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Ethics and Regulations in AdvertisingModule 2

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Agenda

1

Advertising and Social

Responsibility

Impact ofAdvertising

Women andAdvertising EthicsinAdvertising

Regulatory Bodies

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2

EthicsinAdvertising

Isitethical to advertise cigarettes or

to engagein alcohol advertising, which

mightpersuadeyoung peopleto start

smoking anddrinking? These and other questions of

advertising andmarketing ethicshave

becomesubjects ofheateddebatein

recentyears

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EthicsinAdvertising

Many laws andregulations areputinto force

thatdetermines whatispermissiblein

advertising

However, everyissueisnot controlledbyrules

Marketers are often faced withdecisions

regarding appropriateness oftheir actions,

which arebased onethical considerations

ratherthan whatis withinthe law orindustry

guidelines

Certain actionsmaybe withinthe law butstillunethical

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Ethical IssuesinAdvertising

1. Using unnecessarysex appeal or

showing womenin

advertisements immorally

withoutpurpose

2. Making false claims aboutthe

product withhiddentactics

3. Criticizing ordishonoring anything

whichisinreal ofsomehonorto the

society

4. Criticizing the competitors

productby anysimilarname or anyothermatching

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Ethical IssuesinAdvertising

5. Pointing outhuman formulationsuch as

black and fair complexion comparisonetc.6. Delivering confusing andmisleading

information

7. Showing infeasible and unnatural things or

actionsthat areshown as a result of using the

product

8. Advertising intoxicating products like wine,cigarette, tobacco etc.

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False or DeceptiveAdvertising

False claims aboutproducts , when

madein advertisementsdestroypublic

faithin advertising

Advertising containing falsestatements

amountsto deception

Conceptually, deceptionexists when an

advertisementisintroducedinto the

perceptual process ofsome audienceandthe output ofthatperceptual

process (i)differs fromthereality ofthe

situation, and, (ii) affectsbuying

behaviorto thedetriment ofthe

consumer

Refer Page 657to 670 of Myers andAaker Text formore on Deceptive or

FalseAdvertising

Also refer Page 656 ofthesametext for

History ofFederal Regulation of

Advertising

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False or DeceptiveAdvertising

Thedefinition of Deceptive

Advertisement or FalseAdvertisementwas giveninthe Wheeler- Lea Act of

USA as follows:

Theterm false advertisementmeans

an advertisement otherthan labeling,

whichismisleading in a material

respect; andindetermining whether any

advertisementismisleading, thereshall

betakeninto account (among other

things)not onlyrepresentationsmade

orsuggestedbystatement, word,

design, device, sound or any

combinationthereof, but also theextent

to whichthe advertisement failsto

reveal factsmaterial inthe light ofsuch

representations ormaterial withthe

commodityto whichthe advertisement

relates under conditionsprescribedin

said advertisement, or undersuch

conditions as are customary or usual

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Legal estrictionson Advertising

There are 3majorinstitutionsin the societythat

protect consumers againstmisleading or

fraudulent advertising:

1. Government agencies enforcing laws against

offenders

2. Advertising industry associations and media

groupsthatimpose selfregulation upon their

member firms and advertisers3. Advertisersthemselves acting through

enlightened self- interest and a sense ofsocial

responsibility

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Legal Restrictions onAdvertising

TheFederal Trade PracticesAct aspassedbythe

Federal Congressin 1890hasdeclareddealingwith unfairmethods of competitionin

commerce and unfair ordeceptive acts or

practicesin commerceto be unlawful. TheAct

added:

a. Itshall be unlawful for anyperson, partnership

or corporationto disseminate or causeto be

disseminate any false advertisement-

i. Bymails orin commerceby anymeans forthe

purpose ofinducing or whichis likelyto induce

directly orindirectlythepurpose of food,

drugs, devices or cosmetics, or

ii. By anymeans forthepurpose ofinducing or

whichis likelyto inducedirectly orindirectly

thepurchase of food, drugs, devices, or

cosmetics

b. Thedissemination orthe causing to be

disseminated of any false advertisement withinthe

provision ofsubsection (a) ofthissectionshall be

an unfair ordeceptive act orpracticein commerce

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Legal estrictionson Advertising

Sachar Committee hasrecommendedthefollowing acts ofsellers as Unfair Trade

Practices:

