October 19th, 2005

P&G ‘Buzz Marketing’ Unit Hit With Complaint

By Bruce Horovitz
USA Today

Is Procter & Gamble — the world’s biggest packaged goods marketer — breaking the law by enlisting teens to coax friends to try teen-tailored products?One consumer advocacy group thinks it is. Commercial Alert on Tuesday filed a complaint with the Federal Trade Commission that says P&G’s word-of-mouth marketing unit, Tremor, targets teens with deceptive advertising.

If successful, the complaint would have broad impact on the ad business. So-called buzz marketing is the industry’s hottest trend. More than 85% of the nation’s top 1,000 marketers now use some form, estimates Marian Salzman, trend-spotter at JWT Worldwide.

Advertising Age estimates buzz marketing to be a $100 million to $150 million industry. Though still relatively small in dollar volume, the provocative practice ranks among marketing’s highest growth areas — and is causing genuine angst within the industry.

“This is a practice that may be illegal,” says Jonah Bloom, executive editor of Advertising Age. “It’s probably only a matter of time before someone jumps on it” to stop it, he says.

Which is what Commercial Alert is trying to do. P&G, and several smaller buzz marketing specialists named in its complaint, “are perpetuating large-scale deception upon consumers” when people they recruit to promote products by word of mouth don’t disclose that fact, says Gary Ruskin, executive director of Commercial Alert.

FTC officials declined to comment.

P&G’s 4-year-old Tremor division has a panel of 250,000 teens ages 13 to 19 who are asked to talk with friends about new products or concepts P&G sends them. About 75% of members are female.

Steve Knox, CEO of Tremor, which works for outside clients as well as parent P&G, had no comment on the complaint. But, he says, “We’re an incredibly ethical company.” Panelists are not paid cash, he says, but get product samples or other materials.

“To be a member is empowering for a teen,” says Knox. “You have a voice that will be heard, and you get cool information before your friends receive it.”

Knox won’t name any of Tremor’s outside clients, citing client confidentiality.

Tremor recently did a campaign for P&G’s Clairol Herbal Essences. The purpose was to help teens feel more comfortable about coloring hair. It sent some members cardboard booklets that let them push locks of their own hair through a hole and compare it with what the hair would look like in a new color.

“If we’ve done our work correctly, they talk to their friends about it,” says Knox. Tremor doesn’t tell members to say they are part of Tremor, he says, “because you never tell a (panelist) what to say.”

Ruskin says that’s bogus. At a minimum, his complaint says, the FTC should “issue subpoenas” to P&G executives at Tremor — and other buzz marketers — to determine whether their endorsers are disclosing that they are paid marketers.

Comments

  1. Posted by Tom on October 19th, 2005

    Another sad commentary on American corporate slime ....  it seems that selling the people worthless overpriced crap is not enough .. now they want to increase their profit margin by using the consumers themselves to “market” their wares. 

  2. Posted by Stan Slotter on October 19th, 2005

    In the current climate of Corporate control of our government, perpetrated by the fact that our current administration has done all it can to promote the corporate agenda,
    I believe that it will be almost impossible to change what’s happening in this climate without electing a government that has the courage to stand up to corporate exploitation and return our nation to a nation of law for and by “the People” of the United States and not what it has been, for and by “Big Business”.
    No wonder the FTC hasn’t said anything about Buzz Marketing. The people that have power over the FTC like anything that creates more wealth for the wealthy. It’s what’s happening.

  3. Posted by John E. Grant, Jr. on October 19th, 2005

    "Tremor”:
    Talk about “clandestine operations”!

    Though national security isn’t involved, it’s like having [foreign] spies in this country!

    Americans against Americans-maybe we have more to fear from “Big Business” than al Qaeda.

    It’s just as insidious.....

  4. Posted by Leslie on October 19th, 2005

    Those teens who are on Tremor’s panel are probably loving it.  They get free stuff and whether Tremor tells them to talk about it with their friends or not they will anyway.  Any consumer who gets to participate in a company this way is going to love it, not only are you getting free products that probably aren’t out on the shelves yet, you are getting to voice your opinion to the actual company and make a difference (or at least feel like you make a difference). 

  5. Posted by Hillsry Smith on October 19th, 2005

    Another example of our culture pimping out teenage girls. Just lovely.

  6. Posted by Sergei on October 19th, 2005

    I’m not sure if the disclosure requirement will help here. Maybe it would be better to go after long term health effects of the products that they are “pushing”. Kill the “buzzer’s” excitement from the start.

