Chapter 3 Legal and Ethical Implications

Federal regulation Federal Communications Commission Sponsorship identification … Must sponsor’s name be mentioned in a commercial? Yes, public must be aware that it’s listening to an advertisement. Sponsor’s name must be mentioned at least once. Payola and Plugola … What are they? Payola …Penalty, $10,000 fine and year in jail … Plugola … announcer “plugs” product, not mentioning that he has received payment or some inducement. Station-conducted contests … What do you always hear about contests on the radio? Station must disclose the terms of the contest (What are they?)

Political sponsorship identification …. What do you always hear at the end of a political ad? Sponsor of a political ad must be clearly identified … listeners must know they are listening to a political ad and understand who paid for the broadcast time. In Radio spots, announcement at the end … in TV ads, sponsor information may be presented visually. What is “Equal time”? ….If a station carries an ad for one candidate, it must carry ads for others.

Liquor advertising … Why did liquor advertising not appear on TV until 1996? Liquor industry voluntarily refrained from broadcast advertising … never a law against it. Stations cautious about liquor advertising, fearing backlash against beer and wine advertising (cigarette advertising banned in 1971). Federal Trade Commission … protects the public from unfair and deceptive business practices, including false and misleading advertising Deceptive advertising … What makes advertising deceptive? Deliberately false demonstrations or statements … or true statements that convey a misleading implication.

Rigged demonstrations … FTC expects advertisers to show a product as it really is … not altered for effect. FTC tolerates a certain level of exaggeration … What about the statement: “Bayer works wonders”? … Such exaggerations are known as “puffery” – broad, vague, laudatory language. FTC believes everyday consumers are intelligent enough to recognize puffery and not take it seriously. Volvo fined for misrepresenting the strength, crashworthiness and structural integrity of its automobiles … Pickup driving over a row of automobiles, all crushed except the Volvo … Volvo was structurally reinforced, others not.

Testimonials … must celebrity endorsers use the product? Yes, testimonials and endorsements must be genuine. Actors need not actually use a product … but if you identify a person as “Mrs. Jones of Omaha,” she must be Mrs. Jones of Omaha (unless an obvious spoof). Comparative advertising … comparative ads should not disparage or unfairly attack competitors. Research data ….claims based on research must not be false or misleading

Truth in lending … Why the rushed reading of legal information at the end of an ad? Advertiser must fully disclose all credit terms. Self-regulation – ethical questions Stereotyping – What is it? Shorthand used for convenience. Help to avoid character development. Guy in the black hat (bad guy) … young man with thick glasses (geek) … burly college athlete (dumb jock). Viewers may come to believe stereotypes are true, or almost always true. What are some stereotypes of women? What are some ethnic stereotypes? Complaints about the Taco Bell chihuahua (“Yo quiero Taco Bell.”) Others liked the Chihuahua and the character survived. Avoid blatant and unflattering stereotypes.

Cable advertising Cable is regulated more by local franchising than FCC. Not required to observe the FCC rules for sponsorship identification and contests. But cable must observe FCC political sponsorship identification rules. FTC may regulate advertising in all media.