The Advertising, Marketing And Communications Industry: The Pace Of Change Is Accelerating - Part I

Saturday, April 1, 2006 - 01:00
Ronald R. Urbach

Editor: Please tell our readers about your professional background.

Urbach: I am a Partner in and Co-Chair of the Advertising, Marketing and Promotions Department at Davis & Gilbert. Over the years I have worked closely with advertising agencies and marketers of all sizes and types throughout the country and, indeed, throughout the world. The work I do for them relates to the operational part of their business - the creative output, if you will - in whatever media and form they choose, whether broadcast commercials, print advertising, outdoor, viral or wireless. I deal directly with general counsel and corporate legal departments and provide legal services, including second opinions, an assessment of legal issues, and a detailed review of what the law is on a given issue in every jurisdiction across the country. With general counsel, we share ideas across a range of legal disciplines that touch on advertising and marketing and evaluate practical and legal risks.

Editor: What attracted you to Davis & Gilbert and this type of practice?

Urbach: I was interested in working in an industry that is a part of contemporary culture, and Davis & Gilbert represented an opportunity to do precisely that. I have not been disappointed. The work is extremely interesting. To the extent it is connected to - and often driven by - technology, it is changing all the time. That is something of a challenge, but it is exciting and one never stops learning new things. In addition, the firm is entrepreneurial in its collective personality, which I find very attractive, and the practice requires interpersonal skills of a very high order, which is equally attractive.

Editor: The firm has been around for a long time. In light of its 100th anniversary and preeminence in the advertising, marketing and communications industry, you are in a position to tell us something about the state of law as it relates to the industry today.

Urbach: The firm is marking its 100th anniversary this year, and it has changed as the industry has changed. In recent years the pace of change has increased dramatically. Governmental involvement in the industry has always been a reality, but it is increasing in a number of areas - marketers of alcoholic beverages, prescription drugs, tobacco, and certainly now food - know the meaning of government scrutiny. Many of the lessons we learned in the tobacco arena - that the message and the media supporting the message must be limited to certain age groups, for example - we now see applied to other product categories. We also see a move toward restricting cable television in the same way we regulate broadcast advertising. So, if you like Sex In The City or The Sopranos, you may be surprised to see them on cable only in edited versions. And Howard Stern's move to satellite radio has prompted a discussion of extending censorship rules to that medium. Today the concept of extending what is appropriate to the general public, i.e., politically correct, to media that, in many cases, have only just come into existence, means my practice is more fascinating than ever.

And all of this has an extraordinarily social context. We are experiencing an accelerated move away from traditional media - astonishing numbers of consumers turn to their computers, iPods, web casts and cell phones for content and information - and those who determine what is appropriate and what is not are having to play catch-up.

Editor: Conventional wisdom would say that if the pendulum goes too far in one direction, it generally swings back. Is there a First Amendment role in this discussion?

Urbach: In the advertising and marketing space the First Amendment has been the defense of last resort. There is no question but that it might become the first line of defense, however, with attempts currently underway to restrict much of what we have taken for granted in the past. Commercial speech was not protected until the 1970s and the United States Supreme Court decision in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, which established the principle that the mere fact that speech is commercial does not take away its First Amendment protection. In a very recent case, Nike v. Kasky, in which Davis & Gilbert was involved, the issue turned on whether statements made by the company in defense of challenges to its business practices were pure speech or commercial speech. The United States Supreme Court did not address it. There is, accordingly, a great deal of uncertainty in this area today, especially with a new Court.

It is my belief that if we have to rely on the First Amendment to address these issues, we have probably gone too far. Common sense ought to tell us that in imposing the kinds of restrictions that may be acceptable to the general public, or at least most of the general public, the net result is that we are "dumbing down" all speech. What may have made sense when there were only three television networks does not make sense in a world where information is available from a multitude of media sources. Given the available technology, consumers will be able to access what they want irrespective of any restrictions.

