- Interview with Lee Peeler
Interview conducted in New York on September 20, 2011
The Self-Regulation National Advertising Review Council is a group that was created in 1971. The 1970s was a time of great turmoil for the advertising industry when the United States Federal Trade Commission, which has primary jurisdiction over advertising practices in the US, was really cracking down on national advertising issues. There were a lot of concerns about this “new medium” of television and the types of advertising techniques that were being used on it. The industry decided that the best response to those criticisms was to take action itself, to set standards for truthfulness and accuracy of advertising claims, and to create an independent third party body to oversee compliance with those claims. It’s been a great success. Almost forty years of work has now gone on. There have been about 6,000 decisions published by this body.
In the beginning, there were two critical decisions to be made. The idea was to create a body that would oversee advertising and advertisers, make judgments about the truthfulness and accuracy of the advertising, so one big question was whether those decisions would be public or private. There was a group within the advertising industry who believed very strongly that decisions should be private, that confidentiality would facilitate voluntary cooperation. There was another group that believed very strongly that it should be public, including the editors of Advertising Age. A choice was made that the decisions of the National Advertising Review Council would be made public. That would be true whether the participant was found in violation or was found in compliance in any particular case. It’s all public and transparent.
The second major issue was where to put NARC. Some argued that it should be housed in the advertising industry and be a creature of the advertising industry. But there were others who said that it needed independent third-party oversight. So a decision was made to have NARC administered by the Council of Better Business Bureaus, which is a national organization that coordinates a group of 120 local Better Business Bureaus. These bureaus have been in place for almost 100 years now. They were the original advertising self-regulation mechanism back when advertising was largely a local matter.
I think a lot of people, even in the US, think that the Better Business Bureaus are a government thing, but they are not.
The Better Business Bureaus are an entirely private organization. They were created out of the American Advertising Federation’s Ad Clubs, which were in existence in most cities, even 100 years ago. The Better Business Bureaus and the Ad Clubs developed together, sharing a common goal of promoting truthful advertising.
The self-regulatory system is governed by a board of directors, who are drawn from the CBBB and the other three founding organizations: the American Advertising Agency Federation (AAF), the Association of National Advertisers (ANA), and the American Association of Advertising Agencies, which is also known as the 4As. More recently, we’ve added three other members to the board: the Direct Marketing Association (DMA), The Interactive Advertising Bureau (IAB), and the Electronic Retailing Association (ERA). The board sets the policies and procedures for advertising self-regulation in the United States. They are not involved in deliberations about individual cases which are decided by the staffs of the individual investigative units.
I’m the President of the National Advertising Review Council. I head up a group of about 30 professional staff whose job it is to monitor advertising for compliance with various industry standards and issue decisions about whether the cases we inquire into are in compliance with those standards or in violation. If a case is found to be in violation of those standards, we ask the advertiser for a commitment to change that in the future. When we get that commitment, we publish the fact that the advertiser has committed to changing its advertising in the future. If we do not get that commitment, then our rules say that we refer the case to Federal Trade Commission. One...