BBB National Programs, an independent non-profit organization, oversees more than a dozen national industry self-regulation programs that provide third-party accountability and dispute resolution services to companies, outside and in-house counsel, consumers, and others in arenas such as privacy, advertising, data collection, child-directed marketing, and more.
The Center for Industry Self-Regulation (CISR) is BBB National Programs' 501(c)(3) non-profit foundation. CISR was created to harness the power of independent, industry self-regulation to empower U.S. business accountability. CISR is dedicated to education and research that supports responsible business leaders developing fair, future-proof best practices, and to the education of the general public on the conditions necessary for industry self-regulation.
The Advertising Self-Regulatory Council (ASRC) was the American advertising industry's self-regulatory body until June 2019. As of June 2019, BBB National Programs' National Advertising Division (NAD) is the U.S. advertising industry's self-regulatory body.[1]
Prior to ASRC, the organization's name was National Advertising Review Council (NARC). The organization changed its name in 2012.[2]
The self-regulatory system includes the following investigative, enforcement and appellate units:
BBB AUTO LINE: a dispute resolution program that offers both mediation and arbitration to resolve business-to-consumer automotive warranty, lemon law, class action, and dealer manufacturer disputes.
National Advertising Division (NAD): provides independent self-regulation and dispute resolution services. NAD reviews national advertising in all media and its decisions set consistent standards for advertising truth and accuracy.
National Advertising Review Board (NARB): the appellate body for BBB National Programs’ advertising self-regulatory programs (NAD, CARU, and DSSRC). NARB's panel members include 87 volunteer professionals from the national advertising industry, agencies, and public members, such as academics and former members of the public sector.
Children's Advertising Review Unit (CARU): the nation's first Safe Harbor Program under the Children's Online Privacy Protection Act, which helps companies comply with laws and guidelines that protect children from deceptive or inappropriate advertising and ensure that, in an online environment, children's data is collected and handled responsibly.
BBB EU Privacy Shield: an independent recourse mechanism (IRM) for the U.S. Department of Commerce Privacy Shield program. This independent, third-party dispute resolution program enables U.S. businesses to demonstrate that their trans-Atlantic data transfers are consistent with European data protection rules and is a recognized Independent Recourse Mechanism under Privacy Shield.
Global Privacy Program: The Global Privacy Program manages both the BBB EU Privacy Shield program and APEC certification programs. In January of 2021, BBB National Programs became the first U.S.-based nonprofit accountability agent in the APEC (Asia-Pacific Economic Cooperation) Cross Border Privacy Rules and Privacy Recognition for Processors systems. Through this program, the organization works one on one with companies of all sizes doing business in the 21 economies to demonstrate compliance with the CBPR and PRP program requirements.
Children's Food and Beverage Advertising Initiative (CFBAI): a self-regulation program created to improve the landscape of food advertising to children. CFBAI works with leading food, beverage, and quick service restaurant companies to set and implement Uniform Nutrition Standards, which specify the science-based nutritional criteria for foods and beverages that can be advertised to children under age 12.
Children's Confection Advertising Initiative (CCAI): modeled after CFBAI, is a self-regulation program for small- and medium-sized confectionery companies created in partnership with the National Confectioners Association to help improve the landscape of food advertising to children. CCAI companies commit to not advertising confections to children under age 12.
Direct Selling Self-Regulatory Council (DSSRC): provides independent, impartial monitoring, dispute resolution, and enforcement of false product claims and income representations made by direct selling companies and their salesforce members across digital platforms.
Digital Advertising Accountability Program (DAAP): developed by the Digital Advertising Alliance (DAA) to enforce industry self-regulation principles for data privacy in online and mobile advertising, holding companies accountable to the DAA's Privacy Principles. DAAP provides guidance to companies looking to comply with industry principles and responds to complaints filed by consumers about online privacy.
Coalition for Better Advertising Dispute Resolution Program: an independent dispute resolution program for participants of the Better Ads Experience Program. The program helps enforce the Better Ads Standards, which identify optimal online advertising formats to create a better experience for consumers.
Dispute Resolution Program for Verizon Wireless Customers: supports Verizon Wireless customers who need arbitration services for a dispute with Verizon Wireless of $10,000 or less. Before a customer can request arbitration, they must provide Verizon Wireless with written notice at least 30 days before arbitration is requested.
