ASSOCIATION OF NATIONAL ADVERTISERS
April 17, 1997
(As prepared for delivery)
April 17, 1997
Roberto Goizueta of Coca Cola told me that the secret of his success is "early to bed, early to rise, and advertise, advertise, advertise."
Is that applicable to every product and every industry?
Would it work for the FCC?
Intel figured out how to make a brand out of a product that no consumer should ever want to see, touch, feel, smell, or know anything about: a chip inside a box.
If you can sell something like that, could you make a government agency truly popular?
I have read that "Advertisers control what's on TV."
If this is true, could you keep it from my kids?
I told them I was responsible for Arthur and Barney....and they believe me.
I've got lots of questions today, and hope you've got answers.
At the FCC we hope we started a new industry, digital TV, by giving out over a thousand licenses for this new, digital, local, terrestrial medium a couple of weeks ago.
This new business of an encoded digital stream from local TV towers to PC's and TV's in every market can permit customization of audience by ZIP code, language, taste buds or any other data point that you think correlates with sales.
It can make a TV into an Internet gateway, and it will, if Microsoft decides to throw some money at broadcasters to persuade them to adopt a computer-friendly format for the digital feed.
And, according to Edmond Sanctis, NBC Digital Productions senior vp-general mgr., research shows that users view interactive ads as an enhancement to content, rather than a nuisance.
In his speech at the National Association of Broadcasters' Convention, Michael Jordan of Westinghouse emphasized the opportunities that DTV could bring to advertising. "Digital TV provides the opportunity to bring a far greater richness and texture to our programming ... and to our commercials ... than ever before possible. That will make the appeal to viewers and the advertising effectiveness of TV more powerful."
Let competition make it so.
We have a two-point agenda at the FCC: first, we want all our policies to support vigorous and entrepreneurial competition down all five lanes of the info highway that we deal with: broadcast, cable, wireless, wire telephony and satellites.
This competition message is being exported around the world, thanks to the World Trade Organization agreement that we helped Charlene Barshefky strike in February.
I believe that deal will casuse the worldwide advertising market will grow by leaps and bounds.
Competition is point one of our two-point program.
Point two is that, like George Soros, we know that marketplace competition doesn't give you everything that a civilized society wants. Point two is that we have to be prepared to seek and get a public interest dimension to communications businesses.
One industry that happened to be the beneficiary of major Congressional interest was the industry that received digital TV licenses: today's analog broadcasters. Immediately after we implemented Congressional intent and gave the licenses away, the broadcasters' chief lobbyist said, we have to get the government out of our business.
Timing is the secret to humor.
However, all laughing aside, the government should, as to broadcasters' or advertisers' business, fight for competition and otherwise do little.
But at the same time, government should address all public interest issues. At the same time, government, as the representative of the public, should be saying, clearly, honestly, and in a way accountable to the people, exactly what the public expects from broadcasters and those that use and support free TV, the advertisers of America.
Stipulating with broadcasters and advertisers that TV is different from all other media is where we start. This is what the Supreme Court has always said. And it is what everyone in business and society is pretty darn well aware of.
This point is relevant to the letters dated October 7 and November 5, 1996, which I received from ANA, explaining its views on hard-liquor advertising.
The ANA does not agree with me that broadcast TV should have no room for hard liquor ads -- a position shared by advertisers and hard liquor companies from 1948 until suddenly last summer.
As recently as May of 1993, Fred Meister, the head of DISCUS, bragged to the Senate Commerce Committee about how the spirits industry "has recognized its responsibility to combat alcohol abuse" with its "extraordinary record of self-regulation." He continued, "We voluntarily do not advertise on radio or television, the most modern and widespread means of brand advertising ever developed."
But suddenly last November DISCUS voluntarily decided that the most modern and widespread means of brand advertising was just what would induce more Americans, especially young Americans, to pour more hard liquor.
And since then the hard liquor industry has pushed ads onto TV stations and poured lobbying heat on any skeptics, such as myself.
The ANA letters were written to support this sad and shortsighted effort.
The letters said that the Supreme Court in a case called 44 Liquormart v. Rhode Island determined that alcohol beverage advertising has the same First Amendment protection as any other product category.
Sorry. That case wasn't about broadcast TV and it didn't take anything away from the crucial fact that the most 'modern and widespread' medium (I'm paraphrasing the hard liquor industry) ever invented -- television -- asks for and gets special treatment from the courts.
It was broadcasters who established this principle in the Supreme Court only a couple weeks ago, persuading the Supreme Court that the right of the cable industry to control their own content could be reasonably infringed by the must carry rights of broadcasters.
One of the reasons was that broadcasting is specially favored by government is that it is a free, ubiquitous deliverer of programming, including information, including ads in the public interest.