    Most of the hottest new products are not tested, contain many suspected chemicals. By forcing them (P&G) to tell the “buzzers” that “we have no guarantee that your hair will not get thin” or “the product might cause an increase in dandruff and headaches” or “we can not guarantee your safety at all”, the rules will be more effective.

    (Or one can always dream of getting each one of those teen a subscription of Adbusters).

  7. Posted by Robert W. Brown on October 19th, 2005

    Corporations in our country are closer to being facists than being democratic. I don’t believe that Democracy and Capitalism are compatible. Although I am not a Socialist per se, I believe in some social programs and to put some reigns on the “Corporations Gone Wild.” The greatest asset that our country has is its people. The NeoCons that govern our country refuse to recognize this fact.

  8. Posted by Cathy on October 19th, 2005

    I agree with Tom’s comment. Our culture has become ridiculously materialistic, ridiculously concerned with looks, image and youth. It is not healthy. Is no one satisfied with the millions and millions of products we already have? We have to have more, sell more, push more? It’s depressing. Image is everything these days , it seems. 

  9. Posted by Peter Belfiore on October 19th, 2005

    Buzz marketing is really just another domestic facet of Abu Ghraib: the ignorant, alienated and abused using each other as assets (for titillation, money, power, whatever).  We are living in one of the cruelest countries in history, and most of us don’t even notice.
    Peter Belfiore

  10. Posted by Anne Elizabeth Moore on October 19th, 2005

    I wrote a cover piece in Punk Planet Magazine about the effect buzz marketing is having on independent and youth culture—where a lot of people take their cultural cues. It details the underground marketing techniques of Star Wars, Nike, and Tylenol and talks about Tremor as well as the “adult Tremor”, BzzAgent. It’s out on newsstands now, or check www.punkplanet.com for updates!

  11. Posted by Bill Kelm on October 19th, 2005

    Gary,

    Your letter to the FTC was well researched and worded.

    It makes you realize why the courts have you say “Do you swear to tell the truth, THE WHOLE TRUTH, and nothing but the truth...” Let’s apply that statement to Advertising Disclaimers!

    Good Job,
    Bill Kelm

  12. Posted by Shelly Thorn on October 19th, 2005

    I have three children and my greatest challenge in parenting is facing the onslaught of pressures put on my kids from marketers. Junk food, electronics, high-priced sporting goods, whatever anybody wants to sell. Even with little-to-moderate television at home, they are bombarded by (sometimes unwitting sometimes aggressive) allies at schools, sports arenas, grocery stores, etc. Commercial Alert is a small nonprofit that thankfully is having some success at exposing the vast and offensive marketing abuses in this country. I find it incredibly sad that my ability to positively influence my children’s values and choices is seriously hindered by my culture, not supported by it.

  13. Posted by Christine on October 19th, 2005

    I’m with you Shelly.  At times it feels hopeless.  At least I understand now why my 13 yr old son came home from school asking for some noxious smelly deoderant product that “all” the kids are using.  He doesn’t even have body odor yet and he already thinks he needs to use this product.  The good news is that I’m not giving up!

  14. Posted by Michael Stein on October 19th, 2005

    Yikes, probably only a question of time before my two kids start pitching corporate wares at me.  On the other hand, I do enjoy doing “buzz marketing” on behalf of Commercial Alert, speading the word among friends, co-workers, preschool parents, and others!

  15. Posted by Meegan on October 19th, 2005

    I completely understand the idea of deception here and the lengths corporations are taking this->too far.

    BUT, the reason why kids are even up for doing this is because they’re getting something in return, FREE STUFF THEY ALL READY USE > Let’s say they really like a particular brand of electronics. They’ll receive electronics for free if they relay to their friends how much they like it. UMMM, don’t we do that anyway when we recommend to a friend a particular brand of toothpaste or a musical group that you love??? If I could get them for free to boot, I’m all in (if I was 19 or under that is). Street teams = recommendations = wouldn’t do it unless the person actually liked the product. In most cases, I’d think the person is being honest. I do think they should say they received the product for free.  However, I think that might backfire. If a friend told me he was getting free stuff from Sony to recommend their product that just might entice me to join up. 

    Bottomline, Corporatations are mainly bad->no liability, no conscience, still a person->antisocial behavior enter serial killer.

    Special off topic note: What’s deceptive is when companies use false clams from “ACTUAL” paid testimonials. You know, those late night infomercial crap of programs. When will commercial alert get rid of them. I’d rather see a classic 20’s movie than an infomercial when I’m in my insomnia state. 

    Well, just wanted to insert a little reality. Final word, Corporations are brilliant for the idea but as usual, they ALWAYS TAKE THINGS TOO FAR. 

