Chapter 3: ADVERTISING ETHICS & SOCIAL RESPONSIBILITY

Federal Trade Commission

The FTC is operated by the U.S. federal government and is in place "to prevent business practices that are anticompetitive or deceptive or unfair to consumers." o The FTC's main focus in respect to advertising is to identify and eliminate ads that deceive or mislead the consumer o Main areas of concern for the FTC • Deception • Reasonable basis for making a claim • Comparative advertising • Endorsements • Demonstrations

self regulation

Through self-regulation the advertising industry monitors itself and holds advertisers responsible for the claims they make in their advertisements. By monitoring their own industry and handling problems quickly and responsibly, advertising professionals are able to avoid additional government control and regulations.

More creative code ... just read it...

We recognize that there are areas that are subject to honestly different interpretations and judgment. Nevertheless, we agree not to recommend to an advertiser, and to discourage the use of, advertising that is in poor or questionable taste or that is deliberately irritating through aural or visual content or presentation. Comparative advertising shall be governed by the same standards of truthfulness, claim substantiation, tastefulness, etc., as apply to other types of advertising. We also agree that where advertising is placed in a medium that is able to identify a consumer's personal behavior for the purpose of maximizing engagement, the consumer should be provided with an opportunity to decline the advertising. These Standards of Practice of the American Association of Advertising Agencies come from the belief that sound and ethical practice is good business. Confidence and respect are indispensable to success in a business embracing the many intangibles of agency service and involving relationships so dependent upon good faith."55

Comparative Advertising

When an advertiser compares their brand to another brand directly or indirectly in an attempt to show the superiority of their brand

What is the difference between a trademark and a copyright?

While both offer intellectual property protection, they protect different types of assets. Copyright is geared toward literary and artistic works, such as books and videos. A trademark protects items that help define a company brand, such as its logo.

Deceptive/ False advertising

any advertising message that is untrue

Trademark

any visible sign or device used by a business enterprise to identify its goods and distinguish them from those made or carried by others. Trademarks may be words or groups of words, letters, numerals, devices, names, the shape or other presentation of products or their packages, color combinations with signs, combinations of colors, and combinations of any of the enumerated signs

implied claim

claim made indirectly or by inference

Does subliminal advertising work?

found no evidence that subliminal advertising affects attitudes or behavior.

expressed claim

is a literal claim of what the product will do

Endorsements

must actually use product

Puffery

o An exaggerated statement based on opinion -"All the world loves coke" -"The world's best shave" -Papa John's—"Better Ingredients, Better Pizza" puffery is legal because it is not the intention of puffery to deceive poeple. Puffery is simply a matter of opinion rather than a factual representation.

Stereotyping

oGeneralizations, or assumptions, that people make about the characteristics of all members of a group, based on an image (often wrong) about what people in that group are like.

Subliminal advertising

subliminal="below the threshold of consciousness." o A messaged designed to pass below the normal limits of perception EX: Vicary claimed to have placed two phrases, "Eat Popcorn" and "Drink Coca-Cola," into a movie played in a theater in Ft. Lee, NJ to see if it would increase concession sales. The phrases were placed into a single frame of the movie appearing for only 1/2000 of a second. The phrases appeared so quickly they were unable to be seen by the human eye but long enough for the subconscious to see.

Standards of Practice

the code of ethics advertising agencies use when conducting business, creating advertising, and communicating to consumers.

Typical sterotypes

• Men (ex: dumb) • Women (ex: indecisive, sexual objects ) • Minorities • Elderly

why is it important that ad agencies understand copyright laws?

1. they need to make sure the advertisements, plans book, and other original materials are copyrighted to protect the agency and client from others freely using the information. 2. advertisers use copyrighted materials such as photos, music, art, and literature, all the time, so they need to know the laws and what is required of them.

o Children's Television Advertising Practice Act-

1990 Limits set for amounts of advertising to children Commercial breaks must be distinguished No advertising within tv program

Children's Advertising Review Unit

Determines if advertising in children's media is honest and appropriate

National Advertising Division

Determines if the facts in a national advertisement are honest

Online Interest-Based Advertising Accountability Program

Determines whether advertisers can use consumer information for targeted advertisements

The Advertising Self-Regulatory Council

Establishes the policies and procedures of the advertising industry's self-regulation

Electronic Retailing Self-Regulation Program

Examines the truthfulness and accuracy of claims on radio and the Internet

The National Advertising Review Board

Handles appeals by markets for decision made by the National Advertising Division and the Children's Advertising Review Unit

Central Hudson Gas & Electric vs. Public Service Commission of NY

In 1973, the state of New York was suffering from an energy shortage, so a ban was placed on any advertising that encouraged people to buy products that would increase their use of energy By 1976, the energy shortage had ended but the Public Service Commission continued the ban on advertising causing Central Hudson to file a suit claiming the ban infringed on its First and Fourteenth Amendment rights of commercial speech. The Public Service Commission's ban was determined to be unconstitutional because the ban was more extensive than necessary to conserve energy

Other ethical questions

Sex in advertising violence in advertising

Creative Code

Specifically, we will not knowingly create advertising that contains: False or misleading statements or exaggerations, visual or verbal Testimonials that do not reflect the real opinion of the individual(s) involved Price claims that are misleading Claims insufficiently supported or that distort the true meaning or practicable application of statements made by professional or scientific authority Statements, suggestions, or pictures offensive to public decency or minority segments of the population.

some of the self-regulation organizations established by the advertising industry

THE ADVERTISING SELF-REGULATORY COUNCIL NATIONAL ADVERTISING DIVISION CHILDREN'S ADVERTISING REVIEW UNIT ELECTRONIC RETAILING SELF-REGULATION PROGRAM ONLINE INTEREST-BASED ADVERTISING ACCOUNTABILITY PROGRAM THE NATIONAL ADVERTISING REVIEW BOARD

4A's

The American Association of Advertising Agencies 4A's membership "produces approximately 80 percent of the total advertising volume placed by agencies nationwide."