Global Essay Competition 2021

Title: A call for transparent marketing - regaining the customer's trust

Essay:
"No more lies!1 claimed the banner of a Greenpeace activist in front of the Volkswagen
headquarters, the reason? Volkswagen publicly acknowledged to the world that they had
tampered with their vehicle software to report erroneous information about their gas emissions
and thus be able to sell them under false quality standards in the United States and Europe.
The fraud against the public according to the BBC2, was sponsored by the top management of
the company, and their bad corporate practices were in evidence as the investigation showed
the deception was not a covert error, but a crime committed on purpose, a crime that deceived
the consumers who acquired a product they believed to be compliant with the manufacturer's
specifications and so were assailed in their values on top the financial damage. Furthermore,
there was environmental damage caused as a result of a higher and harmful level of emissions
that translates into greater pollution to the environment. After the scandal, the company's
reputation was drastically affected, and consumer confidence was lost due to the deception.
All of this has a name: false advertising.
As per the Federal Trade Commission – FTC3 of the United States, an advertisement is
misleading if it states or omits information that may lead consumers to make a biased purchase
decision, they would not make having truthful and information on which to support a purchase.
In other words, the method of marketing a product or service consists of making use of a
deception to increase its apparent benefits and thus be able to compete in an increasingly less
regulated market. Hence, we have seen cases where products are falsely promising to
rejuvenate the face, to claim to increase the immune system of children, or to cure diseases,
all of this would be great if it weren't for the fact that in most cases those products lack any
scientific support. The problem goes further as, despite the economic sanctions imposed on
companies that incur false advertising, this practice seems to be more recurrent and profitable
for according to data from the FTC4 from 2018 the number of refunds to customers has been
increasing to more than $11 billion, these figures only consider refunds and not the fines
imposed by the FTC on companies that have committed fraud.
But what should be the role of the media in advertising marketing campaigns?
It is no secret that marketing budgets occupy an important portion of operating expenses.
According to Deloitte5, marketing on average reaches 15% of the total budget of companies
converting the advertising into a $517 billion business, and out of that amount, digital

1Enrique Müller, “Volkswagen hace frente a la mayor demanda colectiva en la historia judicial de
Alemania,” El País, September 30, 2019, sec. Economia,
https://elpais.com/economia/2019/09/30/actualidad/1569825336_758404.html.
2 Theo Leggett, “Cómo Volkswagen trató de encubrir el ‘terrible’ fraude de las emisiones
contaminantes,” BBC News Mundo, May 5, 2018, https://www.bbc.com/mundo/noticias-44014908.
3 Federal Trade Commission, “Advertising FAQ’s: A Guide for Small Business,” Federal Trade

Commission, April 4, 2001, https://www.ftc.gov/tips-advice/business-center/guidance/advertising-faqs-

guide-small-business.
4 Federal Trade Commission, “Refunds to Customers,” Tableau Software, January 5, 2021,

https://public.tableau.com/views/Refunds_15797958402020/RefundsbyCase?%3Aembed=y&%3Asho
wVizHome=no&%3Adisplay_count=y&%3Adisplay_static_image=y&%3AbootstrapWhenNotified=true
&%3Alanguage=es&:embed=y&:showVizHome=n&:apiID=host0#navType=0&navSrc=Parse.
5 Deloitte, “Marketing Budgets Vary by Industry,” January 24, 2017,

