Part 1
Enduring Principles in Times of Turmoil
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1.
What is the social impact of brand communication?
2.
What ethical and social responsibilities do communicators bear?
3.
Why and how is advertising regulated?
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Demand Creation
Critics say advertising creates demand, driving consumers to buy products unnecessarily.
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Proponents say companies invest in research to find out what consumers want.
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Audiences can refuse to buy products they don’t need.
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Shaping versus mirroring
Does advertising create or reflect social values?
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Critics say advertising abuses its influence on children and teenagers.
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Critics say advertising creates social trends, dictating how people think, act.
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Advertisers say they spot trends and develop messages that connect with them.
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Advertising both mirrors and shapes values.
The poster is an example of a message aimed at stimulating business after 9/11. Do you think messages like these impact social trends?
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Overcommercialization
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Does advertising lead people to be too materialistic?
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Critics say advertising heightens expectations.
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The lines between advertising, news, and entertainment have become blurred.
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Poor taste and offensive advertising
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Viewer reaction may be affected by sensitivity to:
◦ the product category
◦ the timing
◦ whether the viewer is alone or with others
◦ the context
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Poor taste and offensive advertising
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Creating guidelines is difficult because
“good taste” varies.
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What is considered “offensive” changes over time.
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Sex appeals, body image
Advertising that portrays people as sex objects is considered demeaning.
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Playing on consumers’ insecurities about their appearance can lead to dangerous practices.
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Responsible advertisers now use models of normal size and weight to reduce pressure on young people.
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Diversity and stereotypes
Gender stereotypes
Racial and ethnic stereotypes
Cultural differences in global advertising
Age-related stereotypes
Advertising to children
This ad was created by the Carson/Roberts agency in 1964 during debate over the Civil
Rights Voting Guarantee Bill.
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Message-related issues
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Misleading claims and puffery
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Comparative advertising
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Endorsements and demonstrations
Dunkin Donuts hopes to convince coffee drinkers to switch from Starbucks based on results from a national taste test.
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Product-related issues
Marketers must carefully consider what they choose to produce and advertise.
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Areas of concern:
◦ Controversial products
◦ Unhealthy or dangerous products
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Ethical decisions involve complex, conflicting forces:
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 strategy vs. ethics costs vs. ethics effectiveness vs. ethics
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Personal and professional ethics
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In a Gallup poll, advertising practitioners ranked just above HMO managers and car salesmen.
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The American Association of Advertising Agencies publishes a code of standards.
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Ethical decision-making tools
Codes of ethics can help guide your actions.
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However, they are only broad statements, and do not explain how to handle every situation.
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You must develop a strong personal and professional sense of right and wrong.
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Ethical decision-making tools…
The TARES Test of Ethical Advertising
Ask yourself:
1.
2.
3.
4.
5.
Are the ad claims in the message
Is the claim an
Is the ad
Authentic one?
Truthful
Does the ad treat the receiver with
Is there
?
Respect ?
Equity between the sender and receiver?
Socially responsible?
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Key advertising legislation
3.
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5.
1.
2.
6.
7.
Pure Food and Drug Act (1914)
Federal Trade Commission Act (1914)
Wheeler-Lea Amendment (1938)
Lanham Act (1947)
Magnuson-Moss Warranty/FTC Improvement Act (1975)
FTC Improvement Act (1980)
The Telemarketing and Consumer Fraud Act and Abuse Protection Act (1994)
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Trademark protection
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A trademark is a brand, corporate or store name, or a distinctive symbol identifying a seller’s brand and differentiating it from other brands.
◦ Registering through the Trademark Office provides exclusive use, as long as it’s for a specific product.
◦ The Lanham Trademark Act of 1947 protects unique trademarks from infringement.
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Copyright protection
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A copyright gives organizations exclusive rights to use or reproduce an ad or package design, for a period of time.
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Copyright infringement occurs when a product is used in an ad without proper permission, including copycat ads.
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Marketing communication and the First Amendment
First Amendment protection extends to commercial speech, but not on an absolute basis.
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The Supreme Court permits some restrictions on commercial speech.
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Only truthful speech is protected – not misleading or deceptive statements.
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International laws and regulations
Legal and regulatory restrictions vary by country.
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Some countries ban ads for certain products.
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Thailand, Hungary, Hong Kong, and Malaysia have bans on certain types of tobacco advertising.
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Contests, promotions, and direct mail are illegal in some countries.
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Federal Trade Commission (FTC)
Regulates deceptive and misleading advertising, focusing on:
◦ Unfairness
◦ Deception
◦ Violations
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It also oversees advertising involving weight loss products, children and elderly people, telemarketing, and the entertainment industry.
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Food and Drug Administration (FDA)
Regulatory division of the U.S. Department of Health and Human Services.
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Oversees package labeling, ingredient listings, and advertising for food and drugs.
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Determines the safety and purity of foods, cosmetics.
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It is also a watchdog for drug advertising.
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Federal Communications Commission (FCC)
Regulates radio and television broadcast communications (media, not advertisers).
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Can issue and revoke licenses, ban deceptive messages or those in poor taste.
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It responds to complaints but doesn’t initiate actions.
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Works closely with FTC to eliminate false and deceptive advertising.
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Other regulatory bodies
Bureau of Alcohol, Tobacco, and Firearms (BATF)
Regulates deception in advertising and establishes labeling requirements for the liquor industry.
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U.S. Postal Service regulates direct mail and magazine advertising including the areas of obscenity, lotteries, and fraud.
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The States’ Attorneys General regulate advertising at the state level.
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The FTC and children’s advertising
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Children’s Advertising Review Unit (CARU) evaluates ads directed at children under 12.
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The Children’s Television Advertising Practice Act
(1990) placed ceilings on ads during TV programs.
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As of 1996, all stations must air three hours per week of educational programming.
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Regulating deception
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Deceptive advertising misleads consumers by making false claims, failing to fully disclose important facts, or both.
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Current FTC policy contains three elements:
1.
Misleading: representation, omission, practice
2.
Reasonableness: “reasonable consumer”
3.
Injurious: must cause material injury
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Regulating substantiation
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Does the advertiser have a reasonable basis to make a claim about product performance?
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Factors considered:
◦ Type and specificity of claim made
◦ Type of product
◦ Possible consequences
◦ Degree of reliance
◦ Type and accessibility of evidence
◦ What substantiation is reasonable
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Remedies for deception and unfair advertising
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Cease and desist orders
A process similar to court trial precedes the order.
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Corrective advertising
Advertiser runs messages correcting the false impressions.
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Consumer redress
Cancel or reform contracts, refund money, return property, pay for damages, or public notification.
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Remedies for deception and unfair advertising
A question for you…
Can the ad agency be held liable along with advertiser?
Answer:
Yes, when the agency is an active participant in preparing the ad and knows it is false or deceptive.
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The media screens and rejects advertising that violate standards of truth, good taste.
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The First Amendment allows publishers refuse to run ads.
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Self-Discipline
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Organizations develop and use their own norms
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Major advertisers and agencies utilize in-house procedures.
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Several U.S. companies have their own codes of behavior and criteria for acceptable advertising.
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Industry Self-Regulation
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National Advertising Review Council (NARC)
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National Advertising Division (NAD)
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National Advertising Review Board (NARB)
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Self-Regulation by Public and Community Groups
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Better Business Bureau
Advises local businesses on legal aspects of advertising.
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Consumer activist groups
◦ Action for Children’s Advertising
◦ Public Citizen
◦ Cultural Environment Movement
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