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Advertising: Celebrating Black Beauty and Advocating Diversity

April 19, 2013 by Leave a Comment

On Sunday, Procter Gamble will present a screening of “Imagine a Future” in conjunction with the Tribeca Film Festival. The film, which aims to empower African-American women, features Janet Goldsboro, a teenager from Dover, Del.

“I didn’t look like what I saw in a magazine,” Ms. Goldsboro says about her childhood in the documentary. “I look different from all my cousins. I had dark features, dark hair, dark eyes, big nose and big lips, and I used to get made fun of because of how I looked.”

She says that she is “into boys” — and that their remarks can sting.

“Boys say, ‘I like the light-skinned girls,’ or, ‘I like white girls because I want my baby to come out pretty,’ ” Ms. Goldsboro says. “And that hurts you because it makes you feel like you’re ugly looking.”

The documentary is co-directed by Shola Lynch, whose documentary “Free Angela and All Political Prisoners” about Angela Davis is in theaters now, and by Lisa Cortes, who also produced the documentary and who was an executive producer for the Oscar-winning movie “Precious.”

The filmmakers found their subject through Black Girls Rock!, a Brooklyn nonprofit with programs including a summer leadership camp that Ms. Goldsboro attended last year. Procter Gamble supports the organization financially through My Black Is Beautiful.

Interspersed with footage of the teenager, who visits South Africa, are interviews with women including Michaela Angela Davis, the writer and cultural critic; Gabby Douglas, the Olympic gymnast, and Melissa Harris-Perry, the MSNBC host.

Ms. Lynch, the director, was dubious when Ms. Cortes first approached her about the documentary.

“Lisa came to me and I was like, come on, Procter Gamble is going to let us tell this story the way we want to tell it?“ Ms. Lynch said.

“It was known that this wasn’t going to be a puff piece,” Ms. Cortes added of the 30-minute documentary, which explores how media images of rail-thin white women as a standard of beauty can make black women, particularly curvy ones, feel inadequate. “P. G. has not just been a supportive collaborator,” Ms. Cortes said, “but has really given us creative freedom.”

In the documentary, Ms. Goldsboro visits a market in Johannesburg with Lebogang Mashile, a poet, actress and activist, and says, “I heard that in South Africa that skin bleaching is a big problem here?”

Ms. Mashile replies: “It’s been a problem for a long time. It’s self-hate, it’s not having enough mirrors that affirm you.”

The documentary does not mention that Olay, a Procter Gamble brand, markets skin-lightening products all over the world. A line called White Radiance is sold in countries including Malaysia and Singapore; another, Natural White, is sold in India, United Arab Emirates and elsewhere.

In South Africa, Olay recently introduced a skin-lightening line called Even Smooth. A new commercial features Gail Nkoane, a singer and actress, who applies the product and is instantly bathed in light, giving the effect of her skin becoming several shades lighter.

Efforts like My Black Is Beautiful represent a “new trend among cosmetics corporations to use language that critiques the domination of white beauty standards in order to sell new products to women of color,” writes Margaret Hunter, an associate professor of sociology at Mills College in Oakland, Calif., in an article in The Journal of Pan African Studies in 2011.

The new documentary is “very engaging and very thought provoking about racism,” Professor Hunter said in an interview after viewing it. “But it’s Procter Gamble, meaning that some of the money behind the documentary is made off products including skin-lightening products, and that completely undermines and inverts that message.”

Asked about its skin lightening lines, the company issued a response.

“These kinds of products are very popular in Asia and are designed to help women address uneven skin tone, and dullness which may be caused by acne, skin discoloration issues, or over exposure to the environment and help restore the skin’s original tone,” the statement read.

In a 2009 report about marketing to black women, market research firm Mintel noted that during the 1950s, whitening creams were marketed in the United States with “after” photographs featuring lighter skinned women, but such an approach became taboo in the 1960s, when “cosmetic companies began to emphasize the blemish-fading properties of bleaching creams and de-emphasize the ‘light skin is better’ strategy.”

Procter Gamble in its statement stressed that it does not market White Radiance and Natural White in the United States, but those products are nonetheless available through multiple vendors that import the products on Amazon.com.

“Imagine a Future,” which is not officially part of the Tribeca Film Festival but rather being screened to coincide with it, will appear on Black Entertainment Television on July 5, and will be posted to YouTube.

Imagine the Future also is the name of an initiative introduced in 2012 that promises to have a positive impact on one million black girls by 2015. The effort is a partnership of My Black Is Beautiful, which Procter Gamble began in 2008, the United Negro College Fund and Black Girls Rock!

“There is a need to celebrate black beauty and support diversity, and all of our brands view the African-American consumer as a very important consumer,” said Lauren Hoenig, associate marketing director for multicultural marketing at Procter Gamble. “We know we have to win with African-Americans in order to win.”

Article source: http://www.nytimes.com/2013/04/19/business/media/celebrating-black-beauty-and-advocating-diversity.html?partner=rss&emc=rss

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Media Decoder Blog: Executive Steeped in Print Joins Online Ad Venture

February 13, 2013 by Leave a Comment

A former senior manager at a print industry leader is becoming the chief executive of a company that specializes in one of the most popular trends in online advertising.

