1. Advertising Law

2. Self Regulation Federal Regulation State Regulation Federal Regulation Self Regulation Advertising is regulated through

3. Advertisers and Agencies Industry Trade Associations Industry Trade Associations Media The Public Industry Trade Associations Industry Trade Associations Advertisers, Agencies, Media and their Lawyers Self-regulation of Advertising BBB NARC BBB NARC Voluntary self regulation by the advertising industry, business, and media to maintain consumer trust and confidence and limit government interference

4. AAAA code of ethics © 2013 SAGE Publications, Inc.

5. The Pharmaceutical Industry Has Developed Advertising Guidelines To Self-Regulate

6. The National Advertising Review Council is an Important Self-Regulatory Body

7. Sources of NAD Cases

8. Often results in more stringent standards than those imposed by legislation Often results in more stringent standards than those imposed by legislation Often results in more stringent standards than those imposed by legislation Often results in more stringent standards than those imposed by legislation Encourages truthful, ethical and responsible advertising Encourages truthful, ethical and responsible advertising Effective regulatory mechanism Preferable to government intervention Takes too long to resolve complaints Problems with budgeting and staffing Lack of power or authority Self-serving to advertiser and media Lack of real power or authority Problems with budgeting and staffing Takes too long to resolve complaints Preferable to government intervention Effective regulatory mechanism Encourages truthful, ethical and responsible advertising Encourages truthful, ethical and responsible advertising Appraising Self-Regulation Perspective of Advertisers, Agencies and Media Perspective Of Critics Perspective Of Critics

9. No shots under one second in length Must not over glamorize product No exhortative language, such as “Ask mom to buy…” Generally no celebrity endorsements Can’t use “only” or “just” in regard to price Generally no comparative or superiority claims No costumes or props not available with the toy Three-second establishing shot of toy in relation to child No costumes or props not available with the toy Generally no comparative or superiority claims Can’t use “only” or “just” in regard to price Generally no celebrity endorsements No exhortative language, such as “Ask Mom to buy…” Don’t over-glamorize product Some TV Network Guidelines for Children’s Advertising

10. Mike’s Hard Lemonade: No more moratoriums on Hard Liquor advertising!

11. How About Tobacco advertising? No tobacco ads on tv or radio, but… … magazines and outdoor posters near retailers ok, unless targeted to minors

12. Speech promoting a commercial transaction is protected but must be truthful Speech promoting a commercial transaction is protected but must be truthful Speech promoting a commercial transaction is protected but must be truthful Speech promoting a commercial transaction is protected but must be truthful Freedom of speech or expression is the most basic federal law that governs advertising and promotion Freedom of speech or expression is the most basic federal law that governs advertising and promotion Freedom of speech must be balanced against competing interests such as advertising of harmful products Freedom of speech must be balanced against competing interests such as advertising of harmful products Freedom of speech or expression is the most basic federal law that governs advertising and promotion Freedom of speech or expression is the most basic federal law that governs advertising and promotion Advertising and the First Amendment

13. Political Advertising – Harmful speech ok?

14. Federal Communications Commission (FCC) Food and Drug Administration (FDA) U.S. Postal Service Bureau of Alcohol Tobacco, and Firearms Federal Trade Commission (FTC) U.S. Postal Service Food and Drug Administration (FDA) Federal Communications Commission (FCC) Federal Trade Commission (FTC) * Federal Government Agencies Involved in the Regulation of Advertising and Promotion

15. 1970’s FTC very powerful and active regulator FTC Improvements Act passed FTC becomes less active FTC focused on enforcement of existing regs 1980 1980’s and 1990’s 2000 to present FTC becomes less active 1980’s and 1990’s FTC Improvements Act passed 1980 FTC very powerful and active regulator 1970’s Federal Regulation by the FTC

16. The Concept of “Unfairness”: Legal Requirements Could not reasonably be avoided by consumers Causes substantial physical or economic injury to consumers Could not reasonably be avoided by consumers Causes substantial physical or economic injury to consumers Must not be outweighed by countervailing benefits to consumers or competition

17. “Deceptive Advertising”: Key Elements Perspective of reasonable consumer Likelihood of misleading consumer Perspective of reasonable consumer Likelihood of misleading consumer Materiality – misrepresentation or practice is likely to affect consumers’ purchase decision Materiality – misrepresentation or practice is likely to affect consumers’ purchase decision