  16. Posted by roman on October 20th, 2005

    Word-of-mouth marketing is just another way that marketers commercialise our daily lives. It’s about exlpoiting intimate relationships and social discourse for profit. It makes people treat their friends and relatives as assets or objects of manipulation.
    However, it is quite obvious that it can only succeed in a society that is already obsessed with consumption. After all, P&G does not even pay its “agents”. Despite this, some 280,000 teenagers volunteered to “work” for it, according to an article in the Forbes magazine last year!
    Ultimately, it reflects a fundamental dysfunction of capitalism: corporations are trying to force ever more needless products down our throats even as there are people - even in Western countries - living in desperate poverty or even hunger.
    In my country, Poland, one in five people live below the poverty line, but there is also a wealthy urban elite. Last year, Poland’s first word-of-mouth outfit was founded, called Streetcom. And they had no problem recruiting “agents” either and are growing fast.

  17. Posted by roman on October 20th, 2005

    Word-of-mouth marketing is just another way that marketers commercialise our daily lives. It’s about exlpoiting intimate relationships and social discourse for profit. It makes people treat their friends and relatives as assets or objects of manipulation.
    However, it is quite obvious that it can only succeed in a society that is already obsessed with consumption. After all, P&G does not even pay its “agents”. Despite this, some 280,000 teenagers volunteered to “work” for it, according to an article in the Forbes magazine last year!
    Ultimately, it reflects a fundamental dysfunction of capitalism: corporations are trying to force ever more needless products down our throats even as there are people - even in Western countries - living in desperate poverty or even hunger.
    In my country, Poland, one in five people live below the poverty line, but there is also a wealthy urban elite. Last year, Poland’s first word-of-mouth outfit was founded, called Streetcom. And they had no problem recruiting “agents” either and are growing fast.

  18. Posted by roman on October 20th, 2005

    Word-of-mouth marketing is just another way that marketers commercialise our daily lives. It’s about exlpoiting intimate relationships and social discourse for profit. It makes people treat their friends and relatives as assets or objects of manipulation.
    However, it is quite obvious that it can only succeed in a society that is already obsessed with consumption. After all, P&G does not even pay its “agents”. Despite this, some 280,000 teenagers volunteered to “work” for it, according to an article in the Forbes magazine last year!
    Ultimately, it reflects a fundamental dysfunction of capitalism: corporations are trying to force ever more needless products down our throats even as there are people - even in Western countries - living in desperate poverty or even hunger.
    In my country, Poland, one in five people live below the poverty line, but there is also a wealthy urban elite. Last year, Poland’s first word-of-mouth outfit was founded, called Streetcom. And they had no problem recruiting “agents” either and are growing fast.

  19. Posted by Emile on October 20th, 2005

    Wow, this new trend is truly frightening—is everything really for sale, or able to be manipulated? The “Truman Show” comes to life!  I applaud Commercial Alert for their work in exposing unethical business practice.  Hey business schools in our universities --- please take note!  Emile

  20. Posted by John Cass on October 21st, 2005

    I was thinking the P & G example is a little bit like going to a supermarket where someone asks you to test a product, say a dip or a new type of microwave sandwich. If I ate the product, liked it, bought it and went home and told all my friends. Commercial alert is suggesting the company would ask me to inform everyone I spoke with about the new product that I received a free product at the supermarket. Somehow I don’t think that type of product testing and promotion is against the FTC rules. What do you think?

  21. Posted by Bill Kelm on October 21st, 2005

    I must respond to John Cass’s #20 & duplicate #21 comment.  I’m glad John said “a LITTLE BIT like going to a supermarket” as getting free samples in the mail is a lot different.  Supermarket sample people are out in an open commercial environment, usually identified somehow as representing the seller, and usually give you a small taste, or a very small, specially sized, sample package of the product.

    This Adland blog post ( http://ad-rag.com/125273.php ) has comment #1 from a self described member ofTremor’s panel.  She says “Ok, as a member of Tremor, I say “DUH!! Do they think we are stupid enough not to think that somebody is paying these people?” The fact is that these companies want our feedback so they can turn around and sell the product to us better. I personally like giving my feedback, and I like getting free samples of stuff in the mail, although so far I haven’t actually bought anything from one of the Tremor programs (mostly because they seem to be stuck on Vanilla Coke and deodorant promotions).” So, does she think that Tremor doesn’t care if she promotes these products to friends & family, or not?  Does she also think that Tremor only wants to sell the Tremor members and nobody else?