Steve Sachs, who held several top posts at the Time Inc. unit of Time Warner until he left almost a year ago,  is joining OneSpot, a start-up based in Austin, Tex.,  as chief executive. Matt Cohen, the founder of OneSpot who had been chief executive, is becoming president.

When Mr. Sachs left Time Inc., he was executive vice president for consumer marketing and sales. His duties included helping to adapt the company’s magazines for devices like tablets and e-readers. Before that, he led Time Inc. magazines that included Cooking Light, Real Simple and Southern Living.

OneSpot works for blue-chip marketers like Dell, Home Depot, Procter Gamble, Spectrum Brands and Unilever. The company specializes in what is called content advertising, native advertising or branded content. On online platforms, it offers alternatives to banner ads, which have been losing their potency as an advertising medium because of rapidly declining consumer engagement – that is, falling click-through rates.

What OneSpot does is create, in real time, online ad units that use material like articles, blog posts, white papers, video clips and comments in social media. The automated ads appear in place of banner ads on the marketer’s own Web sites as well as on Web sites that are part of online ad networks.

OneSpot also optimizes the ads in ways that include testing different versions as well as sequencing ads that vary in approach depending on the sites on which they appear.

Content advertising works so well, Mr. Sachs said, because “consumers would much rather click on content than advertising.”

As a result, he added, click-through rates can be “two times to 50 times higher” than banner ads.

A pitfall with content advertising or native advertising is that it can blur the line between editorial content and paid advertising because the goal is for the ad to be perceived by the reader as content, or like content.

“There is no doubt” that is an issue, Mr. Sachs said, adding that in his previous job at Time Inc. there would frequently be questions about the advertising sections styled to look like articles that are known as advertorials.

Advertorials are “thinly disguised advertising,” Mr. Sachs said, whereas content advertising “is not that” because it is “high in value.”

Mr. Sachs, who is 47, said that after leaving Time Inc. in March 2012, he and his family moved to Austin over the summer and he “took a few months off to recharge” before starting to “look at opportunities in technology and marketing and content.”

OneSpot began offering previews to potential clients in March 2012. The company recently received $1.5 million in funding from RSL Venture Partners and 500 Startups.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/13/executive-steeped-in-print-joins-online-ad-venture/?partner=rss&emc=rss

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It’s the Economy: What Will the Economy’s New ‘Normal’ Look Like in 2013?

January 2, 2013 by Leave a Comment

Despite a worse-than-expected holiday season, the Federal Reserve forecast that G.D.P. growth would approach the historic average of about 3 percent in 2013. The economy may be coming back, but the question for many businesses is what the new “normal” looks like. Will shoppers spend as they did in the credit-bubble years? Or has the Great Recession scared them into prolonged stinginess? Early evidence suggests a mix. What is clear is that the big changes are just beginning.

Waste More, Want More

From the 1970s through the 1990s, the dominant retail trend was toward cheap and big: shoppers drove long distances to buy large boxes of everything they needed in bulk. Starting in the last decade, though, this began to change. And the success of products like Tide Pods (premeasured balls of detergent that made Procter Gamble an estimated $500 million last year) suggest that the era of premium conveniences isn’t going anywhere.

Somewhat counterintuitively, this trend is directly related to the downturn, says John N. Frank, an analyst at Mintel, a market-research firm. Fearful of losing their jobs, millions of workers coped with the crisis by putting in more time at the office — “doing at least two people’s jobs,” Frank says — even if it meant less time to shop for deals. Dollar General saw tremendous growth as a more convenient alternative to Sam’s Club. Duane Reade, now owned by Walgreen, is proving that no block in Manhattan should be without a drugstore that also carries basic grocery items at an upcharge. Frank says he expects that anxious, overtired workers will drive this trend well into this decade, too.

Housing Is Back

Now that at least one million households are looking to move somewhere better, investors are looking to buy houses on the cheap — not to flip, but to rent. (The Blackstone Group, the private-equity colossus, has spent more than $1 billion this year buying up thousands of single-family homes around the country.) New residential construction starts also came back strong last year, and much of the growth was from multiunit apartment buildings designed, yes, for renting.

Despite the fact that homeownership has been promoted as a universal economic good since the Depression, the trend toward rentals might be a good one. Renters are more able to follow the job market. Renting, as the housing bubble revealed, benefits the overall recovery, because fewer people have their money tied up in one asset.

Not Your Father’s Oldsmobile

In 2012, the average life of a car in the United States reached a historic high of 11.2 years. This was tied to the collapse of new-car sales during the recession, but it was also driven by several long-term shifts. After steady increases for decades, Americans are driving less. Total miles driven in the United States hit 3 trillion for the first time in 2006. It went up even further in 2007 but has generally fallen since.

For the first time in nine decades, according to census data, walkable cities are growing faster than suburbs. And wherever people happen to move, they are buying smaller, more fuel-efficient cars. Large- and some luxury-car segments are falling, says Tom Libby, an automotive research analyst at Polk, and the cheaper subcompact and emerging sub-subcompact classes are growing. All this means that autos — one of the biggest industries in the United States — will not soon regain the explosive growth of the early 2000s.