Parties may appeal decisions reached by NAD and CARU to NARB, the appellate body. Decisions reached by the self-regulatory system's investigative and appellate units are publicly reported through a press release.[citation needed] In addition, the decisions reported by NAD and CARU also are compiled 10 times each year into the “NAD/CARU Case Reports.” As of 2010, more than 5,000 self-regulatory decisions are included in the NARC Online Archive. The case reports and archive are not public, however; access to the archive is $6900.00 a year, even though procedures state that final case decisions are public.[3]
National Advertising Division
The National Advertising Division (NAD), established in 1971, is charged with monitoring and evaluating truth and accuracy in national advertising. The NAD examines and evaluates a wide range of advertising claims, including puffery, consumer surveys, product testing and product demonstrations, taste tests, pricing claims and disclosures. Through its unique window on the marketplace, NAD identifies hot issues in advertising and promotion. NAD's decisions assist advertisers in anticipating and responding to the challenges that new products and new media can pose.
Since its inception, NAD has examined advertising claims for a wide range of products, including:
Products promoted as "green" or environmentally beneficial
Infant nutrition products
Over-the-counter drugs and dietary supplements
Consumer electronics
Broadband technology
Functional foods and beverages
Cosmetics
Building supplies and home repair and renovation products
Energy services
In cooperation with the Council for Responsible Nutrition, NAD expanded its review of advertising for dietary supplements, a nearly $25 billion industry that is frequently criticized for misleading advertising. The program closed more than 360 cases concerning claims made in dietary supplement advertising. The program ended on July 1, 2020.[4] The NAD opens hundreds of cases each year and more than 95 percent of the advertisers that appear before NAD voluntarily comply with NAD's decisions.
NAD cases often originate through a challenge filed by one advertiser against the advertising claims made by a competing advertiser. In addition, NAD monitors national advertising and investigates complaints filed by consumers and advocacy groups or referred by local Better Business Bureaus. The course of NAD review proceedings is detailed in The Advertising Industry's Process of Self-Regulation, Policies and Procedures by the National Advertising Review Council.[5] The Procedures describe and explain the filing deadlines and requirements for submissions from challengers and advertisers. NAD examines advertising to determine whether the evidence provided by the advertiser fully supports the advertising claims at issue in an NAD review.[6]
The NAD can be expected to make one of three determinations for every claim at issue.
First, the NAD may find that the evidence provided by the advertiser fully supports or substantiates the claim under review.
Second, the NAD may determine that the substantiation is not sufficient to support the advertising claims and recommend the claims be modified in current and future advertising to better reflect the evidence in the record.
Third, the NAD may conclude that the evidence is wholly insufficient to support the claims. In that circumstance, the NAD will recommend that the advertising claims be discontinued.
Should an advertiser refuse to participate, NAD will to refer the advertiser to the appropriate regulatory agency. NAD's findings are detailed in the final decision and outlined in a press release. In addition, NAD regularly monitors closed cases to ensure that advertisers comply with NAD decisions. If the NAD determines the advertiser made a reasonable attempt to comply, but there are still concerns outstanding, the NAD will work with the advertiser to address those concerns. Should the NAD determine that no effort was made to comply, or that the advertisers is unwilling to make further modifications NAD deems necessary, the Procedures allow the NAD to refer the advertiser to the appropriate regulatory agency. NAD cases are closely watched by national advertisers and by the advertising industry.[7][8][9][10][11][12]
Children's Advertising Review Unit
The Children's Advertising Review Unit (CARU) was established in 1974 for the promotion of responsible advertising to children under the age of 12 in all media. CARU reviews and evaluates advertising for truth, accuracy, appropriateness and sensitivity to children's still developing cognitive abilities in accordance with its Self-Regulatory Program for Children's Advertising (the Guidelines), which hold advertisers to strict standards. CARU routinely monitors advertisements found in broadcast and cable TV, radio, children's magazines, comic books, the Internet and mobile services for compliance with its Guidelines. When ads are found to be misleading, inaccurate or inconsistent with its Guidelines, CARU initiates an inquiry and examines the advertising to ensure compliance with the Guidelines. If an ad is found to be non-compliant, CARU seeks discontinuance or correction. The results of CARU inquiries are publicly recorded in the NAD/CARU Case Reports. CARU also handles advertiser challenges and consumer complaints. In 1996, CARU added a section to its Guidelines that highlight issues that are unique to the Internet including Websites directed at children under age 13 for online privacy. In January 2001, CARU's self-regulatory program became the first Federal Trade Commission-approved Safe Harbor under the federal Children's Online Privacy Protection Act of 1998 Children's Online Privacy Protection Act of 1998 (COPPA).[13] Participants who adhere to CARU's Guidelines are deemed in compliance with COPPA and essentially insulated from FTC enforcement action as long as they comply with program requirements.
