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We Were Framed: Business Lobby Groups Claim Ignorance On Ads Offering Rewards For Political Action

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Newscom / Bill Clark

Perhaps even more interesting than the use of the tactic has been the response from the lobby groups -- the Chamber of Commerce, and a health insurers coalition run by the Blue Cross Blue Shield Association (BCBSA) -- that appear to be behind some of these ads. It essentially boils down to: we were framed. But just who would benefit from creating a fake ad designed to look like one from, say, the health insurance industry, remains a mystery.

First, a quick refresher on the examples of incentivized ads we've told you about over the last week.

• An ad on Facebook (see it here), appearing to come from Get Health Reform Right, a coalition of health insurers led by the Blue Cross Blue Shield Association (BCBSA), which offered readers virtual currency, for use in online games, while urging them to send an email to Congress opposing health-care reform.

• A virtually identical ad (see it here) bearing the Get Health Reform Right name, which again urges readers to send the same anti-reform email to Congress. But the apparent bait this time is the chance to win a free plasma TV.

• An offer (see it here) from last year in which readers could win a Hooters gift card if they filled out a survey which included a request to sign up to receive emails from the Chamber of Commerce's campaign against health-care reform. (In this one, it's worth noting, the Chamber's goal was to build an activist list, not to get people to contact lawmakers directly. Still, the presence of an incentive hardly reflects well on the integrity of the organizing effort.)

• A 2008 ad (see it here) that used points-based rewards for hotels, restaurants, and airlines to get readers to email lawmakers on behalf of the American Medical Association, opposing cuts to Medicare payments, a key legislative goal of the doctors lobby.

It's not clear exactly how any of the ads we've seen came about, but, based on conversations with online marketing experts, here's a very rough rundown of how this process tends to work:

The lobby group -- let's say Get Health Reform Right, the insurers group run by BCBSA -- hires a PR firm to handle the task of generating "grassroots" letters to Congress. (BCBSA hired 720 Strategies.) That PR firm then draws up a slick-looking template -- featuring sympathetic looking medical professionals of diverse racial backgrounds -- that allows people to send a form letter to Congress opposing health-care reform. But they don't place the ad. They contract with a direct online marketing firm that specializes in selling commercial offers like subscriptions to NetFlix. (720 hired a firm called Webclients Affiliate Network). And that company may in turn "broker" out the contract to yet another outfit.

It may be this company, three or four links down the chain from the insurers group running the original campaign, which "serves" the ad created by the PR firm. And in doing so, it may wrap that ad in with a host of other commercial offers its pitching.

In the case of the Chamber-Hooters ad, for instance, Karolyn Martin of RealSource Inc. told us that her company was hired last year by Toba, an ad brokerage firm, to work on the Chamber's campaign, which ran only for a few months. In turn, it contracted with a now-defunct firm called Active Response Group, to place the ads.

So the lobby groups didn't directly create the incentivized ads, and likely had no direct knowledge of them. Indeed, BCBSA and 720 Strategies both told us that the contract between them for the anti-health-reform campaign explicitly prohibits such incentivized ads -- and the Chamber said the same thing about its contract. Perhaps, then, it's unfair to hold the lobby groups entirely responsible for ads that appear in their name. Or perhaps it's not.

But the lobby groups are going further than that. Both the Chamber and BCBSA -- backed by 720 Strategies, the PR firm it hired -- have denied that the incentivized ads that bear their name came from anyone with any connection to them, and have claimed to be the victims of fraud.

"Our platform does not allow the sending of letters that stemmed from an outside advertising network,' Jeff Smokler of BCBSA told us. He said that the campaign's ad network has confirmed that its blocking software was in use. "So I feel confident that the 700,000 people who have sent the letters did so through their own volition."

Pam Fielding, the president of 720 Strategies, echoed that claim, saying that the campaign uses a hosted environment that doesn't allow incentivized ads. "It had to be a phony ad," she said. "The client is a victim and we're a victim."

Chamber spokesman Tom Collamore -- a former Philip Morris public affairs exec who helped run Fred Thompson's presidential bid last year -- said the business lobby had checked with its vendors and that none had placed an incentivized ad. "We've been the victim of a fraud," he told us. "The Chamber had nothing to do with it."

It's not clear who would benefit from creating a fake ad, designed to look like it came from the health insurance industry or the Chamber of Commerce, and fooling people into thinking they could win a TV by sending an email to Congress.

Fielding of 720 Strategies offered three suggestions: She said a spammer could have "spoofed" the GHRR ad that appeared on Facebook, in order to harvest email addresses. Alternatively, she said an opponent of the health-insurers' campaign -- a reform supporter, in other words -- could have engineered the entire episode, presumably including tipping off reporters, in order to discredit the insurance industry. Or, one of 720's industry competitors could have done something similar.

What's not in doubt, though, is that the health insurers and Fielding have teamed up in the past on incentivized ads. In 2003, the AP reported that a coalition of insurers run by BCBSA was offering free trips to Washington D.C. as an incentive to write letters to Congress opposing a bill that would have let small businesses band together to offer insurance for their employees. It was Fielding's firm, at the time known as e-advocates, that handled the campaign. In response to AP's reporting, BCBSA said it would stop the advertising.

But at the time, Fielding didn't appear to see anything wrong with the tactic. "These are common techniques designed to get the attention of an activist long enough to read about the issue and decide where they stand on it," she told AP. "We are not the first to do it, and I'm quite sure we will not be the last."

That stance contrasts somewhat with Fielding's interview with us yesterday, in which she declared, "We strongly oppose using incentivization and we don't use it on client campaigns." She added: "We're trying to do the kind of activism that the American people are proud of."

An archived page from the 720 site -- which appears to have been removed after news of the Facebook ad was reported last week -- states that "720 Strategies has a four-year relationship with the Blue Cross Blue Shield Association." 720's campaign has "enabled BCBSA to recruit more than 1,000,000 advocates who have delivered more than 2,000,000 communications to key legislative targets, in the form of e-mail, faxes, letters, telegrams, and phone calls."