https://deloitte.wsj.com/cmo/2017/01/24/who-has-the-biggest-marketing-budgets/.
advertising6 represents 40 percent, followed by television that accounts for 35 percent each
year7. Other media with less share are radio, magazines, newspapers and out of home
advertising (OOH), for example, billboards and the typical ads we find at the bus stop
promoting a product or service. So, what role do these media play besides being channels for
the spreading of marketing campaigns?
If the aim is to regain consumer confidence, the advertising media must scrutinize what they
publish, even if this is a business between private parties. Scrutiny has to be incorporated into
the corporate social responsibility scheme of all players in the marketing distribution process,
whether it is through Google or a TV campaign, broadcast channels, while acting in good faith
must first demand from their customers that the information they intend to advertise has
sufficient evidence to prove the benefits of the product or service. If companies are concerned
about sharing key product information, they can enter into confidentiality agreements with the
channel that advertises it. Nonetheless, if at some point it is proven the advertising is
misleading, the company must rectify it in the same media where it was originally published,
so the consumer can demand their rights and their future purchasing decisions consider this
background. This is necessary because in most cases, end consumers do not realize they are
victims of the fraud, and even when there is a sanction, they continue to buy the products
based on erroneous information.
Do we need tougher financial penalties to prevent false advertising?
I firmly believe that the existing penalties are already sufficiently harsh in economic terms,
however, it is necessary that in addition to this component, cases of deception are widely
documented and circulated as a way to repair the damage caused to consumers and alert
future buyers, besides being a measure that persuades companies not to make use of this
practice, as they will not want to jeopardize the reputation of their brands in front of the public.
To achieve this purpose, an annual report can be run in the mass media at the expense of all
companies that incur in misleading advertising, containing the details of the real characteristics
of the product versus the false promise of value made to the customer, as well as the measures
that the companies will take to ensure that their future advertising will be truthful. The report
should be unbiased and conducted by a government entity responsible for protecting
consumer rights. Thus, telling the truth about the actual product specifications will always
become the best marketing strategy.
However, how can the public access reliable product information? We know that companies
expect the highest possible return on their marketing investments, so they try to optimize the
space on packaging and the time that a commercial can last on TV, therefore, providing
scientific or technical information about a product in detail through marketing may not be that
feasible. However, while remaining efficient, in the era of digital transformation, companies can
offer the customer the possibility of accessing more detailed information through a quick
response code (QR) that can be scanned with a mobile device to access the product licenses,
features, an explanation of its conception, use cases, and recommendations for use. In this
way, in real-time, the QR could connect us with a platform we can call Review it Here and it
will work like a catalog of products and services with relevant information for the customer,
provided by the companies that will upload all the data so that consumers can better guide
their purchasing decisions. Review It Here must be maintained by the corresponding authority

6 “Digital Ad Spend Worldwide 2017,” Statista, accessed January 31, 2021,

https://www.statista.com/statistics/246567/global-online-advertising-revenue/.
7 Statista, “Global TV Advertising Revenue 2017,” Statista, September 29, 2020,

https://www.statista.com/statistics/237803/global-tv-advertising-revenue/.
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in each country and will not contain information on manufacturing processes or patents of the
items that will be published there, thus guaranteeing the integrity of the information for the
companies. It is a win-win for companies and their customers who are increasingly demanding
more transparency, and it is also a way to start repairing the already battered consumer
confidence.
Artificial intelligence for more transparent marketing
With advances in artificial intelligence (AI), marketers can anticipate consumer behavior before
different ways of positioning a product or service in the marketplace, all based on historical
data8. The data can be part of an AI algorithm that can tell a consumer goods company how
customers are reacting in real-time about a breakfast cereal campaign for kids with reduced
sugar but more flavors, depending upon the level of engagement provided by insights allowing
them to adjust on the go. Consequently, with this set of data, a product can deliver real value
to the customer if we know their expectations and can get closer to the consumer's values in
different hypothetical cases. For example, there is a segment of environmentally conscious
customers who buy light bulbs of a certain capacity that emit little heat, would the customer be
willing to pay more for a light bulb of the same capacity that emits less heat? If the answer is
no, then the company can adjust the bulb instead of advertising it with false premises that aims
to induce the customer to buy with inaccurate information.
Another benefit of AI is that it can help organizations like the FTC to detect campaigns that
contain traits of deceptive advertising. One way to do this is by establishing patterns that, for
example, combine keywords or phrases such as "free" or "more content" and that are
recognized as misleading. These patterns are integrated through an Application Programming
Interface (API) in the form of a bot that can consume, process, and classify information from a
data source that may be hosted on a public website or a mobile app. The more information the
robot collects and processes, the faster and smarter the application becomes, making the
information it finds more reliable. With all this data, which is then stored in a cache, an exact
copy of the ad is generated, which serves as evidence in the event of a possible case of fraud,
so that almost immediately, the corresponding authorities can take action to prevent this
practice. At the same time, the owner of the advertisement is informed that his advertisement
may contain traces of fraud in its structure so that he can take the corresponding measures,
thus working on two fronts to make marketing campaigns more and more transparent.
Although AI does not replace human labor at all, it is a great support to exercise a more
effective control over all the advertising that promotes millions of products and services that
are marketed every day, whether in a physical store or online. Imagine how administrative
work would be reduced in the fight against misleading advertising, having this type of
technological aids on the side of companies and regulators. The potential of AI can be seen
most clearly in the case of large companies such as Google or Facebook, which have unlimited
access to technological resources and knowledge to develop applications that are capable of
auditing all advertising traffic that transits through their ad platforms, thus providing users with
a cleaner commercial ecosystem in their content.
Gaining customer trust: a purpose
Beyond all the tools we can use to repair the customer's trust, I think this should become a
purpose for all companies without exception, a purpose that rethinks the way they approach

