1. Ethics in Advertising and Promotion
Is this Worthy of Study?

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

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

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

5. Central Issues of Ethics
Advocacy
Accuracy
Acquisitiveness

6. 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

7. 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.

8. 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

9. 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

10. Targeting by the Tobacco and Alcohol Industry

11. Targeting by the Tobacco and Alcohol Industry

12. Alcohol Ads

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

14. 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”

15. 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

16. 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 .

17. Stereotyping
presenting one group in an unvarying pattern that lacks individuality

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

19. 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

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

21. 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

22. 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

23. 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!

24. 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

25. 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

26. 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