Ethics and Taste in Advertising

Why should this be a significant issue of

concern ?

Four Fundamental Assumptions of the Free Market

1. Self Interest – want more for less

2. Many buyers and sellers3. Complete Information4. Absence of externalities (social

costs)

Ethical Concerns

Ethical lapses and moral indiscretions can occur under the pressures in today’s marketplace to generate profits.

In general, business people, students, customers know the difference between right and wrong!

Ethics in this course related to matters of right and wrong or moral conduct pertaining to marketing communications.

Central Issues of Ethics

AdvocacyAccuracyAcquisitiveness

Criticisms of Advertising

Short-term manipulative argumentsFocusing on style of advertising

Targeting Kids, Teens and the ElderlyLong-term macro arguments

Focus on the social or environmental impact of advertisingComplete information

• Deception

Absence of externalities• Social costs

Targeting Kids and Teens

Concerns about realistic expectations and understanding advertising

Food and BeveragesChildhood Obesity – fat, sugar, caffeine

Surge and Coca Cola

Healthful Choices (McDonald’s)Media choices … Saturday morning TV

Ethics and Tobacco

Tobacco and Alcohol ProductsBudweiser – the “fur factor”Cigarette products such as Dakota, product

placement in movies and TV

Targeting the Elderly

Susceptible to Fear adsMortalityFinancial concernsIllness and Dependence

Is targeting unethical, good marketing or both??

Ethical Issues in Advertising

2/3 of Americans think advertising is often untruthful

Deceptive advertising harms consumersLabeling is a tool to help reduce potential deception

Advertising is Manipulative and Makes People BUY! Causes ‘wants’Encourages materialismSubliminal ads attempt to subvert conscious

decisions

Ethical Issues in Advertising

Advertising Plays on Fears and InsecuritiesElderly and illnessConsequences of NOT buying a product

(deodorant)

Advertising Creates and Perpetuates StereotypesIs advertising worse than society as a whole?

Ethical Issues in PR

Negative PublicityProduct Failure (real or perceived) Audi, Ford,

Firestone Product Side Effect - VioxxProduct Tampering - TylenolStatus Vulnerability – Uptown Cigarettes

Ethical Issues in Packaging and Branding

Label Information – suggests more of a nutritional item than actual (Hawaiian Punch)

Brand naming – name suggests product has features and benefits it does not possess i.e., powerglider

Ethical Issues in Packaging and BrandingSafety - Packaging graphics – toy appears bigger on

the box of cerealEnvironmental implications of packaging

Sales Promotion EthicsUnmailed rebatesConsumers using coupons for unpurchased

products

Deceptive Considerations

PufferyIf taken literallyExcluded from deception generally because it is

assumed consumers do not believe it anyway!Used to enhance images

Pepsi - the choice of the new generation

Pufferyadvertising or other sales

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

Deceptive Considerations

Subliminal AdvertisingA message transmitted in such a way

that the receiver is not consciously aware of it.

ProblemsDistanceIndividual Differences (Perceptual

Thresholds)Effect of Recognizable Material

Deceptive Advertising* False Promises Incomplete Description

Stating some but not all of the product’s contents

Solid oak furniture (only desktop solid) Misleading Comparisons, visual distortions False Testimonials, false demos Partial Disclosures

Kraft cheese slices made with 5 oz. of milk but omit the processing loses about 2 oz. of the milk

Small-Print Qualifications Bait and Switch*as defined by the courts

Ethics vs. Social Responsibility

Ethical advertisingDoing what is the advertiser and

advertising peers believe is morally right in a given situation

Social responsibility

Doing what society views as best for the welfare of people in general

Style Considerations

Stereotypingpresenting one

group in an unvarying pattern that lacks individuality

Offensiveness in Advertising

Racial and Ethnic Stereotypes

Portrayals of groups insubservient or unflattering lights

ExampleSoutherners

portrayed as dumb or hicks

Offensiveness in Advertising

What is viewed in bad taste by some is quite acceptable to others … in other words, taste is subjective and individual ..