Editor: Would you tell us about the area where media, advertising and content converge?

Urbach: In the 1950s advertisers and agencies were very involved in developing program content for television. At a certain point they stepped back and permitted the networks and independent producers to create the content. Today the trend is in the other direction. Advertisers and agencies are now back in the content development world. This raises fascinating legal and regulatory issues. Is the communication pure speech? Do product placements make it commercial speech? Is there a false advertising dimension here? What may be done on David Letterman is fine, but if it is done on a reality show - where there is a major tie-in with a marketer - it may result in the program being viewed as commercial speech. The regulators are usually behind the curve, and the velocity of change that is underway is such that no one knows how this is going to turn out. However, unless people pay for content on a pay per view basis, the linkage between content and marketing will exist. Marketing tie-ins are going to be present. Content is not going to be free.

Editor: The new media is no longer the web. It is now cell phone, iPod, and any combination thereof.

Urbach: Yes, and that raises interesting questions. Companies that have marketed their products by way of traditional media are coming to realize that there may be a real disconnect between what they are producing and the audiences they are attempting to reach. How do you go about getting on board the right vehicle? That may not be so easy. In the music area, for example, who gets paid when a commercial is part of a program viewed on an iPod?

Editor: Would you tell us about the rise and importance of self-regulation?

Urbach: Self-regulation has been a key element of media, marketing and advertising in this country. First, the television networks have, as part of their obligation to act in the public interest, their own guidelines and rules. The National Advertising Division of the Council of Better Business Bureaus (NAD) was established in the 1970s for the industry to regulate itself and offer advertisers, consumers and the industry itself a mechanism to challenge advertising in a manner that is quicker and more cost-effective than going to court. This is of great importance at the moment, in light of the current focus on food advertising and marketing practices. The Children's Advertising Review Unit (CARU), which is part of the NAD, looks at the way the message is communicated and its content. This is at the point of convergence where the discussion of obesity in children, governmental oversight and self-regulation meet.

Advertising is a way to communicate with the market, to reach out to consumers. It is totally pro consumer by providing information for consumers to make informed decisions and, as such, fosters competition and innovation. However, whenever there is a difficult societal issue under discussion, e.g., childhood obesity or soaring prescription drug costs, our society has a tendency to look for a scapegoat. Advertising is often the target of choice. In New York Elliot Spitzer has given much attention to consumer advertising and marketing practices, to which few people object. This lack of outrage builds pressure for governmental scrutiny and, possibly, intervention. Self-regulation, on the other hand, demonstrates an industry's recognition of its public responsibilities and offers some defense against the attacks of politicians.

Editor: How about media self-regulation?

Urbach: The major broadcast and cable networks have some form of self-regulation by the imposition of standards relating to taste, truth, accuracy and acceptability of certain products. But the government has been telling the media to take a stronger line with respect to self-regulation, indicating the print media. There is a major issue that has not been addressed head on: The media constitutes the messenger, not the message. Certainly there is questionable advertising in circulation, but the media is not necessarily - or always - the right body to deal with this problem. The Federal Trade Commission has been vocal in expressing its belief that the media has a public responsibility to self-regulate. In part, this is a reflection of the fact that the FTC has limited resources. While the agency will get involved in the key societal problems reflected in advertising - the protection of children, health and public safety - it cannot take on every issue. This is one of the reasons behind the current emphasis on and acceptance of industry self-regulation.

Editor: That sounds like a volatile state of affairs for the industry.

Urbach: That is right. Advertising, marketing and communications reflect the society in which we live, and now technology is having an extraordinary impact. Broadcast television took a long time to be introduced and evolve. Satellite radio went from zero to millions of members in an incredibly short period of time. With the web and web content, the adoption of this media by children has been dramatic. It is now the primary media for them. Going forward, there will be still other media for the delivery of content to consumers.

Editor's Note: Part II of this interview will appear in the May issue of The Metropolitan Corporate Counsel.