I admit it…I get my news the old fashioned way—reading the newspaper. Today was no different than any other, except I was struck by a very small blurb in the business section of The Washington Post. The chairman of the Senate Commerce Committee, Daniel K. Inouye (D-HI), has introduced a bill called, the “FTC Reauthorization Act of 2008,” that would double the FTC’s current budget over the next seven years! That’s right, if the bill passes, the FTC’s budget will grow from its current $244 million to $468 million by 2015.

If the bill is successful, you can expect the following changes:

1. Expands the Commission’s authority to litigate civil actions involving the FTC act. (The FTC act establishes the FTC’s authority—what they can pursue). Currently, the majority of these cases are brought by the Department of Justice who rely on the FTC for technical expertise;

2. Expands the Commission’s authority to recover civil penalties for violations, where it is currently limited to recovering civil penalties for violations of a rule or final cease and desist order with respect to an unfair or deceptive act or practice;

3. Allows the Commission to hold entities accountable that aid or abet another in violating any law enforced by the FTC;

4. Allows State attorneys general (AGs) to bring cases and seek civil penalties; and

5. Allows the Commission to streamline the rulemaking process by a majority vote instead of the lengthy procedure set forth by the Magnuson-Moss Act.

Fortunately, as good corporate citizens these developments should not alarm you. However, now more than ever you need to understand the rules of the road.

Barbara Tulipane is ERA’s president and CEO

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I recently heard a statistic that 76 percent of consumers don’t trust advertising. Ouch, that’s gotta hurt. This means that your industry’s credibility is only slightly more viable than Hillary’s sinking odds at snagging the Democratic nomination.

Just when you think the direct response industry, or the advertising industry at large, have finally gained some street cred, we get sacked with more FTC complaints against Kevin Trudeau or revelations that Lipitor ads featuring Dr. Robert Jarvik are misleading.

There’s a reason why “Saturday Night Live” has consistently come up with relevant material to ridicule the ad industry…we practically spoon-feed it to them.

All jokes aside, enough is enough! Join ERA and Electronic Retailer at our upcoming events, where you have the power to learn about and change the course of your industry.

April 30, NYC – ERA Legal Series: Practical Knowledge for the New Technology Landscape

The seminar will shed light on the most recent FTC developments and offer practical insights and in-depth legal solutions in the area of emerging technologies, notably behavioral advertising.

April 31, NYC – Electronic Retailer LiveEdit Lab

Discover the fate of paid programming at our Executive Media Summit, followed by a day of relevant sessions geared to keep your business ahead of the game and afloat in times of economic uncertainty.

May 20, Washington, D.C. – ERA Government Affairs Fly-In

Finally, if you truly want to be involved and have your voice heard on behalf of the industry, join with your colleagues as we teach you the legislative issues facing your business. You’ll then be paired into groups with a seasoned lobbyist to meet with your elected representatives in Congress on Capitol Hill to voice your concerns.

It’s your industry; perhaps it’s time to take some ownership.

Pat Cauley, eMedia Editor, Electronic Retailer Magazine

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If you haven’t seen it yet, there’s an interesting advertising dispute brewing between Quiznos and Subway sandwich shops. It seems Quiznos invited the public to submit homemade videos in a contest intended to target its rival, Subway. The contest rules stated that video submissions were meant to draw “a comparison between Quiznos and Subway with Quiznos being superior.”

One of the videos showed a Subway sandwich running to a Quiznos store to find more meat. Another showed two submarines looking like sandwiches, with the Subway submarine being destroyed because it did not have enough meat.

Subway subsequently sued Quiznos, alleging that several of the homemade videos made false claims and depicted its brand in a disparaging manner. In addition, Subway also objected to ads that Quiznos itself created, showing people on the street choosing Quiznos over Subway. The legal question here is because Quiznos did not create the submissions, so should it be held liable for user-generated content created on its behalf?

From a claim substantiation standpoint (assuming that the “more meat” claim is one of the false statements), I wouldn’t want to be the attorney representing Quiznos in this one. You see, knowledge is a dangerous thing. In my opinion, once an advertiser is made aware that claims are being disseminated in the marketplace without the prerequisite underlying support, the advertiser is responsible and must exercise a reasonable effort to remove the videos/ads from circulation. As Richard Leighton, a partner at Keller and Heckman who specializes in advertising and trademark law noted in a New York Times article: “It’s not like Quiznos said, ‘Do any interesting video you can.’ They provoked it, instigated it, so it may be that the consumers, in this case, are effectively their agents.” (more…)

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Before the holidays, the FTC invited a small group of industry representatives to preview their tutorial for ways businesses can protect the personal information that they collect. Frankly, I didn’t look forward to attending what I thought would be yet another boring presentation on data security. Boy was I wrong! The FTC actually produced a video that even our industry would be proud of. It’s interactive, it’s fun, and it was developed with the intended audience in mind.

Click here to view the FTC video!

I strongly encourage you to share it with your fellow employees—it’s the least painful way to learn the five basic principles to protecting your customers’ information: take stock, scale down, lock it, pitch it and plan ahead. I could be wrong, but perhaps the FTC has learned a thing or two from the direct response industry—and that’s knowing your audience. The only thing this video missed was the CTA…let’s keep that one a secret!

Barbara Tulipane, ERA president and CEO

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A key to successful infomercial production involves having the right balance of entertainment and selling. An entertaining infomercial production can be instrumental in gaining the consumer’s attention and getting them to stop and watch your show. However, infomercial marketers need to make sure their infomercial production isn’t too entertaining and doesn’t do a good job of selling your product. A call-to-action (CTA) is the key-selling segment of an infomercial, during which the product benefits, offer and price are revealed to the consumer. Some infomercials do not reveal the price during the CTA, and this type of offer relies on the telemarketing firm to reveal the price and sell the product. This is referred to as a soft offer. Recent research has shown that by including more CTAs in an infomercial production an infomercial marketer can generate a better level of consumer response. Since consumers have so many media options to choose from, they are likely watching infomercials for shorter periods of time, so that’s why it’s important to provide them with the ordering information contained in the CTA more often throughout the infomercial production.

Before-and-After Photos, Product Demonstrations and Continuity Programs

Make sure before-and-after photos and infomercial product demonstrations are believable and represent what the product can actually help you achieve. Today’s consumer is more sophisticated than ever and can detect deceptive product representations. In addition, make sure you work with an experienced FTC lawyer to ensure that your infomercial production complies with all FTC rules and regulations. Many successful infomercials include a continuity program, where the consumer authorizes the infomercial marketer to ship a product to them on a regular basis. This can provide the infomercial marketer with an ongoing stream of income. Work with your telemarketer in establishing a continuity program that complies with all FTC rules.

Peter Koeppel is founder and president of Koeppel Direct

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