Commentary by Rance Crain

AD REGULATORY GROUP NARC MAY LEAVE NYC

Does Dispute Resolution Program Need Dispute Resolution?

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Are the trade associations and their partner, the Council of Better Business Bureaus, in a tug of war over the
Rance Crain, editor in chief, 'Advertising Age'

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ad industry's national self-regulatory body?

It was a shock to ad trade executives when Advertising Age disclosed last month that Coors Brewing Co. was close to signing an agreement to participate in a separate CBBB-run "dispute-resolution" program. It would specifically review Coors' compliance with Coors' own pledges to avoid ad practices that promote over-consumption or underage consumption of beer.

In addition, the ad trade groups now fear that the New York-based National Advertising Review Council, the ad self-regulation program of the CBBB and three major ad associations, might be forced to move to CBBB's Arlington, Va., HQ. (CBBB had a tough 2001, as did other trade groups. It lost about $900,000 on an accrual basis.) The seven staff attorneys working for NARC's National Advertising Review Board, National Advertising Division and Children's Advertising Review Unit have indicated they wouldn't make the move, thus causing the loss of "100 years of institutional memory" about ad self-regulation.

CBBB President Ken Hunter

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told me he doesn't want NARC to move. "Things are going great guns and I don't want to disrupt that," he said, adding that CBBB has just signed an extension on its lease (at lower cost) and that there isn't enough space at its Virginia location to house NARC.

Moving expenses
But the CBBB could always find more room at cheaper rates near Dulles Airport. A CBBB executive committee, made up of local and national members, will decide the NARC relocation issue in June. NARC itself is looking for more space in downtown New York -- and the ad trade groups have been asked to pony up one-time moving expenses.

The problem is that CBBB local board members

might not have the same appreciation for NARC as do its national members. As a matter of fact, one of Ken Hunter's first jobs when he joined CBBB in October 1999 was to quell a revolt by local members ready to break away and form their own organization. Ken's job was to "bring local members back into the fold," I was told, and this he has done. Whether he wants to buck the sentiment of local members of the executive committee is uncertain.

Dispute resolution
CBBB's bread and butter has been doing "dispute-resolution" programs that affect local businesses, such as a major effort involving local car dealers and aggrieved customers. It is now doing the same thing in Web site privacy disputes. That's what the Coors program is all about -- arbitrating whether the company lived up to its promises, in this case regarding its beer advertising.

"We couldn't have a self-regulatory program [like the ad industry's NARC] because we needed to provide different standards to different problems," said Charles Underhill, CBBB senior vice president and dispute resolution and chief operating officer, BBB Online. He acknowledged CBBB has no current dispute-resolution programs that involve advertising but said it would create rules for advertisers that make specific pledges, as Coors did, about its advertising.

The irony here is that CBBB needs the NARC (for its ideas and its outside support) and the NARC needs the CBBB (for its legitimacy and overhead structure).

Let's hope that the current set of circumstances don't upset this delicate balance.

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