ERSP Summit Looks at the Future of Self-Regulation

by Vi Paynich on May 25, 2016 1:42:46 AM ERSP, Advocacy

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This year’s ERSP Summit cast a bright spotlight on self-regulation with the theme, “Self-Regulation in The Changing World of Direct Response Advertising.” On May 24, legal experts and direct response marketing professionals converged at SunTrust Headquarters in Washington, D.C., to discuss key trends and issues affecting the industry today, and take an honest look at where direct response advertising is heading. The half-day conference addressed such topics as: the regulatory focus on the lead generation and payment processing industries; recent developments at the FTC; and how emerging advertising platforms have created new challenges for the direct response industry.

The event kicked off with introductory remarks from Lee Peeler, president and CEO of ASRC and EVP, National Advertising at the CBBB. “We’re all here because through your work in ERSP, you’ve shown that self-regulation works,” Peeler said.

Peter Marinello, director, ERSP and VP, CBBB, then took to the podium to introduce Lois C. Greisman of the FTC, who gave an update on what is currently happening with the Commission with regard to consumer protection across the land.

“The range of what’s going on is absolutely daunting,” she stated. “This fall, the FTC is launching its tech series of seminars. We’re going to look at ransomware, drones, smart TV. At the same time weighing heavily on us is the latest IRS scam—scammers calling up consumers saying, ‘You owe back taxes. We know where you live. We’re going to send someone to arrest you.’" She noted the latest twist to this particular scam is getting people to go from one retail outlet to the next, purchasing iTunes cards as opposed to using Western Union and wiring money to the scammers.

Greisman added that there’s quite a lot going on with the direct response industry. The FTC is continuing its focus on Negative Options, Buy One, Get One Free, and substantiation—to name a few. She then addressed lead generation.

With lead generation, according to Greisman, the message is clear: “The entity generating or selling a lead has to do so legally. The entity purchasing or acquiring those leads also has to make sure that they are using them responsibly, and they are responsible for whether or not the leads were acquired legally,” she said.

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The FTC’s associate director then joined her fellow panelists for the first session of the day, “The Web of Accountability: Lead Generation and Payment Processing.” Moderator Ellen Berge of Venable LLP, along with panelists Andy Borges (Fortune Builders, Inc.), FTC’s Greisman, and Blair Jackson (Invictus Law), discussed the responsibility and accountability of sellers, purchasers, and creators of online leads, as well as the impact on payment processors and other third parties. At one point, Berge asked for comment about the possibility of modeling a self-regulation program after ERSP that would be specifically for the payment processing community.

“Based on my experience of working with ERSP, one of the huge benefits of that is they’re going to take a look at your business from a much higher level,” Borges explained. “They’re working with others in your industry so they really know what to focus on and when they are evaluating your business, they’re going to point out certain areas where you can improve. I think that’s a huge benefit and advantage [because] you’d be working with the merchant processor.” What’s more, he said, you would know exactly what you need to target, because the merchant processors will ask the same questions as the ones ERSP would be asking.

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One of the highlights of this year’s event was the Keynote Presentation featuring FTC Commissioner Terrell McSweeny. Venable’s Amy Ralph Mudge sat down with Commissioner McSweeny for a one-on-one discussion about recent trends at the Federal Trade Commission, along with a prospective look at the evolving landscape of digital marketing practices. With regard to self-regulation, Mudge asked the Commissioner to share what she believes the industry can do to improve their efforts and where she thinks self-regulation should go.

“It’s nothing new or surprising to have a Federal Trade Commissioner who believes that self-regulation can be an incredibly valuable tool, and it can be used with highly dynamic markets,” she said. Commissioner McSweeny pointed out that a lot of this comes down to consumer trust, because brands really flourish when consumers trust them. “In general, continue to do good work on disclosures, on transparency, and making sure that people have real choices and have adequate information in making those choices,” she advised.

The keynote was directly followed by the session entitled, “Direct Response Advertising: Where It’s Been and Where It’s Going.” Moderator Ed Glynn of Locke Lord, LLP was joined by panelists Jack Kirby (Havas Edge), Jonathan Gelfand (Beachbody, LLC), and La Toya Sutton (Manatt). During this session, panelists discussed the genesis of ERA’s self-regulation efforts and explained why they believe direct response has morphed from being unique to a particular industry to crossing over into mainstream marketing.

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According to Kirby, “I think it’s first best to take a step back for a moment and say, ‘What is direct response?’ I would argue that direct response is effectively no more. It is advertising. When you look at the largest brands in America, the majority of them are putting a URL on their advertising and inviting the consumer to visit a website or microsite and learn more information or buy a product. What distinguishes that from a company that calls itself a direct marketer? Advertisers and the largest brands in the country today want the efficiency of direct response advertising, but it needs to look and feel like they are brands.”

After spending the afternoon listening to highly informative session presentations and engaging in lively discussions, Summit attendees had a chance to wind down with cocktails and network during ERA’s Government Affairs Fly-In Opening Reception. This year, ERA welcomed a special guest to the affair, State Attorney General Karl Racine (D-DC), who shared his perspective on consumer protection.

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“My philosophy on consumer protection has really developed as result of my experience in the public and private sector. I used to represent clients, individuals, and businesses mostly in the government investigations context—sometimes against State AGs and a lot of times with respect to the federal government knocking on the door. I have never seen a complaint or indictment that was literally true from beginning to end. That told me that government—despite its best intentions—oftentimes doesn’t have the complete picture that it thinks it has. And so my philosophy at the Office of the Attorney General…is to protect the consumers, but protecting consumers also means giving the companies that we’re reviewing an opportunity to tell their story and to be heard.”

Vi Paynich's blog
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