But Wait, There's More! Gaining Trust in the Direct-Response Realm

As Industry Has Grown, So Has Need to Police Marketplace for False Advertising Claims

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The direct-response industry has some of the most colorful, entrepreneurial people in the world writing copy and millions of customers reading or watching those advertising claims.

We've come a long way since the days of the Flowbee (spinning blades to cut your hair and a vacuum cleaner to whisk away the mess -- who wouldn't want one?) and the beloved, much-parodied Ginsu knife infomercials. Even skeptical shoppers are fascinated by OxiClean's side-by -side demonstrations and the incredible speed of the Slice-O-Matic.

It's an amazing industry, and I have a great job. The Electronic Retailing Association serves more than 400 members, including Expedia, HSN, QVC and, yes, the folks who made the Snuggie.

This industry is a lot of fun, and it's still growing. The best available statistics indicate that direct-to-consumer marketing is a $350 billion-a-year business.

A greater need to police the marketplace for false advertising claims has accompanied that growth. In 2004, ERA launched its own initiative, the Electronic Retailing Self-Regulation Program, to give honest advertisers a level playing field and to guide the uninitiated toward better practices. A couple of examples:

Advertising often mirrors social issues, and these are challenging financial times for many consumers. We've seen a spike in get-rich-quick schemes and debt-relief plans, including a "debt-elimination" offer (Tim Durkop's Legal Credit Cures) that involved testimonials: "Eliminate all your debt in as little as 30 days." "Tim will teach you how to eliminate your debt in as little as 10 minutes." "Tim's Fast and Easy guide to keeping your stuff will teach you all the secrets to eliminate your debt and keep the stuff you want -- the car, the boat, the motorcycle."

Dietary supplements and weight-loss products sometimes promise much more than they can deliver to people desperate for solutions. LeanBean Coffee tantalized consumers with the possibility of eating all their favorites -- junk food, ice cream, bacon and eggs -- while losing weight.

I probably don't need to say that , in both cases, ERSP directed the advertisers to modify or stop making the claims.

ERSP is a great illustration of how a dynamic industry sector can work with a Better Business Bureau-administered self-regulation structure to provide credible self-policing. We need an infomercial for that !

The program has reviewed nearly 6,000 hours of infomercials, tracked more than 3,000 products, monitored more than 3,000 websites and published nearly 300 decisions. It looks at advertising claims made on Facebook pages and in Twitter feeds. It has even ventured into the virtual world of Second Life, calling out a company that claimed its "photo-blocking" spray rendered license plates invisible to traffic cameras.

ERSP has provided extensive guidance on matters that are vital to direct response, including testimonials.

Consumer testimonials were a persuasive staple in the industry. In 2009, the Federal Trade Commission revised "Endorsements and Testimonials" guidelines to require more detailed disclosures than the previously acceptable "results may vary."

To encourage industry-wide compliance, ERSP has issued decisions, provided tutorials, hosted webinars and made conference appearances.

ERSP is good for our customers. It monitors the marketplace, holds advertisers responsible for their claims and practices, and tracks emerging issues and trends.

Self-regulation is good for the direct-response industry because tough review of advertising claims helps build consumer trust. It is a mark of the industry's respect for self-regulation that ERSP has had to refer only 19 advertisers to the FTC for failure to participate in a review or refusal to comply with an ERSP decision.

And we ensure that prospective ERA members know how seriously we take the system. Our guidelines for membership require companies to abide by our code of ethics, participate in any inquiry launched by our counterfeit fact-finding program and comply with any request from ERSP for substantiation of their claims. We bounce companies that don't play fair.

In the end, our commitment to self-regulation comes back to customers.

My father was an early executive at McDonald's Corp., and my sister and I grew up as part of the McDonald's family. At our house, that meant learning at a young age the value of a customer's trust.

I'm grateful for those lessons.

ABOUT THE AUTHOR
Julie Coons is president-CEO of the Electronic Retailing Association.
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