COUNCIL OF BETTER BUSINESS BUREAUS

2016 ANNUAL REPORT

BUILDING A MORE TRUSTED MARKETPLACE

OUR VISIONAn ethical marketplace where buyers and sellers trust each other

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OUR MISSIONTo be the leader in advancing marketplace trust

WE DO THIS BY Setting standards

for marketplace trust

Encouraging and supporting best practices by engaging with and educating consumers and businesses

Celebrating marketplace role models

Calling out and addressing substandard marketplace behavior

Creating a community of trustworthy businesses and charities

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In my year as Chair of

the Council of Better

Business Bureaus, we

accomplished much

and it is my honor to

share with you a few

of those highlights.

I’m proud of how this

group came together

to expand on work already being done and

to imagine the future and move us toward

that vision.

The Enterprise Strategic Plan, which brought

together not only Council’s Board but also the

Boards of the BBB Institute for Marketplace

Trust and the BBB Wise Giving Alliance, was an

accomplishment I am particularly proud to have

spearheaded. This new plan is a catalyst for this

organization and its future growth. During this

process, we reached out to thought leaders and

executives to help us better understand BBB’s

role in the marketplace and how to expand and

drive our mission forward.

The three strategic goals that grew out of these

discussions — Data, Social Enterprise, and

Partnerships at the National Level — will enable

us to spread the BBB brand to new audiences

to have the greatest impact.

In addition to the development of the Strategic

Plan, Council has been working to further its

mission of increasing trust in the marketplace

through white papers and reports that reach

far beyond our usual boundaries. Our dynamic

work in cybersecurity, our innovations in

analyzing data around scams and challenging

preconceived notions of those most a� ected,

are building relevance, and re-positioning our

100 year-old brand to capture new markets and

create change.

New programs such as the Children’s Confection

Advertising Initiative and EU Privacy Shield are

increasing awareness of self-regulation and

privacy issues, putting BBB out in front as a

thought leader on these important issues.

It has been my honor to work with the group

the last year and I’m proud of the amazing

work that was accomplished. I know there is

more work to be done and I look forward to

being part of that change in some way. We

should be proud, but not yet satisfi ed, as there

is more to come and more meaningful work

yet to be done.

I know that together we can do more.

George K. H. Schell

Chair

Council of Better Business Bureaus, Inc.

LETTER FROM THE CHAIR

far beyond our usual boundaries. Our dynamic

4

55

One of the things

that most amazes

me about the BBB

community is the

impact our work and

our programs have on

countless consumers.

Everything we do, at a

national level through

our self-regulation programs, BBB Institute and

the local BBBs, helps to build a stronger mar-

ketplace and stronger communities that are

better for all of us.

Over the last year, we have worked with

industry leaders to launch innovative programs,

to advocate for e� ective self-regulation and set

standards for trust in the marketplace. We are

leading the discussion on marketplace trust,

what truly makes business better and building

partnerships to drive our mission.

In 2016, we held a fi rst of its kind conference

--- BetterBusiness2016 --- which opened doors

for new conversations, fresh insights, and

opportunities to increase brand awareness.

Reaching out to companies to build and renew

connections allows us to advance marketplace

trust and engage in these important discussions

about the future of business and share those

learnings of the larger community.

We also released a paper about the innovative

BBB Scam Tracker program called the “The

Invulnerability Illusion,” which contained

surprising new insights into who is most

likely to get scammed, and how most of us

underestimate our vulnerability to cons and

fraud. A new pilot initiative assessed the state

of cybersecurity among small business in North

America and set out to gauge cybersecurity

risks to small businesses. This report provided

insight into cybersecurity risks and practices,

dispelled common misperceptions, and

demonstrated the importance consumers place

on cybersecurity. It provided a roadmap for 5

Steps to Better Cybersecurity education and

awareness programs to protect small businesses

and their customers.

We also released our second issue of TRUSTED

where we talk to small businesses about best

practices, examine signifi cant marketplace

trends, and talk about current innovation drivers.

Like most of our work, the goal of TRUSTED is to

redefi ne what it means to be a better business;

how else can we move forward in increasing

marketplace trust without these conversations?

We are also expanding our work on the fi ve

gestures of trust to help business owners better

understand how customers view their business.

This important work will become an important

marker in the customer/business relationship

and create better business transactions.

LETTER FROM THE PRESIDENT

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We continued our work with Nielsen to help

us better understand the consumer journey

and BBB’s role in the marketplace. We have a

new appreciation for how purchasing decisions

are made and how BBB, both our brand and

our services, plays a part in the consumer’s

world. We continue to play a role in the story

of trust and we need to be persistent in our

goals of advancing trust in every corner of the

marketplace.

Thank you for your support.

All the best,

Mary E. Power

President & CEO

Council of Better Business Bureaus, Inc.