The other side of special rights for broadcasters is special obligations.
Broadcasters have special duties as the trustees of the airwaves to attend to public interest issues.
And one such issue is whether it is in the public interest to broadcast hard liquor ads at times of day and on shows that inevitably, knowingly, certainly will reach audiences composed in part of millions of people who cannot lawfully be sold hard liquor: kids.
And in any event, even outside of TV, the law recognizes that liquor ads should not be treated like Coca Cola or Buick ads.
In Anheuser-Busch, Inc. v. Schmoke, the Fourth Circuit said a city could ban billboards advertising booze where kids are expected to walk to school or play.
Surely this means that the First Amendment is in no way violated by a prohibition on advertising hard liquor on shows and in time slots when kids are likely to be in the audience in large numbers -- that applies, like it or not, to very late hours.
So in connection with your letter, and generally on this topic, here's my view: let's have a debate.
The ANA agrees that the Commission has the authority to take action where necessary to ensure that the broadcast spectrum is operated in accord with the public interest. And of all agencies, only the FCC has general oversight over the use of the broadcast medium, including advertising.
Hard liquor wouldn't, by the way, be the first advertised product that got the Commission's attention.
In the 1960s the Commission launched a Notice of Proposed Rulemaking to take a look at cigarette advertising.
The prospect of a ban on cigarette ads from the FCC motivated Congress to pass a law to this effect. If a noticed proceeding by the Commission helps the process, let's try it.
Meanwhile, a great idea was launched by Congressman Joe Kennedy. His "Just Say No" bill that would codify the distilled-industry's former voluntary code. Representative Kennedy also introduced legislation, modeled after the V-Chip legislation, that would allow broadcasters to come together to devise their own voluntary code to set standards for alcohol advertising.
Advertisers should have the same right.
You should be able to meet as a group without any legal concerns to decide why in the world you want to promote hard liquor consumption and identification among the young people of America.
As Russell Baker wrote "Some antique sense of social responsibility seems to have been at work in the liquor industry's long voluntary absence from the tube, some remnant of decency left over from an era when people thought there were a few things too shameful to do to children, even for the purpose of improving the bottom line."
A remnant of decency; too shameful to do to children -- these are phrases worth debating in your industry: if it takes a law to encourage your discussions about these values, I'm all for it.
On April 1, the President wrote to me to ask that the Commission take all appropriate actions to explore the effects of hard-liquor advertising, particularly on kids, and to consider the possible actions that the Commission could take to support parents and kids.
I believe that the first right response to the President is for the Commission to launch a Notice of Inquiry. We don't even have a clear idea of how many stations are running these ads. A Notice of Inquiry would allow us to hear from everyone and to get the facts we need.
Some don't think this is a good idea. The ANA has said that it opposes Administration efforts to have the FCC look at liquor ads on television. Don't you want to debate the facts?
How many stations carry these ads? When are they on? Is there anything to the notion that hard liquor ads are no less dangerous than beer ads, even though beer is less than a sixth the alcohol content by volume? Don't you agree that in a free society government should be an open forum for factfinding and debate of public issues?
Sometimes the public interest turns on what should not be on TV.
And other times the issue is what should be on TV.
Let's talk about public service announcements.
PSA's can have a tremendous impact. From "A mind is a terrible thing to waste" to "You can learn a lot from a dummy" to "Friends don't let friends drive drunk," they have entered into our popular language.
Each of these ads has had an enormous impact on public behavior and safety.
Because of the good that PSA's can do, it's important that they remain a robust presence on the public airwaves.
But the statistics I've seen show that the amount of time in prime-time devoted by networks to PSA's, already quite brief, is dropping, while the time devoted to network promotion is escalating.
I'm focussing on network prime-time because that's where the eyeballs are. I know that local stations also run PSA's -- which is terrific. I just received a letter from the CBS affiliate in Omaha -- they did a terrific job on a PSA effort in that market and they were justly praised by their Governor, my friend Ben Nelson.
But as all of you know better than I, if you want your message to reach a big number of viewers, you have to think big. If PSA's are to have the wide impact we want them to have, they need to be placed in network prime-time.
The drying up of network PSA's is occurring even as "clutter" is increasing.
According to the Commercial Monitoring Report, put together by this group, ANA, and the Four A's, clutter -- everything that isn't the program itself -- reached a new high last year.
Clutter accounted for a fourth to a third of all network TV time during all parts of the broadcast day in 1996. In prime time on the four biggest networks, the average hour contained 15 minutes and 21 seconds of clutter.
This is welcome to the viewer, I think, only during the second half of the Super Bowl.
At the same time, the latest report shows that PSA time has dropped to 5 seconds per network per hour of prime time, down from 12 seconds just three years ago. Five seconds in an hour, fifteen seconds a night! That's just not very much.
