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Alcohol advertising, ad placement, and self-regulation

If you’re a stats fan – the kind that can recalculate a pitcher’s ERA before the runner slides across the plate – the release of the FTC’s fourth major study on the alcohol industry offers a wealth of empirical data for your consideration. Based on information submitted by 14 companies in response to FTC Special Orders, the study focuses on alcohol advertising and industry efforts to reduce marketing to underage audiences. Even if you don’t have clients in that sector, the report has a lot to say about ad placement, digital marketing, and the role of self-regulation.

You’ll want to read the report for the specifics, but here are some facts culled from the data the FTC received:

Where are alcohol companies spending their marketing dollars? 31.9% were spent in traditional media – TV, radio, print, and the like. 28.6% helped wholesalers and retailers promote sales. 17.8% went toward sponsorships and public entertainment. 7.9% were directed to online and digital marketing. And outdoor and transit ads accounted for 6.8%. The major story in this fourth FTC industry study: Online and digital expenditures showed a four-fold increase since the 2008 report.

Are companies meeting industry standards on ad placement? Since only those over 21 can buy alcohol, the age of the viewing audience is an issue. In the first half of 2011, 93.1% of all measured media – traditional media and online/other digital – met the alcohol industry’s placement standard at the time, which required that at least 70% of the audience viewing the ads be 21 or older. (Since then, the industry has adopted a new ad placement standard, requiring that at least 71.6% of the audience be 21 or older.)

What about ad placement online or in other digital media? In the first half of 2011, 99.5% of ads industry members placed on sites owned by others – for example, news, sports, or entertainment sites – met that 70% 21-and-over standard. The companies’ own sites and social media pages were “age gated” to require visitors to enter an over-21 date of birth or certify they were that age.

How is the industry doing on the privacy front? Based on the information the FTC received, industry members generally appear to be telling people how their information will be used and requiring consumer opt-in to get further marketing information. On brand websites, cookies and tracking tools appear to be limited to what’s necessary to make sure that only visitors who say they’re 21 or older can re-enter the site or to facilitate browsing. The FTC didn’t find data suggesting that industry members were tying tracking cookies to individual data, using those codes to serve up ads to people in the future, or tracking those under 21.

What’s up with product placement? Only about 1/10 of 1% of expenditures went toward product placements in movies, TV shows, etc. Most placements involved the provision of props – like bottles or signs – rather than money.

How is the industry addressing outside complaints? The report found that the three major alcohol industry trade groups – the Beer Institute, the Distilled Spirits Council of the United States, and the Wine Institute – have procedures in place for outside review of advertising complaints, but only the Distilled Spirits Council received any complaints between January 2009 and December 2012.

The report also offered a series of recommendations for the industry. Here are just a few:

  • When placement compliance levels fall below 90% due to fluctuations in the make-up of the audience, companies should consider using a higher audience composition threshold.
  • Demographics for radio audiences used to measure only 12 and older, but now go as low as 6. Companies should use this more comprehensive data when making placements.
  • Companies should take advantage of age-gating technologies offered by social media, including YouTube. Age gates on company websites should require the entry of a birthdate and not just a certification that the visitor is over 21.
  • For user-generated content, companies should watch what’s going on and use blocking content to reduce the potential for violations of industry advertising and marketing codes.
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