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BUILDING A MORE TRUSTED MARKETPLACE

Business, technology, and consumer habits are changing at a rapid pace. The Better Business Bureau (BBB) has set itself on a path to keep up with these rapidly changing times by building a stronger foundation for future growth. In 2016, we continued research to better understand our constituents, explored trends and benchmarks, created new communications platforms, and strengthened our current national programs.

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HERE ARE SOME OF OUR 2016 NATIONAL HIGHLIGHTS:

Convening Today’s Leaders: BetterBusiness2016 Conference

In April 2016, the Council hosted

a groundbreaking event – the

BetterBusiness2016 Conference: The

Conference for Business, Self-Regulation &

Impact - bringing together thought leaders,

government o� cials, business innovators,

and academics to share ideas and discuss

solutions to some the most pressing global

and domestic issues facing businesses today.

Seven panel discussions over two days featured

over 30 leading thinkers and infl uencers

from organizations like AT&T, ADT Security,

Federal Trade Commission, Facebook, FireEye,

General Mills, IBM, Southwest Airlines, The Walt

Disney Company, and Yelp, as well as industry

associations such as Direct Selling Association

(DSA), Entertainment Software Rating Board

(ESRB), and Distilled Spirits Council of the

United States (DISCUS). The conference

examined self-regulatory best practices,

information security, the sharing economy, the

Internet of Things, and privacy.

Exploring Consumer Trends:Consumer Journey 2.0

The Council partnered again with Nielsen, a

global independent measurement and data

company, to continue exploring consumer

trends (i.e., have we improved from 2015?). We

gathered many new statistics to help reinforce

the value of BBB Trustmarks, explored regional

benchmarks and di� erences, and dove deeper

on who our customers/audiences are. We also

worked with Nielsen to better understand the

awareness and value of BBB Trustmarks for

Charities. The fi ndings of the Consumer Journey

2.0 were presented to local BBBs during our

annual Communication & Marketing Conference

in Philadelphia and during a webinar hosted

with Nielsen. Attendees left with an expanded

platform for engagement with consumers, ideas

for honing their communications

and marketing strategies, and tactics to enhance

their accredited business outreach plans.

HOW PEOPLE DESCRIBE BBB:

HELPFUL (84%)

REPUTABLE(78%)

TRUSTWORTHY (84%)

Source: Nielsen 2016 - Adults familiar with BBB.

TRUSTWORTHY

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Cracking the Invulnerability Illusion White Paper

On July 2016, Council, in collaboration

with BBB Institute for Marketplace Trust,

the educational foundation of the Council,

published its fi rst research paper on “The

Invulnerability Illusion,” with surprising

new insights into who is most likely to get

scammed, and how most of us underestimate

our vulnerability to cons and fraud.

Marketplace scams a� ect one in four households

each year at an estimated loss to individuals

and families of $50 billion, yet most consumers

believe it can’t happen to them. In 2016, we

surveyed consumers in the U.S. and Canada

to try to understand why. The paper dispelled

common misperceptions, and pointed to a new

direction for consumer education and awareness

e� orts aimed at preventing scam victimization.

This study served as an example of the power

of collaboration, opened doors for the BBB

Institute to build new relationships with

businesses and industry, helped position BBB

Institute as a thought leader in the space

with many invites to speak at conferences

and events, and generated signifi cant media

coverage in top-tier publications and news

outlets across North America.

KEY FINDINGS

Stereotypes about scam victims

stand in sharp contrast with

reality. The public believes

victims are likely to be elderly

or ignorant. In fact, we are all

at risk. Highly educated and

younger individuals are actually

more likely to be scammed.

Helping to warn others is a key

motivator for reporting scams.

Underreporting has been a

long-standing challenge to law

enforcement investigations and

public education.

Arming the public with current

information about trending

scam types and the tricks and

techniques of the scam trade is

highly protective. Recognizing

a scam isn’t always easy, but

knowing what to look for in

advance is important to scam

avoidance.

with many invites to speak at conferences

and events, and generated signifi cant media

coverage in top-tier publications and news

outlets across North America.

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Value of BBB Accreditation Pilot Project

As part of its Voice of the Customer program,

our Market Research & Insights Services team in

close collaboration with 17 local Better Business

Bureaus began work on a pilot research project

around the ‘Value of BBB Accreditation.’ The

goal of this new initiative was to increase primary

research which can be used for BBB Accredited

Business (AB) development and retention, to

develop enterprise benchmarks, and to gather

actionable insights.

59%Increases

confidence among my consumers

36%Supports

BBB mission

20%Helps my business be better

42%Increases

credibility of my business

25%Expands my

network

To promote knowledge sharing and

collaboration, we delivered several

presentations and a webinar sharing

best practices on how BBBs may use

this pilot program to optimize their AB

development and retention programs.