1. Misleading advertisements and false

representation- Asellershouldnot falsely

representthat-

a. The goods are of a particularstandard,

quality, grade composition, style ormodel,

iftheydo notpossessthat qualification

b. Therebuilt, second- hand goods arenew

goods

2. Offering of gifts or prizes with the

intention of not providing them and

conducting professional contests

The committeeis ofthe opinionthat all the

aforesaid unfairtradepracticesshouldbe

punishable as an offence or anyperson on

undertaking indulging in any ofthese

activitiesshouldbe liableto beprosecuted

beforethe commission

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Legal Restrictions onAdvertising

Advertising Standards Council of India (ASCI)

In orderto enforce anethical code, India hasthe

Advertising StandardsCouncil ofIndia (ASCI)

Itis a non- profit organizationset upby43

foundermembers who areinvolved with

advertising in one way orthe other

It wasestablishedin 1985

Its Board of Membershasmembers withequitablerepresentationto advertisers,

agencies, media and others

Itputs forward a regulating code

ASCIproposesto adjudicate on whether an

advertisementis offensive anditsdecision will

bebinding onitsmembers Itproposesto deal withthe governmentifthere

are anydisputes

Itseeksto achievethe acceptance of fair

advertising practicesinthebestinterest ofthe

ultimate consumer

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Need forAdvertising Regulations

Morality and Tastes:All ads are not

morally acceptable and known for

good taste

Untruthful advertisements:Almost allads are not cent percent true.

Womanizing:Almost ninety percent of

ads make use of women even if their

presence is not needed.

Advertising is mind pollutant: Toomuch advertising pollutes our mental

environment.

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CorrectiveAdvertising

Corrective Advertising requires advertisersto rectifypastdeception

bymaking suitablestatementsin future commercials The 1975 corrective advertising order against Warner- Lamberts

Listerineis a classic example

Listerinehas advertised for over fiftyyearsthat gargling with

Listerinemouthwashhelpedprevent colds andsorethroatsby

killing germs

The orderrequiredthemto includethestatement, Listerine will

nothelpprevent colds orsorethroats or lessentheirseverity in

$10million of advertising, which wasequal to the average annual

Listerineexpenditureduring thepriorten- yearperiod

Listerineimplementedthe orderbyembedding thestatementin a

commercial featuring two couples, each with a husband finding

himselfhaving onionbreath

The correctivedisclosure appearedmid- way inthethirty- second

spot as follows:

WhileListerine will nothelpprevent colds orsorethroats or lessen

theirseverity, breathtestsproveListerine fights onionbreathbetter

than Scope(a rival mouthwashbrand forListerine)

Refer Page 671 to 675 of Myers andAaker Text forremedies

against DeceptiveAdvertising

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Advertising to Children

Advertising to childrenhasbeen a major

focus ofpublic policy and concern for

manyyears

Much of childrens advertising is

deceptiveinthatit omitssignificant

information, such asthe complexity and

safety of operating toys

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IsAdvertising a waste ofmoney?

Itis logical to think thatif advertising

addsvalueto products orservices, it

also adds cost and affectsprices.

Thisview isnottotally correct.

Whilesome advertisedproductsdo

costmorethanthe unadvertisedproducts, the oppositeis also true.

Advertising mayhelp lowerthe overall

cost of a productmorethanenoughto

offset costs and keepthepricesdown

because ofeconomies ofscalein

production andbyencouragingcompetition

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Guidelines for Advertising

1. Truth: Advertising shall reveal the truth, and shall

reveal significant facts, the omission of which

would mislead the public

2. Substantiation: Advertising claimsshall be

substantiated by evidence in possession ofthe

advertiser and the advertising agencypriorto

making such claims

3. Comparisons: Advertising shall refrain frommaking false, misleading, orunsubstantiated

statementsor claims about a competitororhis

productsorservices

4. Bait Advertising: Advertising shall notofferor

services forsale unlesssuchoffer constitutes a

bona fide efforttosell the advertised productsorservices and is not a device toswitch consumers

toother goodsorservices, usuallyhigherpriced

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Guidelines forAdvertising

5. Guarantees and Warrantees: Advertising of

guarantees and warranteesshall beexplicit, with

sufficientinformationto apprise consumers of

theirprincipal terms and limitations or, when

space ortimerestrictionsprecludesuch

disclosures, the advertisementshall clearlyreveal

wherethe full text ofthe guarantee or warranty

canbeexaminedbeforepurchase

6. Price claims: Advertising shall avoidprice claims

that are false ormisleading, orsavings claimsthat

do not offerprovablesavings

7. Testimonials: Advertising containing testimonials

shall be limitedto those of competent witnesses

who arereflecting a real andhonest opinion or

experience

8. Taste and decency: Advertising shall be free from

statements, illustrations, orimplicationsthat are

offensiveto goodtaste orpublic decency

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THANK YOU !!!