ADVERTISING:
Legal, Social, Ethical and
Economic Aspects
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LAWS AND ETHICS
Two forms of oversight are:
LEGAL
What the law allows
ETHICAL
What we SHOULD do
Ethics are usually the higher standard
Violations of ethical principles results in laws
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Avenues for Oversight
•GOVERNMENT REGULATION:
•[pass and enforce laws]
•SELF-REGULATON:
•Independent bodies [set standards]
•Media companies [to accept ads]
•OTHER:
•Buyer Recourse [“caveat emptor”]
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Government Regulation
Federal laws
Alcohol
Food and Drugs
Provincial laws
Alcohol Regulations
Credit and Loan Disclosures
Self Regulation
Canadian Code of Advertising Standards
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Advertising Standards Canada
2001 Complaints
161 Upheld
321 To Council
833 Pursued
1164 Complaints
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Ethical Perspectives
DEONTOLOGY - Gk. deon - obligation
• Focus is on the means
• Kant’s categorical imperative
• “Do unto others”
• equity, justice, fairness
• Clark: Catholicism and Judaism
• Concern about the least able
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Ethical Perspectives
TELEOLOGY -- Gk. telos - end
• Focus is on the ends
• Utilitarianism
• The greatest good for the greatest number
• Cost - Benefit analysis
• individualism, pursuit of profit, hard work
• Clark: The “Protestant Ethic”
• “Caveat emptor”
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Investigators Find Repeated Deception in Ads for Drugs
By ROBERT PEAR
WASHINGTON, Dec. 3 — Some companies have repeatedly disseminated
misleading advertisements for prescription drugs, even after being cited for
violations, and millions of people see the deceptive commercials before the
government tries to halt them, Congressional investigators said today.
The investigators, from the General Accounting Office, said Pfizer, for example,
had continued to make misleading claims in advertisements for its cholesterollowering drug Lipitor, despite several letters from the Food and Drug
Administration in the last four years.
In a new report, the accounting office said that drug company advertising
appeared to produce a significant increase in the use of prescription drugs, as
well as higher drug spending. The report criticized delays in the enforcement of
federal standards for the accuracy of drug advertising and attributed much of the
delay to a recent change in procedure by the Bush administration that lengthens
the review process
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Senator Susan Collins, a Maine Republican who was one of five members of
Congress who requested the study, said: "The evidence suggests that
consumers are paying a lot of attention to these ads, so it's imperative that they
be accurate. If the increase in utilization is based on false claims, that's very
troubling.“
The report rejected a contention by critics of the pharmaceutical industry,
including many Democrats in Congress, who say drug companies spend more on
advertising than on research and development. Using data obtained mainly from
the drug industry, the report said that drug makers spent much more on research.
Last year, it said, companies spent $30.3 billion on research and development
and $19.1 billion on all promotional activities, including $2.7 billion for advertising
aimed at consumers. But the report said that ad spending rose at a far greater
rate than spending on research.
Consumer advertising has shot up almost 150 percent since 1997, when the
Food and Drug Administration revised its guidelines to permit more ads, and drug
makers have shifted much of their spending from print media to television, the
report said.
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The accounting office said that the recent change by the Bush administration
had "adversely affected" the government's ability to curb deceptive ads, by
significantly increasing the amount of time required to issue a notice of
violation. The new procedure has delayed enforcement actions anywhere from
2 weeks to 11 weeks, the accounting office said. Government lawyers have
used that time to review the notices.
But Senator Collins said, "It takes so long to get letters issued by the F.D.A.
that the advertising campaign for a drug may have run its course before the
company receives a letter demanding corrective action.“
Typically, when the F.D.A. finds that a drug advertisement is so inaccurate,
misleading or incomplete that it violates federal law and regulations, the
agency writes a letter instructing the manufacturer to halt the ads. In November
2001, the Department of Health and Human Services told the agency that it
could not issue such letters until they had been reviewed for "legal sufficiency
and consistency with agency policy.“
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But, the report said, many advertisements "are on the air for only a short time
— about one-fifth of them for one month, and about one-third for two months or
less." Under the new policy, it observed, misleading television ads for
prescription drugs can complete their "broadcast life cycle" before the agency
admonishes the manufacturer.
Since 1997, the report said, the F.D.A. "has issued repeated regulatory letters
to several pharmaceutical companies, including 14 to GlaxoSmithKline, 6 to
Schering Corporation and 5 to Merck & Company." Some companies, it said,
"have received multiple regulatory letters over time for new advertisements
promoting the same drug."
In its most recent letter to Pfizer, on Aug. 12, the agency said that an
advertisement in Time, Reader's Digest, Good Housekeeping and other
magazines was misleading because it falsely suggested that Lipitor was safer
than other statin drugs used to lower cholesterol.
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Vanessa McGowan, a spokeswoman for Pfizer, said: "We complied with
F.D.A.'s request. We pulled the ads and corrected them."
Commenting on the report, the Department of Health and Human Services
acknowledged that it needed to issue enforcement letters more quickly. But it
said the letters had to go through a rigorous legal review because "the F.D.A.
cannot afford to be considered a paper tiger."
Federal rules say drug ads must present a fair, accurate account of both
benefits and risks. From August 1997 to last August, the food and drug agency
issued 88 letters accusing drug companies of advertising violations — 44 for
broadcast advertisements, 35 for print ads and 9 that cited both types of ads.
In many cases, the agency said, companies overstated the effectiveness or
minimized the risks of medicines. Last year, for example, the agency told
Procter & Gamble to halt certain commercials for its osteoporosis drug Actonel
after finding that information about the drug's risks was obscured by "fastpaced, rapidly changing, distracting images" on the screen.
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Leo Burnett
“To me it means that if we believe to
any degree whatsoever in the
economic system under which we live,
in a high standard of living and in high
employment, advertising is the most
efficient known way of moving goods in
practically every product class.”
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Leo Burnett
“Advertising, of course, makes
possible our unparalleled variety of
magazines, newspapers, business
publications, and radio and
television stations.”
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Leo Burnett
“It must be said that without advertising
we would have a far different nation,
and one that would be much the poorernot merely in material commodities, but
in the life of the spirit.”
Excerpts from a speech given April 20, 1967
at the American Association of Advertising Agencies’ 50th anniversary
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Quote of the day
If you tell lies about a product you will be
found out – either by the government,
which will prosecute you, or by the
consumer, who will punish you by not
buying your product a second time.
• David Ogilvy
(Ogilvy & Mather)
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