Source: CBBB Research, 2016 1111

Cybersecurity: Research and Education on Cybersecurity Threats

In keeping with its mission to advance

marketplace trust for all, the Council began

ongoing research for a new report on The State

of Cybersecurity Among Small Businesses in

North America. Based on 1,500 Accredited

Businesses’ responses, Council found that small

business owners are aware of cyber-threats and

willing to act and invest more in cybersecurity if

an approach customized to their size and type of

business was available. This work builds on our

awareness campaign started with the “5 Steps to

Better Business Cybersecurity” training program

and directly contributes to our work building

cybersecurity guidance for small and mid-sized

businesses in the coming year. Building on our

ongoing relationships with the Federal Trade

Commission and the Department of Homeland

Security, we expanded our ties to the federal

government by deepening our connection

with the National Institute of Standards and

Technology in support of our “5-Steps to Better

Business Cybersecurity” outreach.

In 2016, BBB teamed up with the White

House, the National Cyber Security Alliance,

and dozens of public and private sector

organizations to call on consumers and

businesses to “Lock Down Your Login”,

a campaign promoting the use of strong

authentication to secure email and other key

online accounts.

CYBER $3CUR1TYSM

online accounts.

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New Ways to Discover and EngageIn 2016, Council launched a new publication and

podcast series. TRUSTED is a forward-thinking

publication that poses the question and ignites

a dialogue on the topic of what makes a better

business. TRUSTED is written for, by, and about

business leaders. The publication inspires readers

to think beyond traditional boundaries, lead

conversations, and seek and discover what it

means to conduct business better. TRUSTED has

also become a voice for consumers, providing

informative discussion on how consumers are

shaping and infl uencing business decisions and

best practices.

The new BBB podcast series – “The Bistro” and

“Better Business > Better” are also platforms

built to augment the discussion around what

makes a better business. The series creates

a stage where all participants within the

marketplace are given an opportunity to

share their perspectives and expertise on

how the marketplace is evolving, growing

and changing the way we do business. BBB’s

podcasts are a convening space where live and

timely conversations are taking place to entice

everyone to think di� erently about business

not just for the here and now, but for the future

and beyond.W

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WINTER 2017 | BUILDING A MORE TRUSTED MARKETPLACE FOR ALL

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RADIO FLYER BLASTING OFF FOR ITS NEXT 100 YEARS

REAL POSSIBILITIES, AGELESS OPPORTUNITIESAARP’s Real Possibilities initiative goes to the heart of the brand and empowers people to navigate the changing face of aging in America.

LASTINGIMPRESSIONSLegacy: to identify something or someone who has endured through the ages or left a lasting impression.

WINTER 2017 | BUILDING A MORE TRUSTED MARKETPLACE FOR ALL

POSSIBILITIES, AGELESS OPPORTUNITIES

Southwest cares about its customers and it shows.

The INTERNET of THINGSFrom wearable fitness monitors to “smart”

cities, products and services are being

integrated with communication features

like never before.

The SECRET SAUCEHow CustomInk helps small businesses

promote their brand in unique and cost-

effective ways.

Sharing ECONOMYConsumers increasingly say goodbye to

traditional means of doing business such

as renting, owning and buying.

Southwest cares about its customers and it shows.

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SUMMER 2016 | BUILDING A MORE TRUSTED MARKETPLACE FOR ALL

Flying with Heart

TRUSTED IS A FORWARD-THINKING PUBLICATION THAT POSES THE QUESTION AND IGNITES A DIALOGUE ON THE TOPIC OF WHAT MAKES A BETTER BUSINESS.

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IN 2016, THERE WERE OVER

384,000 BBB ACCREDITED BUSINESSES.

THE STRENGTH OF THE BBB SYSTEM

To operate as a BBB, an organization must

meet nine BBB Performance and Accountability

Standards, including 67 specifi c requirements

relating to organizational elements such as

fi nance, governance, technology, accreditation

and other programs central to the mission. All

BBBs undergo annual audits and compliance

reviews to ensure they are meeting standards.

BBBs o� er services to both businesses and

consumers by creating a community of

trustworthy businesses through accreditation,

setting standards for marketplace trust,

encouraging and supporting best practices,

celebrating marketplace role models, and

denouncing substandard marketplace behavior.

In 2016, the BBB system provided more than

220 million direct-service interactions to

businesses, charities and the general public.

From conducting investigations to tracking

scams and handling complaints, BBB continues

to serve as a primary resource for individuals

seeking background information on businesses

and charities.

Adding to the strength of the BBB system

is the breadth of businesses — large

and small — that support our

mission of trust in the

marketplace.

The strength of the BBB system is the local,

independent non-profi ts that are licensed to

serve as BBBs across North America. There are

BBBs covering every corner of the U.S., Puerto

Rico and the Caribbean territories, Mexico and

all of Canada with the exception of French-

speaking Quebec.

