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ANA Responds to FTC Over Buzz Marketing Concerns

By Mar 31, 2006

The Association of National Advertisers has sent a letter to the Federal Trade Commission asking that it reject a request by Commercial Alert to investigate buzz marketers for deception and institute further regulations governing the advertising tactic.

In its March 27, 2006 letter, the ANA said that buzzers fall within already established FTC regulations provided in its Guides Concerning Use of Endorsements and Testimonials in Advertising and that no additional regulation need be enacted. The letter was addressed to Donald Clark, secretary of the FTC.

“Therefore, Commercial Alert has raised no issues or concerns that cannot be addressed by the present regulatory scheme,” the letter read in part, which was signed by ANA attorney Douglas Wood.

The letter outlined a number of buzz, or word of mouth, tactics such as independent statements from consumers about products, sampling, focus groups, premiums and buzzers hired by brands to promote a product to consumers in public places. Commercial Alerts concerns focused on buzzers hired to anonymously promote a brand in public venues.

“Perhaps the most fatal flaw in Commercial Alert’s argument is that all forms of buzz marketing are per se deceptive and require investigation or regulation,” Wood wrote. “Such a conclusion is without precedent or merit. The Commission has never adopted such sweeping conclusions.”

Last October, consumer advocacy group Commercial Alert asked the FTC to investigate buzz marketers for deception. In its letter, it identified Procter & Gamble as a possible culprit (Xtra, Oct. 19, 2005).

The letter asked the FTC to review evidence that “companies are perpetrating large-scale deception upon consumers by deploying buzz marketers who fail to disclose that they have been enlisted to promote products. This failure to disclose is fundamentally fraudulent and misleading.”

The non-profit group also asked the FTC to investigate Procter & Gamble’s Tremor, which it said has enlisted about 250,000 teenagers in its buzz marketing sales force.

Commercial Alert requested that the FTC require all brand ambassadors to disclose their relationship to the brand they are pitching.