As Regulation Increases, WFA Must Decide What's Worth Protecting
Having worked on global liquor brands for 35 years, Pernod Ricard CMO Martin Riley knows a thing or two about regulation. As president of the World Federation of Advertisers, he is about to learn a whole lot more.
Mr. Riley took over the post last week as the organization celebrated its 60th anniversary during Global Marketer Week in Brussels.
Mr. Riley is just settling into the job, but he already has strong views on what the WFA's role should be.
"Business and society are inextricably linked, and I see the WFA being at the forefront in representing the reasonable view of producers, but also of consumers," he said. "I think, like with politicians, people can look at regulators and think, "Do these people have any idea? Do they live in the real world?'"
The WFA says it represents about 90% of global marketing-communication spending -- $700 billion annually -- through 60 of the world's biggest advertisers, including Procter & Gamble, Unilever, McDonald's, Coca-Cola, Kellogg's, Johnson & Johnson, Ikea, Kraft Foods and Nestle. The group also represents national advertiser associations around the world.
And in recent months, the Brussels-based WFA has opened its first Asia office in Singapore, as part of its commitment to a region that has become increasingly important to its members. The region is also fast becoming the home for new global brands -- and members -- like India's Tata and Chinese conglomerate Fosun.
A Brit based in Paris, Mr. Riley began his career in 1977 at Spanish port and sherry producer Sandeman. He then moved on to Seagram and Allied Domecq before joining Pernod Ricard in 1997.
Pernod Ricard ranks 95th among the Ad Age DataCenter's top 100 global marketers, spending nearly $300 million annually on worldwide measured media. In addition to the anise-flavored liqueurs that give the company its name, brands include Absolut Vodka, Jameson, Chivas Regal, Perrier-Jouët and Jacob's Creek.
Ad Age: What are the biggest issues the WFA faces?
Martin Riley: There's the food industry, the soft-drinks industry, the mobile-phone industry, the car industry, data privacy. There's a lot of regulation in place, and I think the WFA has an important role to play in being the honest representative of global companies. We have to determine what's worth protecting in society in a way that allows marketers to do their jobs, but at the same time we have to listen to what is driving the arguments coming from legislators and regulators. We need to ask, "What is the insight they have, and is it the same insight that we have?" I believe everything starts with an insight.
Ad Age: Is self-regulation always your goal?
Mr. Riley: Self-regulation is a very strong hand to play. Because of a number of things, like social media, for example, if any company behaves irresponsibly, you're going to get found out. I think businesses have evolved quite dramatically because of social media.
We [at Pernod Ricard] tell people to avoid excess and to enjoy with moderation; it's just part and parcel of the way we communicate. And most, if not all, big companies want to do things that reinforce their responsible attitude and want to be active members of a global society that's got certain values. We have to demonstrate to legislators that we understand the problems and we want to find solutions.
Ad Age: Often when one country imposes a new law or restriction, it spreads to other regions. How do you approach this?
Mr. Riley: At the moment I can only speak for Pernod Ricard, where regulation is critical to the effective development of the business. We look at regulation globally, and it's very different in different parts of the world. All our teams in all the individual markets know what they can and can't do, and we also have our own internal panel, independent of marketing, which reviews all activities from around the world.
In China, it's relatively open, but Russia [where beer was this year reclassified as alcohol rather than a foodstuff] is a hot spot because we have to approach it in a different way, but there are always other ways you can get your message across -- things like events or a sponsored film or whatever it may be.
Ad Age: Privacy is a huge issue for marketers now. How can they negotiate this complex territory?
I was talking to my son, who's based in New York. He was saying privacy is not such a big issue [in the U.S.] because people are used to the fact that data is used and it's broadly adding value.
Mr. Riley: In Europe for whatever reason -- cultural or historical -- we're much more concerned about privacy, and the horizons that are opening up for marketers and communication agencies could be stopped in their tracks unless we get this resolved in a sensible way.
The European Union is trying to express its citizens' muddled disquiet, while the service providers say they should be left alone, because the whole thing about the internet was that it should be free and available to all.
I had a fascinating visit to the Google research lab in California recently. You recognize there are some very, very clever people there who are effectively creating a new world for us. All of us -- business leaders, governments, regulators -- in positions of responsibility have to take a step back and see where it's all leading, and that it's good for society. But it's going to be a debate, because none of us know.