The public needs PSA's because the public needs the messages that they can deliver so effectively.
The FCC has never thought it necessary to impose a specific requirement to provide PSA's on broadcasters. But PSA's have been part of the service that broadcasters point to show that they are, indeed, using the public's airwaves in the public's interest.
And PSA's are good for your product advertisements, because they contribute to the creation of an environment that best showcases the ads you pay for.
There's another trend that has been spotted in local markets: sponsorship. That's when a local organization pays to "sponsor" a PSA.
There is nothing wrong with a private organization sponsoring an ad.
But if broadcasters are charging for the ads, it's hard to accept the argument that the PSA's are part of what they provide to the public in return for the free use of the spectrum.
And networks have begun to show spots in which the star of a network show will deliver a positive message to the audience. This is great for business, not bad for the public, and also not a public service announcement.
The broadcasters themselves have always imposed very stringent requirements on PSA's, and these have been welcomed and used by advertisers to make very, very effective campaigns.
For example, networks require that the nonpaying sponsor be a 501(c)(3) or a government agency. They look very carefully to be sure that the PSA's are nonpartisan, nonsectarian, not designed to influence specific legislation -- and noncommercial.
The networks also give preferences to PSA's that provide a means for "fulfillment," or follow-through, with a knowledgeable organization -- for example, a PSA that gives a phone number for viewers to get more information.
Another important aspect of traditional PSA's is that they are heavily researched to get at the real attitudinal barriers that might keep the ads having the greatest possible effect.
For example, the "Friends don't let friends drive drunk" ad made an important breakthrough. Advertisers taught us all that it was more effective to educate those who could intervene in a dangerous situation, rather than focus on the horrors of drunk driving.
So advertisers saved lives in this country by shifting the message to friends and to their own behavior, and away from the rationalizing drinkers.
And anti-smoking ads directed at invincible, immortal teenagers just won't work very well if they emphasize lung cancer. To be effective, they take a different approach. For example, in California, ads use teenagers' worries about social disapproval -- one ad shows the result when a girlfriend absent-mindedly takes a sip from a can that her boyfriend has been using as a tobacco juice spittoon.
In Arizona, the ads play off teenagers' anger at manipulation by the media -- by showing teens being driven into a corral by the Marlboro Man or showing them in a playground being rained on by cigarettes.
Thanks to advertisers, PSA's have been the oil and canvas with which you have created wonderful, memorable, important, lifesaving messages.
You have done so much for the country with PSA's. Many of you here serve on the Ad Council.
Won't you help me make sure you still have the opportunity to do this good in the future?
Alex Kroll, the Chairman of the Ad Council, has made a terrific proposal. He has asked for just one second each night, in prime time, for every million kids in the United States. One second for one million. That adds up to 60 seconds a night, in prime time. After all, 12 minutes are devoted each night to promos for network shows. Couldn't one of those 12 minutes be devoted to a PSA? Wouldn't that be a small price to pay for the use of the public spectrum -- particularly after the broadcasters have received the free use of an additional 6 MHz of spectrum for the conversion to DTV?
A big, new exciting version of PSA's is the new interest in free broadcast ad time by candidates for public office.
Why should a public servant's time be consumed by chasing down money to pay to get onto public property -- the airwaves -- to reach the voters? President Clinton and others, including Senator John McCain, Barry Diller, Walter Cronkite, Paul Taylor, and others have all suggested that broadcasters renew their public interest commitment by providing substantial amounts of air time for direct access by candidates to voters.
Just the other day I received a letter from 13 Members of Congress urging the Commission to take steps to improve "our troubled system of financing elections." "The FCC could vastly improve political debate and reduce the cost of elections by offering an incentive to broadcasters to provide candidates with free air time during elections." These Members asked that the DTV licenses be conditioned on the provision of free air time.
And the Commission will soon issue a Notice to consider the public-interest obligations that accompany the DTV licenses, and free time for candidates is one of the most important proposals we will consider.
Free time can relieve the enormous fundraising pressure that is such a burden on our political process, and at the same time, can foster more political speech. All this, in return for what is really a tiny percentage of the total advertising time a station will air in the course of two years. Given that the broadcasters get to make private use of their licenses for free, this return seems little enough to expect. Other industries devote resources to serving the public interest; for example, DBS must give 4-7% of its channel capacity to noncommercial educational and informational programming, and similarly, cable must give carriage to PEG channels. Broadcasters, too, should have concrete, clear guidelines about what they must provide to the public in return for the use of the public spectrum.
I'm telling you something that you know already: television works, advertising works.
This group has an enormous influence over television and what goes on it. I hope you will think about using that influence to make sure that television does everything that it can, and everything it should, and nothing that it shouldn't.