CARU’S Guidelines
CARU's Self-Regulatory Guidelines are deliberately subjective, going beyond the issues of truthfulness and accuracy to take into account the uniquely impressionable and vulnerable child audience.
The Guidelines are based upon the following core principles:
Advertisers have special responsibilities when advertising to children or collecting data from children online. They should take into account the limited knowledge, experience, sophistication and maturity of the audience to which the message is directed. They should recognize that younger children have a limited capacity to evaluate the credibility of information, may not understand the persuasive intent of advertising, and may not even understand that they are being subject to advertising.
Advertising should be neither deceptive nor unfair, as these terms are applied under the Federal Trade Commission Act, to the children to whom it is directed.
Advertisers should have adequate substantiation for objective advertising claims, as those claims are reasonably interpreted by the children to whom they are directed.
Advertising should not stimulate children's unreasonable expectations about product quality or performance.
Products and content inappropriate for children should not be advertised directly to them.
Advertisers should avoid social stereotyping and appeals to prejudice, and are encouraged to incorporate minority and other groups in advertisements and to present positive role models whenever possible.
Advertisers are encouraged to capitalize on the potential of advertising to serve an educational role and influence positive personal qualities and behaviors in children, e.g., being honest and respectful of others, taking safety precautions, engaging in physical activity.
Although there are many influences that affect a child's personal and social development, it remains the prime responsibility of the parents to provide guidance for children. Advertisers should contribute to this parent-child relationship in a constructive manner.[14]
In July of 2021, CARU issued revised guidelines for responsible advertising to children which went into effect January 1, 2022. The core principles of the CARU Advertising Guidelines remained the same, but the revised Guidelines:
Move beyond television-centric to address and reflect today’s digital advertising environment.
Contain a new section dedicated to in-app and in-game advertising and purchases.
Contain a new guideline requiring that advertising not portray or encourage negative social stereotyping, prejudice, or discrimination.
Incorporate updated FTC guidance on endorsements and influencer marketing.
Apply to children under age 13 across all child-directed content no matter the platform. The previous Guidelines applied primarily to children under age 12.
More clearly spell out the factors that determine when an ad is primarily directed to children under age 13.
Remove the children’s privacy guidelines, included in the CARU Advertising Guidelines since 1996, to a separate document, the CARU Self-Regulatory Guidelines for Children’s Online Privacy Protection.
National Advertising Review Board
NARB is the appeals board for the National Advertising Division (NAD), Children's Advertising Review Unit (CARU), and the Direct Selling Self Regulatory Council (DSSRC). When an advertiser or challenger disagrees with an NAD, DSSRC, or CARU recommendation, they may appeal the decision to the NARB for additional review. NARB is made up of 70 professionals from three different categories: National Advertisers Advertising Agencies and Public members made up of academics and former members of the public sector. NARB members are nominated for their stature and experience in their respective fields. If an NAD, DSSRC, or CARU decision is appealed, a five-member NARB panel is chosen to review the decisions. All NARB decisions are published.
History
In the late 1960s and early 1970s, a new consumer-protection movement had found its voice and legislators and regulators were listening. In his academic monograph, “The National Advertising Review Board, 1971-1976,”[15] detailed the troubled commercial climate of the times: “Public opinion surveys of attitudes toward consumerism, business and advertising in the 1960s showed that early in the decade, the majority of studies reflected either positive or mixed attitudes toward advertising. In contrast, studies later in the 1960s and early 1970s reflected more negative attitudes toward advertising and a growing interest in consumerism. “During the same period, Congress passed a host of consumer minded bills, including ‘truth-in-packaging’ legislation, the National Traffic and Motor Vehicle Safety Act and the Public Health Cigarette Smoking Act that banned cigarette advertising from the broadcast media. “The executive branch of government was active as well. Presidents Kennedy, Johnson and Nixon all sent consumer messages to Congress. The position of special assistant to the President for Consumer Affairs, the Office of Consumer Affairs, the Consumer Advisory Council and the Committee on Consumer Interests were all established in that period.” Noted Zanot, “the sheer amount of consumer protection activity at the federal level during the 1960s and 1970s far surpassed that of any other period in U.S. history.” Leaders within the advertising industry were urging the development of a self-regulatory mechanism that could help calm what Zanot described as “a gathering storm of consumerism.”