18. Puffery: Some Examples Advertising or other sales presentations which praise the item to be sold with subjective opinions, superlatives, or exaggerations, vaguely and generally, stating no specific facts Bayer – “The wonder drug that works wonders” BMW – “The ultimate driving machine” Nestle – “The very best chocolate” Snapple – “Made from the best stuff on earth”

19. Affirmative Disclosure Affirmative Disclosure Advertising Substantiation Advertising Substantiation Cease and Desist Orders Cease and Desist Orders Corrective Advertising Corrective Advertising Cease and Desist Orders Cease and Desist Orders Advertising Substantiation Advertising Substantiation Affirmative Disclosure (i.e. disclaimers) Affirmative Disclosure (i.e. disclaimers) Ways the FTC Deals With Deceptive Advertising FTC Programs to Prevent Deceptive Advertising FTC Programs to Prevent Deceptive Advertising FTC Programs to Deal With Deceptive Advertising After It Occurs FTC Programs to Deal With Deceptive Advertising After It Occurs

20. Corrective Advertising & Cease/Desist Doan's Pills Must Run Corrective Advertising: Ads Claiming Doan's Is Superior in Treating Back Pain Were Unsubstantiated FTC News Release May 27, 1999 The Federal Trade Commission has ordered the makers of Doan's Pills to run ads to correct misbeliefs resulting from their unsubstantiated claim that Doan's Pills are superior to other over-the-counter analgesics for treating back pain. The Order, contained in a Commission opinion announced today, would require advertising and packaging to carry the message, "Although Doan's is an effective pain reliever, there is no evidence that Doan's is more effective than other pain relievers for back pain." The order also would prohibit Novartis Corporation and Novartis Consumer Health, Inc., the marketers of Doan's, from representing that the product is more effective than other over-the-counter products unless they possess and rely upon competent and reliable scientific evidence -- including at least two clinical studies — to substantiate their claims. In addition, the order would require Novartis to have scientific substantiation for any claims made regarding the efficacy, safety, benefits or performance of any over-the counter analgesic they market. Doan's has been marketed and sold for over 90 years and always has been advertised as a backache product.

21. False statements have been made about advertiser’s product or your product The ads actually deceived or had the tendency to deceive a substantial segment of the audience The deception was “material” or meaningful and is likely to influence purchasing decisions The falsely advertised products or services are sold in interstate commerce You have been or likely will be injured as a result of the false statements, either by loss of sales or loss of goodwill The falsely advertised products or services are sold in interstate commerce The deception was “material” or meaningful and is likely to influence purchasing decisions The ads actually deceived or had the tendency to deceive a substantial segment of the audience False Advertising: The Lanham Act Elements Required To Win a False Advertising Suit Under the Lanham Act Elements Required To Win a False Advertising Suit Under the Lanham Act

22. Common Areas of FTC Inquiry Environmental Claims “Free” Claims Made in the USA Claims Advertising as a Contract TestimonialsFact vs Puffery

23. State Regulation In addition to recognizing decisions by the federal courts regarding false or deceptive practices, many states have special controls and regulations governing the advertising of specific industries or practices.

24. Self Regulation Industry/Trade—BBB, NARC Corporate standards Media standards and practices Community standards Cultural standards © 2013 SAGE Publications, Inc.

25. Deceptive advertising False or misleading claims Unfair or harmful If part of the ad is false, all of it is false

26. Substantiation Supported by facts Can it stand up in court?

27. Puffery Subjective opinions, superlatives or exaggerations generally stating no specific facts. A reasonable person knows the claims are exaggerated. “The bigger the lie, the safe the claim.”

28. Corrective advertising Remedy for deceptive ads or misinformation contained in previous ads.

29. Copyright © Exclusive right granted to authors, artists to protect original work from being plagiarized, sold or used without their consent. - Does not protect ideas — only how they are expressed. -Registration with the U.S. Copyright Office typically gives a legal advantage to creative copyright owners, but is not “required” for copyright protection. - “Fair Use” provisions – a legal protection against infringement claims.

30. Trademark Any word, name, symbol or device to identify goods and distinguish them from others. ™ ® Registered trademark-lets everyone know it’s registered TESS-Trademark Electronic Search System of U.S. Office of Patents and Trademarks