Disclosure Debate Hits Novel Ideas

Efforts to Integrate Brands Into Cultural and Conversational Spaces Scare Ethicists

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Not so fast with the hidden persuasion.

Many in-vogue marketing techniques try to reach consumers in such a way that might not even realize they're dealing with ad content, and that's raising the ire of critics such as Commercial Alert. As marketing messages get integrated into novels, casual conversation and unbranded websites, new legal and ethical questions about when marketing should be labeled as such are emerging fast.

Perseus Books Group last week announced that the upcoming "Cathy's Book: If Found Call (650) 266-8233" from its Running Books imprint would include product placement from Procter & Gamble Co.'s Cover Girl and the BeingGirl.com website of its feminine-care business. The P&G brands will reciprocate by promoting the book.

no contract or money

Perseus President-CEO David Steinberger said the relationship, struck informally without a contract or money changing hands among the authors, Sean Stewart and Jordan Weisman, and P&G, still would be disclosed on the book's copyright page and publicity materials.

That wasn't enough for advocacy group Commercial Alert, which last week called on 305 book editors not to review what it said was an ad, not a young-adult novel. If such deals become commonplace, Gary Ruskin, executive director of the group, said he'll ask the Federal Trade Commission to require prominent disclosure on books.

The book deal is the latest of several marketing tactics to raise disclosure questions-particularly for global megamarketer P&G, as it shows a growing willingness to try nontraditional tactics.

P&G's newly acquired Gillette unit last month launched NoScruf.org around the idea of a group of militant women refusing to shave until men do. The spoof-by Digitas, Boston-is transparent, but the site's ownership isn't. The connection to P&G and Gillette isn't disclosed on the site, though its ownership can be found with a Who Is search.

"Online advertisers should disclose their advertising or marketing to be such if failure to do so would be misleading," states the Better Business Bureau BBBOnline Code of Online Business Practices, of which P&G was a charter adopter.

Steve Salter, VP-BBBOnline for the bureau, finds it "interesting" that P&G chose a .org domain for NoScruf-that domain is usually used by nonprofits, and P&G hasn't yet identified itself on the site. But, he added, "We would probably not be terribly concerned, because I see virtually no chance of consumer harm here."

The code was adopted in 2001, he said, to safeguard privacy and ensure consumers could identify online merchants they bought from. Such unbranded viral campaigns "are a newer area we didn't envision," he said.

A P&G spokeswoman said the site is clearly satirical and isn't specifically aimed at selling Gillette products. "It's more about raising awareness among men about how women really feel about shaving," she said. Print ads scheduled to break soon will disclose Gillette as the marketer behind NoScruf, she said.

'antiquated' ad laws?

Mr. Ruskin sees the unbranded effort as one of several examples of disclosure issues that regulators need to address. "It shows how antiquated advertising law has become and how it needs to be updated," he said.

"The FTC has repeatedly required advertisers to disclose ads in magazines," he said, and has responded to his group's efforts to require clear labeling of search advertising.

While new commissioners may have brought a pro-marketer tilt, "I believe the issues are the same now," he said.

But Ron Urbach, an attorney with Davis & Gilbert, New York, who specializes in entertainment, intellectual property and advertising issues, said consumers already are well-aware of paid product placement on TV and films and will likely catch on fast if it becomes commonplace in books.

Mr. Urbach said the FTC's rejection last year of Commercial Alert's efforts to require more prominent disclosure of TV product placements shows the commission isn't likely to expand requirements.

The FCC has yet to rule on a similar petition. And the FTC has yet to respond to Commercial Alert's October petition to force members of such word-of-mouth efforts as P&G's Tremor for teens or Vocalpoint for moms to disclose that they are compensated to talk up products to their friends and family.

Members generally get only samples or coupons, a P&G spokeswoman said, though some occasionally can earn $75 or $100 for participating in focus groups. Members are never told what to say, she said, adding that Tremor and Vocalpoint samples are labeled "so that people understand this is a marketing service."

P&G executives did talk to the FTC regarding Commercial Alert's complaint. "It was more an educational session vs. an inquiry," she said. "Coming away from that, we were not aware of any concerns or questions."

"It's still under review," said Mary Engle, associate director of the FTC's Division of Advertising Practices. She declined to comment on plans to interview other parties.

It's not clear Tremor and Vocalpoint disclosures would meet the Word of Mouth Marketing Association's draft code of ethics, proposed last year but still not finalized. "We understand the guidelines WOMMA has in place," the P&G spokeswoman said. "Obviously some of the guidelines in terms of disclosure are very different from what we believe. We respect what they're doing, but right now we're not a member. We try to follow the highest guidelines that we can to protect our consumers."
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