Debt and Taxes

In 2008, Americans owed a collective $12.7 trillion. Today, thanks in part to mortgage defaults, we are down to $11.3 trillion, which is about 95 percent of our disposable income. That’s progress, but it’s still higher than the 88 percent we owed 10 years ago.

Additional reporting by Jacob Goldstein

Adam Davidson is co-founder of NPR’s “Planet Money,” a podcast and blog.

Article source: http://www.nytimes.com/2013/01/06/magazine/what-will-the-economys-new-normal-look-like-in-2013.html?partner=rss&emc=rss

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Automated Bidding Systems Test Old Ways of Selling Ads

November 16, 2012 by Leave a Comment

In digital advertising, that formula is being increasingly tested by fast-paced, algorithmic bidding systems that target individual consumers rather than the aggregate audience publishers serve up. In the world of “programmatic buying” technologies, context matters less than tracking those consumers wherever they go. And that kind of buying is the reason that shoe ad follows you whether you’re on Weather.com or on a local news blog.

That shift is punishing traditional online publishers, like newspaper, broadcast and magazine sites, who are receiving a much lower percentage of ad dollars as marketers use programmatic buying across a much broader canvas. Some sites, like CNN.com, refuse to even accept advertising through programmatic buying because they do not want to cede control over what ads will appear.

“It’s allowing advertisers to assign value to media rather than publishers,” said Ben Winkler, the chief digital officer at OMD, an agency in the Omnicom Media Group. Publishers, he said, “can’t control the price, but they can control the quality of the content and the audience on that site.”

About 10 percent of the display ads that consumers see online have been sold through programmatic bidding channels, according to Walter Knapp, the executive vice president of platform revenue and operations at Federated Media, one of the world’s largest digital advertising networks.

Advertisers like Nike, Comcast, Progressive and Procter Gamble are now using the programmatic buying, and luxury advertisers are starting to follow. According to data from Forrester Research, all ads traded on exchanges, as programmatic ads are, increased more than 17.5 percent to about 629 billion impressions (the number of times an ad appears) in 2012, from 535 billion in 2011.

That growth is affecting publishers of all stripes, but few are willing to discuss their internal numbers. “For a publisher to admit they’ve been hurt is tough for the big guys,” said John Ebbert, the executive editor and publisher of the Web site AdExchanger.

When The New York Times Company announced its earnings last month, the company posted a profit, but said that digital advertising fell 2.2 percent. Jim Follo, the company’s senior vice president and chief financial officer, attributed the dip, in part, on a “shift toward ad exchanges, real-time bidding and other programmatic buying channels that allow advertisers to buy audience at scale.”

Programmatic buying began as a way for advertisers to place lower-cost ads for products like teeth-whitening products and belly fat pills that filled up the back pages of Web sites. But the practice has gained in sophistication and breadth, with major advertisers and many of the world’s largest ad agencies creating private exchanges to automate the buying and selling of ads.

Programmatic buying includes a number of different technologies and strategies, but it essentially allows advertisers to bid, often in real time, on ad space largely based on the value they have assigned to the consumer on the other side of the screen. Say, for example, that Nike wants to sell running gear to a particular consumer who has a high likelihood of buying shoes based on the data it has collected, including the type of Web sites that consumer typically visits. Because the ad-buying is done through computer trading, the price for that space can change rapidly.

“Accessing media is a commodity now,” said Sheldon Gilbert, the founder and chief executive of Proclivity Media, a company that specializes in digital advertising technologies. “Instead of having to commit four months in advance, you can now bid and buy an individual impression in real time.”

In the short run, the growth in programmatic buying has forced overall ad prices to fall. A media buyer who would have once spent $50,000 worth of advertising on a publisher’s site, at, say, an $8 cost-per-thousand, can now buy ad impressions on any Web site on which they happen to find their intended audience and pay less per ad, Mr. Ebbert said.

“There is no scarcity of premium online,” said Dan Salmon, an equity research analyst at BMO Capital Markets. “There’s only one Super Bowl, but there are lots of different places to buy banner ads online.”

While the “halo effect” of buying an ad against premium content has not disappeared entirely — many advertisers still want front-page placement on popular Web sites — the shift is prompting publishers to rethink how they sell their ads.

Clark Fredricksen, the vice president for communications at eMarketer, a data company, said that publishers were “going to have to double down to prove the value of their inventory as they compete with other, cheaper inventory.”

And some publishers are jumping into the game themselves. During the most recent AOL earnings call, Tim Armstrong, the company’s chairman and chief executive, said it was bullish on programmatic buying, despite being a publisher itself with properties that include TechCrunch and The Huffington Post. The company trades its ads through its own ad network, Ad.com, and others like it.

“We will continue to invest in people and technology to capture the programmatic business of advertising,” Mr. Armstrong said.

