ADVERTISING: Legal, Ethical and Economic Aspects

LAWS AND ETHICS Two forms of oversight are: ETHICAL LEGAL What we SHOULD do LEGAL What the law allows Ethics are usually the higher standard Violations of ethical principles results in laws

DEONTOLOGY - Gk. deon - obligation Ethical Perspectives DEONTOLOGY - Gk. deon - obligation Focus is on the means Kant’s categorical imperative “Do unto others” equity, justice, fairness Catholicism and Judaism Concern about the least able

TELEOLOGY -- Gk. telos - end Ethical Perspectives TELEOLOGY -- Gk. telos - end Focus is on the ends Utilitarianism The greatest good for the greatest number Cost - Benefit analysis The “Protestant Ethic” “Caveat emptor”

Ethical Perspectives Let’s use two distinct names for “ethical”: MORAL the means are good OR JUSTIFIABLE the ends justify the means

Avenues for Oversight GOVERNMENT REGULATION: [pass and enforce laws] SELF-REGULATON: Independent bodies [set standards] Media companies [to accept ads] OTHER: Buyer Recourse [“caveat emptor”] Figure 21-1 in the text. 2 2

Government Regulation Federal laws Canadian Radio-Television Comm. (CRTC) Advertising limits, Infomercials, 900 numbers Alcohol, Tobacco and Drugs Provincial laws Alcohol Regulations Credit and Loan Disclosures Unfair Trade Practices Act 4 4

Self-Regulation: CANADIAN CODE OF ADVERTISING STANDARDS Accuracy and clarity “Disguised advertising” Deceptive price claims Bait and switch Guarantees and warranties Honest testimonials Imitation Taste and decency Truth. Advertising shall reveal the truth, and shall reveal significant facts, the omission of which would mislead the public. Substantiation. Advertising claims shall be substantiated by evidence in possession of the advertiser and the advertising agency prior to making such claims. Comparisons. Advertising shall retrain from making false, misleading, or unsubstantiated statements or claims about a competitor or his products or service. Bait advertising. Advertising shall not offer products or services for sale unless such offer constitutes a bona tide effort to sell the advertised products or services and is not a device to switch consumers to other goods or services, usually higher priced. Guarantees and warranties. Advertising of guarantees and warranties shall be explicit, with sufficient information to apprise consumers of their principal terms and limitations or, when space or time restrictions preclude such disclosures, the advertisement shall clearly reveal where the full text of the guarantee or warranty can be examined before purchase. Price claims. Advertising shall avoid price claims that are false or misleading, or savings claims that do not offer provable savings. Testimonials. Advertising containing testimonials shall be limited to those of competent witnesses who are reflecting a real and honest opinion or experience. Taste and decency Advertising shall be free of statements, illustrations, or implications that are offensive to good taste or public decency. 2 2

Advertising Standards Canada 2011 Complaints 146 Upheld 177 To Council 1210 Code issues 1809 Complaints (1153 ads)

Leo Burnett ECONOMIC EFECTS OF ADVERTISING “To me it means that if we believe to any degree whatsoever in the economic system under which we live, in a high standard of living and in high employment, advertising is the most efficient known way of moving goods in practically every product class.”

Leo Burnett “Advertising, of course, makes possible our unparalleled variety of magazines, newspapers, business publications, and radio and television stations.”

Leo Burnett “It must be said that without advertising we would have a far different nation, and one that would be much the poorer-not merely in material commodities, but in the life of the spirit.” Excerpts from a speech given April 20,1967 at the American Association of Advertising Agencies’ 50th anniversary

Quote of the day (Ogilvy & Mather) If you tell lies about a product you will be found out – either by the government, which will prosecute you, or by the consumer, who will punish you by not buying your product a second time. David Ogilvy (Ogilvy & Mather)