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THE YEAR IN STATS

224,890,755Instances of Services to Businesses, Charities & the General Public

167,632,180BBB Business Profi le Inquiries

3,536,943Views on Give.Org for Charity Reports and Tips

860,493Complaints Handled

32,823Scam Reports to BBB Scam Tracker

230,000Media Mentions

52,420,909 General Assistance, Counseling & Industry Information

15,583BBB AUTO LINE Cases

11,337Advertising Reviews

6,260Investigations Conducted

346,648Published Customer Reviews

27,579Mediations, Arbitrations & Dispute Settlement Hearings

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Media Outreach In 2016, BBB received more than 230,000

media mentions, reaching a potential audience

of over 3 billion. Major news coverage included

both traditional media – Time, Forbes, USA

Today, Consumer Reports, AP, Bloomberg,

Reuters, ABC, CBC, CBS, CNN, Fox, NBC – and

well as “new media” outlets like Hu� ngton

Post, BuzzFeed, Marketwatch, Credit.com, and

NerdWallet. BBB Mexico also began media

outreach as it became a fully operational BBB.

Business stories focused on issues such as ethics

(Money), innovation (Fast Company), and the

“sharing economy” (The Wall Street Journal).

Ad Age covered changes to the BBB Code of

Advertising to address native advertising. BBB’s

national programs were mentioned frequently in

various trade publications.

Council coordinated with the local BBBs to

generate news coverage on topics such as the

Top 10 Scams of the Year, “storm chasers,” new

research on Cracking the Invulnerability Illusion,

and ticket scams around popular events such as

the Super Bowl and Broadway’s “Hamilton.” The

Digital Spring Cleaning campaign launched in

April and the BBB Holiday Helper campaign at

Thanksgiving. BBB Wise Giving Alliance o� ered

advice on charitable giving in the wake of

several natural disasters, as well as the Orlando

nightclub shooting.

Council partnered with other organizations

on Data Privacy Day, National Cyber

Security Month, the White House’s

Cybersecurity National Action Plan,

and deceptive door-to-door

alarm sales.

“The Haggler” at The

New York Times

did half a dozen

More than two dozen national and international reporters gathered at BBB Serving Metro New York on March 8, 2016 for the press briefi ng. There were nearly 1,200 media mentions over two days resulting from this briefi ng.

columns based on local BBB investigations

into substandard marketplace behavior. The

entertainment press gave a lot of ink to the

F rating of Kylie Jenner’s company, Kylie

Cosmetics. BBB was cited favorably on a number

of courtroom and home shows, with multiple

mentions by Judge Judy and Mike Holmes.

In March, BBB addressed public inquiries about

the BBB Business Profi le for Trump Entrepreneur

Initiative (formerly Trump University). CBBB

and BBB Serving Metro New York held a press

briefi ng to issue a formal statement in response

to inaccurate reports in the media and during the

presidential debates.

1717

NATIONAL PROGRAMSThe Council is a recognized leader in developing and administering dispute resolution, industry self-regulation and online privacy programs. Each of these programs promotes trust and consumer confi dence while encouraging sound industry self-regulation. practices.

promotes trust and consumer confi dence while encouraging sound industry self-regulation. practices.18

DISPUTE RESOLUTION PROGRAMSBBB EU Privacy Shield Program Launched to Help U.S. Businesses Meet EU Privacy Standards When the long-awaited EU-U.S. Privacy Shield

Framework was formally announced in Brussels July

12, 2016 by U.S. Secretary of Commerce Penny Pritzker

and EU Justice Commissioner Vera Jourovà to replace

the EU Safe Harbor, Council immediately launched its

BBB EU Privacy Shield program in conjunction with

the new data pact. BBB EU Privacy Shield provides

compliance assistance and independent privacy

dispute resolution services for U.S. companies of all

sizes doing business in Europe that must meet EU data

privacy standards under the new Framework.

Like Safe Harbor, the Privacy Shield Framework

enables U.S. businesses to bridge the di� erences

between European and U.S. privacy laws, by self-

certifying their compliance with agreed upon privacy

principles, assuring European consumers and

business partners that their data will be adequately

protected, and by o� ering EU individuals an accessible,

independent dispute resolution option for privacy

complaints.

Privacy Shield provides enhanced transparency and

privacy protections for EU consumers, while enabling

thousands of companies in the U.S. to process personal

data from the European Union, supporting transatlantic

trade and helping grow the digital economy.

BBB EU Privacy Shield replaces BBB EU Safe Harbor,

a trusted independent dispute resolution provider

that had supported the U.S.-EU Safe Harbor since it

launched in 2000. During the initial Privacy Shield

launch period August 1 through September 30, BBB

EU Privacy Shield assisted several hundred former

Safe Harbor participants in their transition to the new

Framework, while also receiving close to 100 new

applications from businesses seeking their fi rst EU

privacy self-certifi cation.

