Imagine you’re the marketing director for an alcoholic beverage company. Like all marketers, you want to learn more about consumers so your company can develop new products and/or devise more-effective marketing campaigns to increase market share. So you do anetnography and learn there’s a huge potential market for a much-sweeter version of one of your products.

Now, if you worked in another industry, you might jump on that insight and get R&D to develop a new formulation and get the ad agency to create a new campaign to promote the sweet beverage to all those consumers who said they want it. But consider this: What if it turns out the majority of respondents in the data you analyzed were minors? Your industry’s own guidelines prohibit you from promoting underage drinking by marketing to minors—not to mention that it’s societally irresponsible and clearly unethical to do so. On the other hand, what if the majority were in fact 21 or older? If that’s the case, not acting on this insight would be to miss out on a great opportunity.

While the scenario is fabricated, the dilemma it illustrates is not; it’s one that alcoholic beverage companies are wrestling with right now. They’re asking themselves: What are the ethical considerations for our industry in doing social media research? Even more importantly, what action should we take on the insights we get?

A Self-Regulated Industry

Alcohol advertising operates under a voluntary industry self-regulatory regime, with oversight and review by federal regulatory agencies. These voluntary codes are primarily implemented by the two major trade associations covering the two largest segments of the industry—DISCUS or the Distilled Spirits Council of the United States, and the Beer Institute.

DISCUS members have developed a Code of Responsible Practices for advertising and marketing to provide guidance to members promoting their brands. The purpose of the code is to ensure responsible placement, which for DISCUS members means advertising and marketing beverage alcohol products to adults of legal purchase age, which is 21. The code says: “Beverage alcohol advertising and marketing should be placed in broadcast, cable, radio, print, and internet/digital communications only where at least 70 percent of the audience is reasonably expected to be above the legal purchase age (determined by using reliable, up-to-date audience composition data).”

Like DISCUS, the Beer Institute code requires placement of marketing and advertising in media where “at least 70% of the audience is expected to be adults of legal drinking age.” The Beer Institute’s placement rules rely on the use of Internet measurement methodologies similar to those of DISCUS.

Meeting the 70 Percent Standard

There’s much debate and disagreement about how good a job alcoholic beverage marketers do—or how good a job it’s possible to do—in determining whether or not the audience for their campaigns meets that 70 percent standard. The new world of social media makes the task even harder, because even if a company can determine this for the site where it places an ad or a video or a game, it can’t control how that content gets passed on. In a comprehensive May 2010 report from the Center for Digital Democracy & Berkeley Media Studies Group (BMSG) entitled Alcohol Marketing in the Digital Age, the authors say that:

“The fluid nature of the digital marketing landscape, however, makes it particularly difficult to cordon off specific forms of marketing, especially viral campaigns that are designed to spread themselves broadly through the social graph, and which are often transmitted by community members rather than the company that initiated the campaign. A recent study by the Marin Institute, moreover, found that online age-verification mechanisms worked only about half the time. ‘Facebook users of all ages,’ the report notes, ‘could become fans, view photos of individuals consuming alcohol, post and read comments, and receive updates.’”

Rebuttal from the Industry

The alcoholic beverage industry, understandably, has a different perspective. Here’s what David J. Hanson, Ph. D., Professor Emeritus of Sociology of the State University of New York at Potsdam, had to say on the AlcoholFacts website, in an article entitled “Center on Alcohol Marketing and Youth: Its Objectives and Methods”:

“In Clicking with Kids: Alcohol Marketing and Youth on the Internet, CAMY [the Center on Alcohol Marketing and Youth] attempts to create public outrage. To do so, it plays outrageously fast and loose with the facts.

  • CAMY is distressed that citizens under the age of 21 can visit web sites sponsored by alcohol beverage companies. It ignores the fact that people of any age can visit grocery stores that, in most states, sell beer and wine.
  • CAMY implies that the existence of video games on some alcohol sites means that they are intended to lure underage visitors. It ignores the fact that the average age of those who play video games is 29.
  • CAMY protests that there is no adult supervision of those visiting alcohol web sites. It ignores the fact that there is no adult supervision of any site on the internet other than that provided by parents and guardians.
  • CAMY charges that the [alcoholic beverage company] web sites are ‘cyber playgrounds’ for underage people. It ignores that fact that those under the age of 21 are not disproportionately visitors to the sites.”
  • The Issue for NetBase and Marketers

    Clearly, there are two points of view on who is viewing alcoholic beverage marketing and how possible it is to control access to it. And yet, the issue that’s of more concern to NetBase, as a company that provides a tool for social media research and understanding, and to the alcoholic beverage companies is: How can companies who conduct this valuable form of research use the resulting insights in ethical and responsible ways?

    The report on “Alcohol Marketing in the Digital Age” hints at a solution: “Alcohol marketers are relying on a flawed system of self-regulation, including an age-verification system that in many cases is easy to circumvent. Given the array of techniques that appeal to young people, a more comprehensive research effort is now required [my emphasis] to assess the scope and nature of digital marketing of alcohol products and their appeal and use by underage youth.”

    Necessary Steps to Ensure Ethical Marketing

    We agree, and we can envision such a “more comprehensive research effort.” Alcoholic beverage companies could use a tool like ConsumerBase as a very valuable first step in a larger research program. ConsumerBase can be the first corner point in the process of triangulating research to reach valid conclusions. I wrote a blog post earlier in the year on this exact subject: The Best Starting Point for Market Research Triangulation.

    An alcoholic beverage company that wants to make sure it’s basing marketing decisions on information from legal-age drinkers could begin by using ConsumerBase to do a netnography of a brand or product. It could analyze the results for insights into opinions, emotions and behaviors. Then it should validate any conclusions by using research techniques where it could carefully control the audience and ensure it’s composed only of legal-age drinkers. Focus groups, surveys, interviews and ethnographies could all meet that criterion.

    Companies have traditionally relied on a range of qualitative and quantitative techniques conducted in parallel or serially, so this is hardly a radical idea. Starting the triangulation process with netnography, which is cheap and fast, can save companies time and money and help them determine what their next research steps should be. In the case of alcoholic beverage companies, taking those next steps has the added important benefit of greatly increasing their chances of formulating ethical marketing plans designed to reach only audiences of legal drinking age.

    Thanks to Dean Holmes for alerting us to this issue and for helping us find sources of information on this topic, including DISCUS.

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