Like AOL, Weather.com is also aggressively moving into programmatic bidding. “Instead of thinking of us a publisher, think of us as a marketing engine,” said Curt Hecht, the chief global revenue officer for the Weather Company.

Neal Mohan, the vice president for product management at Google, which sells advertising though its DoubleClick network, says that in the long run, publishers could see higher returns from programmatic advertising. In the last year, the number of advertisers and publishers using the DoubleClick platform has doubled, Mr. Mohan said, while the rates for those using the platform have increased 11 percent. But that means publishers will have to play by different rules.

“Context still matters and so does placement,” Mr. Ebbert said. “But it’s only one element.”

Article source: http://www.nytimes.com/2012/11/16/business/media/automated-bidding-systems-test-old-ways-of-selling-ads.html?partner=rss&emc=rss

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DealBook: Gupta Won’t Testify at His Insider Trading Trial

June 11, 2012 by Leave a Comment

Rajat Gupta, a former Goldman Sachs director, arriving at court last week.Peter Foley/Bloomberg NewsRajat Gupta, a former Goldman Sachs director, arriving at court last week.

Rajat K. Gupta, a former director of Goldman Sachs accused of leaking secrets about the bank, will not testify at his insider trading trial, according to a letter from his lawyers that was filed with the court on Sunday.

His lawyers’ decision is something of an about-face. Late Friday, after the jury had gone home for the weekend, Gary P. Naftalis, a lawyer for Mr. Gupta, said it was said that it was “highly likely” that his client would testify in his own defense next week.

On Sunday, Mr. Naftalis said he had reversed course.

“We have the spent the last day reviewing what we believe we need to present in the defense case,” Mr. Naftalis wrote in his letter. “After substantial reflection and consideration, we have determined that Mr. Gupta will not be a witness on his own behalf in the defense case.”

A spokesman for the United States attorney’s office in Manhattan declined to comment. Mr. Naftalis declined to comment beyond what was written in the letter.

The government has accused Mr. Gupta, who was also a former head of the consulting firm McKinsey Company, with leaking boardroom secrets about Goldman Sachs and Procter Gamble to his friend and business associate Raj Rajaratnam. Last year, a jury convicted Mr. Rajaratnam, the former head of the Galleon Group hedge fund, with insider trading.

The trial, in Federal District Court in Manhattan before Judge Jed S. Rakoff, will begin on Monday its fourth and final week.

On Friday, Mr. Naftalis had promised Judge Rakoff that if the defense decided that Mr. Gupta was not going take the stand, he would immediately inform the prosecutors so “they could put down their pencils” in preparing to cross examine him.

There were signficant risks — but also potential rewards — in having Mr. Gupta testify.

Once a defendant testifies in his own case, the jury’s focus often shifts from the government evidence to the credibility of Mr. Gupta, who, until recently, had a sterling reputation and a stellar business career. That could have worked in his favor if he would have been able to explain away the substantial circumstantial evidence against him.

But it could have also backfired if something went wrong on the witness stand and Mr. Gupta said something incriminating.

On Friday, the government rested its case after 12 days of testimony from 20 witnesses. The defense began putting on its own witnesses and will continue its case on Monday. Without Mr. Gupta’s testimony, closing statements could begin as soon as Tuesday, with the jury getting the case by mid-week.

Letter From Rajat Gupta’s Lawyer

Article source: http://dealbook.nytimes.com/2012/06/10/gupta-wont-testify-at-his-insider-trading-trial/?partner=rss&emc=rss

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Advertising: Marketers, Seeking Family Show, Hold Script Contest

January 23, 2012 by Leave a Comment

The contest sought scripts for 30-minute situation comedies about modern family life. More than 235 scripts were submitted during the contest, which was won by a young freelance writer whose entry, “O’Connell for Congress,” is about a dysfunctional family turned upside down when the father runs for office.

The contest was sponsored by what is known as the ANA Alliance for Family Entertainment. The initials stand for the Association of National Advertisers, the trade organization for marketers. All 34 members of the alliance also belong to the association.

Those members include major ad spenders like ATT, Campbell Soup, General Mills, Johnson Johnson, Kraft Foods, Mars, McDonald’s, Procter Gamble, Verizon and Wal-Mart Stores. The goal of the alliance, which began in 1998 as the Family Friendly Programming Forum, is to encourage broadcast networks to add to their prime-time schedules more shows that can be watched together by parents and children.

The contest is “a great opportunity to encourage the type of programming we feel is important,” said Colleen Milway, global media director at the Campbell Soup Company, and “create buzz and excitement around the idea of supporting family-friendly programming.”

“We want to make sure we’re reaching our core consumer group, moms and families,” she added, and running commercials in shows they like “makes engagement that much greater.”

More than 20 shows on six networks have been supported by the alliance through efforts like a script-development fund, among them “Everybody Hates Chris,” “Friday Night Lights” and “Gilmore Girls.” One, “Chuck,” on NBC, is still running, but will finish its fifth and final season on Friday. “There was a belief there’d be a momentum in the marketplace for family-friendly programming,” said Robert D. Liodice, president and chief executive of the association, but recently “reality programming has begun to push family programming to the back burner.”