Safe Harbor participants in their transition to the new

Framework, while also receiving close to 100 new

applications from businesses seeking their fi rst EU

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BBB AUTO LINEBBB Auto Line is a non-binding dispute

resolution program administered by Council

and BBBs. Its mission is to help consumers and

businesses resolve automotive warranty or

lemon law disputes. Launched as a program to

one automotive company in 1981, BBB AUTO

LINE now o� ers the program to 23 automotive

companies, including leading brands such as

Ford and General Motors, luxury brands such as

Lotus and Bentley, new companies like Mobility

Ventures, and motorcycle companies.

Best practices in dispute resolution require that

programs be accessible and transparent. Our

program provides consumers with concise

information about eligibility, rules, and what to

expect from a dispute resolution program. In

2015, 95% of surveyed consumers found BBB

AUTO LINE materials either “clear or easy to

understand” or “somewhat clear and easy to

understand.”

In 2016, 17,853 consumers fi led with the program

and the emphasis continues to be on mediation.

Every settlement saves money, time and restores

the relationship between the business and

its customers. The system administered 2,160

arbitrations in 2016 around the country and has a

certifi ed arbitrator pool of over 700 attorneys.

Council also operates an out-of-court disputes

resolution system to other sections of the

marketplace. In 2016, CBBB administered several

court-appointed class action settlements per the

terms of the settlement. Council also provides

dispute resolution to national companies that

have chosen to write BBB into their customer

agreements. In conjunction with local BBBs,

Council continues to provide services to enable

businesses to resolve disputes in an impartial,

cost-e� ective manner.

Council continues to provide services to enable

businesses to resolve disputes in an impartial,

cost-e� ective manner.

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2121

ADVERTISING SELF-REGULATIONCouncil continues to provide platforms for promoting strong, visible and accountable self-regulation programs that set the standard for truthful and responsible advertising. These programs address concerns about food advertising to children, truth in advertising, responsible advertising to children, the collection of behavioral data online and the application of self-regulatory standards to digital advertising.

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Children’s Food and Beverage Advertising InitiativeIn 2016, the Children’s Food & Beverage

Advertising Initiative (CFBAI) celebrated 10

years since the program’s launch, when 10 of the

nation’s leading food and beverage companies

voluntarily pledged to advertise to children under

age 12 only foods that meet strong nutrition

standards, or to not advertise to children at

all. BBB and responsible food companies and

restaurants created the program in 2006 so

that the food industry could do more to address

growing concerns about childhood obesity.

CFBAI has grown from 10 to 18 participants

and has undergone several core improvements

since the program started including expansions

in scope and coverage and adoption of uniform

nutrition criteria. The participants have made

numerous nutritional improvements to the foods

they advertise to children, including reducing

calories, sugars, sodium and saturated fat and

incorporating more whole grains, fruits and non/

low-fat dairy in foods such as cereals, yogurts,

and children’s restaurant meals. CFBAI remains

committed to seeking additional improvements to

strengthen the program and its impact.

2424

In 2016, CFBAI continued to expand BBB’s role

as a leader in self-regulation and a prominent

voice in the national conversation about

childhood obesity:

BBB, in partnership with the National

Confectioners Association, launched the

Children’s Confection Advertising Initiative

(CCAI) in March 2016. Modeled after

CFBAI, the program enables small-to-

medium-sized confectionery companies

to join CFBAI’s larger candy companies

in making the commitment to not engage

in child-directed advertising. The eight

CCAI participants and CFBAI’s six larger

confectioners represent more than half of

the candy on store shelves in the U.S.

CFBAI, the Children’s Advertising Review

Unit, BBB Central Florida and BBB West

Florida exhibited at the 2016 National

Parent Teacher Association (PTA)

Convention & Expo in Orlando, Florida.

The collaboration was an enterprise-wide

e� ort to increase consumer engagement

on BBB’s wide range of programs and

services for families and children. The cross-

organizational team built brand awareness

around BBB’s industry self-regulation

programs and established promising

relationships for continued engagement

between local PTAs and local BBBs.

CFBAI engaged with dozens of external

stakeholders including members of the

food, media and entertainment industries,

trade associations, government agencies

in the U.S. and abroad, NGOs, public health

advocacy organizations, and research

institutions.

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National Advertising Division (NAD) In 2016, the National Advertising Division (NAD)

sta� developed the content for the latest in a

string of standing-room-only annual conferences

on advertising regulation and self–regulation. The

two-day event in September 2016 drew more

than 250 attendees. NAD published six decisions

in 2016 that focused on native advertising and

underscored NAD’s role as thought leader –

both on native advertising and on advertising

in digital media. NAD presented on native and

digital advertising at more than 10 conferences

in the U.S. and abroad – demonstrating the

advertising industry’s demand for clear guidance

and underscoring the impact of self-regulation.

