AdAge.com, January 17, 2007

NEW YORK (AdAge.com) -- Lawyers are rolling up their sleeves for the bounty of work in the children's advertising arena this year surrounding obesity and, likely, a whole lot more.
Despite intimating that no peace is in sight for an industry trying to protecting itself against potential litigants, John Feldman was adamant that food marketers not be constrained by critics and regulations.


"2007 will be a year of focus on kids' advertising," said John Feldman, partner at law firm Reed Smith, at the Association of National Advertisers' Advertising Law & Business Affairs Conference that began today. At the conference, Mr. Feldman announced the creation of KidAdLaw.com, a website offering news and updates on regulatory activities pertaining to marketing to children.

Right now, he said, the scrutiny is on food marketers' advertising to children, but a number of other self-regulated categories could be next on the docket. "Politically," he said, "what gets traction better than kids?"

'Children's Advertising in the Crosshairs'
Mr. Feldman and C. Lee Peeler, president-CEO of the National Advertising Review Council, appeared in a panel dubbed "Overweight and Overwrought: Children's Advertising in the Crosshairs."

At issue were what Mr. Feldman calls the "rules of the sandbox" for marketers of children's products or services amid newly revised guidelines for the Children's Advertising Review Unit and the creation of a Children's Food & Beverage Advertising Initiative led by the top 10 marketers in the kids' package-goods space.

Despite intimating that no peace is in sight for an industry trying to protecting itself against potential litigants, Mr. Feldman was adamant that food marketers not be constrained by critics and regulations. "If you're in the business of selling candy, sell candy; if you're in the business of selling burgers, sell burgers," he said. Where marketers need to tread carefully in this high-stakes game of "gotcha" is in dressing up products as healthy when they're not.

"If you make something that is a treat, full of fat and calories, any implication that it's healthy is dangerous," he said.

'The No. 1 commercial pariah'
Indeed, if food marketers aren't careful, said Guy M. Blynn, VP-deputy general counsel, R.J. Reynolds Tobacco Co., they could end up like his employer, which he called "the No. 1 commercial pariah in America."

Mr. Blynn, along with Geoffrey K. Beach, a partner at law firm Jones Day, spoke on a panel called "Where There's Smoke, There's Fire." They shared lessons learned and advice going forward for attendees, such as those from Big Food, who may find themselves in similar situations.

For example, Mr. Beach suggested several approaches to writing and keeping documents that may help marketers in the case of a lawsuit. When even a memo outlining a brainstorming session can come back to bite a company in court, "context is key," he said. One little explanatory paragraph at the start of a document could be enough to show the true weight of a printed statement. It is also important to remember that documents will be around for a long, long time, so "mean what you say, and say what you mean."

The ultimate key to staying out of the courts, however, may lie in permission-based direct marketing, they said. It's all about making it hard to opt in and easy to opt out. R.J. Reynolds Tobacco's age-verification process is multitiered and backed up by either face-to-face proof or third-party verification -- but that's a lot to go through to buy a box of Oreos.

In other conference news:

The future of intellectual property
James Perry, VP-associate general counsel, Elizabeth Arden, advised marketers to "disabuse ourselves of the notion that we'll be able to control the content on the internet." Mr. Perry, one of three panelists discussing the future of intellectual property and individual rights at a mid-morning session, said, "We have to be in the YouTube, MySpace place. It is the new TV."

So, rather than try to contain messages about their brands, marketers should "determine your parameters," said Joseph Dreitler, partner, Frost Brown Todd, and a former in-house attorney for Procter & Gamble. Panelists said the enormous volume of illegitimate use of trademarked material means attorneys simply cannot keep track of most of it. And when they do see it, they have to determine whether it tarnishes the trademark.

"The question is no longer, 'What can we do?' Now it's, 'What should we do?'" Mr. Perry said. "It is a question that attorneys and the marketing team decide based on a cost/benefit analysis."

Who has dibs on an idea?
In times of media fragmentation and the need to reach consumers on many platforms, such as viral videos, it's a good idea for clients and agencies to hash out detailed agreements about who has dibs on an idea early in the game; determine the financial worth of an idea; and decide how long the idea merits compensation. That was the advice of a panel with Carla Michelotti, exec VP-general counsel, Leo Burnett Worldwide, and Ronald Urbach of Davis & Gilbert.

They said solutions include licensing creative materials to the client for a specific period of time, as Goodby, Silverstein & Partners did with the sock puppet created for client Pets.com. Another is to develop agreements for royalty generation derived from agency-created characters or transactional items. Mr. Urbach cited one example of an ad agency that inked a licensing agreement with an airline in which the agency was compensated for every e-commerce transaction generated on the airline's in-flight TV.

Rick Kurnit, of Frankfurt Kurnit Klein & Selz, said some agencies are exploring bonus compensation based on a campaign's longevity. "Agencies and advertisers are trying to come to an agreement on how much an idea -- say, such as MasterCard's 'Priceless' campaign -- is responsible for a marketer's sales and how the agency should be paid for its success."

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Brooke Capps contributed to this report.

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