Taste is also affected by localeEuropean ideals of sexuality vs. U.S.Advertisements more overtly sexual in Europe

Advertising and the LawAgencies Involved

FTC, FCC, FDAProblem Areas

Deceptive AdvertisementsMisrepresent, mislead, omitBait AdvertisementsEndorsers

Unfair AdvertisingUnjustifiably injured or violate public policy

• Inadequacy of complete disclosure or other externality

Agency Roles

FDAMonitors drugs, cosmetics, food productsLabels, packaging, branding of these

products its domainSeeks complete information for consumersRequires warning labelsMonitors terms such as “low fat,” “fat-free,”

etc.Nutritional labels

Agency Roles - FCC

Maintains jurisdiction over radio, TV, telephone, satellite, the Internet and the cable industry

Indirect impact on advertising as it enforces cease and desist orders

Monitors profanity and obscenity issues

First Amendment Protections

There is a distinction between “speech” and “commercial” speech in the court system

Twenty year history favors significant protection for truthful advertising under free speech, hence use of advertising by professionals such as attorneys and physicians

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 AdvertisementsIf lingering effects known - cease

and desist or consent decree not sufficient or agreed upon

must correct the false impression made that consumers use for future purposes

Examples: Listerine, Ocean Spray

Guidelines to Ethical AdvertisingTruthfulSubstantiate ClaimsRefrain from False

Comparisonsno bait!explicit guaranteesno false price claimscompetent

witnessestasteful and decent

Arguments against advertising to children Arguments against advertising to children

Children, especially young ones, are vulnerable to advertising because they lack the necessary experience and knowledge to understand and evaluate the purpose of persuasive advertising appeals.

Children cannot differentiate between commercials and television programs, do not perceive the selling intent of commercials, and cannot distinguish between fantasy and reality.

Children must be able to understand how advertising works and develop a skeptical or critical attitude to defend themselves against it.

Advertising to children is inherently unfair or deceptive.

© The McGraw-Hill Companies, Inc., 1998Irwin/McGraw-Hill Slide 22-2

Arguments in favor of advertising to children:Arguments in favor of advertising to children:

Advertising is a part of life and children must learn to deal with it as part of the consumer socialization process of acquiring the skills needed to function in the marketplace.

Studies have shown that children are capable of perceiving persuasive intent and the inability to perceive such intent does not necessarily lead to incorrect beliefs about a product.

Parents should be involved in helping children interpret advertising and can refuse to purchase products they feel are undesirable for their children.

Advertisers have a right under the First Amendment to communicate with consumers who make up their primary target audience

© The McGraw-Hill Companies, Inc., 1998

Slide 22-3

Arguments For Advertiser Control of the MediaArguments For Advertiser Control of the MediaThe media's dependence on

advertising revenue can make them susceptible to advertisers because advertisers can influence the media by:

exerting control over editorial content

biasing editorial opinion limiting coverage of controversial issues

© The McGraw-Hill Companies, Inc., 1998Irwin/McGraw-Hill

Slide 22-6

Arguments Against Advertiser Control of the MediaArguments Against Advertiser Control of the Media

It is in the best self-interest of the media to report the news fairly and accurately and not be perceived as biased to retain public confidence.

It can be argued that advertisers need the media more than the media need any individual advertiser.

© The McGraw-Hill Companies, Inc., 1998Irwin/McGraw-Hill

Slide 22-7

Proposed Restrictions on Use of the World Wide WebBanning unsolicited e-mail that cannot

automatically be screened out.Disclosing fully and prominently both the

marketer’s identity and the use for which information is being gathered.

Giving consumers the right to bar marketers from selling or sharing any information collected from them and to review the personal information collected.

© The McGraw-Hill Companies, Inc., 1998Irwin/McGraw-Hill Slide 21-6