8 Jason Hall, “Council Post: How Artificial Intelligence Is Transforming Digital Marketing,” Forbes,
August 21, 2019, https://www.forbes.com/sites/forbesagencycouncil/2019/08/21/how-artificial-
intelligence-is-transforming-digital-marketing/.
Page 3 of 4
the customer and always take them into account in all their decisions. This purpose must be
incorporated and applied within each process of the companies, generating coherence with
the promise of value to the customer. Let us not forget that while Volkswagen promised
environmentally friendly vehicles9, it adulterated the computers to cover up the true level of
emissions of its cars, ironically affecting the sustainability of the planet.

Bibliography:

Deloitte. “Marketing Budgets Vary by Industry,” January 24, 2017.

https://deloitte.wsj.com/cmo/2017/01/24/who-has-the-biggest-marketing-budgets/.
Statista. “Digital Ad Spend Worldwide 2017.” Accessed January 31, 2021.
https://www.statista.com/statistics/246567/global-online-advertising-revenue/.
Federal Trade Commission. “Advertising FAQ’s: A Guide for Small Business.” Federal Trade
Commission, April 4, 2001. https://www.ftc.gov/tips-advice/business-
center/guidance/advertising-faqs-guide-small-business.
———. “Refunds to Customers.” Tableau Software, January 5, 2021.
https://public.tableau.com/views/Refunds_15797958402020/RefundsbyCase?%3Aembed=y&
%3AshowVizHome=no&%3Adisplay_count=y&%3Adisplay_static_image=y&%3AbootstrapW
henNotified=true&%3Alanguage=es&:embed=y&:showVizHome=n&:apiID=host0#navType=0
&navSrc=Parse.
Hall, Jason. “Council Post: How Artificial Intelligence Is Transforming Digital Marketing.” Forbes,
August 21, 2019. https://www.forbes.com/sites/forbesagencycouncil/2019/08/21/how-artificial-
intelligence-is-transforming-digital-marketing/.
Leggett, Theo. “Cómo Volkswagen trató de encubrir el ‘terrible’ fraude de las emisiones
contaminantes.” BBC News Mundo, May 5, 2018. https://www.bbc.com/mundo/noticias-
44014908.
Müller, Enrique. “Volkswagen hace frente a la mayor demanda colectiva en la historia judicial de
Alemania.” El País. September 30, 2019, sec. Economia.
https://elpais.com/economia/2019/09/30/actualidad/1569825336_758404.html.
Skeet, Ann. “The Volkswagen Brand Crisis,” December 30, 2015.
https://www.scu.edu/ethics/leadership-ethics-blog/the-volkswagen-brand-crisis/.
Statista. “Global TV Advertising Revenue 2017.” Statista, September 29, 2020.
https://www.statista.com/statistics/237803/global-tv-advertising-revenue/.

Word Count (essay text only): (1724 /2100)

9Ann Skeet, “The Volkswagen Brand Crisis,” December 30, 2015,

https://www.scu.edu/ethics/leadership-ethics-blog/the-volkswagen-brand-crisis/.
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