Advertising and Society:

Ethics, Regulation, and

Social Responsibility
 Outline
• Advertising and society
• Ethical issues in advertising
• Advertising’s legal and regulatory
environment
• Federal case law affecting advertising
• Advertising and the FTC
• Advertising and other regulatory
agencies
• Social responsibility and self-regulation
 Objectives

Be able to:
• Discuss the social issues advertisers face
• List the key ethical issues that affect
advertising
• Identify the main factors in advertising’s
legal and regulatory environment
• Summarize how the FTC and other federal
agencies govern advertising
• Debate whether advertising self-regulation
satisfies advertisers’ responsibility to society
 Advertising and
Social Responsibility
• Ethical issues
– Advocacy: Advertising tries
to persuade, it is not neutral
or objective
– Accuracy: Advertising
claims are often a matter of
perception
– Acquisitiveness: Advertising
is viewed as a symbol of
society’s preoccupation with
material things
 Advertising and
Social Responsibility
• Is being ethical a problem?
– Codes of ethics, rules, and regulations
offer advertisers some guidance
– Some questions are not clearly
covered by such guides
 Advertising and
Social Responsibility
• Five questions for ethical advertising:
– The target of an ad?
– What should be advertised?
– The symbolic tone of an ad?
– The relation between advertising and mass
media?
– Advertising’s conscious obligation to
society?
 Social
Responsibility
• Public service
announcements (PSAs)
– Ads for a good cause that
run free on broadcast media
– Ad Council: nonprofit group
of ad agencies and media
• Smokey the Bear
• “Just say no”
• Social marketing: using
advertising to communicate
about social programs
 Six Key Issues in
Advertising
• Puffery
– “Advertising or other sales
representations, which praise the item to
be sold with subjective opinions,
superlatives, or exaggerations, vaguely
and generally, stating no specific facts”
– Hallmark: “Send the very best”
– Sugar Frosted Flakes: “They’re g-r-eat”
Six Key Issues in
Advertising
• Taste and advertising
– Different things offend
different people
– Issues of taste can
extend to the product
itself
– Today’s questions of
taste center on sexual
innuendo, nudity,
vulgarity, and violence
Six Key Issues in
Advertising
• Stereotyping in advertising
– Stereotyping is presenting a
group of people in an unvarying
pattern that lacks individuality
– Does advertising shape
society’s values or mirror them?
– Issues include gender, racial
and ethnic stereotypes,
portrayals of seniors, gays and
lesbians
 Six Key Issues in
Advertising
• Advertising to children
– Children may view 20,000 commercials
a year
– Children’s Television Advertising
Practices Act 1990
• Limits commercials in weekend kid’s
programming
• Requires commercial breaks be distinguished
from shows
Six Key Issues in
Advertising
• Advertising controversial
products
– Products once
considered taboo are
now advertised, i.e.,
hemorrhoids and
feminine hygiene
brands
 Six Key Issues in
Advertising
• Advertising controversial products (cont).
– Some products are still not accepted
• Tobacco: Cigarette commercials illegal
since 1971
• Ban proponents claim tobacco ads
encourage sickness, injury, or death
• Opponents argue bans of truthful ads for a
legal product are unconstitutional
• Alcohol
• Liquor executives follow voluntary
guidelines, but alcohol ads appear in
media with underage audiences
• Gambling
• Prescription Drugs
Six Key Issues in
Advertising
• Subliminal advertising
– Subliminal messages communicate
symbols that convey meaning but
are sent below the threshold of
normal perception
– Critic Wilson Key claims
“embeds” are placed in ads to
manipulate purchases
– Research shows only mild effects
of subliminal stimuli
– Experts: it doesn’t work
 Ethical Issues
Ethical Issue Example
Social responsibility Advertising agency working pro
bono for the Red Cross
Puffery Retailer claims it has the best
merchandise in town
Bad taste Ad for topical medication shows or
describes the infected area in detail
Stereotyping Showing a handicapped consumer in
desperate need of help
Advertising to children Suggesting that wearing a sneaker
makes you more popular
Subliminal ads Embedding a sexual image so that it
isn’t noticed on a conscious level
 Question for
Discussion
• Zack Wilson is the advertising manager for the
campus newspaper. He is looking over a
layout for a promotion for a spring break
vacation package. The headline says
“Absolutely the Finest Deal Available This
Spring—You’ll Have the Best Time Ever if
You Join Us in Boca.” The newspaper has a
solid reputation for not running advertising
with questionable claims and promises.

• Should Zack accept or reject this ad?

Advertising’s Legal and
Regulatory Environment
 Advertising
• Deception
– Deceptive advertising is a major focus
– Deceptive acts include:
• Deceptive pricing
• False criticisms of competing products
• Deceptive guarantees
• Ambiguous statements
• False testimonials
– Current policy on deception:
• “High probability” that consumer will be
mislead
• Perspective: a “reasonable consumer”
• Deception must lead to material injury
 Advertising
• Reasonable basis for claims
– Advertisers should have a reasonable basis
for a product performance claim.
Advertisers are expected to substantiate
claims
– Factors for determining reasonableness:
• Type and specificity of the claim
• Type of product
• Consequences of false claims
• Reliance of consumers on the claims
• Type and accessibility of evidence for
making the claim
 Advertising
• Comparative advertising
– Comparative ads highlight the superiority of
one brand over another
– Lanham Act limits claims
– A false advertising suit requires proving
• False claims were made about either brand
• The ads actually or had the tendency to
deceive
• The deception was material
• The falsely advertised goods are sold in
interstate commerce
• The plaintiff has been or will likely be injured
as a result of the false statements
 Advertising
• Endorsements
– Any advertising message that consumers
believe reflects the opinions, beliefs, or
experiences of an individual, group, or
institution
– Endorsers must be qualified by training or
experience to make judgments and must use
the product
– Product placements
• The use of brands in movies or on TV,
sometimes in exchange for a fee paid by the
manufacturer
Advertising
• Demonstrations
– Demonstrations
must not mislead
consumers
– Commercials can
make products
look unappetizing
Social Responsibility
and Self-Regulation
• Advertisers often follow a
societal marketing
approach
– balance company profits,
consumer-want
satisfaction, and public
interest
 Three Aspects of
Social Responsibility
• Self-discipline
– Major advertisers and agencies have in-house ad
review procedures, codes of behavior, criteria for
acceptable ads
• Pure self-regulation and co-opted self-regulation
– Advertising Review Council (ARC)
– National Advertising Division of the Better
Business Bureau (NAD)
– National Advertising Review Board (NARB)
• Local and Media Regulation
NARB Appeal
Process