Is Change Coming to Ad Industry's Self-Regulation Policies?

Attorneys Will Release Recommendations on April 15

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Intending to give a decades-old system of self-regulation a shot in the arm, a group of corporate attorneys are set to release recommendations for changes to the advertising industry's self-policing procedures.

Attorneys who practice before the National Advertising Division and represent some of the nation's largest advertisers, including Sprint, General Mills and Johnson & Johnson, have been working -- and they say arguing -- since August on recommendations on how to improve the NAD and the National Advertising Review Board procedures.

"Sometimes it was an endless bitch fest," said John Villafranco, a partner at Kelley Drye & Warren.

Mr. Villafranco and the other attorneys who worked on the report discussed the process and the issues they tackled at the Association of National Advertisers Advertising Law & Public Policy Conference in Washington. But they decline to reveal their recommendations before they are published on April 15.

Some of the issues considered included whether a company should be able to settle a challenge it has initiated without obtaining NAD approval and whether a company challenging another company's advertising should have the right to appeal an adverse decision.

Ways to make the process, which now takes four to six months, quicker were also considered. So was the question of whether the NAD should accept new evidence if a situation changes after a decision has been made, in effect reopening the case.

"The recommendations are not radical at all but we tried to make them well-thought through," Mr. Villafranco said.

He also said there was a "robust discussion" on whether the NAD decisions should be available to the public for free. They are now available only through subscription.

The attorneys said adoption of some of their recommendations may be hamstrung by a lack of money. The self-regulation system is funded largely by dues, fees and revenue from conferences.

"The process needs more money," said Catherine Miller, an in-house attorney for Sprint.

The lawyers shied away from saying their attempts to modify the industry's process of self-regulation, established in 1971, is a reform.

"We're just stepping back and taking stock of the changes that can be made," said Nancy Felsten, an attorney with Davis Wright Tremaine.

Mr. Villafranco said "there are recommendations that might well be ignored" by the Advertising Self-Regulatory Council

But the ASRC welcomes the effort, said council president Lee Peeler.

"What's pushing the review is that the process is extremely valuable and the group wants to see if it could be made better," he said.

ASRC board member Carla Michelotti also attended the ANA panel and said she supported the review.

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