Ethics in Advertising and Promotion Is this Worthy of Study?

Guidelines to Ethical Advertising Truthful Substantiate Claims Refrain from False Comparisons no bait! explicit guarantees no false price claims competent witnesses tasteful and decent

Ethics in Marketing Communications Ethics really reflects matters of right and wrong. Ethics and Morality are fairly interchangeable terms Promotions particularly vulnerable to criticism

What are Ethics? Is it morality? What about individualism? Are some approaches ethical with only some groups? Honesty, virtue, honor, integrity synonymous

Central Issues of Ethics Advocacy Accuracy Acquisitiveness

When is Regulation Justified? Are consumer decisions based on false or misleading information? Listerine Do the benefits of regulations outweigh costs? Consumer choice improves Product quality tends to improve Price Reductions Cost of Compliance and Enforcement Passed to consumers and taxpayers

Ethics and Targeting The hallmark of sound marketing Questions arise in the areas of the disadvantaged, the elderly, children Is Gatorade, a “healthy alternative for thirsty kids?” No better than water, is the ad ethical? Many of the top companies (Campbell’s, Pepsico, General Mills) abstain from ads to kids <12.

Targeting the Elderly Elderly vulnerable to ads relating to insurance, funeral arrangements, financial advising, reverse mortgages What are their fears? Dying, being sick or incapacitated, being a burden, being broke Watch adds targeting the elderly and the intensity of fear used Too much fear, targets avoid, too little fear, not effective

Targeting by the Tobacco and Alcohol Industry Masters of marketing Criticized for targeting young people Criticized for deception The industry recognizes problems in advertising to ethnic groups, young people, economically disadvantaged. Negative publicity

Targeting by the Tobacco and Alcohol Industry

Targeting by the Tobacco and Alcohol Industry

Alcohol Ads

Advertising and the Law Agencies Involved FTC, FCC, FDA FDA - labeling/packaging Problem Areas Deceptive Advertisements Bait Advertisements Endorsers

Federal Trade Commission Created to fight anticompetitive activities in the marketplace Modified in 1938 Original – “unfair methods of competition” Revision – “unfair methods of competition and unfair or deceptive acts or practices in commerce”

Wheeler Lea Amendment - 1938 Affected advertising via change in mandate FTC mandate enhance consumers rights FTC has applied the unfairness doctrine in three areas: Advertising substantiation Promotional practices directed to children, and Trade regulation rules

Puffery advertising or other sales presentations which praise the product to be sold with subjective opinions, superlatives, exaggerations, or vaguely - generally stating no specific facts .

Stereotyping presenting one group in an unvarying pattern that lacks individuality

Racial and Ethnic Stereotypes Status Vulnerability – Uptown Cigarettes Consistently showing one group in an unflattering or subservient light Southerners, African Americand

Deceptive Advertising If there is a representation, omission or practice that is likely to mislead the consumer acting reasonably in the circumstance Misrepresentation must be material

Deceptive Advertising False Promises Incomplete Description Misleading Comparisons False Testimonials Partial Disclosures Small-Print Qualifications Misleading Omission

Subliminal Advertising A message transmitted in such a way that the receiver is not consciously aware of it. Problems Distance Individual Differences (Perceptual Thresholds) Effect of Recognizable Material

Joe Camel Voluntarily withdrawn At his peak, more recognizable to three year olds than Mickey Mouse Subliminal Ad Helped reposition and revitalize an dying brand

Bait Advertising Attractive but insincere effort to sell something Example: See the Eckerd’s Sunday Flier for a great promotional price, not available when you get there. Bait and Switch - not available and try to sell up!

Corrective Advertisements If lingering effects known - cease and desist not sufficient must correct the false impression made that consumers use for future purposes Examples: Listerine, Ocean Spray

Listerine Required to include the following: “Listerine will not help prevent colds or sore throats or lessen their severity.” Warner Lambert spent $10.3 million Outcome 40% drop in use for preventative function 57% continue to cite prevention as a major reason for purchase 39% cited continued use for this purpose

Unfair Practices Unfair Advertising Acts or practices that cause or are likely to cause substantial injury to consumers , which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers, or competition