In his monograph, Zanot reported that Howard Bell, then-president of the AAF American Advertising Federation and current chairman of the NARB, “became a catalyst in the development of new self-regulatory measures.” Zanot also excerpted a speech delivered in September 1970 by the late Victor Elting, Jr., then-chairman of the AAF, at a meeting of the Chicago Advertising Club. “There are ticking sounds that we hear in all the pressure groups, congressional hearings and other forums that are meeting to decide our fate. Let's defuse them by having the strength and courage to determine our fate for ourselves,” Elting said. Eight months later, on May 13, 1971, Elting announced that the AAF, 4A's, ANA, and CBBB has formed the NARC. NARC was charged with setting policies for the NAD and NARB.[16]
By 1972, the NAD had received or initiated 444 complaints and was struggling against a continuing tide of criticism.[17] By 1973, though, that criticism had begun to abate. As Zanot reported, the organization received an “unexpected boost” when FTC Commissioner Mary Gardiner Jones, a consumer advocate, declared the system to be “a self-regulatory effort of truly historic proportions.”[18]
In 2012, the National Advertising Review Council (NARC), rebranded as the Advertising Self-Regulatory Council (ASRC). The new name and new brand were designed to offer an explicit statement about the mission and purpose of the organization—to advance the self-regulation of the advertising industry.[19] In 2019, ASRC folded into BBB National Programs, a new independent non-profit organization established as a result of the restructuring of the Council of Better Business Bureaus. The self-regulatory programs defined on this page including NAD, NARB, CARU, DSSRC, AUTO LINE, and others are divisions of BBB National Programs.[1]
Related Research Articles
The Children's Online Privacy Protection Act of 1998 (COPPA) is a United States federal law, located at 15 U.S.C. §§ 6501–6506.
Better Business Bureau (BBB), founded in 1912, is a private, nonprofit organization whose self-described mission is to focus on advancing marketplace trust, consisting of 97 independently incorporated local BBB organizations in the United States and Canada, coordinated under the International Association of Better Business Bureaus (IABBB) in Arlington, Virginia.
Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising which uses the Internet to promote products and services to audiences and platform users. Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising, and mobile advertising. Advertisements are increasingly being delivered via automated software systems operating across multiple websites, media services and platforms, known as programmatic advertising.
A self-regulatory organization (SRO) is an organization that exercises some degree of regulatory authority over an industry or profession. The regulatory authority could exist in place of government regulation, or applied in addition to government regulation. The ability of an SRO to exercise regulatory authority does not necessarily derive from a grant of authority from the government.
The Committee of Advertising Practice (CAP) is a British organisation responsible for the UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing, which is the main code of practice for self-regulation of the non-broadcast advertising industry in the UK.
The Association of National Advertisers (ANA) represents the marketing community in the United States. Its headquarters is in New York City and it has another office in Washington, D.C. ANA's membership includes over 600 companies with 25,000 brands that collectively spend over 400 billion dollars in marketing communications and advertising.
The Direct Selling Association (DSA) is a trade association in the United States that represents direct selling companies, primarily those that use multi-level marketing compensation plans. On behalf of its members' companies, the DSA engages in public relations and lobbying efforts against regulation of the multi-level marketing industry, and it funds political candidates through a political action committee.
Comparative advertising, or combative advertising, is an advertisement in which a particular product, or service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it. Also referred to as "knocking copy", it is loosely defined as advertising where "the advertised brand is explicitly compared with one or more competing brands and the comparison is obvious to the audience". An advertising war is said to be occurring when competing products or services exchange comparative or combative advertisements mentioning each other.
The Online Privacy Alliance was a cross-industry coalition of 81 e-commerce companies and associations. It formed in 1998 with the aim of providing a unified voice for companies in the Internet industry to contribute to the definition of privacy policy for the Internet.
The Advertising Standards Authority (ASA) is the self-regulatory organisation of the advertising industry in the United Kingdom. The ASA is a non-statutory organisation and so cannot interpret or enforce legislation. However, its code of advertising practice broadly reflects legislation in many instances. The ASA is not funded by the British government, but by a levy on the advertising industry.
Advertising to children refers to the act of advertising products or services to children as defined by national laws and advertising standards.
The United States Federal Trade Commission's fair information practice principles (FIPPs) are guidelines that represent widely accepted concepts concerning fair information practice in an electronic marketplace.
