FTC Study Reveals How Alcohol Advertisers Use Digital Marketing

Spirits firms increased expenditures fourfold since 2008

Keeping tabs on marketing alcohol to underage consumers, the Federal Trade Commission on Thursday released its fourth study of self-regulation in the alcohol industry. 

While there are no headlines on the compliancy front in their use of traditional media (the beer and spirits companies were squeaky clean), for the first time the study opens a window on the digital marketing practices of the companies.

The study, the agency's fourth since 1999, was based on information provided by 14 major beer and distilled spirits companies representing 1,679 brands and varieties, which spent a total of $3.45 billion in marketing and advertising expenditures in 2011. (The previous study was in 2008.)

Compliance with the industry's self-regulatory code to reduce underage exposure to alcohol marketing was high: 93.1 percent of ads placed in measured media (such as TV, radio, newspapers) met the industry's placement standard, which required that 70 percent of the audience be 21 years or older. In digital, 99.5 percent of ads were on Websites that met the audience standard.

Even though digital represented only 7.9 percent of total expenditures, it was a fourfold increase from 2 percent in 2008.

Of the rest of the marketing dollars allocated, 31.9 percent went to traditional media; 28.6 percent to point of sale; 17.8 percent to sponsorships of sports and entertainment events; 6.8 percent to out of home; and less than 1 percent to product placement.

Of the digital spend, 2 percent was spent across 461 company owned Websites and operated sites like Facebook. Facebook was the most-used operated site, followed by Twitter and YouTube. More than 5 percent of digital spending was spent for campaigns placed on other Websites; less than 1 percent was placed on mobile, email, or apps.

The companies, said the FTC report, placed "hundreds of campaigns" on Websites owned by others, including search engines, online news and entertainment sites, music services, social media and YouTube— and it often contained a mobile app component.

If the FTC had any complaint about the digital campaigns, it was the way the companies handled their privacy policies. Although they generally let visitors know how their information is being used, and employed opt-in permission to obtain more detailed information for marketing, the privacy policies left something to be desired. The FTC described them as "long and complex, contain internally inconsistent provisions, and often appear to offer fewer privacy protections than the companies' submissions suggest consumers actually received," according to the report.

The FTC had a few other recommendations for companies, including taking better advantage of age-gating technologies offered by social media, including YouTube. Age gates should require a birth date, and not just a certification that the visitor is over 21. Companies should also keep a close eye on user-generated content to make sure it doesn't violate the industry advertising and marketing codes.

Recommended articles