Some of NAD’s highest-profi le cases in 2016

involved celebrity endorsements and advertising

on new platforms or in new formats. NAD also

marked the 10-year anniversary of its initiative

with the Council for Responsible Nutrition. That

initiative was launched to expand NAD’s review

of advertising for dietary supplements and it

has succeeded beyond all initial expectations

– resulting in more than 250 challenges to

determine the truth and accuracy of advertising

claims made for supplement products.

Children’s Advertising Review Unit (CARU)The Children’s Advertising Review Unit (CARU)

hosted a one-day conference in Los Angeles in

May 2016, highlighting developments in children’s

advertising and marketing. CARU also held its

Supporters’ Council meeting in September, an

opportunity for children’s advertisers to consider

and discuss the unique issues facing companies

that market directly to children under 12. CARU’s

most recent public service announcement –

“Would you know if someone was following

your child online?” – continued to air in 2016,

addressing recent changes in privacy laws,

helping adults safeguard children from divulging

personal information online without parental

consent, and highlighting the role of CARU and

the BBB in protecting children in the digital world.

Electronic Retailing Self-Regulation Program (ERSP)The Electronic Retailing Self-Regulation Program

(ERSP) held a successful half-day Summit

in conjunction with the Electronic Retailing

Association Government Fly-In, a gathering that

featured experts in direct-response advertising

who addressed key issues facing that industry,

including new challenges posed by emerging

advertising platforms. ERSP continued

development of its Telemarketing Sales program,

a pioneering e� ort to adapt principles of

advertising self-regulation to the dynamic world

of telemarketing and live seminars.

2626

Online Interest-Based Advertising Accountability ProgramIn 2016, the Accountability Program celebrated

its fi ve-year anniversary. In these fi ve years, the

program has won recognition for its vigorous

enforcement of the Digital Advertising Alliance’s

Self-Regulatory Principles for Online Behavioral

Advertising, its educational outreach to industry

and consumer groups, and its involvement as a

thought-leader in international self-regulation.

The Accountability Program’s body of decisional

work provides authoritative guidance to the

digital advertising industry on best practices to

protect consumers’ privacy in a world of digital

advertising. To mark this fi ve-year milestone, the

DAA has issued a comprehensive casebook which

provides summaries of each of the Accountability

Program’s formal actions.

The Accountability Program held its fi rst

conference dedicated to compliance with

the DAA Principles. Held in conjunction with

the DAA’s yearly Summit in Los Angeles, the

event featured panels of experts addressing

a varied audience, including attorneys, ad

industry professionals, and technologists. The

Accountability Program participated in 21 other

conferences and webinars during the year,

reaching six states in person and the wider

world online.

As consumers migrated from their desktops to

mobile, so did the advertising industry, reaching

consumers on their mobile devices with ads

tailored to consumers’ interests. In 2016, the DAA

issued guidance on applying the Self-Regulatory

Principles to the mobile environment, and the

Accountability Program began enforcement in

this technically challenging environment with

fi ve enforcement actions. The cases dealt with

the responsibility of app developers to provide

timely notice about interest-based advertising

and access to an easy-to-use opt-out tool. The

mobile app cases also enforced companies’

responsibilities when collecting sensitive

information, including precise location data,

medical data, and data from young children

which is forbidden under statute without

parental consent. The Accountability Program

also continued its vigilance of interest-based

advertising on websites, releasing three decisions

that began as consumer complaints about

website’s privacy practices.

2727

NATIONAL PARTNERS The National Partner Program represents an exclusive group of leading corporations, law fi rms, and non-profi t organizations looking to advance marketplace trust, infl uence industry behavior, and engage with consumers, government regulators, and peers on a national scale.