    John’s analogy is flawed in my opinion as these teenagers are probably given full size products that don’t say “sample size” on them.  But, even if they did, they are probalbly
    going into schools promoting their “cool, inside information” without being aware of the stealth motives = http://en.wikipedia.org/wiki/Stealth_marketing of the seller.

    An example of that is comment #13, right here, that says “At least I understand now why my 13 yr old son came home from school asking for some noxious smelly deoderant product that “all” the kids are using. He doesn’t even have body odor yet and he already thinks he needs to use this product.”

    John’s flawed logic, “supermarket” example is indeed flawed, but I don’t think your good logic, and well done research of the real life situation in the FTC letter is flawed, Gary.

    Keep Up the Good Work,
    Bill Kelm

  22. Posted by Paul on October 22nd, 2005

    I’m afraid I agree with John Cass on this. This particular example does not seem like a problem to me. However, actually paying people to sell products to their friends could be, especially when it involves teenagers. But giving people free stuff and hoping they will tell friends, etc. has been going on forever. I think there are more important, deceptive problems going on. Misleading and/or outright lying in advertising, for example. Personally, I would like to see more of a focus on that. For example, I just did a “survey” for Chick-fil-et that I’m sure they will give bogus info about and distort for their needs. Also, if you really want to go after buzz marketing, you’d probably do better to go about cigarette people, who give away lots of free stuff, etc. More public opinion against them.

  23. Posted by nikki on October 23rd, 2005

    RE: #22:

    It is just that; a BIT like going to the dupermarket & eating samples, buying it & then telling your friends about it. A bit only; there’s no contract between us as dupermarket shoppers & samplers and the dupermarket. But, there is a contract between these companies and the teenage shills. Deceptive marketing is illegal. Ever heard of the BBB?

  24. Posted by zeek on October 25th, 2005

    i almost cant beleive this is happening, and further, cant beleive that people not only agree with it, but advance it. how could anyone call this practice ethical? it is nothing but deception pure and simple. whether it is illegal or not is to my mind, at least as of the writing of this letter, irrelevant. it is certainly immoral.
    so, we have come to this? allowing all that is legal without any question from the larger community about the morality of such an activity? what can be done. morally, nothing. there are (thankfully) no moral police (though recently it seems to be heading in such a direction) , thus the way to proceed is legal. but that is unsatisfying. for advertisers to slip in some activity, as this buzz advertising, and sanction it as moral or ethical. my god. who are these people? they must have friends and family. these dont complain about such behavior? what nees to be done (and this is a push for moral action) is the sanction of these people. if they , eg advertisers, are you friends or family , do something about it. do not just allow such behavior, do not let it pass. ignore them, or tell them what you think. these activities must be stopped. yes, they fit in with other activities that are going on in the larger society, but these ads, or so called ads are socially sanctioned deception, and again, those of us who are families or acquaintances of such people, we must let them know that this is NOT allright, it is NOT just a job, this type of activity has far reaching implications....
    all for now. sorry for not being so clear..... this is an expression of my anger.

  25. Posted by Ryan on October 25th, 2005

    In response to the first post by TOM, the next time a friend says to you “Hey, yo’uve gotta try this...” or, “You’ve gotta see this movie...”

    Remember that you feel Buzz Marketing is wrong and that he, in essence, is corporate slime.

  26. Posted by Kate Kaye on October 30th, 2005

    There’s an extensive essay you can download for free at SalesPitchSociety.com which analyzes the growing phenomenon of engineered buzz/viral/word-of-mouth marketing. Back in 2001, I wrote “Sales Pitch Society: How Advertisers Get Us to Do Their Dirty Work,” which depicts a variety of ways, some stealth, some overt, in which our society is slowly accepting the evolution of humans to humads. 

  27. Posted by John Cass on October 31st, 2005

    Nikki,

    Ah, but that’s the point, there is no contract between the participants of Tremor and Proctor and Gamble.  I don’t believe this practice is illegal. Though I am not a lawyer.  I think that Gary wrote a great letter and had some excellent points when it comes to being above board on revealing that your endorsement of a product has been influenced by payment.

    John

  28. Posted by kevin on December 13th, 2005

    "If you do not change the direction in which you are going, eventually you will get there” - Chinese proverb

  29. Posted by Bill Kelm on May 5th, 2006

    Gary,

    This is my latest relevant post on Buzz Marketing and Word-of-Mouth Marketing.  I suggested continuous disclosure all through the “downstream”.  I also linked to this article.

    http://www.brokerblogger.com/brokerblogger/2006/05/deceptive_marke.html#more

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