Ethics and Taste in Advertising

1
Ethics and Taste in Advertising

• Why should this be a significant issue of concern
  ?

2
Four Fundamental Assumptions of the Free Market

• 1. Self Interest want more for less
• 2. Many buyers and sellers
• 3. Complete Information
• 4. Absence of externalities (social costs)

3
Ethical Concerns

• Ethical lapses and moral indiscretions can occur
  under the pressures in todays marketplace to
  generate profits.
• In general, business people, students, customers
  know the difference between right and wrong!
• Ethics in this course are related to matters of
  right and wrong or moral conduct pertaining to
  marketing communications.

4
Central Issues of Ethics

• Advocacy
• Accuracy
• Acquisitiveness

5
Criticisms of Advertising

• Short-term manipulative arguments
• Focusing on style of advertising
• Targeting Kids, Teens and the Elderly
• Long-term macro arguments
• Focus on the social or environmental impact of
  advertising
• Complete information
• Deception
• Absence of externalities
• Social costs

6
Targeting Kids and Teens

• Concerns about realistic expectations and
  understanding advertising
• Food and Beverages
• Childhood Obesity fat, sugar, caffeine
• Surge and Coca Cola
• Healthful Choices (McDonalds)
• Media choices Saturday morning TV

7
Ethics and Tobacco

• Tobacco and Alcohol Products
• Budweiser the fur factor
• Cigarette products such as Dakota, Uptown and
  product placement in movies and TV

8
Targeting the Elderly

• Susceptible to Fear ads
• Mortality
• Financial concerns
• Illness and Dependence
• Is targeting unethical, good marketing or both??

9
Ethical Issues in Advertising

• 2/3 of Americans think advertising is often
  untruthful
• Deceptive advertising harms consumers
• Labeling is a tool to help reduce potential
  deception
• Advertising is Manipulative and Makes People BUY!
  
• Causes wants
• Encourages materialism
• Subliminal ads attempt to subvert conscious
  decisions

10
Ethical Issues in Advertising

• Advertising Plays on Fears and Insecurities
• Elderly and illness
• Consequences of NOT buying a product (deodorant)
• Advertising Creates and Perpetuates Stereotypes
• Is advertising worse than society as a whole?

11
Ethical Issues in PR

• Negative Publicity
• Product Failure (real or perceived) Audi, Ford,
  Firestone
• Product Side Effect - Vioxx
• Product Tampering - Tylenol
• Status Vulnerability Uptown Cigarettes

12
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

13
Ethical Issues in Packaging and Branding

• Safety Protects the product from damage
• Packaging graphics toy appears bigger on the
  box of cereal
• Environmental implications of packaging
• Sales Promotion Ethics
• Unmailed rebates
• Consumers using coupons for unpurchased products

14
Deceptive Considerations

• Puffery
• If taken literally, can be perceived as deceptive
• Generally non-product claim
• Be all that you can be
• Excluded from deception generally because it is
  assumed consumers do not believe it anyway!
• Used to enhance images
• Pepsi - the choice of the new generation

15
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

16
Deceptive Considerations

• 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

17
Deceptive Advertising

• False Promises
• Incomplete Description
• Stating some but not all of the products
  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

18
Ethics vs. Social Responsibility

• Ethical advertising
• Doing 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

19
Style Considerations

• Stereotyping
• presenting one group in an unvarying pattern that
  lacks individuality
• Offensiveness in Advertising

20
Racial and Ethnic Stereotypes

• Portrayals of groups in
• subservient or unflattering lights
• Example
• Southerners portrayed as dumb or hicks

21
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 locale
• European ideals of sexuality vs. U.S.
• Advertisements more overtly sexual in Europe

22
Advertising and the Law

• Agencies Involved
• FTC, FCC, FDA
• Problem Areas
• Deceptive Advertisements
• Misrepresent, mislead, omit
• Bait Advertisements
• Endorsers
• Unfair Advertising
• Unjustifiably injured or violate public policy
• Inadequacy of complete disclosure or other
  externality

23
Agency Roles

• FDA
• Monitors drugs, cosmetics, food products
• Labels, packaging, branding of these products its
  domain
• Seeks complete information for consumers
• Requires warning labels
• Monitors terms such as low fat, fat-free,
  etc.
• Nutritional labels

24
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

25
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

26
Bait Advertising

• Attractive but insincere effort to sell something
• Example See the Kohls or Walmart Sunday Flier
  for a great promotional price, not available when
  you get there.
• Bait and Switch - not available and try to sell
  up!

27
Corrective Advertisements

• If 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

28
Guidelines to Ethical Advertising

• Truthful no false promises
• Substantiate Claims
• No Visual Distortions or False Demonstrations
  (Campbells)
• Refrain from False Comparisons
• no bait! / small print qualifications
• Partial disclosures
• explicit guarantees
• no false price claims
• competent witnesses
• tasteful and decent

29
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.

Irwin/McGraw-Hill
Slide 22-2

• The McGraw-Hill Companies, Inc., 1998

30
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

Slide 22-3

• The McGraw-Hill Companies, Inc., 1998

31
Arguments For Advertiser Control of the Media

• The 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

Slide 22-6
Irwin/McGraw-Hill

• The McGraw-Hill Companies, Inc., 1998

32
Arguments 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.

Slide 22-7
Irwin/McGraw-Hill

• The McGraw-Hill Companies, Inc., 1998

33
Proposed Restrictions on Use of the Internet

• Banning unsolicited e-mail that cannot
  automatically be screened out.
• Disclosing fully and prominently both the
  marketers 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.

Irwin/McGraw-Hill
Slide 21-6

• The McGraw-Hill Companies, Inc., 1998