In 2016, the Council’s Board of Directors

developed and adopted an Enterprise Strategic

Plan which includes an initiative to grow and

expand partnerships and alliances at the national

level. The strategic objective will expand the

National Partner value proposition and ensure

stakeholders embrace it; widen and deepen

relationships with National Partners; and increase

the number of National Partners and alliances. The

initiative is part of a three-year plan. In addition, in

2016 sta� and volunteers revitalized the National

Partner Leadership Circle to provide feedback

and guidance on the value of the National

Partner program and support the enterprise in

growing the number of National Partners. Seven

new organizations were welcomed as National

Partners in 2016.2828

2016 NATIONAL PARTNERSCorporations3MAbbott Nutrition Products DivisionAcxiom Corporation ADT SecurityAlEn USA, LLC*Alticor †Anheuser-Busch Companies AOL LLCAT&T, Inc.Bayer Healthcare, LLCBBDOBIC CorporationBoston Beer CompanyBridgestone Americas, Inc.Burger King CorporationCampbell Soup Company†Capital OneChurch & Dwight Co., Inc.Clearpoint Financial Solutions, Inc. Clif Bar & CompanyThe Clorox CompanyThe Coca-Cola CompanyColgate Palmolive CompanyCombe, Inc. ConAgra Foods, Inc.Coty, Inc.The Dannon CompanyDel Monte Foods, Inc.Discover Financial ServicesDr. Pepper Snapple GroupDuracell Distributing, Inc.E. T. Browne Drug CompanyEnergizer HoldingsEpson America, Inc.*Eric Mower and Associates, Inc.EuroPharma Inc. Expedia, Inc.Fan DuelFerrero USA, Inc.Ford Motor Company †Fujifi lm CorporationGeneral Mills †General MotorsGeorgia-Pacifi c CorporationGlaxoSmithKline PLCGrey GroupThe Hershey CompanyHormel Foods CorporationHyundai Motor AmericaImmunotecJ.M. Smucker CompanyJohns Manville CompanyJP Morgan Chase Credit CardKao Brands Company

Kellogg Company†Kimberly-Clark CorporationKraft Heinz Company†LEGO Systems, Inc.L’Oreal USA, Inc.LuxotticaManhattan Advertising and Media Law, Inc.Mars, Inc.Mary Kay, Inc.Maserati North America Inc.Mazda North American OperationMcDonald’s CorporationMead JohnsonMeijer, Inc.Mission Pharmacal CompanyMizkan America, Inc.*Mondelēz Global LLCNestlé USANew Avon, LLCThe Nielsen CompanyNissan North America, Inc.North American Insulation Manufacturers AssociationNu Skin Enterprises, Inc.Ogilvy & MatherOverstock.comPep BoysPepsiCo†Pfi zer, Inc.Post Consumer BrandsPriceline.comThe Procter & Gamble Company†Reckitt Benckiser LLCS.C. Johnson & Son, Inc.†Shaklee CorporationShell Oil Products USShiseido Americas CorporationSUBWAY Franchisee Advertising Trust FundSun Products CorporationTarget Corporation Tempur-Pedic International, Inc.Unilever USA, Inc.Verizon CommunicationsVerizon WirelessWhirlpool Corporation

Law FirmsArent Fox LLPArnold & Porter LLPCoblentz, Patch Du� y & Bass LLPCramer-KrasseltCrowell & Moring LLPDavis & Gilbert LLPDavis Wright Tremaine LLP

Debevoise & Plimpton LLPDLA PiperFrankfurt Kurnit Klein & SelzHogan Lovells US LLPHyman Phelps & McNamara LLPKatten Muchin Rosenman, LLPKeller and Heckman LLPKelley Drye & Warren LLPKilpatrick Townsend & Stockton LLPKirkland and Ellis LLPKramer Levin Naftalis & Frankel LLPLoeb & Loeb LLPManatt Phelps & Phillips, LLPMorrison & Foerster LLPOlshan Frome Wolosky Patterson Belknap Webb & Tyler LLPPerkins Coie LLPProskauer Rose LLPSidley Austin Brown & Wood LLPSimpson Thacher & Bartlett LLPVenable LLPWiley Rein LLPWilson Sonsini Goodrich & Rosati PCWinston & Strawn LLP

AssociationsAmerican Advertising Federation American Association of Advertising Agencies American Licorice Company*Association of National AdvertisersConsumer Healthcare Products AssociationCouncil for Responsible NutritionDirect Selling AssociationGrocery Manufacturers AssociationNational Association of Ticket Brokers*National Confectioners Association*PLATO Inc. (Portable Lights of American Trade Organization)Solar Energy Industries Association, Inc.*Toy Industry Association

