Tripartite promotional plan involving in-store audio advertising. '

Tripartite promotional plan involving in-store audio advertising.

'- (File No. 703 7109)
Opinion Letter
August 28, 1970
Dear Mr. Apperson:

This is in response to your request in behalf of Hall, King, Stanfill Agency, Inc., for an advisory opinion relative to a promotional plan involving in-store audio-advertising.

It is the Commission’s understanding of this matter that Hall, King, Stanfill Agency, Inc., as promoter will promote to participating retail outlets in-store audio-advertising through the use of taped background music with intermittent commercial announcements regarding products of the advertising manufacturer or supplier found in the stove. There is involved in this promotional plan a “basic. plan” wherein compensation to each store will be a net cash sum computed on the basis of a formula based on a fixed sum per 1000 persons (customers) exposed to the promotional announcement, less a determinable portion of the expenses in producing the announcements. The scale of expenses is based upon a formula per thousand persons plus fixed expenses of monthly charges for audio equipment, servicing, tapes and music.

The promoters herein offer two alternative plans to retailers. The Alternate Plan #1 is designed to take care of those outlets already providing background music, or who want a different music system. Alternate Plan #2 is designed to make the plan functionally available to all competing retail outlets by providing them with in-store promotional material such as window banners, posters, handbills and shelf displays, as well as the assistance of merchandising specialists. Under the various plans offered compensation to each store or retail outlet will be a net cash sum computed on the basis of a formula composed of a fixed sum for each 1,000 persons exposed to each promotional announcement, less a determinable portion of the expense for producing the promotional announcement or providing the merchandising aides. In addition, the provisions for making the plan, with alternates, functionally available to all competing retailers have been get. forth in substantial detail.

Tue Commission has given full consideration to this matter. With the understanding that the complete details of the basic plan and the alternates have been fully and appropriately communicated to all ‘competing retailers, the Commission is of the view that implementation of the proposed course of action in the manner described would not. violate the laws administered by the Commission.

By direction of the Commission.
Letter of Request
May 5, 1970