“So our coalition has had to re-strategize and take a different tack,” he added, “and out of a lot of different ideas came the contest.”

•

The winner, Megan Angelo, of Jersey City, is a freelancer for publications including Glamour, Marie Claire and The New York Times. She receives $5,000 and a chance for her script to be offered to the networks.

“I can’t believe any of this is happening,” said Ms. Angelo, who lists among her favorite sitcoms “It’s Always Sunny in Philadelphia,” “New Girl” and “Parks and Recreation.”

Ms. Angelo, 27, said she learned about the contest from her husband, Erik Parker, a software engineer, who read about it on a comedy blog, SplitSider, that he follows because he is “also a sketch comedian.”

(Now there’s an idea for a sitcom.)

Among the judges of the contest was John Wells, executive producer of series including “ER,” “Shameless,” “Southland” and “The West Wing.” Mr. Wells will be a mentor to Ms. Angelo, working with her on the script.

“There’s always a lot of talented people around who are not in Hollywood making a living,” Mr. Wells said, adding that he was “very taken with the irreverence” of “O’Connell for Congress,” whose title character turns to politics after being far less successful in business than his wife.

Ten or 15 years ago, such a script might not have passed muster as family entertainment, Mr. Wells said, but today “the audience has a much larger definition of what ‘family friendly’ or ‘family viewing’ should be.”

“The idea got a bad rap because it had some political implications,” he added, associated with the term “family values,” but series like “Modern Family” are just as much about “generosity and kindness and love” as traditional sitcoms.

Ms. Milway of Campbell Soup echoed him. “We want to be relevant in today’s time, relevant to consumers as we see them now,” she said, and the company takes “an open-minded approach” in evaluating the content of shows in which it buys commercials.

“Our preference would be more wholesome family programming that doesn’t rise to the level of controversy,” she added, with scripts that “are more meaningful over time and can live on in syndication,” unlike say, a “sensational” reality show that may be “the high-rated program” for only a brief time.

Although the days when Campbell Soup sponsored family series like “Lassie” are unlikely to return, there is a demand for contemporary versions of such shows, George Carey, a marketing consultant, said.

“A lot of advertisers are hypnotized by the allure of narrowly targeted audiences like tween boys born in November under full moons,” said Mr. Carey, chief executive at the Family Room in Norwalk, Conn., a marketing consultancy formerly known as Just Kid Inc.

“But kids and parents are telling us they’re looking for ‘shared solutions,’ ways to come together to have fun,” he added, citing examples like the Nintendo Wii game console, so shows families could watch together would be “addressing a tremendous need.”

•

The alliance plans more efforts this year to urge the development of family-oriented series, including working with a network.

Mr. Wells said he was inspired to work on the contest by something that happened when he was starting out as a script writer.

“Danny Arnold ran a very informal scholarship program,” he said, of the writer and producer who created sitcoms like “Barney Miller,” and “I had just finished my degree at U.S.C., and he gave me a small honorarium.

“That was the difference between being a writer or not,” he added.

Article source: http://feeds.nytimes.com/click.phdo?i=26fae797dddb5776a8eb5dcf28c32822

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DealBook: Cat-and-Mouse Game in the Gupta Prosecution

January 10, 2012 by Leave a Comment

Rajat K. Gupta, left, and his lawyer, Gary Naftalis, leaving court in October after Mr. Gupta was charged with insider trading.John Marshall Mantel for The New York TimesRajat K. Gupta, left, and his lawyer, Gary Naftalis, leaving court in October after Mr. Gupta was charged with insider trading.

We often think of prosecutions as involving a single crime that took place at a particular moment, so that the charges are fixed and the information that will be presented in court fairly clear-cut. In white-collar prosecutions, that is rarely the case, as prosecutors refine their case after filing charges, sometimes finding new violations, while defendants try to pry evidence from the government that can help their defense.

The insider trading prosecution of Rajat K. Gupta is a good example of the cat-and-mouse game that takes place in the lead-up to a trial in a white-collar case, as each side tries to gain the upper hand. With the case scheduled to go to trial on April 9, the jockeying between the two sides was on display last week, and will only increase over the next three months.

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At a pretrial conference on Thursday, DealBook reported that a Justice Department prosecutor indicated it was “more likely than not there will be a superseding indictment” identifying additional inside information that Mr. Gupta is accused of leaking to Raj Rajaratnam, the former head of the Galleon Group hedge fund. The information related to Procter Gamble’s sale of its Folgers Coffee brand for about $3 billion to J.M. Smucker in June 2008, a deal that Mr. Gupta learned about as a P.G. director.

It is unclear why prosecutors did not include this alleged violation in the original indictment of Mr. Gupta that was returned in October. Mr. Rajaratnam was recorded on a wiretap discussing a source at P.G. who he said told him about the deal, so the tipping was certainly known for at least the last three years as the Justice Department prepared its securities fraud case against him.