† Founding Partner, 1971* New Partner 2016

29

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

ASSETS

Cash and cash equivalents $ 7,846,918

Investments 416,613

Accounts receivable, net 1,160,084

Prepaid expenses & other assets 776,398

Property & equipment, net 2,281,214

Investments held for service awards for Bureau o� cers -

TOTAL $ 12,481,227

LIABILITIES AND NET ASSETS

Accounts payable and accrued expenses $ 1,484,474

Deferred revenue 1,466,564

Deferred rent and lease incentive 1,145,233

Funds held for service awards for Bureau o� cers 213,131

Other liabilities 170,066

Investments held for service awards for Bureau o� cers -

TOTAL $ 4,479,468

NET ASSETS

Unrestricted $ 7,303,482

Temporarily restricted 698,277

TOTAL $ 8,001,759

30

STATEMENTS OF ACTIVITIES

REVENUE

Dues $ 14,137,694

Contracts 5,542,624

Subscriptions & License Fees 2,855,843

Grants & Contributions 277,567

Participation Fees 1,157,025

Filing Fees 1,306,735

Events 777,757

Other Program Revenue 69,823

Investment & Other Revenue 53,777

In-kind Revenue 4,875,868

Net Assets Released from Restrictions 2,303,719

TOTAL $ 33,358,432

EXPENSES

Program Services

BBB Programs $ 6,630,615

Self Regulation 6,587,726

Dispute Resolution 3,830,822

Charity Reporting Activities 1,755,858

Marketplace Trust 5,293,160

TOTAL PROGRAM SER-VICES $ 24,098,181

Supporting Services

Management & General $ 8,843,796

Fundraising 31,637

CHANGE IN UNRESTRICTED NET ASSETS

$ 384,818

TEMPORARILY RESTRICTED NET ASSETS

Grants & Contributions $ 2,208,334

Net Assets Released from Restrictions (2,303,719)

CHANGE IN TEMPORARILY RESTRICTED NET ASSETS

CHANGE IN NET ASSETS 289,433

NET ASSETS

Beginning of year 7,712,326

End of year $ 8,001,759

31

CBBB 2016 BOARD OF DIRECTORS AND OFFICERSCHAIRGeorge K. H. SchellChief Marketing Counsel (Retired)The Coca-Cola Company

VICE CHAIRDavid Hubbard Vice President and Deputy General Counsel Verizon

SECRETARYKip MorseRepresenting the BBB Institute for Marketplace TrustPresident BBB of Central Ohio

TREASURERFred ElsberryCEO BBB of Metro Atlanta, Athens

and NE Georgia

NATIONAL PARTNER DIRECTORSBrad Cansler Segment Controller - Home Hardware

Duracell

Jennifer MurilloVice President of Brand

Communications,

Discover Financial Services

Ken K. Patel Vice President and General CounselThe Procter & Gamble Company

MEMBER BUREAU DIRECTORSFred Chown

Owner Chown, Inc.

Lynn Conner Owner/Licensee Hialeah Terrace

Tom Eastman President Summit Security Company

Shaila Kapur PrincipalMergence Consulting

Joseph Schmelzle Senior Director Agency Development and Customer Service Unigroup, Inc.

CBBB ENTITIESPaulette Maehara, CFRE, CAERepresenting BBB Wise Giving AlliancePresident & CEO (retired)

Association of Fundraising

Professionals

Eric MowerRepresenting the Advertising Self-Regulatory CouncilChairman and CEO Eric Mower + Associates

BBB CEO DIRECTORSRod Davis President & CEOBBB Serving Southeast Florida

and the Caribbean

Jane Driggs President and CEO BBB of Utah

Matthew Fehling President and CEOBBB of Central, Northern and

Western Arizona

Kevin Hinterberger President and CEOBBB Serving Central North

Carolina

Kim States President and CEOBBB Serving Denver/Boulder

EXTERNAL MEMBER DIRECTORSScott Broetzmann President and CEOCustomer Care Measurement and

Consulting, LLC

Jennifer MurilloVice President of Brand

Communications,

Discover Financial Services

32

Kamal Nigam Engineering DirectorGoogle

Colleen P. Rudio Founder/OwnerCascadia Business Development

PUBLIC DIRECTORSeth Kahan Executive Strategy AdvisorVisionary Leadership

CBBB EX-OFFICIO DIRECTORSMary E. PowerPresident and CEOCouncil of Better Business

Bureaus, Inc.

Richard Woods Vice President, General Counsel and Corporate SecretaryCouncil of Better Business

Bureaus, Inc.

CBBB STAFF OFFICERSGenie BartonPresidentBBB Institute for Marketplace

Trust & Vice President,

Digital Advertising

Council of Better Business

Bureaus, Inc.

Beverly BaskinSenior Vice PresidentBBB Services

Maureen EnrightDeputy DirectorChildren’s Food and Beverage

Advertising Initiative

Bill FanelliChief Security O� cer

Frances Henderson Vice President and National Director Privacy Initiatives

Bennie F. JohnsonChief Strategy O� cer

Wayne J. KeeleyDirector and Vice President Children’s Advertising Review

Unit (CARU)

Andrea LevineSenior Vice President and DirectorNational Advertising Division

(NAD)

Nancy LoaderNational Director Dispute

Resolution Programs

Peter MarinelloVice President and DirectorElectronic Retailing Self-

Regulation Program (ERSP)

C. Lee PeelerCBBB Executive Vice President and PresidentAdvertising Self-Regulatory

Council (ASRC)

Michael PerdueChief Operating O� cer

Steve SalterVice President, Standards and Services

Ben SteinbergChief Information O� cer

H. Art TaylorPresident and CEOBBB Wise Giving Alliance

Bennett WeinerChief Operating O� cerBBB Wise Giving Alliance

3333

Council of Better Business Bureaus, Inc.3033 Wilson Boulevard, Suite 600Arlington, VA 22201

bbb.org