all going to have to regroup” if the proposals stand.

Fogle’s story is highlighted on Subway’s Web site, accompanied by an asterisk and the text, “Their results are not typical. Your loss, if any, will vary.”

“This is not something we are prepared to comment on at this point,” a spokesman for Subway said of the proposed guidelines.

The tougher rules, the first update to the guidelines since 1980, are designed to make it easier for consumers to judge the credibility of marketers’ claims. The changes would affect all forms of advertising and marketing, including blogs and company Web sites. The FTC could bring legal action against firms that don’t comply.

The final guidelines are expected to be issued later this year.

The revisions have drawn sharp criticism from product manufacturers, advertising agencies and trade groups who say it is the “aspirational” theme of their ads that motivates consumers to purchase their goods. Show less than the ultimate achievement, they say, and consumers are less likely to buy.

What’s more, they say, it’s impossible to determine typical results for many personal-care products because of unique physiological characteristics among humans and the varying levels of effort put into any endeavor.

“A lightbulb, I can give you a typical result,” said Jonathan Gelfand, general counsel for Product Partners LLC, which sells fitness programs, gear and nutritional supplements under the “Beach Body” brand.

“Showing what people start and end with and saying very prominently, ‘Results may vary,’ that is as true as you can make it,” Gelfand said. “If we can’t show a picture and give results, what are we going to do?”

He added, “Someone who can’t fit in an airline seat is not going to pick up the phone for a 10-pound weight change.”

A spokeswoman for weight-loss program provider Jenny Craig Inc.—whose celebrity endorsers have included Kirstie Alley, Valerie Bertinelli and most recently Phylicia Rashad—said it would be premature to comment on the guidelines.

Competitor NutriSystem Inc., which has been touted by Marie Osmond and whose Web site showcases a woman who lost 40 pounds, did not respond to calls for comment.