Adding a new charge this close to trial makes life more difficult for Mr. Gupta because his lawyers will have to determine how to fit this into the defense strategy. The indictment already alleges two instances in which Mr. Gupta is accused of disclosing information about Goldman Sachs that he learned as a member of its board and led to a trade by Mr. Rajaratnam, along a purported tip about P.G.’s quarterly earnings in January 2009 As the government adds to the number of disclosures, it becomes more difficult for the defense to argue that contacts between the two men were innocuous.

Mr. Gupta filed a number of motions last week to try to shape how the case would unfold. Like Mr. Rajaratnam, Mr. Gupta has challenged the wiretaps as having been improperly obtained, asking the court to preclude the government from using them at trial. That argument was rejected in Mr. Rajaratnam’s case, and Judge Jed S. Rakoff, who will preside over Mr. Gupta’s trial in Federal District Court in Manhattan, indicated he would take the same course when he said at the pretrial conference that “if I were the defense, I would not be optimistic on this particular motion.”

Even if Mr. Gupta has little chance of succeeding in having the wiretaps suppressed, he has to raise the issue now in order to preserve it for a subsequent appeal if he is convicted. The United States Court of Appeals will consider the wiretaps in Mr. Rajaratnam’s appeal later this year, so Mr. Gupta is pinning his hopes on a favorable ruling in that case.

A second filing by Mr. Gupta that seeks additional information from the government gives a preview of how his lawyers plan to defend against the insider trading charges at trial. The government has already provided Mr. Gupta with almost 2.5 million pages of documents, so while it is hard to believe there could be much more evidence out there, it is often the case that what a defendant believes has not been furnished is most important.

Unlike civil cases, in which the oft-described “liberal” discovery rules allow each side access to all the opponent’s information and witnesses, federal criminal prosecutions offer a defendant much more limited discovery that does not include depositions or broad requests for documents in most cases. Nevertheless, a powerful tool for the defense is the Supreme Court’s requirement, announced in the seminal decision in Brady v. Maryland, that prosecutors must provide the defendant with all “exculpatory” information that might negate evidence of a person’s guilt or mitigate the severity of the punishment.

In his motion, Mr. Gupta asked the government to turn over any exculpatory evidence showing that Mr. Rajaratnam is untrustworthy and prone to exaggeration in describing his sources of information. The wiretaps do not record Mr. Gupta directly disclosing inside information to Mr. Rajaratnam for his trading, but do have Mr. Rajaratnam boasting about having a highly placed source inside Goldman and P.G. If prosecutors believe Mr. Rajaratnam was a liar, then the defense can question whether his statements on the wiretaps are reliable.

There is no clear definition of what constitutes exculpatory evidence, and it is generally viewed as information that undermines the strength of the government’s case. In his filing, Mr. Gupta argues that prosecutors should be required to turn over any evidence “in which the government expressed its own doubts about Rajaratnam’s veracity – or simply that he is not to be trusted, even if stopping short of calling him a liar – [because it] would obviously be helpful to the defense, and equally obviously is known to the government.”

So Mr. Gupta is happy to piggyback on Mr. Rajaratnam’s challenge to the wiretaps while assailing the credibility of statements recorded by the government.

By making it clear that the defense plans to attack Mr. Rajaratnam’s credibility with the government’s own evidence, it could also make it more difficult for prosecutors to try to reach a deal with Mr. Rajaratnam so he can testify against Mr. Gupta in exchange for a potential reduction in his 11-year prison term. Putting Mr. Rajaratnam on the witness stand to testify against his old friend would be a risky maneuver if the government has also assailed his truthfulness.

Mr. Gupta also asked Judge Rakoff to order prosecutors to provide him with a “bill of particulars” specifying the benefits he is alleged to have received from providing inside information to Mr. Rajaratnam. To prove Mr. Gupta committed securities fraud, the government must show that there was a quid pro quo arrangement between the two men in which Mr. Gupta realized some personal or pecuniary benefit.

The indictment is vague about what Mr. Gupta received in exchange for disclosing the confidential information, only stating that he “benefited and hoped to benefit from his friendship and business relationships with Rajaratnam in various ways, some of which were financial.” To the extent the defense can pin down exactly what prosecutors believe was the quid pro quo, the easier it will be to dispute the claim. The government no doubt prefers to keep the allegation as broad as possible so that a wide range of evidence can support a jury finding of a quid pro quo exchange between the two men.

Just as trials are a type of theater, so the pretrial phase is about seeking out advantages that can be used to help shape the story that will be told to the jury.

Peter J. Henning, who writes White Collar Watch for DealBook, is a professor at Wayne State University Law School.

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DealBook: P.&G. Settles Trademark Dispute With Start-Up Skin Care Company

October 15, 2011 by Leave a Comment

Procter Gamble had argued that Willa, Christy Prunier’s skin care line, is too similar to the name of its Wella hair care products.Andrew Sullivan for The New York TimesProcter Gamble had argued that Willa, Christy Prunier’s skin care line, is too similar to the name of its Wella hair care products.

A Connecticut mother and businesswoman has won the right to name her company after her daughter, Willa, despite the objections of the nation’s largest consumer products company.

Christy Prunier spent the last three years creating a line of skin care products aimed at preteenage girls like Willa, who is 11. But after obtaining trademark approval from the government early this year, she received a cease and desist letter from Procter Gamble, which owns the hair care brand Wella.

