A recent commentary in Adweek on “Green Advertising” warns that if new regulations are implemented by the Federal Trade Commission on “Environmental Advertising” it would negatively affect innovation in the advertising industry.
The author of the story, Ronald Urbach, writes that the FTC’sdecision to update its standard rules on ‘green’ marketing one year ahead of schedule are welcomed by professionals in the advertising industry so long as they don’t cut back on the sector’s competitiveness.
Urbach, who is the co-chair of the advertising, marketing and promotions department of law firm Davis & Gilbert, went on to mention ‘product packaging’ claims specifically. He uggested that new regulation in that sector (which happens to be among the easiest for companies to address) would hurt companies’ ability to communicate with consumers about packaging innovation, and might even stifle innovation itself.
Despite the wild growth of confusing, even conflicting messages in the marketing arena, Urbach is not too happy about stricter rules. He warns that “implementing further government regulation would likely have a chilling effect on an advertiser’s ability to communicate important and valuable information to consumers — and might actually contribute to making our environmental problems worse by stifling innovation.” He also says “Advertisers have every right to promote their green credentials, and it is important that companies feel the responsibility to do so and to become part of the environmental solution, even if their sense of responsibility may arise more from an attempt to seize a sales edge than a desire to save the world.” Perhaps the latter statement indicates where the divide between companies and rules is.
The environmentally friendly product sector has been estimated at around $230 billion recently by the National Marketing Institute. That’s quite sizable, putting green products firmly in the mainstream markets’ league – and the green products market is still growing. It’s estimated that 80% of Americans check out a company’s environmental properties before purchasing.
Two comments on Urbach’s article.
-I wonder whether he agrees at all that clarity actually benefits the debate. Without rules, companies run the risk of being found misleading to consumers even if they did not intend to do so. In other words; companies might need as much protection as consumers in a situation where end-users are overly skeptical.
-I wonder what the advertising industry thinks about consumers. A recent TerraChoice study have shown that as much as 90% of all green marketing of products carried misleading information and any action to set some sort of standards would definitely not be impoverishing this scene. Information about good products already is to a large extent distributed via free networks like the internet, which is a clear signal that information provision is not dependent on financing. Further underscoring this is the accuracy of information which in many cases is not sponsored at all. Bloggers, for example, have long left traditional commercial communication behind, interacting directly with each other about what’s recommendable and what not.