The Children’s Advertising Review Unit (CARU) is a U.S. self-regulatory organization that was established in 1974 and is administered by BBB National Programs. It is an independent self-regulatory agency for the promotion of responsible advertising and privacy practices to children under the age of 13 in all media. CARU reviews and evaluates child-directed media for truth, accuracy, appropriateness and sensitivity to children’s still developing cognitive abilities in accordance with its Self-Regulatory Guidelines for Children's Advertising, privacy guidelines, and relevant laws.
The Network Advertising Initiative is an industry trade group founded in 2000 that develops self-regulatory standards for online advertising. Advertising networks created the organization in response to concerns from the Federal Trade Commission and consumer groups that online advertising — particularly targeted or behavioral advertising — harmed user privacy. The NAI seeks to provide self-regulatory guidelines for participating networks and opt-out technologies for consumers in order to maintain the value of online advertising while protecting consumer privacy. Membership in the NAI has fluctuated greatly over time, and both the organization and its self-regulatory system have been criticized for being ineffective in promoting privacy.[Missing Citation]
The United States Federal Trade Commission (FTC) has been involved in oversight of the behavioral targeting techniques used by online advertisers since the mid-1990s. These techniques, initially called "online profiling", are now referred to as "behavioral targeting"; they are used to target online behavioral advertising (OBA) to consumers based on preferences inferred from their online behavior. During the period from the mid-1990s to the present, the FTC held a series of workshops, published a number of reports, and gave numerous recommendations regarding both industry self-regulation and Federal regulation of OBA. In late 2010, the FTC proposed a legislative framework for U.S. consumer data privacy including a proposal for a "Do Not Track" mechanism. In 2011, a number of bills were introduced into the United States Congress that would regulate OBA.
David C. Vladeck is the former director of the Bureau of Consumer Protection of the Federal Trade Commission, an independent agency of the United States government. He was appointed by the chairman of the FTC, Jon Leibowitz, on April 14, 2009, shortly after Leibowitz became chairman.
The Advertising Standards Council of India (ASCI) is a voluntary self-regulatory organization of the advertising industry in India. Established in 1985, ASCI is registered as a non-profit company under section 25 of the Company Act.
The United States food and beverage industry has increased the amount of advertising that intensively and aggressively targets children through multiple channels. Food marketers know that the youth consumers have equal if not more spending power than adults, they hold purchasing influence, and have the potential to be lifelong consumers. The advertisements for products predominantly high in sugar and fat have increased and have had an effect on the major health epidemic in the US of Childhood obesity, and as such are inconsistent with national dietary recommendations. Food advertisements have moved from the television into the classroom. Marketing companies are exploring new creative techniques to reach their target audience, young children, through promotions, contests, and incentive programs. As a result, the US has progressively been placing regulations on how much advertising is allowed during children's programming.
AdChoices is a self-regulatory program for online interest-based advertising that exists in the United States, Canada and across Europe. The program calls for advertising companies to establish and enforce responsible privacy practices for interest-based advertising, aimed to give consumers enhanced transparency and control. Companies adhere to a set of principles that are enforced by accountability programs.
The Digital Advertising Alliance of Canada (DAAC) is a Canadian non-profit trade association.
↑ "National Advertising Review Council Online Archives". Archived from the original on 22 October 2010. Retrieved 22 November 2012. "The NARC Online Archives is a paid for subscription that is only accessible through our website. ... An annual subscription is $6900" (Click "Subscribe to NARC Online Archives" to display.)
↑ Clifford, Stephanie, " Best Soup Ever? Suits Over Ads Demand Proof", The New York Times, New York 22 November 2009. Retrieved on 2010-06-27
↑ Clifford, Stephanie, " Notice Those Ads on Blogs? Regulators Do To", The New York Times New York, 10 August 2009. Retrieved on 2010-06-27
↑ Latimer, Hugh; Kuzin, John, " The NAD: A Primary Forum For Resolving Advertising Disputes", Metropolitan Corporate Counsel, New York, 1 January 2009. Retrieved on 2010-06-27
↑ Stevenson, Seth, "How New is 'New?' How Improved is 'Improved?' The People Who Keep Advertisers Honest", Slate Magazine, 12 July 2009. Retrieved on 2010-06-27.
↑ Morrison, Maureen, " NARC Nixed; Name Changed to Advertising Self-Regulatory Council Adland's Self-Policing Unit Opts for Clear Name", Advertising Age, New York 23 April 2012. Retrieved on 2012-05-28
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