Lawyers for Procter Gamble said consumers would be confused because of the similarities, and demanded that she drop the name Willa. Ms. Prunier fought back. The two sides were scheduled to go to trial this week but instead settled the dispute, subject to a judge’s approval. 

“We are pleased to confirm that this matter has been amicably resolved,” said Jennifer Chelune, a spokeswoman for Procter Gamble, in an e-mail. She declined to elaborate.

Lawyers for Ms. Prunier also declined to provide additional specifics about the settlement, other than confirming that their client can continue to use the name Willa for her line of lip balm, facial masks and other skin care products.

Ms. Prunier, who had likened her struggle to David versus Goliath, declined to comment, citing confidentiality provisions in the settlement pact.

Trademark lawyers said it was not uncommon for disputes like Ms. Prunier’s to settle just before trial.

“What’s important to brand owners is control, and a private resolution that allows continued use in certain respects rather than an all-or-nothing decision by a judge or jury can be a good result,” said James D. Weinberger, an intellectual-property lawyer at Fross Zelnick Lehrman Zissu in New York. “If you go to trial and win, great; but if you lose, there can be long-term damage that is difficult to repair.”

Mr. Prunier’s battle with P. G. is just the latest case of a small-business owner claiming “trademark bullying” by a large corporation. This summer, the Maya Archaeology Initiative fought claims by Kellogg that a bird in the organization’s logo was too similar to Toucan Sam, the bird on the Froot Loops cereal box. The sides settled the dispute, allowing the Mayan group to use its mark.

The legal battles have caught the attention of Congress, which last year passed legislation that required a study of the issue. The subsequent Commerce Department report concluded that there was inconclusive evidence of widespread trademark bullying and that disputes “may be best addressed by the existing safeguards in the litigation system.”

A former film executive, Ms. Prunier said the idea of creating a cosmetics business for preteenage girls arose while Willa was taking a bath several years ago. Willa complained that she was tired of using “babyish” soaps and instead wanted soap made for girls her age.

Ms. Prunier spent the next three years meeting with chemists and developing a line of soaps and lotions that will be sold in purple and white bottles. She said her face wash was meant to “smell like a girl in the summertime who takes a shower outside.”

Willa had caught the attention of Target, J. Crew and an Upper East Side boutique owned by the actress Phoebe Cates before the squabble with Procter Gamble left the business in limbo.

The company’s namesake was in school on Friday and unavailable for comment.

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Sustainable Profits: How Willa Can Defend Against P.&G.’s I.P. Suit

October 5, 2011 by Leave a Comment

Sustainable Profits

The challenges of a waste-recycling business.

You may have seen a fascinating New York Times article about the lawsuit Procter Gamble has filed against a start-up called Willa, which produces a line of cosmetics that is sold in Target and in small boutiques. It turns out that P.G. has a line of cosmetics called Wella, a German hair care brand that the conglomerate acquired in 2003 for $7 billion. P.G. sued Willa over the name, claiming that it was confusingly similar to Wella.

The case resonated with me because TerraCycle went through a similar lawsuit a number of years ago. The settlement terms prohibit me from discussing the case, but it had a similar David vs. Goliath plot line. Intellectual property law generally requires the owner of a mark or patent to police it. For example, if we find someone using a logo similar to TerraCycle’s, we would have to do something — starting with a gentle request and moving on to legal action if necessary. Bottom line: use it or lose it. So before we come down too hard on the Goliaths who bring these cases, it is important to put these efforts in context: the big companies have little choice; it’s the way the system works.

But all is not lost for the Davids. Yes, a lawsuit like this can crush a small business — Willa, apparently, has already spent $750,000 in legal fees, a very big bill for a small company. But the money doesn’t have to go to waste. I believe that the best defense when a big company attacks a smaller company is to take the fight to the press. America loves the little guy. It goes back to the colonies and the Redcoats. It’s in our D.N.A.

So, Willa might do well to keep telling its story. I have seen this work for other companies (here’s an example involving Jennifer Lopez that wound up on the cover of Inc. magazine). The result can be a barrage of media that can create some major benefits: the small brand receives more attention, its consumers become more passionate, and the big brand is put on the defensive. Again, I am bound by the settlement agreement in the TerraCycle case not to disclose details of the case, but I can report that the year of the lawsuit our sales doubled from $1.5 million to $3.3 million.

This media strategy changes the game from one played in the courtroom to one played in the court of public opinion. The good news is that the court of public opinion favors the little guy and will overlook many details and even legal rights that may favor the big guy. This strategy is not for everyone, however. To prevail, one needs to have a great story, one that resonates with the public. So, one thing to remember is the value in your company’s story.

For many companies, the better strategy is to avoid these situations. I strongly recommend hiring a good I.P. lawyer and — just as important — buying liability insurance that will cover legal fees.

As to the specifics of the Willa case, in my disinterested opinion, I do think the names are confusingly similar. But, while I support P.G. on the merits, I, like most Americans, I suspect, will be rooting irrationally for Willa.

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.

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Online Video Start-Ups Seek to Carve Out a Place Beside YouTube

June 6, 2011 by Leave a Comment

Mr. Michaud co-owns Channel Awesome, an aspiring Viacom of the online video world, which promotes online shows about video games, comic books and assorted realms of popular culture. He was a casualty of the recession, having been laid off by Circuit City, the electronics retail chain that later was closed, and now he is a beneficiary of the advertising rebound, having doubled his revenue last year, enough to employ seven people full time.

“People may still scoff at online video, but this is a real business now,” he said over breakfast recently. Channel Awesome’s primary partner is not YouTube, but Blip.tv, which distributes made-for-the-Web series and surrounds them with ads. The companies that create these series are small, are popping up in unexpected places — like Mr. Michaud’s home — and are creating unlikely stars in lucrative niches.

Channel Awesome’s best-known weekly show, “Nostalgia Critic,” which another Circuit City cast off, Doug Walker, produces from his home five minutes from Mr. Michaud’s, draws about three million views a month. Several of Blip’s top production partners are on track to earn at least a $1 million in ad revenue from Blip this year, said Dina Kaplan, a co-founder of Blip.

Like YouTube, Blip splits advertising revenues with Web series producers. But unlike YouTube, which also streams amateur videos, and Netflix, which streams feature films and television shows, Blip is solely focused on those producers. Rather than competing directly, it is trying to carve a niche next to YouTube in the expanding world of Web video.

“This ecosystem that we started working with in 2005 has finally come into its own,” Ms. Kaplan said, citing the success of companies like Mr. Michaud’s, Blip’s relationships with top advertisers like Procter Gamble, and the growing popularity of streaming video on televisions.

Shows hosted by Blip’s servers now account for 330 million video views a month, the company says. Blip is in its third round of financing by venture capital firms that have invested $18 million.   But what the system has been lacking, Blip executives and other industry specialists say, are ways to find made-for-the-Web series that are worth watching. The problem, in industry parlance, is discovery, and it is a huge hurdle for Web video makers and sponsors to clear.

“There just isn’t anywhere right now that focuses on original Web series and presents them in a clean, curated, well-lit environment,” Mike Hudack, another co-founder of Blip and the company’s chief executive, said last month as he showed his solution: a new home page for Blip that is updated daily with links to new episodes of shows.

The new home page divides shows into categories like sports and comedy, ranks shows by popularity and creates what Mr. Michaud calls “real show pages” for users to visit.

YouTube, too, is trying to solve the discovery problem by programming its home page and putting a new emphasis on channels of content. In March, the company, a unit of Google, bought a Web video production company called Next New Networks, and now the employees of Next New are training other budding YouTube producers.

Like so many other Web video companies, Blip is a partner of YouTube, so it avoids any insinuation that it is a competitor. But it would clearly prefer to rack up video views on its own sites, not YouTube’s.

The audiences for most Web series are still puny by television standards, and so are the budgets for the series. Mr. Michaud, 29, who wore to breakfast a yellow shirt with the star symbol from Super Mario Bros. 3 imprinted on the front, said online video itself “still has a lot of growing up to do.”

“My company has a lot of growing up to do,” he said, “but I believe that sometime in the next one to two years someone will create that one series that gets everyone talking.”

That one show, he said, could then start pulling people from traditional television “to the endless options of online video.”

Many of Blip’s top shows are part of a network, the same way that MTV is an umbrella for all sorts of shows. Along with Channel Awesome, Blip praises Rooster Teeth, a production company based in Austin, Tex., that makes the action drama “Red vs. Blue” and “Immersion,” which tests video game tropes in real life.

Mr. Hudack’s other favorites include “Dusty Wright’s Culture Catch,” a music and culture talk show and blog, and “Aidan 5,” a black-and-white sci-fi drama produced in Columbus, Ohio, and based on a film short.

“When it comes to Web video, Hollywood could learn lessons from Illinois and Texas,” Ms. Kaplan said.

As the channel and show names imply, success often results from tackling topics that appeal to young viewers. They are some of the same people who are “watching less television,” Ms. Kaplan said, “so if advertisers want to reach them, they have to start advertising on Web series.”

Last week, Blip signed its latest content deal, with a management company called the Collective, that will steer more videos — and thus more views and ad impressions — in Blip’s direction. The Collective represents online stars like Lucas Cruikshank, who plays a helium-voiced character called Fred in a hit YouTube series. In celebration of the deal, Blip’s new office space on Broadway in the NoLIta neighborhood of Manhattan was rearranged into a dance floor last Thursday night, where staff members at Blip, executives at the Collective and friends from YouTube all mingled. In the back, out of reach of 200-plus partygoers, an unopened bottle of Champagne sat at an employee’s desk.

To hit the million-dollar mark that Ms. Kaplan mentioned, Channel Awesome has to add new series and maintain the audiences for its current series. Mr. Michaud is now looking for warehouse space in suburban Chicago, and benefiting, he said, from the weak real estate market. He considered the vacant Circuit City building where he once worked, he said, but concluded that the space was too small.

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